No Tax Gross-up
In the event of a Change in Control, none of our NEOs are entitled to reimbursement or gross-up for any excise taxes that may be imposed under Section 280G of the Code.
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2022 Pay Ratio Disclosure |
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Pay Ratio
In accordance with the requirements of Section 953(b) of the Dodd-Frank Act and Item 402(u) of Regulation S-K (which we collectively refer to as the “Pay Ratio Rule”), we are providing the following estimated information for fiscal 2022:
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the median of the annual total compensation of all our employees (except our Chief Executive Officer) was $10,669; |
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the annualized total compensation of our Chief Executive Officer was $9,964,565; and |
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the ratio of these two amounts is 934 to 1. We believe that this ratio is calculated in a manner consistent with the requirements of the Pay Ratio Rule. |
Methodology for Identifying Our “Median Employee”
Identifying and Adjusting Our Employee Population
To identify the median of the annual total compensation of all of our employees (other than our Chief Executive Officer), we identified our total employee population as of January 28, 2023, the last day of our fiscal year. Our employee population consisted of full-time, part-time, seasonal and temporary employees globally.
Determining Our Median Employee
To identify our median employee, we calculated the cash compensation paid during the fiscal year for the employee population, annualizing the cash compensation of any permanent employee who joined the Company during the fiscal year. We identified the median compensation amount using this compensation measure which was consistently applied to all our employees in the calculation. We then selected a reasonably representative employee with total compensation equal to the median compensation amount as our “median employee.”
Using the methodologies described above, we determined that our median employee was a part-time, hourly employee. The total compensation of the median employee was $10,669.
Determination of Annual Total Compensation of Our Median Employee and Our Chief Executive Officer
Once we identified our median employee, we then calculated such employee’s annual total compensation for 2022 using the same methodology we used for purposes of determining the annual compensation of our NEOs for 2022.
For the purpose of calculating our Chief Executive Officer’s total annual compensation used to determine our CEO pay ratio, as permitted by Commission rules, we elected to annualize the compensation of Ms. Boswell, who was serving as Chief Executive Officer on January 28, 2023, the determination date for identifying our median employee. Since Ms. Boswell was appointed Chief Executive Officer effective on December 1, 2022, we annualized her Salary and Non-Equity Incentive Plan Compensation as disclosed in the 2022 Summary Compensation Table, and added the disclosed values of her Bonus, Stock Awards and other components of All Other Compensation to arrive at a value of $9,964,565, used for the ratio of annual total compensation for our Chief Executive Officer to the annual total compensation for our median employee:
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we annualized Ms. Boswell’s base salary to $1,500,000 (from the $213,462 reported in the 2022 Summary Compensation Table); and |
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we annualized Ms. Boswell’s non-equity incentive plan compensation to $2,850,000 based on her annual target amount (from the $1,080,964 reported in the 2022 Summary Compensation Table). |
We did not annualize Ms. Boswell’s stock awards, as the full grant date fair value of those the one-time sign-on award is already included in Ms. Boswell’s fiscal 2022 compensation under Commission rules. Similarly, we did not annualize Ms. Boswell’s one-time cash sign-on bonus or her relocation benefit and aircraft usage in connection with her relocation from her residence in Florida, as those were benefits associated with a point in time and the full amount is included in Ms. Boswell’s fiscal 2022 compensation.
The Commission’s rules for identifying the median employee and calculating the pay ratio allow companies to apply various methodologies and apply various assumptions and, as a result, the pay ratio reported by us may not be comparable to the pay ratio reported by other companies. Our median employee worked approximately 11 hours per week during fiscal 2022. If the total compensation per hour earned by the median employee was extrapolated to full-time employment, the median employee’s annual total compensation would be approximately $37,100 and the ratio would be 269 to 1.
56 Bath & Body Works, Inc. | 2023 Proxy Statement