Deckers Outdoor Corporation · NYSE:DECK
Deckers Outdoor — Proxy Contest (November 2017)
15 slides from Deckers Outdoor's proxy contest presentation, Nov 21, 2017
Slide 1: Right Plan, Right Board: Response to Marcato's November 13, 2017 Presentation
1 RIGHT PLAN, RIGHT BOARD RESPONSE TO MARCATO’S NOVEMBER 13, 2017 PRESENTATION
Slide 2: Disclosures
2 DISCLOSURES Safe Harbor We make forward - looking statements in this presentation, which represent our expectations or beliefs about future events and financial performance. Forward - looking statements are identifiable by words such as “believe,” “anticipate,” “expect,” “intend,” “plan,” “will,”
Slide 3: Executive Summary: Marcato's Misleading Statements and Analyses
3 EXECUTIVE SUMMARY MARCATO HAS RESORTED TO SERIOUSLY MISLEADING STATEMENTS AND ANALYSES IN ITS ATTEMPT TO SEIZE CONTROL OF DECKERS CONSIDER THE FACTS – VOTE THE WHITE PROXY CARD SUMMARY MISLEADING TACTICS USED BY MARCATO • Marcato’s presentation relies on several misleading pieces of information in
Slide 4: Deckers Shares Have Outperformed Its Proxy Peers Over the Last Five Years
4 A B C C DECKERS SHARES HAVE OUTPERFORMED ITS PROXY PEERS OVER THE LAST FIVE YEARS THE FACTS: • Marcato is selectively picking its benchmarking date, using a reference that is over nine months old and does not reflect Deckers’ current market price 1 • Using the current market price, Deckers is outp
Slide 5: Deckers Shares Have Outperformed Its Proxy Peers Over the Last Five Years (Cont'd)
5 DECKERS SHARES HAVE OUTPERFORMED ITS PROXY PEERS OVER THE LAST FIVE YEARS (Cont’d) Source: Capital IQ Note: Market data as of 11/17/17, with five - year market performance measured against market data as of 11/19/12 (as 11/17/12 was a Saturday ) 1. Deckers Proxy Peer Group includes The Buckle, Inc
Slide 6: Deckers Share Price Has Significantly Increased Beyond Any Market Reaction to Marcato
6 DECKERS SHARE PRICE HAS SIGNIFICANTLY INCREASED BEYOND ANY MARKET REACTION TO MARCATO THE FACTS: • Misleading figures; Deckers reported normalized actual EPS of $4.11, significantly higher than the $1.27 cited by Marcato • Marcato opportunistically bought its stake as a significant Deckers stockho
Slide 7: Sell-Side Analysts Recognize Deckers' Ongoing Margin Progress
7 SELL - SIDE ANALYSTS RECOGNIZE DECKERS’ ONGOING MARGIN PROGRESS THE FACTS: • Recent research reports show analysts believe in the plan, as demonstrated by the fact that 14 of 15 analysts have a buy or neutral rating (or equivalent ). Highlights include: x ” We have conviction in DECK’s cost reduct
Slide 8: The Board Effectively Manages Deckers' Cash Considerations
8 THE BOARD EFFECTIVELY MANAGES DECKERS’ CASH CONSIDERATIONS THE FACTS: • As announced in October 2017, Deckers changed its financial policy to a 1x EBITDA leverage target • Marcato’s chart is misleading… 1. Chart focuses on the fiscal year peak or near - peak in cash (significant fluctuations due t
Slide 9: The Board Has Designed a Strong Compensation Plan
9 THE BOARD HAS DESIGNED A STRONG COMPENSATION PLAN THE FACTS: • High pay - for - performance alignment resulted in lower realized pay during years where performance was below target • Deckers has effectively and consistently tied its compensation program to its strategic and business objectives • I
Slide 10: Board and Management Developed and Began Implementing Their Transformation Plan Before Marcato
10 BOARD AND MANAGEMENT DEVELOPED AND BEGAN IMPLEMENTING THEIR SUCCESSFUL TRANSFORMATION PLAN LONG BEFORE MARCATO INITIATED ITS POSITION THE FACTS: Prior to Marcato’s 13D filing on February 8, 2017, Deckers took several proactive steps: • Hired top tier consultant, Alix Partners, to examine company’
Slide 11: Marcato's Analysis Demonstrates It Does Not Understand the Retail Apparel Business
11 MARCATO’S “ANALYSIS” DEMONSTRATES THAT IT DOES NOT UNDERSTAND THE RETAIL APPAREL BUSINESS THE FACTS: • In Deckers’ experience, the recapture rate of lost retail revenue is significantly below 50 % • When Deckers opens retail stores in a new market, it has seen a lift in the overall sales of that
Slide 12: Review of Marcato Nominees: Summary
12 REVIEW OF MARCATO NOMINEES SUMMARY MARCATO NOMINEES LACK IMPORTANT SKILLSETS FOR THE DECKERS BOARD • Marcato’s proposed slate of Directors are unvetted and unknown, with limited public company Board experience • In its continued efforts to best serve its stockholders, the Deckers Governance Commi
Slide 13: Review of Marcato Nominees
13 REVIEW OF MARCATO NOMINEES Matthew P. Hepler û No C - suite experience, operational or retail experience û Not independent; a partner at Marcato û Limited corporate experience; much of his career has been spent working for activist hedge funds, currently Marcato û Has only ever served on one publ
Slide 14: Review of Marcato Nominees (Cont'd)
14 REVIEW OF MARCATO NOMINEES (Cont’d) Mitchell A. Kosh û No C - suite experience until 2014; HR and administrative roles only – Executive VP and Chief Administrative Officer at Ralph Lauren from April 1, 2015 to October 19, 2015 – Executive VP of Global HR at Ralph Lauren from 2014 to April 1, 2015
Slide 15: Review of Marcato Nominees (Cont'd)
15 REVIEW OF MARCATO NOMINEES (Cont’d) Kirsten J. Feldman û No public Board experience û No C - suite, operational or retail experience; work experience almost exclusively related to investment banking, a role that she has not been actively employed in since 2008 Deborah M. Derby û Sits on Board of