Sally Beauty Holdings, Inc DEF 14A, filed Dec 11, 2024

Sally Beauty Holdings, Inc. (SBH)

DEF 14A 2024-12-11 For: 2025-01-24

View Original

Added on June 12, 2026

About this DEF 14A

Sally Beauty Holdings, Inc filed this DEF 14A on December 11, 2024.

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


☐		Preliminary Proxy Statement

☐		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

☒		Definitive Proxy Statement

☐		Definitive Additional Materials

☐		Soliciting Material under §240.14a-12



☒		No fee required.

☐		Fee paid previously with preliminary materials.

☐		Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.


4	2024 PROXY STATEMENT SUMMARY

12	PROPOSAL 1 – ELECTION OF DIRECTORS

17	BOARD NOMINEE QUALIFICATIONS AND EXPERIENCE

19	CORPORATE GOVERNANCE, THE BOARD AND ITS COMMITTEES

19	Board Purpose and Structure

19	Corporate Governance Philosophy

20	Board Diversity

21	Sustainability

	21	Purpose and Values

	21	Governance

	22	Ethics Code

	22	Human Capital

	26	Culture and Belonging

	28	Philanthropy and Community Impact

	29	Environmental Sustainability

	30	Responsible Sourcing and Supply Chain

	31	Data Protection and Cybersecurity

31	Director Independence

32	Nomination of Directors

32	Stockholder Recommendations or Nominations for Director Candidates

33	Director Qualifications

33	Annual Election of Directors

33	Mandatory Retirement of Directors

33	Directors Who Change Their Present Job Responsibilities

33	Board Self Evaluations

34	Board Meetings and Attendance

34	Board Leadership Structure

34	Communications with the Board

35	Board’s Role in the Risk Management Process



35		Committees of the Board of Directors

37		Compensation Committee Interlocks and Insider Participation

38		Compensation Risk Assessment

38		Related Party Transactions

40		Directors’ Compensation and Benefits

40		Narrative Discussion of Director Compensation Table

41		Director Indemnification Agreements

42		No Material Proceedings

43		BENEFICIAL OWNERSHIP OF THE COMPANY’S STOCK

44		Securities Owned by Directors and Executive Officers

45		Persons Owning More than Five-percent

47		PROPOSAL 2 – ADVISORY VOTE ON EXECUTIVE COMPENSATION

48		EXECUTIVE OFFICERS

50		EXECUTIVE COMPENSATION

50		Compensation Discussion and Analysis

74		Compensation and Talent Committee Report

75		Compensation Tables

86		CEO Pay Ratio

87		Pay Versus Performance

90		PROPOSAL 3 – APPROVAL OF THE SALLY BEAUTY HOLDINGS, INC. 2025 OMNIBUS INCENTIVE PLAN

100		PROPOSAL 4 – RATIFICATION OF SELECTION OF AUDITORS

101		Report of the Audit Committee

102		PROPOSAL 5 – STOCKHOLDER PROPOSAL

104		DEADLINES AND PROCEDURES FOR NOMINATIONS AND STOCKHOLDER PROPOSALS

105		QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

111		OTHER MATTERS

A-1		APPENDIX 1 – NON-GAAP FINANCIAL NUMBERS RECONCILIATION

A-2		APPENDIX 2 – SALLY BEAUTY HOLDINGS, INC. 2025 OMNIBUS INCENTIVE PLAN



TIME AND DATE		9:00 a.m. Central Time, January 24, 2025

PLACE		This year’s annual meeting will be virtual and will be held solely online via live webcast. You will be able to attend and participate in the annual meeting online, vote your shares electronically and submit your questions prior to and during the meeting by visiting meetnow.global/M4WVJMF and following the instructions on your Notice, proxy card, or on the instructions that accompanied your proxy materials. Please refer to the Q&A section beginning on page 105 for instructions on how to attend the virtual meeting.

RECORD DATE		November 25, 2024

VOTING		Stockholders as of the Record Date are entitled to notice of, and to vote at, the annual meeting. Each share of common stock is entitled to one vote for each director nominee and one vote for each of the other proposals to be voted on.


PROPOSAL	BOARD VOTE RECOMMENDATION	PAGE REFERENCE (for more detail)

Proposal 1: Elect nine directors	FOR each Nominee	12

Proposal 2: Approve, on an advisory basis, compensation of our named executive officers (NEOs)	FOR	47

Proposal 3: Approve the Sally Beauty Holdings, Inc. 2025 Omnibus Incentive Plan	FOR	90

Proposal 4: Ratify KPMG LLP as our independent registered public accounting firm for fiscal 2025	FOR	100

Proposal 5: Vote on a stockholder proposal regarding director election resignation guideline	AGAINST	102


Enhancing Our Customer Centricity		✓ Build our BSG ecosystem to leverage digital tools to drive full service and expand B2B2C (a business model where one company sells to another that resells to consumers) business leveraging ‘Cosmo Prof Direct’ learnings • BSG sales force identified over 10,000 sales prospects and made over 2,350 conversions, far exceeding our goal, and is working on launching a new ordering platform • Defined a product roadmap and support model for ‘Cosmo Prof Direct’ and launched user experience enhancements ✓ Deliver inspiration at Sally through education and expertise • Expanded ‘Licensed Colorist on Demand’ to a total of 61 Licensed Colorists, serving 162,000 customers year-to-date and generating $5.1M total revenue • Continued learning through ‘Studio by Sally’ by measuring the performance of 6 pilot stores and refined our operating model based on these learnings • Developed and executed a Sally brand refresh test (marketing and store layout) ✓ Advance customer relationship management (“CRM”) activities to drive long-term growth • Delivered year-over-year CRM sales increases of 33.4% for BSG and 14.2% for Sally through app engagement, well exceeding our initial expectations • Delivered customer algorithm reporting for the organization ✓ Grow e-commerce / marketplace DoorDash and Instacart) sales • Grew BSG e-commerce sales by $12M and Sally marketplaces by $13.1M, well exceeding our goal • Implemented an operational improvement roadmap ✓ Expand Mexico store base • Successfully opened 12 new locations in Mexico

Growing High Margin Own Brands and Amplifying Innovation		✓ Expand BSG distribution footprint and launch new brands and new products to drive growth • Secured Amika store distribution including AMLP franchise locations in all remaining states, Morroccanoil in additional states and Briogeo product line in 500 stores • Continued momentum of FY23 expansions to achieve $49.9M growth, well exceeding our goal, in Amika, Color Wow, Danger Jones and Morroccanoil • Completed acquisition of Exclusive Beauty Supplies of Florida ✓ Grow our own brands (“OB”) and launch new branded color and care innovation in Sally • Grew OB penetration in the U.S. and Canada to 36.6% and 31.7% in Europe • Expanded Bondbar with new SKUs across color and care, leading to strong performance • Launched clean initiative with Inspired by Nature ✓ Continue the Happy Beauty pilot, innovating the concept as we learn • Approved 10 additional stores to be opened by late 2024


Increasing Operational Efficiency and Optimizing Our Capabilities		✓ Create ‘Fuel for Growth’ by thinking differently about how we operate • Delivered $24M+ in savings from adjustments to our transportation, shipping, etc. • On track for a run rate of at least $72M in savings during FY25, to be refined through the long-range planning process ✓ Advance our end-to-end supply chain capabilities to benefit customers and associates while also increasing flexibility for the future • Maintained 90%+ in-stocks for both Sally and BSG through the year, exceeding our goal • Maintained weeks of supply <26 for Sally and <22 for BSG
Progress on Sustainability		✓ Advance the following areas related to Sustainability • Culture & Belonging • Launched 2 additional Employee Resource Groups (Veterans and Disabilities / Neurodivergence) • Maintained our gender parity in leadership roles • Improved our BIPOC (black, indigenous, and people of color) representation in leadership roles • Philanthropy & Community Engagement • Launched our charitable foundation (SBH Inspires) externally and enabled payroll deductions for associates • Environmental Sustainability & Responsible Sourcing • On track for all new production runs, starting January 2025, fitting the regulated criteria will meet or exceed our goal of 25% PCR in componentry • Surpassed our 2% reduction goal in Co2 emissions for OB • Achieved a +25% year-over-year decline in electricity usage in stores with EMS (energy management system) / LED (light-emitting diode) investments


Our current Board of Directors consists of nine individuals, eight of whom qualify as independent of us under the rules of the NYSE. Eight of our current nine directors are standing for re-election. Our Certificate of Incorporation and our By-Laws provide for the annual election of each of our directors for one-year terms. Following the recommendations of our Nominating, Governance and Corporate Responsibility Committee, our Board of Directors has nominated the following nine individuals for election to our Board of Directors: Ms. Paulonis, Ms. Bishop, Mr. Boyer, Ms. Ferguson, Ms. Flur, Mr. Head, Mr. Molloy, Ms. Nealy Cox and Debra Perelman. Accordingly, this Proposal 1 seeks the election of these nine individuals to be directors, each with a one-year term that will expire at the annual meeting of stockholders in 2026. Due to a job change Mr. Conroy is not standing for re-election, but will serve out his current term. Unless otherwise indicated, all proxies that authorize the proxy holders to vote for the election of directors will be voted “FOR” the election of the nominees listed below. If a nominee becomes unavailable for election as a result of unforeseen circumstances, it is the intention of the proxy holders to vote for the election of such substitute nominee, if any, as the Board of Directors may propose. As of the date of this Proxy Statement, each of the nominees has consented to serve and the Board is not aware of any circumstances that would cause a nominee to be unable to serve as a director. Except for Debra Perelman who is standing for election to our Board for the first time, each director nominee is a current director with a term expiring at this annual meeting. Each director nominee has furnished to us the following information with respect to their principal occupation or employment and principal directorships:
		Denise A. Paulonis
		Director, President and Chief Executive Officer, age 52 Ms. Paulonis has served on our Board of Directors since May 2018 and is the Company’s President and Chief Executive Officer, a role she has held since October 2021. Prior to being appointed to her current role, Ms. Paulonis served as Chief Financial Officer of Sprouts Farmers Market, Inc. Prior to joining Sprouts in February 2020, Ms. Paulonis was the Executive Vice President and Chief Financial Officer of The Michaels Companies, a position she held from August 2016 to January 2020. Ms. Paulonis joined Michaels in September 2014 and served as its Senior Vice President, Finance and Treasurer from November 2015 to August 2016 and as its Vice President, Corporate Finance, Investor Relations and Treasury from September 2014 to November 2015. Prior to joining Michaels, Ms. Paulonis held various senior level positions with PepsiCo and McKinsey & Company, after starting her career at Procter & Gamble. She holds an M.B.A. from The Wharton School at the University of Pennsylvania and a Bachelors of Science in Finance and Economics from Miami University. Ms. Paulonis has served on the Conagra Brands Board of Directors since August 2022. We believe that Ms. Paulonis’ executive, management and finance experience well qualifies her to serve on our Board.


Rachel R. Bishop, Ph.D.
Director, age 51 Ms. Bishop was elected to our Board of Directors in July 2022. Ms. Bishop brings more than 20 years of experience in consumer goods, manufacturing and retail. She currently serves as President, Hefty Tableware at Reynolds Consumer Products (NASDAQ: REYN), where she oversees a $1Bn portfolio of consumer products and leads Reynolds’ ESG programming. She was a member of the management team that led Reynolds through a successful IPO in January 2020. Prior to joining Reynolds in 2019, she held senior positions with Treehouse Foods, Inc., (NYSE: THS) from 2014 through 2018, including President, Snacks Division and SVP & Chief Strategy Officer. Her previous roles include GVP Retail Development and Global Merchandising at The Walgreen Co., now Walgreens Boots Alliance Inc., and started her business career with eight years at McKinsey & Company. Ms. Bishop holds a Ph.D. in Materials Science and Engineering from Northwestern University, and a Bachelor of Science in Materials Science and Engineering, and in Geophysics from Brown University. We believe that Ms. Bishop’s strong executive background in consumer products, retail, ESG, M&A and strategic planning well qualifies her to serve on our Board.

Jeffrey Boyer
Director, age 66 Mr. Boyer was elected to our Board of Directors in July 2022. Mr. Boyer is an experienced finance and operations executive and retail industry veteran. He currently serves as Chief Operating Officer of Fossil Group (NASDAQ: FOSL) after having held the roles of Chief Financial Officer and Treasurer from October 2017 to April 2020. Mr. Boyer also served as a director on Fossil Group’s Board from 2007 to 2017, including serving as Chair and a member of its Audit Committee. Prior to joining Fossil Group, Mr. Boyer held Chief Financial Officer roles at Pier 1 Imports, Tuesday Morning, and Michaels Stores, Inc., among others. He began his career at PricewaterhouseCoopers. Mr. Boyer holds a Bachelor of Science in Finance from the University of Illinois. We believe that Mr. Boyer’s extensive finance and operations experience, and his executive leadership in retail, well qualifies him to serve on our Board.


		Diana S. Ferguson
		Director, age 61 Ms. Ferguson was elected to our Board of Directors in January 2019 and has served as Chair of the Board since January 2023. Ms. Ferguson has served as a principal of Scarlett Investments, LLC, a private investment firm, since 2013. She formerly served as Chief Financial Officer to Cleveland Avenue, LLC, a venture capital investment firm, from September 2015 to December 2020. She also served as Chief Financial Officer of the Chicago Board of Education from February 2010 to May 2011 and as Senior Vice President and Chief Financial Officer of The Folgers Coffee Company from April 2008 to November 2008 when Folgers was sold. Prior to joining Folgers, she was Executive Vice President and Chief Financial Officer of Merisant Worldwide, Inc. Ms. Ferguson also served as the Chief Financial Officer of Sara Lee Foodservice, a division of Sara Lee Corporation, and in a number of leadership positions at Sara Lee Corporation, including Senior Vice President of Strategy and Corporate Development, as well as Treasurer. She currently is a director of Mattel, Inc., where she serves on the Audit Committee and is also a director of Gartner, Inc., where she serves on the Audit Committee. We believe that Ms. Ferguson’s executive, management and finance experience well qualifies her to serve on our Board.

		Dorlisa K. Flur
		Director, age 59 Ms. Flur has served on our Board of Directors since 2020. Ms. Flur is a corporate director and strategic advisor to companies in the retail industry. She was recently appointed as a director of SpartanNash and serves on its Audit and Compensation Committees. She also serves as a director of United States Cold Storage, a wholly-owned subsidiary of John Swire & Sons, Ltd., and chairs its Strategy Committee. She is on the Board of Trustees for BlueCross BlueShield of NC and serves on its Audit and Governance & Nominating Committees. She previously served on the board of Hibbet, Inc. from 2019 to 2024. Ms. Flur has served as strategic advisor to Southeastern Grocers, Inc. since August 2018 and was previously its Chief Strategy and Transformation Officer from August 2016 to July 2018. Ms. Flur previously served as Executive Vice President, Omnichannel for Belk, Inc. from 2013 to 2016, where she integrated stores and eCommerce and also led supply chain. Prior to that she was Vice Chair, Strategy and Chief Administrative Officer at Family Dollar Stores, Inc. where she held a series of top operating roles including real estate, marketing and merchandising as the company scaled from 5000 to 7500 stores. Ms. Flur is a former partner of McKinsey & Company, Inc. and co-led its Charlotte, North Carolina office. She is recognized by the National Association of Corporate Directors as NACD Directorship Certified^™ and also served as one of 24 Commissioners on its 2024 Blue Ribbon Commission on technology leadership in the boardroom. We believe that Ms. Flur’s governance, executive and management experience, including extensive work driving transformations within mass market retail, well qualifies her to serve on our Board.


James M. Head
Director, age 59 Mr. Head was elected to our Board of Directors in January 2021. Mr. Head serves as Strategic Advisor at MultiPlan Corporation where he was the Executive Vice President and Chief Financial Officer from November, 2021 to August, 2024. Prior to his roles at MultiPlan, Mr. Head served as a Partner at BDT & Company, LLC from 2016 until June 2021 and, prior to that, worked at Morgan Stanley for 22 years where he held various executive leadership roles, including Co-Head of the Mergers, Acquisitions and Restructuring Group, Americas from 2013 to 2016; Co-Head of the Financial Institutions M&A Group, Americas from 2008 to 2013; and Managing Director from 2003 to 2016. We believe that Mr. Head’s financial, strategic, and transactional experience – including over 30 years as an investment banker involved in complex financial and strategic transactions – well qualifies him to serve on our Board.

Lawrence “Chip” P. Molloy
Director, age 63 Mr. Molloy was elected to our Board of Directors in July 2022. Mr. Molloy brings finance, private equity and board experience to Sally Beauty. He retired from Sprouts Farmers Market (NASDAQ: SFM) in January 2024 where he was Chief Financial Officer from September 2021 through 2023, Chair of the Audit and Compensation Committees of Sprouts’ board from 2012 to 2021 and Interim Chief Financial Officer from June 2019 to February 2020. Previously, Mr. Molloy served as a director and Chair of Torrid’s Audit Committee from 2018 to 2021 and Interim Chief Executive Officer of Torrid from January 2018 through August 2018. His previous roles include serving as Senior Advisor at Roark Capital Group, a private equity firm focused predominately on the restaurant and retail sectors, as well as holding Chief Financial Officer roles at Under Armour and PetSmart. Prior to his business career, Chip served as a U.S. Navy fighter pilot for 10 years, later retiring from the Naval Reserve with the rank of Commander. Mr. Molloy holds an MBA from the University of Virginia and a Bachelor of Science in Computer Science from the US Naval Academy. We believe that Mr. Molloy’s extensive executive and finance experience well qualifies him to serve on our Board.


		Erin Nealy Cox
		Director, age 54 Ms. Nealy Cox has served on our Board of Directors since July 2021 and is a partner in the Government, Regulatory and Internal Investigations Group at Kirkland & Ellis. Ms. Nealy Cox is a trial attorney, cybersecurity expert and former federal prosecutor who served as an independent director on our Board from August 2016 to November 2017. She resigned from the Board when she was nominated and confirmed as the U.S. Attorney for the Northern District of Texas. Ms. Nealy Cox served in this role until January 2021. Prior to her appointment as the U.S. Attorney, she served briefly in 2017 as a senior advisor at McKinsey & Co. in the consulting firm’s cybersecurity and risk practice. From 2008 to 2016 Ms. Nealy Cox was executive managing director at Stroz Friedberg, a cybersecurity and investigations consulting firm. She began her career serving as an Assistant U.S. Attorney for ten years in the Northern District of Texas. We believe that Ms. Nealy Cox’s executive management, cybersecurity and legal experience well qualifies her to serve on our Board.

		Debra Perelman
		Director Nominee, age 51 Ms. Perelman is a successful advisor and investor who partners with investors and management teams to scale CPG brands. She is currently Executive Chair of Stripes Beauty, an L Catterton backed business as well as advisor to several beauty and wellness businesses. Ms. Perelman served as President and Chief Executive Officer of Revlon, Inc. from May 2018 to August 2023 and as Chief Operating Officer from January 2018 to May 2018. Prior to joining Revlon, Ms. Perelman served as Executive Vice President, Strategy and New Business Development from January 2012 until January 2018 at MacAndrews & Forbes Incorporated where she focused on new technology investment opportunities, strategy and portfolio management. Ms. Perelman is currently a director of AMC Networks, where she serves on the Audit Committee. Ms. Perelman sits on the board of Sakara, a nutrition based meal delivery business. She also sits on Mastercard’s Innovate Steering Committee. Ms. Perelman is co-founder and board member of the Child Mind Institute, an independent, national nonprofit dedicated to transforming the lives of children and families struggling with mental health and learning disorders.


Gender Identity

	Female	Male	Non-Binary	Did Not Disclose Gender

Director Nominees (9)	6	3	—	—
Demographic Background

Asian, South Asian, Southeast Asian or East Asian	—	—	—	—

Native Hawaiian or Pacific Islander	—	—	—	—

Middle Eastern	—	—	—	—

Black or African American	1	—	—	—

Hispanic or Latino	—	—	—	—

Native American or Alaskan Native	—	—	—	—

White	5	3	—	—

Multiracial or Biracial	—	—	—	—

LGBTQ+	1

Did Not Disclose Demographic Background	—



Name	Fees Earned or Paid in Cash ($)		Stock Awards ($)(4)		Total ($)

Rachel R. Bishop, Ph.D.		105,000		187,496		292,496

Jeffrey Boyer		105,000		187,496		292,496

James Conroy		71,827		149,997		221,824

Diana S. Ferguson		280,000		187,496		467,496

Dorlisa K. Flur		105,000		187,496		292,496

James M. Head		105,000		187,496		292,496

Linda Heasley (2)		33,462		187,496		220,958

Lawrence “Chip” P. Molloy		135,000		187,496		322,496

Erin Nealy Cox		125,000		187,496		312,496

Denise A. Paulonis (3)		—		—		—


Diversity		Independence

Age Mix		Tenure



Board Role	Cash Retainer Amount

Non-Executive Chair		$150,000

Audit Committee Chair		$ 30,000

Compensation and Talent Committee Chair		$ 25,000

Nominating, Governance & Corporate Responsibility Committee Chair		$ 20,000



Name of Beneficial Owner	Amount and Nature of Beneficial Ownership of Common Stock (1)			Percent of Class (2)

Marlo M. Cormier		132,507	(3)		*

Mary Beth Edwards		90,046	(4)		*

John H. Goss		160,474	(5)		*

Kim McIntosh		16,685	(6)		*

Denise A. Paulonis		487,708	(7)		*

Scott C. Sherman		191,504	(8)		*

Mark G. Spinks		331,612	(9)		*

Rachel R. Bishop		12,458	(10)		*

Jeffrey Boyer		12,458	(11)		*

James Conroy		—	(12)		*

Diana S. Ferguson		49,724	(13)		*

Dorlisa K. Flur		42,537	(14)		*

James M. Head		26,801	(15)		*

Lawrence “Chip” P. Molloy		12,458	(16)		*

Erin Nealy Cox		25,967	(17)		*

Debra Perelman		—	(18)		*

All directors and executive officers as a group (16 persons)		1,592,939			1.56	%



Name of Beneficial Owner	Amount and Nature of Beneficial Ownership of Common Stock		Percent of Class

BlackRock, Inc. 55 East 52^nd Street, New York, NY 10055		16,292,468 (1)		15.9%

FMR LLC 245 Summer Street, Boston, MA 02210		15,396,347 (2)		15.02%

The Vanguard Group 100 Vanguard Blvd., Malvern, PA 19355		12,149,493 (3)		11.86%


50	Compensation Discussion and Analysis

51		Executive Summary

56		Compensation Philosophy and Objectives

57		FY24 Executive Compensation Program

59			Tying Compensation to Performance

60			Base Salary

61			Annual Incentive

64			Long-Term Incentives

69			Other Compensation

69			Change-in-Control Severance Protection

69			Additional Compensation Policies

71		Compensation Decision-Making Process

71			Role of Compensation and Talent Committee

71			Role of Independent Compensation Consultant

71			Role of Management

72			Market Data/Benchmarking

72			Total Compensation Review

73			Consideration of Stockholder Vote on Executive Compensation

73		Management of Compensation-Related Risk

74	Compensation and Talent Committee Report

75	Compensation Tables

75		Summary Compensation Table

77		Grants of Plan-Based Awards for FY24

79		Outstanding Equity Awards at 2024 Fiscal Year-End

83		Option Exercises and Stock Vested in FY24

83		Potential Payments Upon Termination or Change in Control

86	CEO Pay Ratio

87	Pay Versus Performance


NEOs

		Denise A. Paulonis President and Chief Executive Officer

		Marlo M. Cormier Senior Vice President, Chief Financial Officer

		John H. Goss President, Sally Beauty Supply

		Mark G. Spinks President, Beauty Systems Group

		Scott C. Sherman Senior Vice President, Chief Legal and Human Resources Officer (1)


Overview	The retail and beauty industries have continued to be affected by a variety of factors driving change and uncertainty, including lingering impacts from the COVID-19 pandemic, economic instability, and inflation. Our team continues to work both smart and hard, overcoming supply chain issues, quickly changing priorities to account for shifting customer behaviors, cutting costs, updating our systems, enhancing personalization, building up our e-commerce, and looking for and implementing new and innovative ways to get and keep customers shopping online, in our stores and with our full service direct sales team. For FY24, we continued these efforts with enhancing our customer centricity, growing our own brands and amplifying innovation, increasing efficiency of our operations and optimizing our capabilities, and making meaningful, measurable progress on sustainability. We viewed FY24 as a year of continuation on key initiatives intended to drive long-term growth and enhance profitability during a time of uncertainty and adopted changes to the FY24 incentive compensation program to reflect this.
FY24 Company Strategies	Enhance Our Customer Centricity	✓ Build our BSG ecosystem to leverage digital tools to drive full service and expand B2B2C (a business model where one company sells to another that resells to consumers) business leveraging ‘Cosmo Prof Direct’ learnings • BSG sales force identified over 10,000 sales prospects and made over 2,350 conversions, far exceeding our goal, and is working on launching a new ordering platform • Defined a product roadmap and support model for ‘Cosmo Prof Direct’ and launched user experience enhancements ✓ Deliver inspiration at Sally through education and expertise • Expanded ‘Licensed Colorist on Demand’ to a total of 61 Licensed Colorists, serving 162,000 customers year-to-date and generating $5.1M total revenue • Continued learning through ‘Studio by Sally’ by measuring the performance of 6 pilot stores and refined our operating model based on these learnings • Developed and executed a Sally brand refresh test (marketing and store layout) ✓ Advance customer relationship management (“CRM”) activities to drive long-term growth • Delivered year-over-year CRM sales increases of 33.4% for BSG and 14.2% for Sally through app engagement, well exceeding our initial expectations • Delivered customer algorithm reporting for the organization ✓ Grow e-commerce / marketplace (DoorDash and Instacart) sales • Grew BSG e-commerce sales by $12M and Sally marketplaces by $13.1M, well exceeding our goal • Implemented an operational improvement roadmap ✓ Expand Mexico store base • Successfully opened 12 new locations in Mexico
FY24 Company Strategies	Grow Own Brands and Amplify Innovation	✓ Expand BSG distribution footprint and launch new brands and new products to drive growth • Secured Amika store distribution including AMLP franchise locations in all remaining states, Morroccanoil in additional states and Briogeo product line in 500 stores • Continued momentum of FY23 expansions to achieve $49.9M growth, well exceeding our goal, in Amika, Color Wow, Danger Jones and Morroccanoil • Completed acquisition of Exclusive Beauty Supplies of Florida ✓ Grow our own brands (“OB”) and launch new branded color and care innovation in Sally • Grew OB penetration in the U.S. and Canada to 36.6% and 31.7% in Europe • Expanded Bondbar with new SKUs across color and care, leading to strong performance • Launched clean initiative with Inspired by Nature ✓ Continue the Happy Beauty pilot, innovating the concept as we learn • Approved 10 additional stores to be opened by late 2024


FY25 Changes	Compensation Program Changes As we look at plan design for FY25, we are focused on additional improvements to our key initiatives aimed at driving long-term future growth and enhanced efficiencies and profitability. We, again, also strived to balance retention, incentivizing associates on key growth and efficiency initiatives and growing our value for shareholders. As a result, we made minor adjustments to our payout scales and continue to set challenging, yet achievable goals aligned with our annual plan. For AIP, we will keep the same metrics and weightings (60% Adjusted Operating Income, 20% Comparable Sales, and 20% Strategic Initiatives), with Comparable Sales continuing to be based on two, six-month performance periods versus a one-year performance period, with any payout for this metric occurring after the end of FY25. LTI awards will continue to be in the form of 50% PSUs and 50% RSUs, with the weighting of the PSU performance metrics continuing to be 60% AOIM over three, one-year performance periods and 40% rTSR over a three-year performance.
Corporate Governance	WHAT WE DO	WHAT WE DO NOT DO
Corporate Governance	✓ Closely align pay with performance ✓ Retain an independent compensation consultant ✓ Conduct an annual review of our peer group composition ✓ Conduct an annual review of our executive officer performance and compensation ✓ Conduct an annual review of our incentive compensation design ✓ Limit incentive compensation with a maximum payout/cap ✓ Maintain a comprehensive clawback policy ✓ Require a minimum vesting period for equity ✓ Maintain equity ownership policy and retention requirements	✘ No employment agreements for executive officers ✘ No discounting or repricing of stock options without stockholder approval ✘ No pledging or hedging transactions with respect to Company stock ✘ No “single trigger” change-in-control severance benefits ✘ No “single trigger” change-in-control equity acceleration for assumed awards ✘ No 280G excise tax “gross-ups” ✘ No excessive executive benefits or perquisites ✘ No tax “gross-ups” for executive benefits or perquisites (with certain limited exceptions in the case of new-hire or health-related benefits) ✘ No compensation programs that encourage excessive risk taking


Pay for Performance		✓ Link incentive compensation to performance through objectives that align with shareholder and other stakeholder interests and drive annual and long-term results. ✓ The higher the level in the organization, the greater the link to performance (more at-risk; making leaders more accountable).
Alignment with Shareholders		✓ Align executive and long-term shareholder interests by linking pay to achievement of performance objectives viewed as drivers of sustained value creation, delivering a significant portion of pay in equity compensation, and requiring executive officers to accumulate and hold a meaningful amount of SBH stock.
Drive Annual and Long-Term Results		✓ Ensure performance objectives are understandable and drive delivery of financial results and successful execution of strategic initiatives. ✓ Ensure performance goals align to our annual and long-term strategies and financial operating plans.
Pay Competitively		✓ Ensure pay remains competitive with peer companies in order to attract, motivate and retain associates. ✓ Target the 50^th percentile of market for all compensation components, adjusted by various factors such as individual performance, responsibilities, experience, internal equity, and expected future contributions.
Mitigate Undue Risk		✓ Use a mix of annual and long-term incentives and financial and strategic metrics. ✓ Use caps for annual incentives and use vesting periods, caps, and restrictive covenants for long-term incentives. ✓ Maintain clawback and equity ownership policies. ✓ Review and approval of annual and long-term incentive performance goals, results and payouts by the Committee.


Component	Form of Compensation	Purpose	Performance Criteria

Base Salary	Cash	Providing a competitive level of fixed compensation that attracts and retains skilled management, recognizing their respective roles, responsibilities, and experience.	Reviewed annually for increases.

AIP	Cash	Communicating and driving achievement of financial and strategic annual objectives that are important to our sustained success and stock value.	Earned based on achievement of AOI, comparable sales, and strategic initiative goals, with potential adjustment based on individual performance.

LTI 2019 Omnibus Incentive Plan	PSUs	Creating a strong financial incentive for meeting or exceeding long-term financial goals, rewarding performance, recognizing promotions, encouraging an equity stake in the Company, and aligning interests with those of our stockholders.	PSUs are eligible to vest based on achievement of goals related to AOIM over three, one-year periods and rTSR over a three-year period. In addition, realized value of PSUs at vesting is tied to SBH’s stock price.
LTI 2019 Omnibus Incentive Plan	RSUs	Encouraging retention through multi-year vesting requirements.	RSUs vest ratably over a three-year period with continued employment providing a retention incentive. Realized value of RSUs at vesting is tied to SBH’s stock price.


Component		Form of Compensation	Purpose

Other Compensation	Health and Welfare Benefits	Eligibility to receive available health and other welfare benefits paid for, in whole or in part, by the Company, including broad-based medical, dental, life and disability insurance.	Providing a competitive, broad-based employee benefits structure and promoting the good health of our executive officers.
	Retirement Plan	Eligibility to participate in, and receive Company contributions to, our 401(k) plan (available to all employees).	Providing competitive retirement-planning benefits to attract and retain skilled management.
	Executive Physical	Reimbursement for an annual physical exam.	Promoting the good health of our executive officers.
	New Hire Benefits	Limited new hire benefits (including Company-paid COBRA and relocation expenses).	Attracting new talent by providing a smooth transition to our Company.

Change-in-Control Severance Protection		Eligibility to receive cash severance (1.99 times base salary and a 5-year average AIP award payout) and post-termination health and welfare benefits (24 months) in connection with involuntary termination within two years after a change in control.	Providing a competitive compensation package for attraction and retention purposes before and after a change in control, as well as ensuring continuity of management in the event of any actual or threatened change in control of our Company.


Name	Start of FY24 Base Salary		% Increase	End of FY24 Base Salary

Denise A. Paulonis	$	1,140,000	5.3%	$	1,200,000

Marlo M. Cormier	$	625,000	7.2%	$	670,000

John H. Goss	$	558,000	4.8%	$	585,000

Mark G. Spinks	$	491,500	5.8%	$	520,000

Scott C. Sherman (1)	$	432,500	17.9%	$	510,000


Name	FY23 Target Award Percentage (1)	FY24 Target Award Percentage (1)

Denise A. Paulonis (2)	150%	160%

Marlo M. Cormier	75%	75%

John H. Goss	75%	75%

Mark G. Spinks	75%	75%

Scott C. Sherman (3)	65%	68.3%


Name	FY24 Base Salary (1)		Target Award Percentage	Target Award (1)

Denise A. Paulonis	$	1,183,847	160%	$	1,894,156

Marlo M. Cormier	$	657,885	75%	$	493,414

John H. Goss	$	577,731	75%	$	433,299

Mark G. Spinks	$	512,327	75%	$	384,246

Scott C. Sherman (2)	$	483,643	68.3%	$	330,329



Payout Scale (1)	AOI (Millions)	Performance Achieved	Payout %	Weighted Payout %

Maximum	≥ $385.8	≥ 108.3%	200%	120%

Target	$356.2	100%	100%	60%

Threshold	$302.8	85%	50%	30%

Below Threshold	< $302.8	< 85%	0%	0%



Payout Scale (1)	H1 Comparable Sales	Performance Achieved	Payout %	Weighted Payout %

Maximum	≥ 2.0%	≥ 101.5%	150%	15%

Target	0.5%	100%	100%	10%

Threshold	-2.0%	97.5%	25%	2.5%

Below Threshold	< -2.0%	< 97.5%	0%	0%



Payout Scale (1)	H2 Comparable Sales	Performance Achieved	Payout %	Weighted Payout %

Maximum	≥ 3.0%	≥ 101.5%	150%	15%

Target	1.5%	100%	100%	10%

Threshold	-1.0%	97.5%	25%	2.5%

Below Threshold	< -1.0%	< 97.5%	0%	0%



Performance Achieved	Payout %	Weighted Payout %

Exceeds	101-150%	21-30%

Target	100%	20%

Not Fully Achieved	0-99%	0-19%



Name	Target Award (1)		Performance Objectives Payout %	Award Payout (1)

Denise A. Paulonis	$	1,894,156	82.6%	$	1,564,573

Marlo M. Cormier	$	493,414	82.6%	$	407,560

John H. Goss	$	433,299	82.6%	$	357,905

Mark G. Spinks	$	384,246	82.6%	$	317,388

Scott C. Sherman	$	330,329	82.6%	$	272,852



Name	FY24 Equity Award Grant Value

Denise A. Paulonis		$5,000,000

Marlo M. Cormier		$1,000,000

John H. Goss		$ 900,000

Mark G. Spinks		$ 900,000

Scott C. Sherman		$ 575,000


TSR =				Ending Stock Price – Beginning Stock Price + Reinvested Dividends

				Beginning Stock Price