Nate Smith
About Nate Smith
Nate Smith (age 56) became President & Chief Executive Officer and a Director of Tilly’s effective August 18, 2025; he previously served as CEO of Marolina Outdoor (Sep 2024–Jul 2025), President, Americas at Boardriders (2017–2024), and held leadership roles at Oakley, IPATH Footwear, MV Transportation, and Patagonia following eight years in the U.S. Navy . Tilly’s FY2024 context into which he steps: cumulative TSR value 39.82 (base=100), net loss of $46.2M, and operating loss of $49.8M, underscoring a turnaround mandate . His pay design centers on a $1.0M base, a 100% target bonus (200% max) aligned to revenue growth/EBITDA/operational improvements, and 1.8M stock options with explicit price hurdles ($4/$6/$8 30-day average), directly linking compensation to shareholder value creation .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Marolina Outdoor, Inc. | Chief Executive Officer | Sep 2024–Jul 2025 | Led performance apparel/gear company as CEO prior to joining Tilly’s . |
| Boardriders, Inc. | President, Americas | Jun 2017–Apr 2024 | Ran Americas region for global action sports portfolio (Quiksilver, etc.) . |
| Oakley, Inc. | VP/GM, North American Wholesale | Sep 2015–Jun 2017 | Led NA wholesale channel for Oakley branded products . |
| Oakley Defense | Vice President | Jul 2012–Jun 2017 | Oversaw defense-focused business segment at Oakley . |
| IPATH Footwear | Executive role | Not disclosed | Senior leadership role (details not disclosed) . |
| MV Transportation, Inc. | Executive role | Not disclosed | Senior leadership role (details not disclosed) . |
| Patagonia, Inc. | Executive role | Not disclosed | Senior leadership role (details not disclosed) . |
| United States Navy | Service | 8 years | Military service prior to business career . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Tilly’s, Inc. | Director | Aug 18, 2025–present | Appointed at start as CEO; receives no additional board compensation . |
| Other public company boards | — | — | None disclosed in filings . |
Fixed Compensation
| Element | Amount | Terms |
|---|---|---|
| Base Salary | $1,000,000 | Annual; may not be reduced below $1.0M except across-the-board or voluntary . |
| Target/Max Annual Bonus | 100% / 200% of base | Metrics set by Compensation Committee; expected to include revenue growth, EBITDA milestones, operational improvements; bonus begins with FY2026 performance . |
| Sign-on Bonus | $400,000 | Paid within 5 business days of start; full repayment if he resigns within 2 years (except death/disability) . |
| Car Allowance | $24,000 per year | Paid monthly [$2,000/month] . |
| Benefits | Standard employee plans | Eligible first day of month following start . |
| Relocation/Lease Reimbursements | Up to $35,000 moving + up to $7,900/month lease through May 31, 2026 | Subject to repayment if he resigns or is terminated for cause within 2 years; includes tax gross-up on taxable reimbursements . |
Performance Compensation
| Award Type | Size | Exercise Price | Vesting | Performance Conditions | Expiration | CIC Treatment |
|---|---|---|---|---|---|---|
| Time-Based Stock Options | 900,000 options | Closing price on grant date (within 60 days of start) | 25% on first anniversary; remainder monthly thereafter, subject to service . | None | 10 years from grant . | Accelerates in full immediately prior to Change in Control . |
| Performance-Based Stock Options | 900,000 options | Closing price on grant date (within 60 days of start) | Vests in 3 tranches of 300,000 upon 30-trading-day average share price reaching $4.00, $6.00, $8.00; requires continued service through 1-year anniversary and certification . | Stock-price hurdles: $4/$6/$8 30-day average; Board/Committee certification required . | 10 years from grant . | Accelerates only to extent earned as of CIC; service condition lapses . |
Equity Ownership & Alignment
- Beneficial ownership: Not included in the April 21, 2025 proxy (appointment effective Aug 18, 2025); option grants of 1.8M total disclosed in 8-K .
- Hedging/Pledging: Company prohibits hedging, short sales, derivatives, and pledging/margin purchases for directors and officers .
- Ownership guidelines: Not disclosed in the proxy; equity plan share reserve increased in 2025 to support retention and alignment .
- Clawbacks: Company maintains a Dodd-Frank-compliant recovery policy; offer letter also enables recoupment of incentive pay upon restatements .
- Board pay: As CEO-director, he receives no additional compensation for board service .
Employment Terms
| Provision | Detail |
|---|---|
| Employment status | At-will . |
| Severance (without Cause) | 1.0x base salary paid over 12 months; pro-rated annual bonus for year of termination based on actual performance; subject to release . |
| Change-in-Control (CIC) | Time-based options accelerate fully immediately prior to CIC; performance-based options accelerate only to extent earned as of CIC and service condition lapses . |
| Good Reason definition | Material diminution in duties/responsibilities or failure to pay material compensation/benefits; company cure rights apply . |
| Non-compete / Non-solicit | Non-compete during employment; non-solicit of employees for 1 year post-termination . |
| Confidentiality/IP/Cooperation | Standard confidentiality, works-for-hire, and cooperation clauses . |
| Indemnification/D&O | Standard indemnification agreement and D&O coverage . |
| Other boards | May not serve on other company boards without prior Tilly’s Board approval . |
| 409A compliance | Agreement intended to comply with or be exempt from Section 409A . |
| Non-disparagement/whistleblower | Mutual non-disparagement with legal exceptions; whistleblower carve-outs respected . |
| Relocation clawback | Repayment of relocation/lease reimbursements if resigns (other than death/disability) or terminated for cause within 2 years . |
Board Governance
- Structure: Board size seven; majority independent directors; company is a NYSE “controlled company” but does not currently rely on governance exemptions; Executive Chairman (Hezy Shaked) separate from CEO; no designated lead independent director .
- Committees: All committee members independent; Audit (Chair: Seth Johnson), Compensation (Chair: Doug Collier), Nominating & Corporate Governance (Chair: Janet Kerr); attendance was ≥75% for all directors in FY2024 .
- Executive sessions: Independent directors expect to hold at least two per year .
- Director compensation: Non-employee directors receive cash retainers and ~$80,000 annual restricted stock; not applicable to Smith as he is an employee director .
- Dual-role implications: Smith is CEO and a Director (not independent). Executive Chair remains separate, which partially mitigates CEO/Chair consolidation, though absence of a lead independent director is a governance consideration .
Performance & Track Record (Company Context)
| Metric | FY2020 | FY2021 | FY2022 | FY2023 | FY2024 |
|---|---|---|---|---|---|
| Cumulative TSR (index, $100 base) | 90.12 | 117.16 | 80.01 | 69.16 | 39.82 |
| Net (Loss) Income ($000s) | (1,145) | 64,249 | 9,677 | (34,492) | (46,229) |
| Operating (Loss) Income ($000s) | (3,040) | 87,595 | 11,187 | (30,982) | (49,849) |
Note: Smith’s tenure began August 18, 2025; FY2024 results predate his appointment. Management cited inflation, consumer pressure, and operational challenges across FY2023–FY2024, framing the need for revitalization he was hired to lead .
Compensation Committee Analysis and Shareholder Feedback
- Pay philosophy: Incentive-weighted, balancing short- and long-term, cash and equity; FY2024 NEO bonuses paid only upon achieving operating income and comparable store sales thresholds (none were earned in FY2024) .
- Peer group and consultant: Mercer supported peer development in 2022 (Boot Barn, Buckle, Cato, Citi Trends, DXL, Duluth, J.Jill, Torrid, Zumiez, etc.); used for context, not strict benchmarking .
- Equity plan: 2025 amendment increased reserve by 2,000,000 shares to 8,613,900; overhang and dilution analyses disclosed .
- Say-on-pay: ~91% approval in 2024; annual frequency adopted .
Performance Compensation (Detailed Table)
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Annual bonus metrics (FY2026 onward) | Set annually by Comp Committee | Revenue growth/EBITDA/operational improvements (examples) | Not yet applicable | Not yet applicable | Cash paid post-audit; must be employed through payment date unless determined otherwise . |
| Stock-price hurdles (Performance Options) | 100% of performance-option grant | 30-day avg price $4/$6/$8 | Not yet applicable | Vests 300k per hurdle | Requires service through 1-year anniversary and certification . |
Director Service and Independence Considerations
- Board service history: Appointed to Tilly’s board effective Aug 18, 2025; no prior Tilly’s board tenure; no family relationships or related party transactions disclosed .
- Committee roles: None assigned; as CEO, he is not independent and does not sit on independent committees .
- Independence issues: Dual role as CEO and Director; however, CEO is not Chair (Executive Chairman is separate). Company maintains majority independent board and fully independent committees despite controlled status .
- Meeting attendance: FY2024 attendance thresholds met by all directors; Smith joined after FY2024 .
Related Party Transactions and Red Flags
- Related party: None with Smith requiring disclosure under Item 404 of Regulation S-K .
- Hedging/pledging: Prohibited—reduces misalignment risks .
- Tax gross-ups: Limited to tax gross-up on taxable portions of relocation/lease reimbursements; no broad excise tax gross-ups under equity plan .
- Option repricing: Prohibited without shareholder approval under equity plan .
- Change-in-control acceleration: Single-trigger acceleration for time-based options at CIC (performance options accelerate only if earned), which some investors view less favorably than double-trigger designs .
Investment Implications
- Alignment and upside leverage: Heavy option mix (1.8M options) with explicit price hurdles directly ties value to multi-dollar stock-price milestones; the 1-year service condition before any performance options vest tempers short-term churn and selling pressure .
- Retention risk: Moderated by 4-year time-based vesting, 1-year service requirement on performance options, and relocation/lease repayment and sign-on clawback if he resigns within two years; severance is limited to 1x salary plus prorated actual bonus, which is conservative vs. market .
- Governance considerations: CEO is a Director but not Chair; the Executive Chair remains separate; absence of a lead independent director and single-trigger acceleration on time-based options are watch items; anti-hedging/pledging policies and independent committees are positives .
- Pay-for-performance: Cash bonus mechanics (from FY2026) are expected to key on revenue/EBITDA/ops metrics; the share-price hurdles ($4/$6/$8 30-day averages) provide transparent market-based milestones that can act as trading catalysts if execution improves .
- Turnaround backdrop: FY2024 losses and depressed TSR underscore a challenging baseline; Smith’s prior action-sports and wholesale leadership background suggests merchandising and brand revitalization focus, consistent with the company’s stated rationale for the hire .