Glenn Murphy
Petco Health & Wellness CompanyAbout Glenn Murphy
Executive Chairman of Petco Health and Wellness Company, Inc. since May 14, 2024; age 63; BA, University of Western Ontario . Petco reported fiscal 2024 net revenue of $6.1B (+0.3% YoY), Adjusted EBITDA of $336.5M (vs target range $335.1–$355.2 with “strike zone”), and Adjusted Free Cash Flow of $67.6M, underpinning 2024 AIP payouts; Murphy’s AIP paid $211,418 for 2024 (116.6% of target) . As Executive Chairman, Murphy supports profitability initiatives, strategy, and CEO succession; he leads quarterly executive sessions of the Board . He is not independent and holds no Board committee memberships; Petco is a “controlled company,” relying on certain governance exemptions (e.g., non-fully independent compensation and nominating committees) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Gap Inc. | Chairman & CEO | 2007–2014 | Led strategy and operations across major retail brand |
| Shoppers Drug Mart | Chairman & CEO | 2001–2007 | Drove retail pharmacy leadership in Canada |
| Loblaw Companies | Various leadership roles | ~14 years | Built foundational retail and operations experience |
| FIS Holdings Ltd. | Founder & CEO | 2016–present | Consumer-focused investment firm; operating/board engagement platform |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Wella Company | Executive Chair of the Board | Current | Global beauty; Murphy stepped down from Wella comp committee before joining Petco |
| Aimbridge Hospitality | Director | Current (at appointment) | Listed in Petco 8-K appointment disclosure |
| lululemon athletica inc. | Executive Chair then Chairman (prior) | Prior to Aug 2023 | Governance/strategy leadership through transition |
Fixed Compensation
| Element | 2024 Terms | Notes |
|---|---|---|
| Base salary | $250,000 | Per NEO base salary table |
| Target bonus | 100% of base salary | AIP design; Murphy target rate |
| 2024 AIP payout | $211,418 (116.6% of target) | Reflects financial + strategic performance |
Performance Compensation
| Metric | Weight | Target | Actual | Payout mechanics | Murphy’s weighted payout |
|---|---|---|---|---|---|
| Adjusted EBITDA ($M) | 60% | $335.1–$355.2 (target range; 50% at $318.3; 200% at $402.1) | $336.5 | “Strike zone” pays target for 100%–106%; linear outside to 50%/200% | 60% |
| Adjusted Free Cash Flow ($M) | 20% | $35.0–$55.0 (50% at $20.5; 200% at $75.0) | $67.6 | Linear interpolation to max | 32% |
| Strategic goals (company-wide) | 20% | Goals set (operational excellence, customer outcomes, vendor partnership, execution) | Significant progress | Individual assessment | Murphy 24% (120% of personal component) |
Total weighted payout: 60% + 32% + 24% = 116% (rounded consistent with reported 116.6%) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (as of May 13, 2025) | 3,745,253 Class A shares beneficially owned; ~1.5% of Class A; ~1.3% of voting power |
| Direct purchase | 1,470,589 Class A shares purchased at $1.70 for ~$2.5M; 50% locked until May 13, 2026 and remaining 50% until May 13, 2027 |
| Inducement RSUs → Restricted Stock | 1,000,000 RSUs granted May 24, 2024; converted to restricted stock in Aug 2024 due to Canadian tax; vest quarterly over 3 years beginning May 14, 2024; holding requirement through May 14, 2027; 833,334 restricted shares outstanding at amendment date referenced in 10-K |
| Inducement stock options | 1,074,000 @ $3.58; 750,000 @ $5.00; 1,000,000 @ $7.50; 1,000,000 @ $10.00; vest in equal quarterly installments over 3 years from May 14, 2024 |
| Hedging/pledging | Prohibited for directors/officers under Insider Trading Policy |
| Ownership guidelines | Officers (other than CEO): 2x base salary; includes outright shares, unvested time-based RSUs/restricted shares; excludes options/PSUs; compliance expected within grace period |
Performance Compensation – Equity Awards Detail
| Grant | Date | Vehicle | Amount/Terms | Vesting/Hold |
|---|---|---|---|---|
| Executive Chairman inducement | May 24, 2024 | RSUs → Restricted Stock | 1,000,000 units (converted to restricted stock in Aug 2024) | Equal quarterly vesting over 3 years from May 14, 2024; holding of net shares through May 14, 2027 |
| Executive Chairman inducement | May 24, 2024 | Options | 1,074,000 @ $3.58; 750,000 @ $5.00; 1,000,000 @ $7.50; 1,000,000 @ $10.00 | Equal quarterly vesting over 3 years from May 14, 2024 |
Notes: Initial 8-K provided a sliding mechanism for the lowest-strike option (up to 1.5M shares between $2.50–$5.00) depending on market price; actual grants reflect $3.58 tranche size of 1,074,000 shares .
Employment Terms
| Term | Summary |
|---|---|
| Start date/role | Appointed Executive Chairman effective May 14, 2024; employment via a Canadian subsidiary |
| Cash comp | $250,000 salary; target bonus 100% of salary under AIP |
| Equity | One-time inducement RSUs and options as above; shares received must be held to May 14, 2027 |
| Severance (without Cause) | Statutory severance per Canadian law; accrued but unused vacation; any earned but unpaid prior-year bonus; equity: full acceleration upon termination without Cause or resignation for Good Reason; partial acceleration upon death/disability (12-month forward vesting) |
| Good Reason (summary) | (i) Required to serve other than Chairman; (ii) material base salary reduction; or (iii) material breach, subject to notice/cure |
| Clawback | Nasdaq 10D-1 compliant; restatement-based recovery of excess incentive comp for prior 3 years; additional misconduct clawback for incentive comp (incl. time-based equity) for prior 3 years |
| Hedging/pledging | Prohibited; covered by Insider Trading Policy |
Board Governance
- Status and structure: Petco is a “controlled company” under Nasdaq with ~66% director-election voting power held by the Principal Stockholder; compensations and nominating/governance committees rely on controlled-company exemptions (not fully independent). Audit committee is fully independent as required .
- Role: Executive Chairman; leads quarterly executive sessions and supports profitability strategy and CEO succession .
- Committee roles: None (no committee memberships listed for Murphy) .
- Independence considerations: The Board evaluated cross-roles at Wella (Murphy Executive Chair; director Iris Yen as Wella executive) and determined independence of Ms. Yen; Murphy stepped down from Wella’s compensation committee before joining Petco and has no role in Yen’s compensation at Wella .
- Director compensation: Executive Chairman is not eligible for the non-employee director compensation program; receives salary/AIP instead .
Compensation Design, Peer Group and Say‑on‑Pay
- Design: Majority at-risk with annual AIP and LTI; 2024 AIP 60% Adjusted EBITDA, 20% Adjusted FCF, 20% strategic; PSUs focused on absolute TSR for 3-year period; options premium-priced for alignment .
- Peer group (2024): Academy Sports, Advance Auto Parts, American Eagle, Casey’s, Central Garden & Pet, DICK’s, Foot Locker, National Vision, PriceSmart, RH, Sally Beauty, Sprouts, Tractor Supply, Ulta Beauty, Williams‑Sonoma .
- Say‑on‑Pay: 96% approval at 2024 Annual Meeting; program enhancements disclosed (greater EBITDA/FCF focus; mix includes PSUs and options; Murphy did not receive additional equity in fiscal 2025) .
Related Party Transactions and Alignment Signals
- Equity purchase: Murphy (via GSSB Corporation) purchased 1,470,589 newly issued Class A shares ($1.70/sh; $2.5M), with two/three-year holding commitments; transaction disclosed as a related person transaction .
- No pledging/hedging: Policy prohibits both, mitigating alignment risk .
Risk Indicators & Red Flags
- Governance concentration: Controlled company structure; reduced independence of compensation and nominating committees relative to non-controlled peers .
- Dual role implications: Executive Chairman leads executive sessions and supports management; Board states separation of CEO and Executive Chairman roles enhances oversight given retail expertise .
- Equity award timing and MNPI controls: Company described grant timing relative to earnings and 8-K events; premium-priced options had exercise prices above pre/post 8-K close .
Investment Implications
- Alignment and retention: Significant personal equity purchase with multi-year lockup plus RSU/restricted stock holding requirement through May 2027 and premium‑priced options create strong long-term alignment and reduce near-term selling pressure .
- Pay for performance: 2024 AIP outcomes tied to EBITDA/FCF delivered ~116% payout; Murphy’s 2024 cash incentive was modest in dollar terms ($211k) given low base salary, with the bulk of value in equity that requires stock appreciation and service; no severance gross-ups and clawback/anti‑hedging policies in place .
- Governance risk: Controlled company exemptions and Executive Chairman role warrant scrutiny on independence; however, audit committee is fully independent and cross‑company relationships (Wella) were addressed procedurally .
- Execution track record: Murphy brings multi‑decade retail turnaround expertise (Gap, Shoppers Drug Mart, Lululemon); Petco’s 2024 operational metrics (stable revenue, positive FCF) underpin incentive payouts; ongoing absolute TSR PSU design emphasizes future stock performance .