Macy's Inc · NYSE:M
Macy's — Presentation (October 2020)
32 slides from Macy's's investor presentation, Oct 7, 2020
Slide 1: Shareholder Outreach Off-Season 2020
Shareholder Outreach Off-Season 2020 October 2020
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT All forward-looking statements are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the expectations a
Slide 3: Contents
CONTENTS • Polaris strategy to stabilize the business and accelerate growth • Sustainability strategy and its integration into the company’s Polaris strategy • Diversity & Inclusion • Health & Safety strategy in the face of the current health pandemic • Governance profile • Key features of our execu
Slide 4: Polaris Strategy
Polaris Strategy
Slide 5: Polaris Strategy: Vision to be the leading multi-branded fashion retailer
POLARIS STRATEGY OUR VISION IS TO BE THE LEADING MULTI-BRANDED FASHION RETAILER FROM OFF-PRICE TO LUXURY, FROM ONLINE TO OFFLINE, FROM ON-MALL TO OFF-MALL WE WILL OFFER CONVENIENT ACCESS TO THE FULLNESS OF OUR BRANDS Our customers want great fashion Our customers are omni-shoppers. Our customers com
Slide 6: Polaris strategies strengthen and reinforce each other
POLARIS STRATEGY OUR POLARIS STRATEGIES WILL STRENGTHEN AND REINFORCE EACH OTHER CUSTOMER FASHION DIGITAL strengthen CUST OM ER We will develop a high We will build on our We will strategically RELATIONSHIPS engagement customer fashion authority by invest across the ecosystem that is curating the be
Slide 7: Polaris strategies drive competitive advantage and differentiation
POLARIS STRATEGY POLARIS STRATEGIES DRIVE COMPETITIVE ADVANTAGE & DIFFERENTIATION TO FIRST RECOVER THE BUSINESS THEN DRIVE BOTH TOP- AND BOTTOM-LINE GROWTH strengthen curate accelerate optimize reset With our C U S T O M E R Q U A L I T Y D I G I T A L OMNI COST COLLEAGUES RELATIONSHIPS FASHION GROW
Slide 8: Maintaining financial flexibility during COVID-19 pandemic
POLARIS STRATEGY MAINTAINING FINANCIAL FLEXIBILTY DURING COVID-19 PANDEMIC • Temporarily closed all stores on March 18 and continued to serve customers through our e-commerce sites • Q1 comparable sales (owned + licensed) down ~45% year-over-year; adjusted EBITDA declined by more than $1.1 billion •
Slide 9: Maintaining business continuity during COVID-19 pandemic
HEALTH & SAFETY MAINTAINING BUSINESS CONTINUITY DURING COVID-19 PANDEMIC • Macy’s Business Continuity team began monitoring the pandemic in December and supported our Hong Kong office with additional safety equipment. • The team boosted VPN licensing and access capabilities early on to permit collea
Slide 10: Sustainability
Sustainability
Slide 11: The Sustainability Team: What We Do
SUSTAINABILITY THE SUSTAINABILITY TEAM: WHAT WE DO WE ARE A CENTER OF EXCELLENCE, WORKING WITH PARTNERS ACROSS MACY’S, INC. We identify sources of risk and growth opportunities The Sustainability team We shape policies that protect people, the planet and the Macy’s, Inc. guides Macy’s, Inc. on how b
Slide 12: Next steps will integrate ESG with Polaris Strategy
SUSTAINABILITY OUR NEXT STEPS WILL INTEGRATE ESG WITH POLARIS STRATEGY Early 2000s Mid- to late-2000s 2018 – 2019 2020 2021 Launched Social Supported Localized Added Best Practices Formalized Develop and Execute Compliance Program Innovation and Key for Advancing Sustainability Strategy Disclosures
Slide 13: Diversity & Inclusion
Diversity & Inclusion
Slide 14: Diversity & Inclusion strategy has evolved from reactive to embedded
DIVERSITY & INCLUSION STRATEGY HAS EVOLVED FROM REACTIVE TO BEING EMBEDDED IN DNA AND CULTURE WITH RESPECT TO HOW WE THINK, ACT AND OPERATE Early 2000s Mid- to late-2000s 2018 – 2019 2020 2021 Business Case for Launched Workshop Established Diversity Racial Injustice & Accelerate Progress Diversity
Slide 15: Diversity & Inclusion Center of Expertise vision, mission and goals
DIVERSITY & INCLUSION IN 2018, ESTABLISHED A DIVERSITY & INCLUSION CENTER OF EXPERTISE WITH ENTERPRISE-WIDE VISION, MISSION AND GOALS COLLEAGUE: Reflect the full spectrum of diversity at all levels of our workforce VISION: Be a beacon of diversity & CUSTOMER: Welcome, accept, and respect every one o
Slide 16: Expanding strategy to drive systemic change externally
DIVERSITY & INCLUSION IN 2020, WE ARE EXPANDING OUR STRATEGY TO BECOME A PROMINENT LEADER IN DIVERSITY & INCLUSION BY DRIVING SYSTEMIC CHANGE EXTERNALLY 1 2 3 Publish Macy’s, Inc. Diversity & Increase our diverse retail spend Serve on CEO Action for Racial Inclusion Report: with Black-owned business
Slide 17: Governance
Governance
Slide 18: Corporate Governance Highlights
GOVERNANCE CORPORATE GOVERNANCE HIGHLIGHTS 11 of 12 directors are independent Lead independent director Annual board and committee evaluation Majority voting in uncontested director elections Annual election of all directors No shareholder rights plan Policy prohibiting pledging and hedging ownershi
Slide 19: Directors provide effective mix of experience and diversity
GOVERNANCE CORPORATE GOVERNANCE HIGHLIGHTS DIRECTORS PROVIDE EFFECTIVE MIX OF EXPERIENCE, FRESH IDEAS, GENDER, AGE AND ETHNIC DIVERSITY. ETHNIC DIVERSITY INDEPENDENCE DIRECTOR AGE 33% • Average age 60.2 years Macy’s 1 Ethnically 4 Chairman Diverse and CEO 40 – 49 YRS 50 – 59 YRS 60 – 69 YRS 70+ YRS
Slide 20: Executive Compensation
Executive Compensation
Slide 21: Compensation programs grounded in strong governance practices
EXECUTIVE COMPENSATION COMPENSATION PROGRAMS GROUNDED IN STRONG GOVERNANCE PRACTICES Align pay with company performance Incentive plans use multiple metrics to reward performance driving company strategy and aligned to stock price performance Leverage relative total shareholder return metric, with a
Slide 22: Strong alignment between pay and performance
EXECUTIVE COMPENSATION STRONG ALIGNMENT BETWEEN PAY AND PERFORMANCE IS AT CORE OF COMPENSATION PROGRAM Demonstrated in the design of our programs … … and the outcome of our programs 2019 Program Design CEO 2019 Realized Compensation $10,010 CEO 12% 27% Salary Overall 36% of Target (FIXED) Stock LTI
Slide 23: Company strategies and 2020 compensation program considerations
EXECUTIVE COMPENSATION COMPANY STRATEGIES AND 2020 COMPENSATION PROGRAM CONSIDERATIONS • The company has been on a transformation journey, executing on our multi-year Polaris strategy o We have been executing our plans to improve gross margin, and SG&A expense in order to counter the macro headwinds
Slide 24: 2020 compensation program in response to COVID-19 pandemic
EXECUTIVE COMPENSATION 2020 COMPENSATION PROGRAM IN RESPONSE TO COVID-19 PANDEMIC Item Key Program Development Considerations Actions • In alignment with other actions taken by the company to conserve cash, implemented base pay • Base salary reductions reductions for executives, including 100% for C
Slide 25: 2020 compensation program in response to COVID-19 pandemic (continued)
EXECUTIVE COMPENSATION 2020 COMPENSATION PROGRAM IN RESPONSE TO COVID-19 PANDEMIC Item Key Program Development Considerations Actions • Due to challenges of setting multi-year financial targets, utilized Relative Total Shareholder Return (rTSR) • Mix of performance-based restricted stock as the sole
Slide 26: 2020 incentive plan metrics in response to COVID-19 pandemic
EXECUTIVE COMPENSATION 2020 INCENTIVE PLAN METRICS IN RESPONSE TO COVID-19 PANDEMIC • The CMD committee selected metrics to reward performance on an absolute and relative basis o The metrics in the annual incentive plan reward for performance in alignment with the components of our Polaris Strategy
Slide 27: Appendix
Appendix
Slide 28: Health & Safety Standards
HEALTH & SAFETY HEALTH & SAFETY STANDARDS Prior to a store’s reopening, colleagues were provided additional training on health and safety standards. COLLEAGUE SAFETY • Perform wellness checks • Provide safety equipment • Require protective wear CUSTOMER SAFETY • Enforce social distancing as the new
Slide 29: Customer Safety
HEALTH & SAFETY CUSTOMER SAFETY SOCIAL DISTANCING REDUCED TOUCHPOINTS SANITATION STATIONS Social distancing guidelines are visible Intimate selling experiences, such as Sanitizer depots are installed in frequently throughout the store. Key reminders Beauty services, Fine Jewelry, and visited locatio
Slide 30: Health & Safety Signage
HEALTH & SAFETY SIGNAGE We have created an environment that enables our customers and colleagues to shop and work with safety, confidence and peace of mind. Our customers and colleagues have new safety expectations when shopping or working in our buildings. 30
Slide 31: Colleague Safety
HEALTH & SAFETY COLLEAGUE SAFETY PROTECTIVE WEAR WELLNESS CHECKS Store colleagues are provided Store colleagues are asked to with company-issued cloth complete wellness checks before masks to wear at all times. reporting to work. Colleagues processing multiple Continue to promote safe hygiene goods
Slide 32: Store Environment Safety
HEALTH & SAFETY STORE ENVIRONMENT SAFETY ENHANCED ENHANCED WORKSTATION HOUSEKEEPING CLEANING Frequently visited locations are New cleaning practices for colleagues cleaned more regularly and visibly. have been implemented around This includes elevators, escalators, frequently touched areas like sign