Executive Compensation
Message from Beth Newlands Campbell, Board Chair
Members,
We are committed to being transparent with our members on our business and operational performance. This is why we share a comprehensive impact report each year, along with our financial results. This commitment extends to providing the details of our executive compensation, and how that fits into our overall compensation structure.
The Co-op’s long-held compensation philosophy prioritizes higher market-range pay for hourly employees - who are integral to our member and customer engagement – over executive pay. This means that our hourly employees are paid within the upper quartile of market rates, whereas executives are positioned between the median and lower quartile. Annually, we conduct a comprehensive benchmarking exercise against industry peer companies and executive pay surveys, assessing base salary, variable incentives, and retirement contributions. We also use a pay-for-performance framework to govern executive compensation, ensuring that a majority of leadership compensation is contingent on and directly linked to REI’s performance against our annual and long-term goals.
The last few years have demanded significant resilience and navigation as we work to set ourselves up for long-term success in driving our business and impact. We planned 2023 as an important year to focus on moving the Co-op toward profitability through focused growth, operational efficiencies, and selectively investing in key areas of the business. Despite momentum we gained through the first three quarters of 2023, challenging market conditions in Q4 had a negative impact on our results – like many in the retail sector. This led to REI ending the fiscal year short of our 2023 budget and revenue down 2% from 2022.
As we look to 2024, our focus remains on finding the right balance between rewarding our employees and navigating the ongoing uncertainties of the market. We're committed to adapting and evolving in ways that align with our values and ensure the Co-op's enduring success.
For a deeper dive into the specifics of our compensation strategy and executive pay, we invite our members to review the 2023 Compensation Discussion and Analysis (CD&A).
Together, we'll continue to move forward, grounded in our shared values and collective determination to thrive, no matter the challenges ahead.
Best,
Beth Newlands Campbell
REI Board Chair
About Executive Compensation at REI
REI's executive compensation is overseen by the board of directors through the oversight of the Compensation Committee, guided by their charter and REI’s executive compensation philosophy. The Compensation Committee engages an independent compensation consultant to challenge, confirm and advise the board on executive compensation issues.
REI’s board of directors has annually published information on the total compensation of REI's President and CEO, Executive Vice Presidents, and other Named Executive Officers. In fiscal year 2022, the disclosure includes the following Named Executive Officers (NEOs): President & CEO, CFO, and the three most highly compensated executive officers. In addition, a compensation discussion and analysis (CD&A) is included to provide a better understanding of the philosophy and programs governing executive compensation at REI. The summary compensation table and narrative provides compensation data for the years 2020, 2021 and 2022. This information is updated annually.
Board of Directors Compensation at REI
The Compensation Committee of the board is charged with developing the recommendation for director compensation bi-annually. The Compensation Committee’s independent consultant provides market information on pay levels and prevailing practices among companies of similar size, scope and complexity, including companies in the retail industry and the outdoor industry.
Director compensation should be adequate to attract highly-qualified individuals who are co-op members and who possess the business acumen, leadership experience and character attributes to successfully guide the co-op for the long term. At the same time, director compensation needs to reflect the special nature of the co-op and REI’s enduring values, which include service to members and the co-op. In that context, the board's compensation is set below the median for comparable companies. Currently, REI’s total board compensation is below the 25th percentile for comparable companies.
The chair of the board, the vice chair of the board, and the chairs of our three standing committees (Audit & Finance, Compensation, and Nominating & Governance) receive additional compensation in recognition of the additional work and responsibilities associated with those leadership roles. Below is a chart showing current board compensation.
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Effective as of January 1, 2022 |
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Directors |
$125,000 per year |
|
Board Chair |
Additional $50,000 per year |
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Board Vice Chair |
Additional $25,000 per year |
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Committee Chair |
Additional $25,000 per year |
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Travel Expenses |
Reimbursed for reasonable expenses |