executive base salaries near the median of the applicable market data; however, individual salaries may fall above or below the median, generally within the 25th to 75th percentile range, based on the executive’s responsibilities, experience, tenure, performance, and overall contribution to the Company.
In addition to market considerations, the Compensation Committee evaluates each executive officer based on a qualitative assessment of factors including increased responsibilities, performance of areas under the executive’s control, leadership, execution of strategic initiatives, and decision-making abilities. The Compensation Committee does not utilize predetermined performance targets in establishing base salary adjustments but instead exercises its judgment based on the totality of the circumstances. Based on these considerations, including the Company’s performance during fiscal 2026, the Compensation Committee approved salary increases of 3% for each of the named executive officers for fiscal 2027.
Annual Cash Bonus
The Company’s executive compensation program includes an annual cash bonus designed to reward executive officers based on the Company’s overall performance and individual contributions during the fiscal year. The actual bonus amounts earned by the named executive officers are reflected in the Summary Compensation Table for the fiscal year in which they were earned, although payment is made in the subsequent fiscal year.
In determining annual bonus awards, the Compensation Committee considers both Company performance and a qualitative assessment of individual performance. Factors considered include increased responsibilities, performance of areas under the executive’s control, leadership, execution of strategic initiatives, and decision-making abilities. The Compensation Committee does not utilize predetermined performance targets in determining bonus amounts but instead exercises its judgment after considering the totality of these factors.
In fiscal 2026, the Compensation Committee awarded annual cash bonuses that, in the aggregate, were 5% lower than those awarded in fiscal 2025. In making these determinations, the Compensation Committee considered, among other factors, the Company’s 7% decrease in net income, excluding nonrecurring items. Annual bonus awards are not established as a fixed percentage of base salary; however, the bonuses awarded to the named executive officers for fiscal 2026 ranged from approximately 44% to 74% of base salary. The Compensation Committee’s objective is to maintain total annual cash compensation, consisting of base salary and annual cash bonus opportunities, at approximately the median of the applicable market data. Individual compensation levels may vary above or below the median based on each executive’s role, responsibilities, experience, tenure, performance, and overall contribution to the Company, and generally fall within the 25th to 75th percentile range of the applicable market data.
Equity
Equity awards are determined using a target grant-date value approach. In determining target award values, the Compensation Committee considers an executive’s position within the organization, responsibilities, tenure, individual performance, overall contribution to the Company, and market data provided by its independent compensation consultant. Generally, the annual target award values are below the 25th percentile of comparable companies; however, the Compensation Committee believes these award levels are appropriate in light of the retention-oriented nature of the Company’s restricted stock program and the substantial existing stock ownership maintained by most named executive officers. The target award value is converted into a number of shares based on the fair market value of the Company’s Class A Stock over a 20-day trading average prior to the grant date, and accordingly the number of shares awarded may vary from year to year as the Company’s stock price changes.
The Company has historically granted restricted stock awards every three years, with the shares cliff vesting at the end of the third year. Following a review of the Company’s executive compensation program, the Compensation Committee determined that an annual equity award program with graded vesting would better support retention, succession planning and leadership continuity. As a result, beginning in fiscal 2026, the Company transitioned all participants in the restricted stock program, including the named executive officers, from a three-year cliff-vesting grant cycle to annual restricted stock grants that generally vest over a three-year period.
To facilitate this transition, the Compensation Committee approved transition awards for the named executive officers during fiscal 2026. One-half of the shares subject to each transition award vest on March 16, 2027, one-third vest on March 14, 2028, and the remaining shares vest on March 13, 2029. Beginning with future annual grants, awards generally will vest in equal one-third installments over three years, subject to the executive’s continued employment with the Company. The target value of each transition award was approximately two times the annual grant value that
