Joel Anderson
Petco Health & Wellness CompanyAbout Joel Anderson
Joel Anderson is Petco’s Chief Executive Officer and a Class III director, age 60, serving since July 29, 2024; he holds an MBA from Harvard Business School and BA degrees in political science and speech communications from Saint Olaf College . Anderson is a 30-year retail operator with prior CEO roles at Five Below and Walmart.com; at Five Below he scaled the chain from 366 to over 1,500 stores and grew revenue from ~$500 million to >$3.5 billion, evidencing strong value creation in multi-unit retail . Petco’s FY2024 performance context includes net revenue of $6.1B and +0.3% comparable sales, with Adjusted EBITDA of $336.5M and Adjusted Free Cash Flow of $67.6M, metrics that also underpin Anderson’s annual incentive outcomes .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Five Below, Inc. | President & CEO; Director | Feb 2015 – Jul 16, 2024 | U.S. expansion from 366 to >1,500 stores; eCommerce launch; revenue growth from ~$500M to >$3.5B; operations optimization |
| Walmart.com | President & CEO | 2011 – 2014 | Led multi-billion dollar dot-com business; digital scale and operations |
| Walmart (Northern Plains division) | Divisional SVP | 2010 – 2011 | Oversaw >100,000 associates and >$25B annual sales |
| Lenox Group, Inc. | President, retail and direct business units | Unspecified | Multi-channel retail leadership |
| Toys “R” Us Inc. | Various executive roles | 14 years | Big-box retail operations and merchandising experience |
External Roles
| Organization | Role | Committee service |
|---|---|---|
| Sprouts Farmers Market | Director | Audit and Compensation Committees |
Fixed Compensation
| Component | Detail |
|---|---|
| Base salary | $1,300,000 per year |
| Target annual bonus | 150% of base salary; FY2024 not prorated |
| FY2024 actual bonus paid | $2,273,700 (total payout 116.6% of target) |
| Perquisites | Lump-sum relocation allowance $300,000 (pro-rata repayment conditions if departure by end of 2025); financial/tax preparation up to $20,000/year; executive physical up to $5,000/year; legal fee reimbursement up to $20,000 |
Performance Compensation
Annual Incentive (FY2024)
| Metric | Weighting | Threshold | Target range | Maximum | Actual | Weighted payout |
|---|---|---|---|---|---|---|
| Adjusted EBITDA ($M) | 60% | $318.3 | $335.1 – $355.2 | $402.1 | $336.5 | 60% |
| Adjusted Free Cash Flow ($M) | 20% | $20.5 | $35.0 – $55.0 | $75.0 | $67.6 | 32% |
| Personal/strategic goals | 20% | N/A | N/A | N/A | 120% achievement | 24% |
| Total payout | 100% | — | — | — | — | 116.6% |
Notes:
- FY2024 AIP metrics emphasized cash generation and profitability; Adjusted EBITDA included a “strike zone” of 100–106% around target; performance above/below linearly interpolated to 200% cap .
- FY2025 AIP adds Revenue (20%) alongside Adjusted EBITDA (60%) and Adjusted FCF (20%) to balance top-line and cash metrics; linear interpolation applies for each metric to 200% cap .
Initial Long-Term Equity (Inducement Award, granted July 29, 2024)
| Instrument | Grant date value | Quantity/terms | Vesting | Performance metric |
|---|---|---|---|---|
| RSUs | $5,000,002 | 1,492,538 RSUs | 34% at first anniversary, then 16.5% every six months through third anniversary (service-based) | |
| PSUs | $5,000,002 | 1,492,538 target PSUs (0–200% earnout) | Earned post 3-year period (FY2025–FY2027) | Cumulative Adjusted EBITDA with gate: 10% of target forfeited if FY2025 Adjusted EBITDA below threshold or if FY2026/FY2027 Adjusted EBITDA does not exceed prior year |
| Stock options | $2,500,001 @ $5.00 | 1,366,121 options @ $5.00 | 34% at first anniversary, then 16.5% every six months; 10-year term | |
| Stock options | $2,500,001 @ $7.50 | 1,381,216 options @ $7.50 | 34% at first anniversary, then 16.5% every six months; 10-year term |
Additional terms:
- Option grant values may be increased up to $3,750,000 each if the interim 30-day VWAP rises up to 50% between public announcement and grant; exercise price never below closing price on grant date .
- PSUs performance period runs February 2, 2025 – January 29, 2028; service requirement through committee certification of performance .
Governance features:
- Company clawback policy applies to RSUs, PSUs, and options (financial restatement and misconduct); Nasdaq Rule 10D-1 compliant .
- No option repricing without stockholder approval; no tax gross-ups on severance; prohibition on hedging and pledging .
Equity Ownership & Alignment
| Holding type (as of FY2024 year-end) | Quantity | Terms |
|---|---|---|
| Unvested RSUs | 1,492,538 | Vests 34% on July 29, 2025, then 16.5% semiannually through third anniversary |
| Target PSUs (unearned) | 1,492,538 | Earnout based on FY2025–FY2027 Cumulative Adjusted EBITDA; vesting post performance period |
| Options @ $5.00 (unexercisable) | 1,366,121 | 10-year term; premium-priced; time-based vesting |
| Options @ $7.50 (unexercisable) | 1,381,216 | 10-year term; premium-priced; time-based vesting |
Ownership policies:
- CEO stock ownership guideline: 5x annual base salary; 5-year compliance window from becoming subject to guideline; unvested time-based RSUs count; unearned PSUs and unexercised options do not count .
- Hedging and pledging of company stock are prohibited under the Insider Trading Policy .
Note: Beneficial ownership percentage of outstanding shares for Mr. Anderson is not disclosed in the cited documents; Petco discloses outstanding awards and ownership guidelines .
Employment Terms
| Term | Detail |
|---|---|
| Employment start date | July 29, 2024 |
| Employment status | At-will; California law governs the offer letter |
| Severance (without Cause / for Good Reason) | Lump sum 1.5x base salary; pro-rata actual annual incentive for year of termination; 18x monthly COBRA premiums for employee/dependents; payment of any earned but unpaid prior year annual incentive; certain accelerated vesting of RSUs/options and conditional treatment of PSUs (see below) |
| Change-in-control treatment | On or within 24 months following a Change in Control: RSUs, options, and PSUs become fully vested upon qualifying Involuntary Termination; pre-CIC terminations in FY2026/FY2027 preserve a prorated or full opportunity for PSUs subject to gates and continued performance measurement |
| Good Reason / Cause | Detailed definitions include material diminution of duties, compensation, reporting changes, relocation >50 miles after relocating, failure to assume obligations by successor; and enumerated Cause triggers including material breaches, willful failure, fraud, felony/moral turpitude, misconduct resulting in material harm |
| Clawback and confidentiality | Clawback applies; comprehensive confidentiality and inventions agreements attached to award documents |
| Perquisites | Relocation allowance $300,000; executive physical up to $5,000/year; financial/tax services up to $20,000/year; legal fee reimbursement up to $20,000 |
Board Governance
- Board service: Appointed to Petco’s Board concurrently with CEO appointment; Class III director with term continuing until the 2026 Annual Meeting; currently no committee memberships listed for Anderson .
- Independence: Petco is a controlled company; independent directors are explicitly identified and do not include Anderson (CEO is an executive director) .
- Board leadership: Roles are split—Executive Chairman (Glenn Murphy) and CEO (Joel Anderson) to strengthen governance; board held three executive sessions in FY2024 .
- Attendance: Each incumbent director attended at least 75% of Board and committee meetings during FY2024; seven attended the 2024 Annual Meeting .
- Director compensation: Executives are not separately compensated as directors; independent director program terms disclosed; Anderson’s compensation appears only in NEO tables .
Compensation Governance, Peer Benchmarking, and Say-on-Pay
- Compensation committee: R. Michael Mohan (Chair), Christy Lake, Mary Sullivan; as a controlled company, Petco relies on certain committee independence exemptions while maintaining an independent audit committee .
- Independent consultant: Exequity advised the compensation committee on peer selection, program design, and benchmarking; no conflicts identified .
- Peer group: Academy Sports & Outdoors; Advance Auto Parts; American Eagle Outfitters; Casey’s General Stores; Central Garden & Pet; DICK’S Sporting Goods; Foot Locker; National Vision; PriceSmart; RH; Sally Beauty; Sprouts Farmers Market; Tractor Supply; Ulta Beauty; Williams-Sonoma .
- Say-on-Pay: ~96% approval at 2024 Annual Meeting; ensuing changes include emphasis on Adjusted EBITDA, FCF and TSR-linked PSUs, and option usage to require stock price appreciation .
Related Party Transactions and Red Flags
- Petco disclosed no Item 404(a) related party transactions for Anderson at appointment; no family relationships .
- Governance practices include: clawback policy; prohibition on hedging/pledging; no single-trigger CIC payouts; no option repricing without shareholder approval; no tax gross-ups on severance—all investor-friendly features .
Expertise & Qualifications
- Education: MBA (Harvard); BA in political science and speech communications (Saint Olaf) .
- Functional expertise: retail operations, merchandising, branding, leadership development, large-scale digital commerce .
- Public board experience: Sprouts Farmers Market director (audit and compensation committees); served on Five Below’s board during tenure as CEO .
Performance & Track Record
- Five Below: multi-year U.S. expansion, category diversification, operations optimization, revenue growth from ~$500M to >$3.5B .
- Petco FY2024 performance context: net revenue $6.1B, comps +0.3%, supporting incentive outcomes; AIP actuals: Adjusted EBITDA $336.5M and Adjusted FCF $67.6M .
Equity Vesting Cadence and Potential Selling Pressure
- RSUs/options vest 34% at first anniversary of start date (July 29, 2025), then 16.5% each six months through year three, creating semiannual liquidity events; PSUs cliff-vest post FY2025–FY2027 performance certification (potential 0–200% payout), with gates tied to Adjusted EBITDA progression, which can constrain earnout if EBITDA declines year-over-year .
- Insider Trading Policy allows the company to impose resale timing restrictions and coordination among insiders, which can mitigate market impact risk from executive sales .
Investment Implications
- Alignment: Premium-priced options ($5.00 and $7.50) require meaningful stock appreciation before any value accrues, tightly aligning pay with shareholder outcomes; PSUs tied to multi-year Cumulative Adjusted EBITDA with gates discourage backward EBITDA steps and incentivize sustained improvement .
- Retention: Significant unvested RSU/option balances with front-loaded 34% vesting at first anniversary and semiannual vesting thereafter provide strong retention hooks through mid-2027; inducement PSUs extend retention/performance through early 2028 .
- Pay-for-performance design: FY2025 AIP reintroduces Revenue alongside Adjusted EBITDA and FCF, balancing profitability and cash with top-line momentum; continued TSR-focused PSUs for other NEOs plus option grants signal emphasis on absolute performance and stock price appreciation .
- Governance quality: Clawbacks, prohibitions on hedging/pledging, no option repricing, and no severance gross-ups reduce agency risk; strong say-on-pay support (~96%) indicates shareholder alignment with the pay framework .
- Trading signals: The July 29, 2025 first-vesting date and semiannual cadence thereafter are potential overhang windows; corporate ability to coordinate insider sales and policy-based timing restrictions can moderate selling pressure .