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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant Filed by a Party other than the Registrant      

CHECK THE APPROPRIATE BOX:
  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 Rule 14a-12

Mattel, Inc.

(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
  No fee required.
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.
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Dear Fellow Stockholders,

Ynon Kreiz

Michael Dolan

      

We hope that this letter finds you and your families safe and healthy.

As challenging as this last year has been for people everywhere, it has also served to remind us of how fortunate we are to be part of an industry that consumers can turn to and trust in both good and tough times.

We are proud of the many ways in which the entire Mattel global team responded to the COVID-19 pandemic. We leveraged our resources to act as responsible corporate citizens to support consumers, customers, employees, business partners and the communities where we live, work and play.

In spite of the challenges, particularly with respect to the first half of the year, 2020 was another milestone year for Mattel as we made significant progress on our short-to-mid term strategy to restore profitability and regain topline growth. Our profitability continued to improve across all key financial metrics, and we achieved our second consecutive year of Net Sales growth in constant currency,* while growing market share in our two largest regions, North America and Europe, the Middle East and Africa (EMEA).

We also made significant progress on our mid-to-long term strategy to capture the full value of our intellectual property (“IP”) through franchise management, as well as online retail and e-commerce. In 2020, Mattel Films and Mattel Television announced several new projects, with more to come. We continue to see the success of our digital games through Mattel163, our mobile gaming joint venture with NetEase, and our digital gaming licensing business continues to grow with several exciting new games launched on multiple digital platforms. Our e-commerce business grew significantly as we worked closely with our global retail partners and began expanding our own Direct-to-Consumer business with the launch of Mattel Creations, a highly curated platform targeting fans of all ages with limited edition, collectible products.

As a result of our strong execution in 2020, we are confident in our ability to accelerate our topline growth, improve profitability and capture the full value of our IP in 2021 and beyond.

In support of the execution of our strategy, the Board remains focused on governance practices that promote long-term stockholder value creation. We have added six new independent directors since 2018, whose backgrounds and expertise are closely aligned with our strategy. Most recently, in July 2020, we welcomed Diana Ferguson to the Board. As Chair of Mattel’s Audit Committee, she brings a proven track record of corporate financial management and strategic planning and further deepens the quality of our directors’ collective insights.

The Board recognizes that people are the heartbeat of our Company. As part of our transformation strategy, we have been creating a working environment that is fueled by innovation, collaboration and execution. Late last year, we conducted a Company-wide employee engagement survey to gather feedback from our team regarding culture and well-being. We had a participation rate of over 90%, with all scores demonstrating the progress made in strengthening our culture and morale and the pride our people have in working for Mattel.


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Diversity and inclusion is a corporate priority for Mattel. We are building on our long heritage in this important area by promoting diversity and inclusion across the Company as well as representation and inclusivity in our products. In 2020, we announced global diversity and inclusion goals to achieve 100% pay equity for all employees performing similar work globally and to increase female and minority representation at all levels of the organization. We have already achieved 100% pay equity for employees of all races and genders in the United States. As part of our Play Fair program, we have committed to the development and recruitment of Black talent, expanded conscious inclusion training across the Company and made donations to organizations that support the Black community. We are also proud to note that, for the second consecutive year, Mattel received a perfect score on the Human Rights Campaign Foundation’s Corporate Equality Index, a leading benchmarking survey and report measuring corporate policies and practices related to LGBTQ+ workplace equality.

Environmental sustainability is another key priority at Mattel and creating sustainable products and packaging is an important part of our commitment to the planet. In late 2019, we announced our goal to achieve 100% recycled, recyclable or bio-based materials in both our products and packaging by 2030. In 2020, we launched Fisher-Price and MEGA products made from sugarcane-based plastics, and also began producing UNO Nothin’ But Paper, which is made without cellophane packaging and is 100% recyclable. We continue our work in this important area and will be looking to enhance communication of our various initiatives and progress going forward.

As always, active, year-round stockholder engagement remains a key focus area for our Board. During 2020, we engaged with stockholders representing approximately 70% of Mattel’s outstanding shares, with Michael, as Independent Lead Director, participating in all meetings. Feedback from our investors was relayed directly to the full Board and provided the directors with full visibility into stockholder perspectives on Mattel’s business strategy, approach to human capital management, diversity and inclusion initiatives, environmental sustainability efforts and governance and compensation practices. We look forward to continuing these dialogues in the coming year.

While we remain mindful of the ongoing challenges created by the COVID-19 pandemic, we could not be more proud of the Company’s efforts in 2020. The entire Mattel team persevered through an extremely tumultuous year, and demonstrated innovation, collaboration and execution.

We look forward to sharing our continued progress as we execute on our strategy to transform Mattel into an IP-driven, high-performing toy company and create long-term stockholder value. It remains a privilege to lead Mattel on your behalf.

Sincerely,


Ynon Kreiz
Chairman and Chief Executive Officer


Michael Dolan
Independent Lead Director

*Net Sales in constant currency is a non-GAAP measure under the SEC’s rules. Please see “Glossary of Non-GAAP Financial Measures & Key Performance Indicator and Non-GAAP Reconciliations” on page 114.

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Mattel, Inc.
Notice of 2021 Annual Meeting of Stockholders

         
Date and Time   Virtual Meeting
  Record Date

May 26, 2021 at 9:00 a.m.
(Los Angeles time)

You may attend the virtual meeting by visiting: www.virtualshareholdermeeting.com/MAT2021

Holder of record of Mattel common stock at the close of business on April 1, 2021

We will consider and act on the following matters of business at our 2021 annual meeting of stockholders (“2021 Annual Meeting”):

Matter           The Board’s
Recommendations
Proposal 1 Election of the ten director nominees named in the Proxy Statement FOR each Director Nominee
Proposal 2 Ratification of the selection of PricewaterhouseCoopers LLP as Mattel’s independent registered public accounting firm for the year ending December 31, 2021 FOR
Proposal 3 Advisory vote to approve named executive officer compensation (“Say-on-Pay”) FOR
Proposal 4 Approval of the Fifth Amendment to the Mattel, Inc. Amended and Restated 2010 Equity and Long-Term Compensation Plan FOR
Such other business as may properly come before the 2021 Annual Meeting

In light of continuing concerns related to the COVID-19 pandemic, we made the decision to again conduct a virtual annual meeting of stockholders, which will provide access for all stockholders while safeguarding the health and safety of our stockholders, directors, officers, employees, and other stakeholders. Stockholders of record as of the close of business on April 1, 2021 will be able to attend the 2021 Annual Meeting, view the list of our stockholders of record, vote, and submit questions during the meeting via live webcast by visiting www.virtualshareholdermeeting.com/MAT2021. To participate in the meeting, stockholders of record must have the 16-digit control number that is shown on your Notice of Internet Availability of Proxy Materials or on your proxy card if you receive the proxy materials by mail. If your shares are held in street name and your voting instruction form or Notice of Internet Availability indicates that you may vote those shares through the http://www.proxyvote.com website, then you may access, participate in, and vote at the 2021 Annual Meeting with the 16-digit access code indicated on that voting instruction form or Notice of Internet Availability. Otherwise, stockholders who hold their shares in street name should contact their bank, broker, or other nominee (preferably at least five days before the 2021 Annual Meeting) and obtain a “legal proxy” in order to be able to attend, participate in, or vote at the 2021 Annual Meeting. You will not be able to attend the 2021 Annual Meeting in person. Whether or not you expect to attend the 2021 Annual Meeting online, please vote as soon as possible so that your shares will be represented and voted at the 2021 Annual Meeting.

By Order of the Board of Directors

                        
Jonathan Anschell
Secretary
El Segundo, California
April 13, 2021

How To Vote

Internet
www.proxyvote.com (prior to May 26, 2021)

Attend our annual meeting virtually by logging into the virtual annual meeting website and vote by following the instructions provided on the website (during the meeting)

Telephone
1-800-690-6903

Mail
Mark, sign, date, and promptly mail the enclosed proxy card in the postage-paid envelope

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be held on May 26, 2021. The proxy statement and the annual report are available at https://investors.mattel.com/financial-information/annual-reports-proxies.

2021 Proxy Statement

         

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2020 Strategic Overview and Business Highlights      6
Updated Strategy 8
Citizenship at Mattel 9
2020 Citizenship Highlights 9
Response to COVID-19 10
 
Proxy Summary 11
Voting Matters and Board Recommendations 11
Board Composition 12
Director Nominees Snapshot 13
Corporate Governance Highlights 14
Ongoing Stockholder Engagement Program 14
Executive Compensation Highlights 16
 
Corporate Governance at Mattel 19
 Proposal 1       Election of Directors 19
Board Composition and the Director Nomination Process 32
Board Structure 33
Board’s Role and Responsibilities 40
Board Accountability and Effectiveness 43
Director Compensation 46
 
Audit Matters 49
 Proposal 2    Ratification of Selection of Independent Registered Public Accounting Firm 49
Report of the Audit Committee 50
Fees Incurred for Services by PricewaterhouseCoopers LLP 52
 
Compensation at Mattel 53
 Proposal 3    Advisory Vote to Approve Named Executive Officer Compensation (“Say-On-Pay”) 53
Executive Officers 54
Compensation Discussion and Analysis 56
2020 Named Executive Officers 56
Overview 56
Pay-For-Performance Philosophy 60
Elements of Compensation 60
2020 Individual Performance Assessments 64
How Compensation is Determined 70
Important Policies, Governance, and Guidelines 72
Executive Compensation Tables 74
Summary Compensation Table 74
Grants of Plan-Based Awards in 2020 77
Outstanding Equity Awards at 2020 Year End 78
Option Exercises and Stock Vested in 2020 81
2020 Nonqualified Deferred Compensation 81
Potential Payments Upon Termination or Change of Control 83
Estimated Potential Payments 87
Pay Ratio of CEO to Median Employee 90
Report of the Compensation Committee 91
 
 Proposal 4    Approval of the Fifth Amendment to Mattel, Inc. Amended and Restated 2010 Equity and Long-Term Compensation Plan 92
Background and Purpose of the Amended Plan 92
Current Overview of Outstanding Equity Information 93
Summary of the Amended Plan 95
Estimate of Benefits; New Plan Benefits 101
Certain Material U.S. Federal Income Tax Consequences 102

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Stock Ownership and Reporting      104
Principal Stockholders 104
Security Ownership of Management and the Board 105
Equity Compensation Plan Information 106
 
2021 Annual Meeting and Voting Information 107
General Meeting Information 107
Important Notice Regarding the Availability of Proxy Materials for the 2021 Annual Meeting 107
Deadline for 2022 Proposals and Nominations 112
 
Glossary of Non-GAAP Financial Measures & Key Performance Indicator and Non-GAAP Reconciliations 114
 
Other Matters that May Come Before the 2021 Annual Meeting 117
 
Appendix A - Fifth Amendment to Mattel, Inc. Amended and Restated 2010 Equity and Long-Term Compensation Plan A-1
 
Appendix B - Mattel, Inc. Amended and Restated 2010 Equity and Long-Term Compensation Plan B-1

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2020 Strategic Overview and Business Highlights

In 2020, we continued to focus on the execution of our transformation strategy, which was designed around two phases. The first phase, in the short-to-mid term, is to restore profitability by reshaping operations and to regain topline growth by growing our power brands and expanding our brand portfolio. The second phase, in the mid-to-long term, is to capture the full value of our intellectual property (“IP”) through franchise management, online retail, and e-commerce.

In spite of the challenges, particularly with respect to the first half of the year, 2020 was another milestone year as we continued to make significant progress on restoring profitability, regaining topline growth, and growing global market share. Mattel today is a much stronger Company creatively, operationally, competitively, and culturally, than it has been in many years. As we continue to advance our goal to transform Mattel into an IP-driven, high-performing toy company, we remain committed to our strategy and creation of long-term stockholder value.

    

1. Significant Progress Towards Restoring Profitability

In 2020, we saw significant year-over-year improvement in several financial measures, reflecting our continued progress on restoring profitability:

Gross Margin increased by 490 basis points to 48.9%;

Operating Income increased nearly ten-fold to $381 million; and

Operating Cash Flow increased by 1.6x to $289 million.

In the last three years, we made substantial progress across these and other financial metrics:

Gross Margin improved by over 1,100 basis points;

Operating Income increased by more than $700 million and Operating Income Margin improved by 1,500 basis points;

Operating Cash Flow improved by more than $300 million and Free Cash Flow* improved by almost $500 million; and

Earnings Per Share improved significantly and turned positive.

This broad-based success was driven by the commitment of the entire organization and several key strategic initiatives, including $1 billion in cost savings through 2020, primarily driven by our multi-year Structural Simplification and Capital Light programs, which were key drivers in restoring profitability.

These programs also provided greater visibility and insights into our operations as a whole, which enabled us to identify additional areas where we can further improve operations and drive greater productivity to accelerate growth, while continuing to reduce our cost base. As a result, in February 2021, we announced our “Optimizing for Growth” program, which is expected to deliver, in aggregate, $250 million in incremental savings by 2023. This new program integrates our ongoing Capital Light program with several new productivity opportunities that leverage our scale and global platform.

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2020 Strategic Overview and Business Highlights

Gross Margin       Operating Income       Operating Income Margin
As % of Net Sales Actual FX
$ in millions Actual FX
As % of Net Sales Actual FX
 
Earnings Per Share
Operating Cash Flow
Free Cash Flow*
$ Actual FX
$ in millions
$ in millions Actual FX

*
Free Cash Flow is a non-GAAP measures under the SEC’s rules. Please see “Glossary of Non-GAAP Financial Measures & Key Performance Indicator and Non-GAAP Reconciliations” on page 114.

2. Significant Progress Towards Regaining Topline Growth

We also made meaningful progress towards regaining topline growth in 2020:

Net Sales were $4,584 million, up 2% as reported and up 3% in constant currency*, versus prior year, achieving our second consecutive year of Net Sales growth on a constant currency* basis;
Gross Billings* were $5,138 million, up 1% as reported and up 3% in constant currency*, versus prior year, achieving its biggest Q4 and full year result since 2017;
Barbie Gross Billings grew 16% and had its third consecutive year of billion-dollar Gross Billings;
Hot Wheels achieved record Gross Billings for the third consecutive year;
Fisher-Price and Thomas & Friends, American Girl, and MEGA demonstrated a positive shift in momentum;
UNO performed exceptionally well, remaining the #1 item based on units in the Games and Puzzles super category globally per NPD;
We saw growth in a number of evergreen entertainment franchises, in a very light entertainment year, including Jurassic World, Minecraft, and WWE;
Our Plush products, a white space for us just over a year ago, showed strength driven by our 11-inch Star Wars, The Child plush, which was the #1 item in the Plush super category in the U.S. per NPD; and
We ended the year with the world’s #1 Toy property (Barbie), #1 Vehicle brand (Hot Wheels), #1 Game (UNO), and remain the #1 Infant, Toddler & Pre-School (ITPS) manufacturer (Fisher-Price) for 2020, per NPD.

*
Net Sales in constant currency, Gross Billings and Gross Billings in constant currency are non-GAAP measures or key performance indicators under the SEC’s rules. Please see “Glossary of Non-GAAP Financial Measures & Key Performance Indicator and Non-GAAP Reconciliations” on page 114.

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2020 Strategic Overview and Business Highlights

3. On track to capture the full value of our IP in the mid-to-long term

In the mid-to-long term, we remain focused on capturing the full value of our IP through franchise management and the development of our online retail and e-commerce capabilities. We believe Mattel owns one of the strongest portfolios of children’s and family entertainment franchises in the world. Our portfolio is the foundation of our mid-to-long term strategy to capture the full value of our IP through the monetization of our brands and franchises in highly-accretive, large verticals that are directly adjacent to the toy industry. These verticals include film, television, digital gaming, live events, music, consumer products, and merchandise.

Mattel Films continues to be a magnet for some of the most prolific talent in the entertainment industry. We announced two new film projects in 2020, Wishbone and Thomas and Friends, and one in 2021, an UNO live action film. We have now announced 11 feature films, with more to come.

Mattel Television also continued to make significant progress, with 17 television shows and specials in production, and more projects in development. In 2020, we premiered a Barbie movie special musical titled “Barbie Princess Adventure”, two Enchantimals specials, and new seasons of Polly Pocket, Fireman Sam, and Thomas & Friends. We also recently announced the launch of two more Barbie movie specials on Netflix, additional new seasons of Fireman Sam and Polly Pocket, and a new Thomas & Friends series airing on Netflix and Cartoon Network in the U.S. In addition, we announced the launch of two Masters of the Universe animated series premiering globally on Netflix, both UNO and Whac-a-Mole game shows, as well as a Monster High animated series and live-action television movie with Nickelodeon.

Our IP uniquely positions Mattel to bring immersive digital games to players globally and capitalize on the fast-growing digital gaming industry. We continue to see the success of our games launched through Mattel163, our mobile gaming joint venture with NetEase. Our digital gaming licensing business continues to grow, with several exciting new games launched on multiple digital platforms.

Additionally, we delivered continued strong growth in online retail and e-commerce, leveraging our brands’ and products’ built-in fan base to attract interest and demand, as we accelerated our business in these channels. In 2020, we grew our e-commerce business by approximately 50% in the year, representing more than 35% of global retail sales in the fourth quarter.

Another important part of our strategy is building out our own direct-to-consumer (DTC) business. At the forefront of this strategy is American Girl, a leading DTC brand in the industry. We are also further developing Mattel Creations, a highly-curated platform targeting fans of all ages with limited edition, collectible products. We are leveraging these learnings and capabilities to further strengthen and accelerate our DTC business as another engine of growth for Mattel.

Updated Strategy

Given the significant progress made over the last three years and our positive outlook, in February 2021, we evolved our strategic roadmap and expanded on its key pillars. In the short-term, we are aiming to improve profitability by optimizing our operations and to accelerate topline growth by growing our Power Brands and expanding our brand portfolio. In the mid-to-long term, we will continue to make progress on capturing the full value of our IP through franchise management and online retail and e-commerce. Our updated strategy reflects our confidence in the continued momentum of our Power Brands, the appeal of our iconic IP portfolio, and the strength of our entertainment partnerships, all of which are fueled by innovation and cultural relevance.

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2020 Strategic Overview and Business Highlights

Citizenship at Mattel

We are committed to being a responsible corporate citizen and actively supporting the communities in which we live, work, and play.

           
Philanthropy
Diversity & Inclusion
The Mattel Children’s Foundation was created more than 40 years ago with a vision of making a difference in the lives of children in need around the world. Since then, the Foundation has supported thousands of organizations and millions of children.
Our global team is passionate about the belief that all children should have access to play and we actively engage our most valuable assets – our employees – to participate in philanthropic activities to support this.
Through our diversity goals, we are cultivating a work environment that promotes equality, inclusion, and empowerment.
Our Play Fair program articulates the actions we are taking to address the racism, injustice, and violence against the Black community.
Our Employee Resource Groups, created and led by our employees to bring together members and allies of underrepresented identities across the Company, organize Company-wide learning opportunities, cultural celebrations, and community outreach, elevate important conversations, and collect critical feedback.
Sustainability
Health & Well-Being
We are working to create sustainable products and packaging, including through use of circular economy design principles, as an important part of our commitment to the planet.
We are actively reducing our use of natural resources in our products, packaging, and business operations.
We are also working to implement approaches to reduce the environmental impacts we create, with a focus on reducing carbon emissions and waste.
We have a long history of promoting health and wellness and supporting playgrounds, day-cares, community centers, and hospitals around the world.
In 2020, we supported healthcare heroes on the front lines by producing face shields and cloth face masks for medical professionals in the U.S. and around the world.
In a Company-wide employee engagement survey conducted in late 2020, 82% of Mattel employees reported feeling well supported by the Company.

2020 Citizenship Highlights

100% pay equity achieved
for U.S. employees of all races
and genders
.
     
Women make up 56% of the
global workforce, and
51% of all
leadership positions.
      Published Global D&I Goals:
Achieve 100% Global Pay Equity
Increase Female Representation
Increase Minority Representation
 
Hired a Global Head of
Sustainability
, a new role to lead
sustainability efforts across Mattel.
Launched the Mattel Playroom to create a meaningful way to help
parents and caregivers encourage
kids to “Keep Playing”.
Education requirements and systemic
barriers removed

from job descriptions.
 
Launched #ThankYouHeroes,
a special edition line of collectible
toys honoring the individuals
leading the fight against COVID-19
as well as the everyday heroes.
Introduced the Play Fair Initiative
to outline our commitments to fight
against systemic racism.
Announced the creation of the Ruth
Handler Mentorship Program

for Women in Toys, Licensing, and
Entertainment, designed to advance
career growth across the toy industry
through mentorship, coaching,
professional development, and learning.

Launched the iconic Fisher-Price Rock-a-Stack and Fisher-Price Baby’s First Blocks, made from sugarcane-based
plastics, and
UNO Nothin’ But Paper, a cellophane-free, 100% recyclable version of the classic matching game.

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2020 Strategic Overview and Business Highlights

Response to COVID-19

Our top priority remains protecting the health and safety of our people, while continuing to mitigate business disruption.

Employees
Community
Business
We successfully transitioned to a remote work structure for many of our employees
Adopted rigorous health and safety measures to safeguard employees at manufacturing plants and distribution centers
Launched the Mattel Playroom to support parents and caregivers and to engage and encourage kids to “Keep Playing”
Produced personal protective equipment, including face shields and cloth masks, for donation to frontline healthcare workers
Released “Thank You Heroes” collection to pay tribute to frontline healthcare workers and everyday heroes
Our global supply chain organization has rapidly responded to the frequent and unpredictable changes occurring in various locations where we operate
Our global commercial organization worked closely with our retail partners to navigate the dynamic landscape and evolving consumer path to purchase by quickly developing and launching new promotions and marketing activation initiatives tailored to new consumer behaviors
Focusing on regional execution, we closely partnered with retailers to navigate the disruption and adapt to the new retail environment, including with respect to online retail and omni-channel experience

Mattel’s management teams and business were highly resilient in navigating COVID-19 related challenges in 2020, restoring profitability and topline growth, and achieving growth that outpaced the broader industry.

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Proxy Summary

This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting. For more complete information regarding our 2020 financial performance, please review our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission (the “SEC”) on February 25, 2021 (the “Form 10-K”). We made this Proxy Statement available to stockholders beginning on April 13, 2021.

Voting Matters and Board Recommendations

Matter The Board’s
Recommendations
Page
1 Election of Ten Director Nominees FOR each
Director
Nominee
19
2 Ratification of PricewaterhouseCoopers LLP as our Independent Accounting Firm for 2021 FOR 49
3 Advisory Vote to Approve Named Executive Officer Compensation (“Say-on-Pay”) FOR 53
4 Approval of the Fifth Amendment to Mattel, Inc. Amended and Restated 2010 Equity and Long-Term Compensation Plan FOR 92


How To Vote
Internet
Telephone
Mail
www.proxyvote.com (prior to May 26, 2021) Attend our annual meeting virtually by logging into the virtual annual meeting website and vote by following the instructions provided on the website (during the meeting)
1-800-690-6903
Mark, sign, date, and promptly mail the enclosed proxy card in the postage-paid envelope

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Proxy Summary

Board Composition

         
 
R. Todd Bradley Adriana Cisneros Michael Dolan
Independent Lead Director
Director Since: 2018 Director Since: 2018 Director Since: 2004
Committee Memberships: Audit;
Compensation
Committee Memberships:
Governance and Social
Responsibility
Committee Memberships:
Compensation (Chair); Executive
Committee (Chair); Governance
and Social Responsibility
 
 

Diana Ferguson

Ynon Kreiz

Soren Laursen

 

Director Since: 2020 Director Since: 2017 Director Since: 2018
Committee Memberships:
Audit (Chair), Executive
Committee Memberships: Equity
Grant Allocation

Committee Memberships: Finance;
Governance and Social Responsibility

 
  
Ann Lewnes Roger Lynch

Dominic Ng

 
Director Since: 2015 Director Since: 2018 Director Since: 2006
Committee Memberships:
Governance and Social
Responsibility (Chair); Executive
Committee Memberships:
Audit; Finance

Committee Memberships:
Finance (Chair); Audit; Executive

 
  = Independent
         = Audit Committee Financial Expert
  

Dr. Judy Olian

 

Director Since: 2018

Committee Memberships:
Compensation; Governance and
Social Responsibility


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Proxy Summary

Director Nominees Snapshot

We believe effective oversight comes from a board of directors that represents a diverse range of experience and perspectives that provide the collective talent, skills, areas of expertise, experience, diversity, and independence necessary for sound governance. The nominees to our board of directors (the “Board”) possess a diverse set of skills, experience, and attributes, which align with our business strategy and contribute to effective oversight. A summary of the skills, experience, and attributes of our director nominees is outlined below.

Director Nominees Skills, Experience, and Attributes

Skills and Experience      
      Industry                           
Finance      
Diversity            
Brand and Marketing            
International Operations
Sustainability
Human Capital Management
Senior Leadership

Attributes      
Independent
Director Since 2018 2018 2004 2020 2017 2018 2015 2018 2006 2018
Age 62 41 74 58 56 57 59 58 62 69
Gender Identity M F M F M M F M M F
African American/Black
Asian/South Asian
White/Caucasian
Hispanic/Latino

Diversity       Independence       Average Tenure       Average Age

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Proxy Summary

Corporate Governance Highlights

We maintain industry-leading corporate governance and Board practices that promote accountability and enhance effectiveness in the boardroom.

       
Corporate Governance Practices           Board Practices
Annual elections for all directors
Majority voting standard
Robust Independent Lead Director role with significant responsibilities
Stockholder right to call special meetings
Stockholder right to proxy access
Stockholder ability to remove directors with or without cause
Stockholder ability to act by written consent
Routine review of Board leadership structure
Annual Board and committee evaluations
Robust director succession and search process
Annual review and evaluation of the Chief Executive Officer’s (“CEO”) performance by independent directors
Quarterly executive sessions held without management present
Comprehensive risk management with Board and committee oversight
Nine of ten director nominees are independent
       

Ongoing Stockholder Engagement Program

Mattel has established and maintains an ongoing and active stockholder engagement program. This engagement helps inform the Board’s understanding of stockholder perspectives on a wide range of matters. Stockholder dialogue is a year-round practice for Mattel facilitated by our Investor Relations team. In addition, an engagement effort focused on governance and executive compensation is also led by an independent director, with management, once or twice a year.

Investor Engagement Cycle

Annual Meeting of
Stockholders
Review annual meeting vote results and feedback
Plan for Fall engagement with investors
Consider enhancements to governance and compensation practices and disclosures, if needed
Conduct off-season engagement focused on governance and executive compensation
Share investor input with Board and Board committees
Conduct in-season engagement to understand investor views on proposals, if needed

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Proxy Summary

In 2020, our Independent Lead Director, Mr. Dolan, participated in all stockholder engagement meetings with members of senior management. Input received from our stockholders during these engagements is shared with the full Board, the Governance and Social Responsibility Committee, and the Compensation Committee, who consider this input when making decisions. Mr. Dolan’s participation in stockholder engagement allows for a direct line of communication with our Board.

Total Percentage of Stockholders
Contacted in 2020
Total Percentage of Stockholders
Engaged in 2020

Our substantive conversations with stockholders covered a variety of governance and compensation-related topics, including:

Business Strategy       Executive Compensation Programs       Board Structure
   
COVID-19 Response Governance Practices Environmental Sustainability
 
Diversity & Inclusion Board Refreshment Human Capital Management

We believe our ongoing stockholder engagement is productive and provides an open exchange of ideas and perspectives for both Mattel and our stockholders. We look forward to continuing these dialogues with our stockholders in 2021 and beyond.

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Proxy Summary

Executive Compensation Highlights

Our executive compensation programs reflect our commitment to pay-for-performance and compensation governance best practices by emphasizing at-risk performance-based compensation and long-term stockholder value creation in the form of annual short-term cash incentives (Mattel Incentive Plan or “MIP”) and annual equity long-term incentives (“LTIs”).

The chart below shows the 2020 target total direct compensation (“TDC”)* mix for our CEO and the average 2020 target TDC mix for our other named executive officers (“NEOs”):

A Significant Portion of 2020 Target Total Direct Compensation is At Risk
2020 Compensation 2020 Objective, Structure, and Performance Measures Portion of 2020 Target TDC
CEO Other NEOs**

Base Salary

Provide fixed cash compensation based on individual role, skill set, market data, and internal pay equity

Annual Cash Incentive (“MIP”)

Incentivize and motivate senior executives to achieve our short-term strategic and financial objectives that we believe will drive long-term stockholder value
Our 2020 MIP financial measures focused on restoring profitability, regaining topline growth, and improving our working capital position. The 2020 MIP was structured as follows:
50% MIP-Adjusted EBITDA
20% MIP-Adjusted Net Sales
15% MIP-Adjusted Gross Margin
15% MIP-Adjusted Inventory & Accounts Receivable
Individual Performance Multiplier of 0%-125%
Equity Long-Term Incentives (“LTIs”)

75%
Performance
Units

50%
Performance
Units

Performance-Based Restricted Stock Units (“Performance Units”)

Incentivize and motivate senior executives to achieve key long-term strategic financial objectives and stock price outperformance
Three-Year Cumulative Adjusted Free Cash Flow Goal
Three-Year Relative Total Stockholder Return (“TSR”) vs. S&P 500 Multiplier of 67%-133%

Stock Options

Align senior executives’ interests with stockholders’ interests and drive focus on increasing long-term stockholder value
Vest in approximately equal annual installments over three years

25%
Stock Options

25%
Stock Options

Time-Based
Restricted Stock
Units (“RSUs”)

Encourage senior executive stock ownership
Stockholder-aligned retention
Vest in approximately equal annual installments over three years

0%
RSUs

25%
RSUs

* TDC is the sum of 2020 year-end annual base salary, MIP target incentive opportunity, and Annual LTI Value (i.e., grant value of Performance Units granted under the 2020-2022 Long-Term Incentive Program (“LTIP”), stock options, and RSUs).
** In light of Mr. Euteneuer’s departure in August 2020, this chart excludes his compensation.

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Proxy Summary

2020 Pay-For-Performance Results

The compensation outcomes in 2020 reflected our pay-for-performance philosophy by rewarding progress on restoring profitability and regaining topline growth, and improved stock price performance.

2020 MIP Earnout Reflects Continued Progress on Restoring Profitability and Regaining Topline Growth
Our continued progress on restoring profitability and regaining topline growth resulted in a Company financial performance earnout of 170%.

Financial Measure*       Weighting      

Threshold
(35% earned)

Target
(100% earned)

Max
(200% earned)

     

% Earned
before
weighting

     

% Earned
after
weighting

MIP-Adjusted EBITDA 50%

200%

100%

MIP-Adjusted Net Sales 20%

200%

40%

MIP-Adjusted
Gross Margin
15%

200%

30%

MIP-Adjusted Inventory &
Accounts Receivable
15%

0%

0%

TOTAL EARNED

170%

*

The table above reflects actual performance as adjusted from GAAP results consistent with the pre-established plan parameters, which were approved by the Compensation Committee. Such adjustments are intended to ensure that events outside the control of management do not unduly influence the achievement of the performance measures, while also ensuring that they are aligned with stockholders’ interests. The adjustments under the MIP are described on page 63 and each measure is defined under "Glossary of Non-GAAP Financial Measures & Key Performance Indicator and Non-GAAP Reconciliations." For 2020, there were no adjustments to any financial measure relating to the impact of the COVID-19 pandemic."

For our NEOs, the 170% earnout under the MIP for Company financial performance was then adjusted by a multiplier of 0% to 125% based on our CEO’s assessment of each executive’s progress, and the Compensation Committee’s assessment of our CEO’s progress, against pre-established individual goals that tied to the execution of our short-to-mid term strategy (“Individual Performance Multiplier”). For 2020, the Individual Performance Multiplier for our CEO was 125% and for our other NEOs ranged from 100% to 125%. Please see “2020 Individual Performance Assessments” on page 64.

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Proxy Summary

2018-2020 LTIP Earnout Reflects Improvements in Adjusted Free Cash Flow and Stock Price Performance
By continuing to make significant progress on restoring profitability, we achieved three-year cumulative Adjusted Free Cash Flow of $300 million, resulting in a maximum performance earnout of 150% over the three-year performance period. Our relative TSR resulted in a multiplier of 76%. Accordingly, the total earnout was 114%.

Financial Measure*      

Threshold
(37% earned)

Target
(100% earned)

Max
(150% earned)

     

% Earned

Three-Year Cumulative Adjusted Free
Cash Flow

150%

 

Effect of TSR Multiplier

Actual at
December 31, 2020

Mattel TSR Relative to S&P 500

≤25th

50th

≥75th

32nd

TSR Multiplier**

67%

100%

133%

76%

TOTAL EARNED

114%

*

Adjusted Free Cash Flow is a non-GAAP measure under the SEC’s rules. Please see “Glossary of Non-GAAP Financial Measures & Key Performance Indicator and Non-GAAP Reconciliations” on page 114 for a description of the adjustments under the LTIP.

** The TSR Multiplier for TSR levels achieved between the 25th, 50th, and 75th percentiles is linearly interpolated.

Compensation Governance Best Practices

The Compensation Committee maintains the following compensation governance best practices, which establish strong safeguards for our stockholders and further enhance the alignment of the interests of our management and stockholders:


What We Do
        
Compensation Recovery Policy (“Clawback Policy”) applicable to all Section 16 officers and other direct reports to the CEO
Best practices in severance arrangements, including severance benefits at competitive levels not greater than 2x base salary plus annual bonus
Double-trigger accelerated vesting in the event of a change of control
Robust stock ownership guidelines as a multiple of base salary: 6x for CEO, 4x for Chief Operating Officer (“COO”) and Chief Financial Officer (“CFO”), and 3x for other NEOs
Independent compensation consultant
Annual compensation risk assessment
Annual review comparing executive compensation with peer companies (“peer group”)
Annual tally sheet review

What We Do Not Do
        
No excise tax gross-ups on severance or other payments in connection with a change of control
No poor pay practice of tax gross-ups on perquisites and benefits
No hedging or pledging by Board members, officers, or employees permitted

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Corporate Governance at Mattel

Proposal
1

    Election of Directors
 

The Board recommends that stockholders vote FOR each of the nominees named herein for election as directors.

After receiving input from members of the Governance and Social Responsibility Committee, the Board has nominated ten director nominees for election at the 2021 Annual Meeting, all of whom are currently directors. The following director nominees will hold office from election until the next annual meeting of stockholders and until their respective successors have been duly elected and qualified, or until their earlier death, resignation, disqualification, or removal:

       
R. Todd Bradley   Adriana Cisneros   Michael Dolan   Diana Ferguson   Ynon Kreiz
                 
       
Soren Laursen   Ann Lewnes   Roger Lynch   Dominic Ng   Dr. Judy Olian

Each director nominee has consented to being named in this Proxy Statement as a nominee for election as a director and agreed to serve as a director, if elected.

If your properly submitted proxy does not contain voting instructions, the persons named as proxies will vote your shares “for” the election of each of the ten director nominees named above. If, before the 2021 Annual Meeting, any director nominee becomes unavailable to serve, the Board may identify a substitute for such director nominee and treat votes “for” the unavailable director nominee as votes “for” the substitute or, alternatively, it may reduce the size of the Board. We presently believe that each of the nominees will be available to serve.

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Corporate Governance at Mattel

Director Nominees Overview

Diversity Independence Average Tenure Average Age

Board Refreshment

The Board remains focused on aligning our directors’ collective skills and expertise with Mattel’s strategy, and has undergone significant refreshment in recent years. The director nominees bring a wide range of valuable perspectives and experiences that the Board believes will best support Mattel in executing its transformation strategy.

80%
of our director nominees joined our Board within the last 6 years

Director Nominees Skills, Experience, and Attributes

     
Industry
Finance
Diversity
Brand and Marketing
International Operations
Sustainability
Human Capital Management
Senior Leadership

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Corporate Governance at Mattel

Our director nominees possess a diverse set of skills, experience, and attributes, which align with our business strategy and contribute to effective oversight. A summary is outlined below.

Industry

Mattel is a leading global toy company and owner of one of the strongest portfolios of children’s and family entertainment franchises in the world, and creates innovative products and experiences that inspire, entertain, and develop children through play. Directors with significant experience in the consumer goods and entertainment industries provide valuable perspective on issues specific to the operation of our business.

     
International Operations

Our business is worldwide in scope, with operations in over 50 countries and territories, offices and/or warehouse space in over 35 countries, and facilities across multiple countries producing our products. As such, we benefit from directors having experience as a senior leader in a large organization with international operations.

       
Finance

We measure our operating and strategic performance by reference to certain financial metrics. Accurate financial reporting is critical to Mattel’s success. Accordingly, we seek to have a number of directors who qualify as audit committee financial experts (as defined by SEC rules).

 
Sustainability

We recognize our responsibility to be a global, corporate citizen, and positive environmental steward, which is a priority for the entire organization. Our directors are committed to our sustainability initiatives designed to achieve long-term stockholder value through a responsible, sustainable business model.

       
Diversity

We understand that a culture rich in diversity is key to our business success, as it allows us to better understand the business opportunities in various markets around the world and develop products that resonate with consumers in diverse cultures. Diverse directors representing a range of perspectives expands the Board’s understanding of the needs and viewpoints of consumers, employees, and other stakeholders worldwide.

 
Human Capital Management

Our people are among our most important assets and we believe the successful development and retention of our employees is critical to our success. As such, we benefit from having directors with a deep understanding of human capital management obtained from experience as a senior leader in a large organization.

       
Brand and Marketing

We own a portfolio of global brands with vast IP potential. As we look to capture the full value of our IP in the mid-to-long term, directors with relevant experience in consumer marketing or brand management, especially on a global basis, provide important insights to our Board.

 
Senior Leadership

Directors with CEO or senior management experience have a demonstrated record of leadership and a practical understanding of organizations, processes, strategy, risk, and risk management, as well as methods to drive change and growth. Through their service as top leaders at other companies, our directors also bring valuable perspectives on common issues affecting large and complex organizations.


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Corporate Governance at Mattel

Director Nominees for Election

The Board, after receiving input from members of the Governance and Social Responsibility Committee, selected director nominees whose talents, skills, areas of expertise, experience, diversity, and independence, including those highlighted above, led the Board to conclude that these persons should serve as our directors at this time.

For each director nominee, set forth below is his or her name, age, tenure as a director of Mattel, and a description of his or her principal occupation, other business experience, public company experience, and other directorships held during the past five years. The specific experiences, qualifications, and attributes that led the Board to conclude that each nominee should serve as a director are described below.

Age: 62

Director Since: 2018

Mattel Committee Memberships:
Audit Committee
Compensation Committee
Other Current Public Directorships:
Commvault Systems, Inc.
One Equity Partners Open Water I Corp.
        R. Todd Bradley  

Key Experience/Director Qualifications

Mr. Bradley brings to Mattel’s Board significant leadership, finance, digital, marketing, and technology experience. As a prior Chief Executive Officer of a technology-driven company, he brings digital, marketing, and technology expertise relevant to Mattel’s strategy, and management experience with logistics, production, and quality control. In addition, Mr. Bradley has proven experience with turnaround companies in driving growth and improving profitably.

Career Highlights

One Equity Partners Open Water I Corp., a special purpose acquisition corporation
Co-Chair and Chief Executive Officer since January 2021
One Equity Partners, a middle-market private equity firm
Operating Partner since June 2020
Mozido, LLC, a global provider of digital commerce and payment solutions
Chief Executive Officer and Director (December 2016 – May 2017)
TIBCO Software, Inc., an integration, analytics, and event-processing software company
President (June 2014 – December 2014)
Hewlett-Packard Company, a global provider of products, technologies, software, solutions, and services
Executive Vice President Strategic Growth Initiatives (June 2013 – June 2014)
Executive Vice President of Printing and Personal Systems Group (March 2012 – June 2013)
Executive Vice President of Personal Systems Group (June 2005 – March 2012)
PalmOne, Inc., a maker of mobile devices and WebOS
President and Chief Executive Officer (October 2003 – March 2005)
Other Public Company Directorships
Commvault Systems, Inc. since 2020; also serves on Compensation and Operations Committees
One Equity Partners Open Water I Corp. since 2020
Eastman Kodak Company (2017 – 2020); also served on Compensation and Nominating & Governance Committees
TrueCar, Inc. (2013 – 2016)

Additional Leadership Experience and Service

Director, Spartronics since 2020; also serves on Audit Committee
Trustee, Newseum (2014 – 2016)

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Age: 41

Director Since: 2018

Mattel Committee Memberships:
Governance and Social Responsibility Committee
        Adriana Cisneros  

Key Experience/Director Qualifications

Ms. Cisneros brings to Mattel’s Board significant leadership, media, real estate, entertainment, consumer products, and digital experience. As the Chief Executive Officer of a global company, she has valuable expertise in restructuring, growth strategy, and technology. Ms. Cisneros has experience transforming a company through innovation and digital strategy. She brings a valuable perspective on global consumers and corporate social responsibility. She also has experience serving on the boards of nonprofit entities.

Career Highlights

Cisneros Group of Companies, a privately held company with over 90 years’ experience operating businesses globally with three divisions (Cisneros Media, Cisneros Interactive and Cisneros Real Estate)
Chief Executive Officer since September 2013
Vice Chairman and Director of Strategy (September 2005 – August 2013)

Additional Leadership Experience and Service

President, Fundación Cisneros since 2009
Member, International Academy of Television Arts & Sciences since 2015; also serves on Executive Committee
Trustee, Paley Center for Media since 2016
Director, Museum of Modern Art (“MoMA”) since 2012; also serves on Latin American Acquisition Committee and Cisneros Institute Advisor
Director, MoMA PS1 since 2006
Director, Parrot Analytics since 2018
Director, Knight Foundation since 2017; also serves on Nominating and Program Committees
Director, University of Miami since 2017; also serves on Academic Affairs Committee
Director, Citibank Private Bank Latin American Advisory Board since 2018
Director, AST & Science since 2018; also serves as Head of Strategy since 2019
Member, Strategic Advisory Board of Mission Advancement Corp. since 2020
Director, Americas Society/Council of the Americas since 2021
Co-chair, Endeavor Miami (2014 – 2020)
Director, International Emmy’s (2016 – 2019); also served on Executive Committee

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Age: 74

Director Since: 2004

Mattel Committee Memberships:
Compensation Committee (Chair)
Executive Committee (Chair)
Governance and Social Responsibility Committee
Other Current Public Directorships:
Haymaker Acquisition Corp. II
        Michael Dolan  

Key Experience/Director Qualifications

Mr. Dolan brings to Mattel’s Board significant leadership, finance, global consumer products and branding, strategic marketing, and operations experience. Mr. Dolan also brings a valuable perspective on the entertainment industry through his experience as the former Chief Executive Officer of IMG, which is important to Mattel since many of our most popular toys are derived from licensed entertainment properties. In addition, Mr. Dolan’s long tenure with Young & Rubicam enables him to provide unique insights into brand building and advertising. Mr. Dolan has also gained valuable experience as the Chief Financial Officer of IMG, Viacom, and Young & Rubicam, where he dealt with complex accounting principles and judgments, internal controls, and financial reporting rules and regulations, and evaluated the financial results and financial reporting processes of large companies.

Career Highlights

Bacardi Limited, a global privately-held spirits company
Chief Executive Officer (November 2014 – September 2017)
Interim Chief Executive Officer (May 2014 – November 2014)
Director (2009 – September 2017; served on Audit Committee until 2014)
IMG Worldwide, a global sports, fashion, and media entertainment company
Chairman of the Board and Chief Executive Officer (November 2011 – May 2014)
President and Chief Operating Officer (April 2011 – November 2011)
Executive Vice President and Chief Financial Officer (April 2010 – April 2011)
Viacom, Inc., a global entertainment content company
Executive Vice President and Chief Financial Officer (May 2004 – December 2006)
Kohlberg Kravis Roberts & Co., a global investment firm
Senior Advisor (October 2004 – May 2005)
Young & Rubicam, Inc., a global marketing and communications company
Chairman of the Board and Chief Executive Officer (2001 – 2003)
Vice Chairman and Chief Operating Officer (2000 – 2001)
Vice Chairman and Chief Financial Officer (1996 – 2000)
Other Public Company Directorships
Haymaker Acquisition Corp. II since 2019
OneSpaWorld Holdings Limited (2019 – 2020)

Additional Leadership Experience and Service

Director, March of Dimes since 2013
Director, Northside Center for Child Development since 2003
Chairman of the Board, America’s Choice, Inc. (2004 – 2010)

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Age: 58

Director Since: 2020

Mattel Committee Memberships:
Audit Committee (Chair)
Executive Committee
Other Current Public Directorships:
Frontier Communications Corporation
Invacare Corp.
Sally Beauty Holdings, Inc.
        Diana Ferguson  

Key Experience/Director Qualifications

Ms. Ferguson brings to Mattel’s Board of Directors significant leadership, finance, and human capital management experience. Ms. Ferguson serves as a principal of Scarlett Investments LLC, a firm that invests in and advises middle-market consumer products companies, which she founded in 2013. Previously, Ms. Ferguson served as Chief Financial Officer of Cleveland Avenue LLC, a privately held venture capital and consulting firm. Ms. Ferguson also served as Chief Financial Officer of the Chicago Board of Education, leading a staff of more than 200 professionals and managing all aspects of the organization’s more than $6 billion financial operations.

Career Highlights

Scarlett Investments, LLC, a private investment and consulting firm
Principal (August 2013 – Present)
Cleveland Avenue LLC, a privately held venture capital and consulting firm
Chief Financial Officer (September 2015 – December 2020)
The Folgers Coffee Company, a maker of coffee products
Senior Vice President and Chief Financial Officer (April 2008 – November 2008)
Merisant Worldwide, Inc., a maker of table-top sweeteners and sweetened food products
Executive Vice President and Chief Financial Officer (2007 – 2008)
Sara Lee Corporation, a global consumer products company
Senior Vice President and Chief Financial Officer, Sara Lee Foodservice (2006 – 2007)
Senior Vice President Strategy and Corporate Development (2004 – 2006)
Vice President and Treasurer (2001 – 2004)
Other Public Company Directorships
Frontier Communications Corporation since 2014; also serves as Chair of Compensation Committee and member of Nominating and Corporate Governance Committee
Invacare Corp. since 2018; also serves on Audit Committee and Nominating and Governance Committee
Sally Beauty Holdings, Inc. since January 2019; also serves as Chair of Compensation and Talent Committee and member of Audit Committee
TreeHouse Foods, Inc. (2008 – 2016; chaired Audit Committee and served on Compensation Committee)

Additional Leadership Experience and Service

Trustee, Groton School since 2015; also serves as Treasurer
Board Member, Leadership Greater Chicago (2003 – 2005); also served as Board President (2012 – 2014)

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Age: 56

Director Since: 2017

Mattel Committee Memberships:
Equity Grant Allocation Committee
Other Current Public Directorships:
Warner Music Group Corp.
        Ynon Kreiz  

Key Experience/Director Qualifications

Mr. Kreiz brings to Mattel’s Board of Directors significant leadership, finance, multimedia, entertainment, and content experience, and during his tenure as a director of Mattel has gained a deep understanding of Mattel’s business and the toy industry. As a former Chief Executive Officer of a number of global media companies and a board member of Warner Music Group Corp., he brings a valuable perspective on the entertainment, digital, and media industries, including a focus on children’s programming. He was also General Partner at Balderton Capital where he was active in early stage technology and media investments.

Career Highlights

Maker Studios, Inc., a global digital media and content network company
Chairman of the Board (June 2012 – May 2014)
Chief Executive Officer (May 2013 – January 2015)
Endemol Group, one of the world’s leading television production companies
Chairman of the Board and Chief Executive Officer (June 2008 – June 2011)
Balderton Capital (formerly Benchmark Capital Europe), a venture capital firm
General Partner (2005 – 2007)
Fox Kids Europe N.V., a children’s entertainment company
Chairman of the Board, Chief Executive Officer and Co-founder (1996 – 2002)
Other Public Company Directorships
Warner Music Group Corp. since May 2015; also serves on Audit Committee

Additional Leadership Experience and Service

Chairman of the Board, Showmax (March 2017 – August 2018)
Board of Advisors, Anderson Graduate School of Management at UCLA since April 2015
Chairman of Board of Trustees, Israeli Olympic Committee, London Games (2012)

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Age: 57

Director Since: 2018

Mattel Committee Memberships:
Finance Committee
Governance and Social Responsibility Committee
        Soren Laursen  

Key Experience/Director Qualifications

Mr. Laursen brings to Mattel’s Board of Directors significant leadership, finance, brand, marketing, retail, global, and toy industry experience. As a former Chief Executive Officer of a toy retail company and former President of a toy manufacturer, he has tested experience and understanding of Mattel’s business and the global commercial toy industry, deep expertise in developing strong brand franchises supported by compelling media, digital and technology activations, and leadership experience in successfully turning around a company and driving growth.

Career Highlights

TOP-TOY, a toy retailer in the Nordic market
Chief Executive Officer (April 2016 – January 2018)
LEGO Systems, Inc., the Americas division of the family-owned and privately-held The LEGO Group, a toy company based in Denmark
President (January 2004 – March 2016)
The LEGO Company
Senior Vice President, Europe North and Europe East (April 2000 – December 2003)
Senior Vice President, Special Markets (1999 – 2000)
Vice President/General Manager, LEGO New Zealand (1995 – 1999)

Additional Leadership Experience and Service

Interim Executive Director, Mattel (October 2018 – September 2019)
Advisor, American Toy Industry Association since 2014; also served as Chairman 2012-2014 and Board Member at large since 2004
Director, A.T. Cross, R.I (2014 – 2016)
Board member, Varier Furniture A/S Oslo since 2015; also serves as Chairman since 2019
Director, LEGO Children’s Fund (2010 – 2016)
Director, Connecticut Children’s Medical Center (2008 – 2016; also served on Executive and Strategy Task Force Committee)
Advisor, AVT Business School since 2018
Director, Patentrenewals.com since 2018
Director, Isabella A/S since 2018
Chairman, Postevand Aps since 2015
Chairman, BørneRiget Fonden since 2020
Director, BoeBeauty since 2020

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Age: 59

Director Since: 2015

Mattel Committee Memberships:
Governance and Social Responsibility Committee (Chair)
Executive Committee
        Ann Lewnes  

Key Experience/Director Qualifications

Ms. Lewnes brings to Mattel’s Board her significant leadership experience in branding, advertising, technology, and financial management marketing. She also brings experience in driving strategic growth and global demand at two public technology companies, as well as her experience serving on the boards of nonprofit entities. At Adobe, Ms. Lewnes is responsible for Adobe’s corporate brand, corporate communications, and integrated marketing efforts worldwide, and has spearheaded the transformation of the company’s global marketing efforts to be digital-first and data-driven. At Intel, Ms. Lewnes played a key role in globally positioning the business and products to consumers, business professionals, and key computer channels.

Career Highlights

Adobe Systems Incorporated, a multinational computer software company providing digital marketing and media solutions
Chief Marketing Officer and Executive Vice President, Corporate Strategy and Development, since January 2016
Senior Vice President and Chief Marketing Officer (November 2006 – January 2016)
Intel Corporation, a multinational semiconductor manufacturing company that designs, manufactures, and sells integrated digital technology platforms
Vice President, Sales & Marketing (2000 – 2006)
Awards Received
Matrix Award (2020)
American Marketing Association Hall of Fame (2019)
Forbes Most Influential CMOs (2017-2020)

Additional Leadership Experience and Service

Director, Advertising Council (2009-2019)
Director, Sundance Institute since 2020

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Age: 58

Director Since: 2018

Mattel Committee Memberships:
Audit Committee
Finance Committee
        Roger Lynch  

Key Experience/Director Qualifications

Mr. Lynch brings to Mattel’s Board significant leadership, media, technology, and internet experience. He has a wealth of consumer experience, including experience leveraging changing consumer behaviors that can be applied to help further Mattel’s growth. Additionally, he has extensive experience leading, innovating, and scaling consumer media and technology businesses globally, including having guided a number of companies through critical transformation periods. Through his media industry experience, Mr. Lynch has frequently worked with large content providers to create business models that embrace technological changes in distribution.

Career Highlights

Condé Nast, a global media company
Chief Executive Officer since April 2019
Pandora Media, Inc., a streaming music service
Chief Executive Officer, President, and Director (September 2017 – February 2019)
Sling TV Holding LLC, an on-demand internet streaming television service (subsidiary of DISH Network)
Chief Executive Officer and Director (July 2012 – August 2017)
Dish Network LLC, a pay television operator
Executive Vice President, Advanced Technologies (November 2009 – July 2012)
Video Networks International, Ltd., an internet protocol television provider
Chairman and Chief Executive Officer (2002 – 2009)
Chello Broadband N.V., a broadband internet service provider in Europe
President and Chief Executive Officer (1999 – 2001)

Additional Leadership Experience and Service

Director, Partnership for New York City since 2021
Director, USC Dornsife School of Letters, Arts and Sciences since 2018
Director, Quibi LLC since 2018
Director, Tuck School of Business at Dartmouth since 2017
Director, Video Networks International LTD since 2002
Board Observer, Roku LLC (2012 – 2017)
Director, Digitalsmiths LLC (2010 – 2015; served as Chair of Compensation Committee)

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Age: 62

Director Since: 2006

Mattel Committee Memberships:
Finance Committee (Chair)
Audit Committee
Executive Committee
Other Current Public Directorships:
East West Bancorp, Inc.
        Dominic Ng  

Key Experience/Director Qualifications

Mr. Ng brings to Mattel’s Board significant experience in leadership, strategy, business development, and global business. He also has valuable experience in dealing with complex accounting principles and judgments, internal controls, and financial reporting rules and regulations, and evaluating financial results and financial reporting processes of large companies. Mr. Ng transformed East West Bank from a small savings and loan association based in Los Angeles into a large, full-service commercial bank with differentiated focus on the United States and China markets. Mr. Ng’s extensive experience conducting business in China is extremely valuable to Mattel because of Mattel’s large manufacturing presence in China and emerging markets initiatives (including China). He also brings to Mattel’s Board extensive business and governmental relationships in the State of California and the greater metropolitan area of Los Angeles, where Mattel is headquartered.

Career Highlights

East West Bancorp, Inc. and East West Bank, a global bank based in California
Chief Executive Officer and Chairman of the Board since 1992
President (1992 – 2009)
Seyen Investment, Inc., a private family investment business
President (1990 – 1992)
Deloitte & Touche LLP, an accounting firm
Certified Public Accountant (1980 – 1990)
Other Public Company Directorships
East West Bancorp, Inc. since 1992; also Chairman since 1992
PacifiCare Health Systems, Inc. (2003 – 2005)
ESS Technology, Inc. (1998 – 2004)

Additional Leadership Experience and Service

Director, STX Entertainment (August 2016 – April 2020)
Trustee, University of Southern California since 2014
Trustee, Academy Museum of Motion Pictures since 2018
Member, Keck School of Medicine Board of Overseers since 2016
Director of the following nonprofit entities and government organizations: Federal Reserve Bank of San Francisco – Los Angeles Branch (2005 – 2011); California Bankers Association (previously 2002 – 2011, 2016 – 2017); Chairman, Committee of 100 (2011 – 2014); The United Way of Greater Los Angeles (2006 – 2014); Pacific Council on International Policy (2010 – 2013); and Los Angeles’ Mayor’s Trade Advisory Council as Co-Chair (2009 – 2011)

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Age: 69

Director Since: 2018

Mattel Committee Memberships:
Compensation Committee
Governance and Social Responsibility Committee
Other Current Public Directorships:
Ares Management LLC
United Therapeutics Corp.
        Dr. Judy Olian  

Key Experience/Director Qualifications

Dr. Olian brings to Mattel’s Board her extensive leadership record in running large organizations, as well as her professional expertise in human resource management, top management teams, and management strategy. She also has extensive board experience in publicly traded and nonprofit boards. Prior to her most recent roles, she served as Dean of Penn State’s Smeal College of Business, and in various faculty and leadership roles at the University of Maryland. She was also a management consultant, and chairman of AACSB International, the premier accrediting and thought leadership organization for global business schools.

Career Highlights

Quinnipiac University
President since July 2018
UCLA Anderson School of Management
Dean and John E. Anderson Chair in Management (January 2006 – July 2018)
Other Public Company Directorships
Ares Management LLC since 2015; also serves on Audit Committee
United Therapeutics Corp. since 2016; also serves on Audit Committee

Additional Leadership Experience and Service

Director, UCLA Technology Development Corporation (2014 – 2018)
Board member, Business-Higher Education Forum
Member, CT Governor’s Workforce Commission
Advisory Board Member, Catalyst Inc. since 2011
Board member, AdvanceCT related to economic development, appointed by Governor of Connecticut
Chairman, Loeb Awards for Excellence in Business Journalism (2006 – 2018)
Member, International Advisory Board, Peking University School of Business (2007 – 2016)

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Board Composition and the Director Nomination Process

Identifying and Evaluating Director Nominees

The Board, acting through the Governance and Social Responsibility Committee, is responsible for identifying and evaluating candidates for membership on the Board. The Board’s Amended and Restated Guidelines on Corporate Governance (the “Guidelines on Corporate Governance”) set forth the process for selecting candidates for director positions and the role of the Governance and Social Responsibility Committee in identifying potential candidates and screening them, with input from the Chairman of the Board.

Under the Guidelines on Corporate Governance and the charter of the Governance and Social Responsibility Committee, the Governance and Social Responsibility Committee is responsible for reviewing with the Board annually the appropriate skills and characteristics required of Board members given the current make-up of the Board and the perceived needs of the Board at that time. The Governance and Social Responsibility Committee also reviews the results of the Board’s annual self-evaluation. This review includes an assessment of the talents, skills, areas of expertise, experience, diversity, and independence of the Board and its members. Any changes that may have occurred in any director’s responsibilities, as well as such other factors as may be determined by the committee to be appropriate for review, are also considered.

The charter of the Governance and Social Responsibility Committee also sets forth the process by which the committee actively seeks qualified director candidates for recommendation to the Board. The committee, with input from the Chairman of the Board, screens candidates to fill any vacancies on the Board, solicits recommendations from Board members as to such candidates, and considers recommendations for Board membership submitted by stockholders as described further below. The committee works with a third-party, independent search firm to locate candidates who may meet the needs of the Board. Candidates who the committee expresses interest in pursuing must meet in person with at least two members of the committee before being selected. The committee recommends to the Board the director nominees for election at each annual meeting of stockholders. Diana Ferguson was initially recommended to the committee by a member of Mattel’s Talent Acquisition team.

Our Director Nominations Policy describes the methodology for selecting the candidates who are included in the slate of director nominees recommended to the Board and the procedures for stockholders to follow in submitting nominations and recommendations of possible candidates for Board membership.

Under our Director Nominations Policy, each director nominee should, at a minimum, possess the following:
An outstanding record of professional accomplishment in his or her field of endeavor;
A high degree of professional integrity, consistent with Mattel’s values;
Willingness and ability to represent the general best interests of all of Mattel’s stockholders and not just one particular stockholder or constituency, including a commitment to enhancing long-term stockholder value; and
Willingness and ability to participate fully in Board activities, including active membership on at least one Board committee and attendance at, and active participation in, meetings of the Board and the committee(s) of which he or she is a member, and no commitments that would, in the judgment of the Governance and Social Responsibility Committee, interfere with or limit his or her ability to do so.

Our Director Nominations Policy also lists the following additional skills, experiences, and qualities that are desirable in director nominees:
Skills and experiences relevant to Mattel’s business, operations, or strategy;
Qualities that help the Board achieve a balance of a variety of knowledge, experience, and capability on the Board, and an ability to contribute positively to the collegial and collaborative culture among Board members; and
Qualities that contribute to the Board’s overall diversity – diversity being broadly construed to mean a variety of opinions, perspectives, professional and personal experiences, and backgrounds, as well as other differentiating characteristics.

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Lastly, a nominee’s ability to qualify as an independent director of Mattel is considered in terms of both the overall independence of Mattel’s Board as well as the independence of its committees.

The committee reviews the Director Nominations Policy periodically and may amend the policy from time to time as necessary or advisable based on changes to applicable legal requirements and listing standards as well as the evolving needs and circumstances of the business. In addition, the Guidelines on Corporate Governance are reviewed periodically, and may be changed by the Board only if, upon a determination by the independent directors in executive session, the independent directors determine that such change is in the best interests of the Company and its stockholders, and recommend such change to be made to the full Board. For additional information on the Board’s selection and evaluation process, see our Director Nominations Policy, which is available on Mattel’s corporate website at https://corporate.mattel.com/en-us/investors/corporate-governance.

Stockholder Recommendations of Director Candidates

The Governance and Social Responsibility Committee will consider recommendations for director candidates made by stockholders and evaluate them using the same criteria as other candidates. Under our Director Nominations Policy, any such recommendation must include a detailed statement explaining why the stockholder is making the recommendation, as well as all information that would be required were the stockholder to nominate such person under our Amended and Restated Bylaws (the “Bylaws”) or applicable law. For additional information on stockholder recommendations, see our Bylaws and Director Nominations Policy, which are available on Mattel’s corporate website at https://corporate.mattel.com/en-us/investors/corporate-governance.

Stockholder recommendations for director candidates should comply with our Director Nominations Policy and should be addressed to:

Governance and Social Responsibility Committee
c/o Secretary, TWR 15-1
Mattel, Inc.
333 Continental Boulevard
El Segundo, CA 90245-5012

Stockholder Proxy Access Right

Our Bylaws permit a stockholder, or group of up to 20 stockholders, owning at least three percent of the Company’s outstanding common stock continuously for at least three years, to nominate and include in the Company’s proxy materials for an annual meeting of stockholders, director nominees constituting up to the greater of two nominees or 20% of the Board, provided that the stockholder(s) and the director nominee(s) satisfy the requirements specified in the Bylaws. Additional information on the deadlines to submit director nominations pursuant to the proxy access provisions of our Bylaws is set forth on page 113 under “Director Nominations Pursuant to Proxy Access Provisions.”

Board Structure

Board Leadership Structure

The Board believes that one of its most important responsibilities is to evaluate and determine the most appropriate Board leadership structure for Mattel so that it can provide effective, independent oversight of management and facilitate its engagement in, and understanding of, Mattel’s business. To carry out this responsibility, the Guidelines on Corporate Governance empower the Board to evaluate and determine the optimal leadership structure for the Company in relation to Mattel’s specific characteristics or circumstances at any given time. The Board evaluates its structure periodically, as well as when warranted by specific circumstances, such as the appointment of a new CEO. As part of its evaluation, the Board assesses which structure it believes is in the best interests of Mattel and its stockholders based on the evolving needs of the Company. This governance structure provides the Board appropriate flexibility to determine the leadership structure best suited to support the dynamic demands of our business.

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In April 2018, in connection with Mr. Kreiz’s appointment as CEO, the Board determined that the Company and its stockholders would be best served by a leadership structure in which Mr. Kreiz serves as Chairman and CEO, counterbalanced by a strong, independent Board led by Mr. Dolan, as Independent Lead Director.

The Board believes that this leadership structure, including our strong Independent Lead Director, best serves Mattel and its stockholders at this time by leveraging executive leadership experience while providing effective independent oversight. Independent leadership still remains an important pillar of the Board leadership structure and, as such, the Company continues to have an Independent Lead Director with robust, well-defined responsibilities as set forth below under “Independent Lead Director Responsibilities.”

Going forward, the Board will continue to evaluate its leadership structure in order to confirm it aligns with and supports the evolving needs and circumstances of the Company and its stockholders.

Independent Lead Director Responsibilities

The Board recognizes the importance of strong independent Board leadership. As such, the independent directors of the Board elect annually an Independent Lead Director when the Chairman is not independent. Our Independent Lead Director has specifically-enumerated powers and responsibilities, providing the same leadership, oversight, and benefits to the Company and Board that would be provided by an independent Chairman.

Michael Dolan   |   Independent Lead Director

Director since 2004; Independent Lead Director since 2015
Chair of the Compensation Committee and Executive Committee; member of Governance and Social Responsibility Committee
Board experience at Mattel in multiple operating environments
In 2020, the independent directors of the Board re-elected Mr. Dolan to serve as the Board’s current Independent Lead Director, a position he has held since January 2015. The Board believes that Mr. Dolan’s extensive business experience across a variety of industries, unique insights in the areas of advertising and brand building, and prior service on several boards of directors make him well qualified to serve as Mattel’s Independent Lead Director.

The Independent Lead Director’s duties include the following significant powers and responsibilities:
Presides at all meetings of the Board at which the Chairman is not present, including executive sessions of the independent directors;
Serves as liaison between the Chairman and the independent directors;
Approves information sent to the Board;
Approves meeting agendas for the Board;
Approves schedules of meetings to assure that there is sufficient time for discussion of all agenda items;
Has authority to call meetings of the independent directors; and
If requested by significant stockholders, makes himself or herself available for consultation and direct communication.

Board Independence Determinations

Mattel’s Board has adopted Guidelines on Corporate Governance consistent with Nasdaq listing standards that include qualifications for determining director independence. These provisions incorporate Nasdaq’s categories of relationships between a director and a listed company that would make a director ineligible to be independent.

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The Board has affirmatively determined that each of Messrs. Bradley, Dolan, Laursen, Lynch, and Ng, Mses. Cisneros, Ferguson, and Lewnes, and Dr. Olian is independent within the meaning of both Mattel’s and Nasdaq’s director independence standards, as currently in effect, and has no relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Because Mr. Kreiz is employed by Mattel, he does not qualify as independent. Vasant Prabhu, who served as director until June 10, 2020, was determined to be independent during the time he served on the Board. Furthermore, the Board has determined that each of the members of our Audit Committee, Compensation Committee, and Governance and Social Responsibility Committee is independent within the meaning of Nasdaq director independence standards applicable to members of such committees, as currently in effect.

The Compensation Committee members also qualify as “non-employee directors” and “outside directors” within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Section 162(m) of the Internal Revenue Code, respectively.

In making these determinations, the Board considered, among other things, ordinary course commercial relationships with companies at which Board members then served as executive officers (including Adobe Systems Incorporated and Condé Nast). The aggregate annual amounts involved in these commercial transactions were less than the greater of $200,000 or 5% of the annual consolidated gross revenues of these companies, and the Board members were not deemed to have a direct or indirect material interest in those transactions. The Board has determined that none of these relationships are material and that none of these relationships impair the independence of any non-employee director.

Board Committees

The Board has established six principal committees: the Audit Committee, the Compensation Committee, the Governance and Social Responsibility Committee, the Finance Committee, the Executive Committee, and the Equity Grant Allocation Committee. Each of the Audit Committee, the Compensation Committee, and the Governance and Social Responsibility Committee has a written charter that is reviewed annually and revised as appropriate. A copy of each of these committee’s current charter is available on Mattel’s corporate website at https://corporate.mattel.com/en-us/investors/corporate-governance.

The current chairs and members of these committees are identified in the following table:

Director Audit Compensation Governance and
Social Responsibility
Finance Executive Equity Grant
Allocation
Non-Employee Directors
R. Todd Bradley
Adriana Cisneros
Michael Dolan+
Diana Ferguson
Soren Laursen
Ann Lewnes
Roger Lynch
Dominic Ng
Dr. Judy Olian
Employee Director
Ynon Kreiz

= Chair
+ = Independent Lead Director
= Audit Committee Financial Expert
= Member

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The primary responsibilities, membership, and meeting information for the committees of the Board during 2020 are summarized below.

Audit Committee
Members in 2020:
Diana Ferguson (Chair, effective September 2020)
R. Todd Bradley
Roger Lynch
Dominic Ng
Vasant Prabhu (member until June 2020)
Meetings in 2020: 15
The Board has determined that each member meets applicable SEC, Nasdaq, and Mattel independence and “financial sophistication” standards and qualifies as an “audit committee financial expert” under applicable SEC regulation.
Primary Responsibilities
Assist the Board in fulfilling the Board’s oversight responsibilities regarding the quality and integrity of Mattel’s financial reports, the independence, qualifications, and performance of Mattel’s independent registered public accounting firm, the performance of Mattel’s internal audit function, and Mattel’s compliance with legal and regulatory requirements
Oversee the Company’s assessment and management of Mattel’s material risks impacting the Company’s business, including those relating to the Company’s financial reporting and accounting and information technology security
Sole authority to appoint or replace the independent registered public accounting firm; directly responsible for the compensation and oversight of the work of the independent registered public accounting firm for the purpose of preparing or issuing an audit report or related work; directly responsible for the evaluation of the performance and independence of the independent registered public accounting firm, including consideration of the adequacy of quality controls and the provision of permitted non-audit services
Meet with the independent registered public accounting firm and management in connection with each annual audit to discuss the scope of the audit, the staffing of the audit, and the procedures to be followed
Review and discuss Mattel’s quarterly and annual financial statements with management, the independent registered public accounting firm, and the internal audit group
Discuss with management and the independent registered public accounting firm Mattel’s practices with respect to risk assessment, risk management, and critical accounting policies
Discuss with management and the independent registered public accounting firm key reporting practices (including the use of non-GAAP measures) and new accounting standards
Review periodically with the Chief Legal Officer the implementation and effectiveness of Mattel’s compliance and ethics programs
Discuss periodically with the independent registered public accounting firm and the senior internal auditing officer the adequacy and effectiveness of Mattel’s accounting and financial controls, and consider any recommendations for improvement of such internal control procedures
Pre-approve audit services, internal-control-related services, and permitted non-audit services to be performed for Mattel by its independent registered public accounting firm

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Governance and Social Responsibility Committee
Members in 2020: Meetings in 2020: 5
Ann Lewnes (Chair)
Adriana Cisneros
Michael Dolan
Soren Laursen
Dr. Judy Olian
The Board has determined that each member meets applicable Nasdaq and Mattel independence standards.

Primary Responsibilities

Assist the Board by identifying individuals qualified to become Board members, consistent with the criteria approved by the Board, and to select, or to recommend that the Board select, the director nominees for the next annual meeting of stockholders
Assist the Board in evaluating potential executive candidates in succession planning
Develop and recommend to the Board the Guidelines on Corporate Governance
Lead the evaluation of the Board’s performance
Evaluate and make recommendations to the Board regarding the independence of the Board members
Recommend director nominees for each committee of the Board
Assist the Board with oversight and review of social responsibility matters such as sustainability, corporate citizenship, community involvement, diversity and equal opportunity matters, responsible supply chain standards, public policy matters, and environmental, health, and safety issues
Oversee and review with management risks relating to governance and social responsibility matters
Oversee the Company’s engagement with institutional stockholders and proxy advisory firms concerning governance and social responsibility matters
Provide oversight with regard to philanthropic activities
Work closely with the CEO and other members of Mattel’s management to affirm that Mattel is governed effectively and efficiently

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Compensation Committee
Members in 2020: Meetings in 2020: 7
Michael Dolan (Chair)
R. Todd Bradley
Dr. Judy Olian

The Board has determined that each member meets applicable Nasdaq and Mattel independence standards and qualifies as an “outside director” within the meaning of Section 162(m) of the Internal Revenue Code and as a “non-employee director” within the meaning of Rule 16b-3 of the Exchange Act.

Meets at least once each year without the CEO present.

Primary Responsibilities

Develop, evaluate and, in certain instances, approve or determine compensation plans, policies, and programs
Approve all forms of compensation to be provided to the CEO and all other executives who are subject to Section 16 of the Exchange Act
Annually review and approve corporate goals and objectives relevant to the CEO, and review and evaluate the CEO’s performance
Administer short- and long-term incentive and equity compensation plans and programs
Approve all forms of compensation to be provided to the non-employee directors
Assess material risks associated with Mattel’s compensation structure, policies, plans, and programs generally
Report and, as appropriate, make recommendations to the Board regarding executive compensation programs and practices
Inform the non-management directors of the Board of its decisions regarding compensation for the CEO and other senior executives
Oversee the Company’s engagement with institutional stockholders and proxy advisory firms concerning executive compensation matters

Independent Compensation Consultant

The Compensation Committee has the authority to retain independent legal or other advisors, to the extent it deems necessary or appropriate, and has retained Frederic W. Cook & Co., Inc. (“FW Cook”) as its independent compensation consultant since August 2007 to provide the committee with advice and guidance on the design of our executive compensation levels, plans, programs, and practices. FW Cook has not performed and does not currently provide any services to management or Mattel. Each year the Compensation Committee reviews the independence of the compensation consultant and other advisors who provide advice to the Compensation Committee, employing the independence factors specified in the Nasdaq listing standards. The Compensation Committee has determined that FW Cook is independent within the meaning of the committee’s charter and the Nasdaq listing standards, and the work of FW Cook for the committee does not raise any conflicts of interest. FW Cook attends Compensation Committee meetings when invited and meets with the Compensation Committee without management. FW Cook provides the Compensation Committee with third-party data and analysis as well as advice and expertise on competitive compensation practices and trends, executive compensation plans and program designs, and proposed executive and director compensation levels. FW Cook reports directly to the Compensation Committee and, as directed by the Compensation Committee, works with management and the Chair of the Compensation Committee. In 2020, FW Cook assisted the Compensation Committee on the following matters:

Analyzing and advising on:
The base salaries, bonus leverage, target and actual annual cash incentives, target and actual annual LTIs, TDC, and all other compensation for our CEO and his direct reports (Executive Vice Presidents (“EVPs”) and above) as compared to the market and compensation of their counterparts in our peer group;

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Our MIP and LTI designs, provisions, and practices; and
The compensation of the Board as compared to the board compensation at our peer group companies.
Reviewing and advising regarding our peer group;
Assessing if our compensation plans, policies, and programs present potential material risk to the Company;
Reviewing and advising on our 2020 Proxy Statement;
Providing executive compensation regulatory and legislative updates; and
Advising regarding institutional proxy advisors’ voting policies and market trends.

Finance Committee
Members in 2020: Meetings in 2020: 5
Dominic Ng (Chair)
Soren Laursen
Roger Lynch
Vasant Prabhu (member until June 2020)

Primary Responsibilities

Advise and make recommendations to the Board regarding allocation and deployment of available capital, including credit facilities and debt securities, capital expenditures, dividends to stockholders, stock repurchase programs, and hedging transactions
Oversee interactions with credit rating agencies
Advise and make recommendations to the Board regarding mergers, acquisitions, dispositions, and other strategic transactions
Oversee third-party financial risks

Other Board Committees

The Executive Committee did not hold any meetings in 2020. The members of the Executive Committee are Mses. Ferguson and Lewnes and Messrs. Dolan and Ng. Mr. Prabhu was a member of the Executive Committee until June 2020. Mr. Dolan chairs the Executive Committee. The Executive Committee may exercise all the powers of the Board, subject to limitations of applicable law, between meetings of the Board.

Mattel also has an Equity Grant Allocation Committee (“EGAC”) with Mr. Kreiz as the current sole member. The EGAC’s primary function is to exercise the limited authority delegated to the committee by the Board and the Compensation Committee with regard to approving annual and off-cycle equity grants to employees below the CEO direct report level (Senior Vice Presidents (“SVPs”) and below) who are not Section 16 officers.

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Board Meetings

During 2020, the Board held five meetings. No incumbent director attended less than 75% of the aggregate of all Board meetings and all meetings held by any committee of the Board on which such director served (in each case, held during the period of time such director served on the Board or the applicable committee).

Policy Regarding Attendance of Directors at the Annual Meeting of Stockholders

Each member of Mattel’s Board is expected, but not required, to attend Mattel’s annual meeting of stockholders. There were ten directors at the time of our 2020 annual meeting of stockholders (“2020 Annual Meeting”) and nine directors attended the meeting.

Board’s Role and Responsibilities

Strategic Oversight

Our Board is responsible for maintaining a leadership structure that provides independent oversight of the Company’s business strategy. The Board oversees and provides advice and guidance to senior management on the formulation and implementation of the Company’s strategic plans, including, but not limited to, the execution of the Company’s transformation strategy. To reflect that this remains a key responsibility for the Board, members of the Board conduct this oversight through regular meetings of the Board and its committees, a dedicated meeting each year to focus on strategy, and regular discussions between the Board and management outside of Board and Committee meetings.

This ongoing effort enables the Board to assess Company performance both in the short-to-mid term and the mid-to-long term. In addition to overseeing financial and operational performance, our Board remains focused on non-financial measures, including human capital management, diversity and inclusion, culture, sustainability, and risk management.

In 2020, the Board worked closely with management in evaluating the impacts of the COVID-19 pandemic on Mattel’s business, strategy, and workforce – receiving regular briefings from Mattel’s Finance, Commercial, Supply Chain, and Human Resources teams.

While the Board and its committees oversee the Company’s transformation strategy, management is charged with its day-to-day execution. To monitor performance against the Company’s transformation strategy, the Board receives regular updates and actively engages in dialogue with management.

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Risk Oversight

 

Board Oversight
The full Board is responsible for overseeing Mattel’s ongoing assessment and management of material risks impacting Mattel’s business. The Board relies on Mattel’s management to identify and report on material risks, and relies on each Board committee to oversee management of specific risks related to that committee’s function. The Board engages in risk oversight throughout the year and specifically focuses on risks facing Mattel each year at a regularly scheduled Board meeting.

    
  
 

Audit Committee
The Audit Committee oversees the Company’s assessment and management of Mattel’s material risks impacting the Company’s business, including those relating to the Company’s financial reporting and accounting and information technology security. The Audit Committee receives regular reports from management regarding Mattel’s information technology security programs and policies, including its response to cyber threats and related risks. The Audit Committee is also responsible for overseeing Mattel’s compliance risk, which includes risk relating to Mattel’s compliance with laws and regulations. The Audit Committee annually reviews and discusses with Company management the steps management has taken to monitor and control these risks.

 

Compensation Committee
The Compensation Committee oversees and assesses material risks associated with Mattel’s compensation plans, policies, and programs generally, including those that may relate to pay mix, selection of performance measures, the goal setting process, and the checks and balances on the payment of compensation. See “Compensation Risk Review” for a more detailed description of the Compensation Committee’s review of potential pay risk.

 

Finance Committee
The Finance Committee oversees and reviews with management risks relating to capital allocation and deployment, including Mattel’s credit facilities and debt securities, capital expenditures, dividend policy, mergers, acquisitions, dispositions, and other strategic transactions. The Finance Committee also oversees third-party financial risks, which include risks arising from customers, vendors, suppliers, subcontractors, creditors, debtors, and counterparties in hedging transactions, mergers, acquisitions, dispositions, and other strategic transactions.

Governance and Social Responsibility Committee
The Governance and Social Responsibility Committee oversees and reviews with management risks relating to governance and social responsibility matters, including succession planning, environmental and health and safety compliance, sustainability, corporate citizenship, community involvement, global responsible supply chain standards, diversity and equal opportunity, philanthropy and charitable contributions, and public policy and government relations.

           

Role of Management
Consistent with their role as active managers of Mattel’s business, our senior executive officers play the most active role in risk management, and the Board looks to such officers to keep the Board apprised on an ongoing basis about risks impacting Mattel’s business and how such risks are being managed. Each year as part of Mattel’s risk evaluation process performed by its internal audit team, Mattel’s most senior executive officers, including the Chief Legal Officer, provide input regarding material risks facing the business group or function that each manages. These risks are presented to the Audit Committee and the full Board along with Mattel’s strategy for managing such risks. Since much of the Board’s risk oversight occurs at the committee level, Mattel believes that this process is important to make all directors aware of Mattel’s most material risks.

 

Oversight of COVID-19
In response to the COVID-19 pandemic, we assembled a cross-functional team with members of Mattel’s management, including our executive officers, responsible for continuously monitoring the impact of the pandemic on our business operations and implementing necessary measures to appropriately manage risk. Management has provided the Board with regular updates regarding developments related to the COVID-19 situation and has involved the Board in strategic decisions related to the impact of the COVID-19 pandemic on our business.


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Director Succession Planning

The Board has a robust director succession and search process. The Board retains an independent, third-party search firm to assist with the search for director candidates. The Board has worked diligently to achieve the right balance between long-term, institutional knowledge, and fresh perspectives on the Board. The Board believes that the current mix of director tenures provides Mattel with an optimal balance of knowledge, experience, and capability. In its oversight of management and our continued transformation efforts, this mix allows the Board to leverage the new viewpoints, experiences, and ideas of newer directors as well as the deep Company knowledge of, and experience with, Mattel of longer-tenured directors. The Board continues to be thoughtful and proactive about this process and will continue to evaluate its composition with respect to skills, attributes, and experience in order to maintain the right balance for effective, independent Board oversight.

Human Capital Management Oversight

Mattel believes that the Company is at its best when every member of our team feels respected, included, and heard. We value and share a wide range of ideas and voices that evolve and broaden our perspectives with a reach that extends into all of our brands, partners, and suppliers. Recruiting, developing, and motivating a talented global workforce is key to Mattel’s long-term growth and success. The Board is actively involved in the oversight of how we manage human capital through the Company and how we foster a culture of diversity and inclusion where everyone can show up as themselves and do their best work every day. In particular, the Board and the Governance and Social Responsibility Committee receive regular updates on our workforce management and diversity and inclusion programs.

Our purpose-driven culture reflects how Mattel works and manages its global workforce:

We collaborate: Being a part of Mattel means being part of one team with shared values and common goals where every person counts.
We innovate: At Mattel, we always aim to find new and better ways to create innovative products and experience across the organization.
We execute: We are a performance-driven company that empowers our people to strive for excellence and best-in-class outcomes.

Consistent with our long-standing commitment to providing a safe and ethical working environment for all of our employees, our top priority over the course of the COVID-19 pandemic has been to protect the health and safety of our employees, while at the same time mitigating the disruption to our business. The Board oversaw the implementation of enhanced protocols to provide a safe and sanitary working environment for employees. In late 2019 and early 2020, Mattel successfully transitioned to a remote work structure for many of our employees. In addition, we have adopted rigorous health and safety measures to safeguard employees at our manufacturing plants and distribution centers.

Continuously developing our people’s skills and capabilities for the future is essential to transforming Mattel into an IP-driven, high-performing toy company. We believe that offering employees the opportunity to continuously learn and grow their careers at Mattel is a key driver of our employee engagement strategy. In 2020, employees at all levels around the globe participated in almost 600,000 hours of learning content across professional, management development, and technical training. This included both online and instructor-led training.

An integral component towards fostering an inclusive culture at Mattel are our Employee Resource Groups (ERGs), created and led by employees to bring together members and allies of underrepresented identities across the organization. The ERGs organize Company-wide learning opportunities, cultural celebrations, and community outreach, elevate important conversations, and collect critical feedback.

We have been repeatedly recognized for these efforts and for our commitment to diversity and inclusion, including being recognized by the Human Rights Campaign Foundation as one of the country’s top places to work for LGBTQ+ equality. For the second consecutive year, we received a perfect score on the Human Rights Campaign Foundation’s Corporate Equality Index, a leading benchmarking survey and report measuring corporate policies and practices related to LGBTQ+ workplace equality.

In 2020, we announced the following global diversity and inclusion goals:

1. Achieve 100% pay equity for all employees performing similar work globally.
2. Increase female representation at all levels of the organization.
3. Increase minority representation at all levels of the organization.

In 2020, we achieved 100% pay equity for all employees in the United States. In addition, in 2020, women made up 56% of the global workforce and 51% of all leadership positions, and in the U.S., 42% of our employees are persons of color.


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Board Accountability and Effectiveness

Stockholder Engagement

Stockholder feedback is an important consideration for the Board, helping to shape our practices.

Mattel has established and maintains an ongoing and active stockholder engagement program. This engagement helps inform the Board’s understanding of stockholder perspectives on a wide range of matters. Stockholder dialogue is a year-round practice for Mattel facilitated by our Investor Relations team. In addition, an engagement effort focused on governance and executive compensation is also led by an independent director, with management, once or twice a year.

Investor Engagement Cycle

Annual Meeting of
Stockholders
Review annual meeting vote results and feedback
Plan for Fall engagement with investors
Consider enhancements to governance and compensation practices and disclosures, if needed
Conduct off-season engagement focused on governance and executive compensation
Share investor input with Board and Board committees
Conduct in-season engagement to understand investor views on proposals, if needed

In 2020, our Independent Lead Director, Mr. Dolan, participated in all stockholder engagement meetings with members of senior management. Input received from our stockholders during these engagements is shared with the full Board, the Governance and Social Responsibility Committee, and the Compensation Committee, who consider this input when making decisions. Mr. Dolan’s participation in stockholder engagement allows for a direct line of communication with our Board.

Total Percentage of Stockholders
Contacted in 2020
Total Percentage of Stockholders
Engaged in 2020

Our substantive conversations with stockholders covered a variety of governance and compensation-related topics, including:

Business Strategy      Executive Compensation Programs      Board Structure
 
COVID-19 Response Governance Practices Environmental Sustainability
 
Diversity & Inclusion Board Refreshment Human Capital Management

We believe our regular stockholder engagement is productive and provides an open exchange of ideas and perspectives for both Mattel and our stockholders. We look forward to continuing these dialogues with our stockholders in 2021 and beyond.

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Board Evaluations

The Board conducts an annual self-evaluation process to assess effectiveness at both the Board and Board committee levels. The Chair of the Governance and Social Responsibility Committee is responsible for leading the annual review and makes herself available for private sessions with Board members during the evaluation process. Comments are aggregated and summarized, and the results are reviewed with the Board and Board committees. In addition, the Governance and Social Responsibility Committee conducts an annual review of the Board’s composition and skills, and makes recommendations to the Board accordingly. This review includes an assessment of the talent base, skills, areas of expertise, experience, diversity, and independence of the Board and its members, and consideration of any recent changes in a director’s outside employment or responsibilities.

Key Areas of Focus for
the Annual Evaluations
Board operations
Board accountability
Board committee performance

Improvements in Board
Effectiveness due to Evaluations
Enhanced agenda item selection
Improved discussion formats
Greater interaction with our CEO and management team
Process
1
Questionnaires

Directors provide feedback regarding board composition and structure, Board interaction with management, meetings and materials, effectiveness of the Board, future agenda items, and director education opportunities.

2
Committee Review

The Governance and Social Responsibility Committee reviews the results of the evaluations.

3
Board Review

Results are presented to the full Board.

4
Feedback and Action

Based on the evaluation results, changes in practices or procedures are considered and implemented, as appropriate.

Certain Transactions with Related Parties

The Board maintains a written Related Party Transactions Policy regarding the review, approval, and ratification of any transaction required to be reported under Item 404(a) of the SEC’s Regulation S-K. Under the policy, a related party transaction (as defined below) may be consummated or may continue only if the Audit Committee approves or ratifies the transaction in accordance with the guidelines set forth in the policy. A transaction entered into without pre-approval of the Audit Committee is not deemed to violate the policy so long as the transaction is brought to the Audit Committee as promptly as reasonably practical after it is entered into. The policy provides that management shall present to the Audit Committee each new or proposed related party transaction, including the terms of the transaction, the business purpose of the transaction, and the benefits to Mattel and to the relevant related party. For the purposes of our policy, a “related party transaction” is any transaction or relationship directly or indirectly involving one of our directors (which term includes any director nominee) or executive officers (within the meaning of Rule 3b-7 under the Exchange Act), any person known by us to be the beneficial owner of more than 5% of our common stock, or any person known by us to be an immediate family member of any of the foregoing that would need to be disclosed under Item 404(a) of the SEC’s Regulation S-K.

Our directors and executive officers complete questionnaires on an annual basis designed to elicit information about any potential related party transactions. They are also instructed and periodically reminded of their obligation to inform our legal department of any potential related party transactions. In addition, we review information about security holders known by us to be beneficial owners of more than 5% of any class of our voting securities (see “Stock Ownership and Reporting – Principal Stockholders”) to determine whether there are any relationships with such security holders that might constitute related party transactions.

We are not aware of any related party transactions with any directors, executive officers, more-than-5% security holders, or any person known by us to be an immediate family member of any of the foregoing requiring disclosure under the SEC’s rules or our Related Party Transactions Policy.

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Corporate Governance at Mattel

Code of Conduct

The Board has adopted a Code of Conduct, which is a general statement of Mattel’s standards of ethical business conduct. The Code of Conduct applies to all of our employees, including our CEO and CFO. Certain provisions of the Code of Conduct also apply to members of the Board in their capacity as Mattel’s directors. The Code of Conduct covers topics including, but not limited to, conflicts of interest, confidentiality of information, and compliance with laws and regulations. We intend to disclose any future amendments to certain provisions of our Code of Conduct in accordance with the SEC rules, and any waivers of provisions of the Code of Conduct required to be disclosed under the SEC rules or the Nasdaq listing standards, on Mattel’s corporate website at https://corporate. mattel.com/en-us/citizenship/ethics-and-compliance#code-of-conduct.

Corporate Governance Documentation and How to Obtain Copies

In addition to our Committee charters and Code of Conduct, current copies of the following materials related to Mattel’s corporate governance policies and practices are available publicly on Mattel’s corporate website at https://corporate.mattel.com/en-us/investors/corporate-governance:

Amended and Restated Guidelines on Corporate Governance;

Restated Certificate of Incorporation;
Amended and Restated Bylaws;
Director Nominations Policy;

Audit Committee Complaint Procedures for Accounting, Internal Accounting Controls and Auditing Matters;

Policy on Adoption of a Shareholder Rights Plan; and
Golden Parachute Policy.

Communications with the Board

The independent directors of Mattel have unanimously approved a process by which stockholders of Mattel and other interested persons may send communications to any of the following: (i) the Board, (ii) any committee of the Board, (iii) the Independent Lead Director, or (iv) the independent directors. Such communications should be submitted in writing by mailing them to the relevant addressee at the following address:

[Addressee]
c/o Secretary, TWR 15-1
Mattel, Inc.
333 Continental Boulevard
El Segundo, CA 90245-5012

Any such communications will be relayed to the Board members who appear as addressees, except that the following categories of communications will not be so relayed, but will be available to Board members upon request:

Communications concerning Company products and services;

Solicitations;
Matters that are entirely personal grievances; and
Communications about litigation matters.

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Director Compensation

Independent Consultant Review

On an annual basis, the Compensation Committee reviews, with the assistance of FW Cook, our non-employee director compensation program. In November 2020, FW Cook conducted an independent review of our non-employee director compensation program and concluded that the total annual compensation for our non-employee directors on average was slightly less than the median of our then current peer group and that the mix of cash and equity aligns with peer practice. As a result, our Compensation Committee determined, based in part on FW Cook recommendations, that there would be no change to our non-employee director compensation program, under which no increases have been made since May 2016. In addition, FW Cook indicated that our non-employee director compensation program structure is aligned with best practices, as set forth below.

Non-Employee Director Compensation Program Elements:

Retainer-only cash compensation (i.e., no meeting fees);
Total annual compensation mix slightly weighted in favor of equity versus cash;
Annual equity grants delivered as full value awards based on a fixed-value formula;
Immediate vesting that avoids entrenchment;
Robust stock ownership guidelines;
Flexible voluntary deferral provisions;
Annual total limit on equity and cash compensation in the stockholder approved equity plan; and
No major benefits or perquisites other than modest charitable gift matching.

Cash Retainers

For 2020, non-employee directors received:

Annual cash retainer $ 100,000
Additional cash retainer for the Independent Lead Director of the Board $ 30,000
Additional cash retainer for the Chairs of the Audit and Compensation Committees $ 20,000
Additional cash retainer for the Chairs of the Executive, Finance, and Governance and Social Responsibility Committees $ 15,000
Additional cash retainer for Audit Committee members, including the Chair $ 10,000

Directors had the option to receive all or a portion of their annual cash retainer in the form of shares of Mattel common stock and/or to defer receipt of all or a portion of their total cash retainer under the Mattel, Inc. Deferred Compensation Plan for Non-Employee Directors (“Director DCP”), as described below under “Narrative Disclosure to Director Compensation Table - Director DCP.” Each of our non-employee directors who were elected at our 2020 Annual Meeting on June 10, 2020, received his or her total cash retainer shortly thereafter, except Messrs. Lynch and Ng who elected to defer their total cash retainer under the Director DCP.

For non-employee directors commencing service as a non-employee director other than at our annual meeting of stockholders, cash retainers are prorated from the date of commencement of service until the next annual meeting of stockholders. Ms. Ferguson, who was elected by the Board as a non-employee director effective July 21, 2020, received a prorated cash retainer in July 2020 based on the number of months (including partial months) she will have served from July 2020 to the date of the 2021 Annual Meeting.


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Equity Compensation

For 2020, non-employee directors received:

Annual equity grant of deferred vested RSUs (intended fixed grant value) $140,000

Each of our non-employee directors elected at our annual meeting of stockholders receives the annual grant of deferred vested RSUs on the annual meeting date. However, in June 2020, in light of the volatility in financial markets and our stock price caused by the COVID-19 pandemic, the Board determined that the non-employee director annual equity grants would be granted on July 31, 2020 (other than for Ms. Ferguson, which was granted on her appointment date), the same date as the employee annual 2020 equity grants, to ensure consistent treatment with LTI-eligible employees when determining the number of deferred vested RSUs granted. It is expected that the non-employee directors elected at our 2021 Annual Meeting will receive the annual grant of deferred vested RSUs on the annual meeting date, consistent with standard practice prior to 2020.

For non-employee directors commencing service on the Board other than at our annual meeting of stockholders, annual equity grants are prorated for service until the next annual meeting of stockholders. Accordingly, Ms. Ferguson received deferred vested RSUs with a value of $128,333 on July 21, 2020, upon her appointment to the Board. Each RSU represents a contingent right to receive one share of Mattel common stock. These RSUs vest immediately, but a non-employee director generally will not receive actual shares of Mattel common stock in settlement of the vested RSUs until the earlier of the third anniversary of the grant date or the date he or she ceases to be a director. The Compensation Committee reserves the right to settle the RSUs in cash in an amount equal to the fair market value of the stock but does not anticipate doing so. The RSUs have dividend equivalent rights, meaning that for the period before the RSUs are settled in shares, we will pay the director cash equal to any cash dividends that he or she would have received if the RSUs had been an equivalent number of actual shares of Mattel common stock. The directors may also elect to defer the receipt of the RSU shares under the Director DCP and, if they do so, any dividends paid on such shares are also deferred under the Director DCP in the form of Mattel stock equivalents.

Director Compensation Table

The following table shows the compensation of the members of the Board who served at any time during 2020, other than Mr. Kreiz, whose compensation as an executive officer is set forth in the Summary Compensation Table.

Name       Fees Earned
or Paid in Cash(1)
($)
      Stock
Awards(2)
($)
      All Other
Compensation(3)
($)
      Total
($)
R. Todd Bradley 130,000 139,997 0 269,997
Adriana Cisneros 100,000 139,997 7,500 247,497
Michael Dolan 165,000 139,997 0 304,997
Diana Ferguson 119,167 128,338 8,500 256,005
Soren Laursen 100,000 139,997 7,500 247,497
Ann Lewnes 115,000 139,997 15,000 269,997
Roger Lynch 110,000 139,997 15,000 264,997
Dominic Ng 125,000 139,997 15,000 279,997
Dr. Judy Olian 100,000 139,997 15,000 254,997
Vasant Prabhu(4)   0   0   0   0
(1) The amount shown for Ms. Ferguson represents a prorated portion of the cash retainer in light of her appointment to the Board on July 21, 2020. For Messrs. Lynch and Ng, the amount shown was deferred under the Director DCP.
(2) Each of our non-employee directors received an annual equity grant of 12,601 RSUs under our Amended and Restated 2010 Equity and Long-Term Compensation Plan (the “Amended 2010 Plan”). In light of her appointment to the Board in July 2020, Ms. Ferguson received an initial grant of 11,418 RSUs, representing a prorated portion of the annual equity grant. Amounts in this column represent the grant date fair value of such shares, computed in accordance with FASB ASC Topic 718, based on our closing stock price of $11.24 on July 21, 2020 and $11.11 on July 31, 2020.

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Corporate Governance at Mattel

The table below shows the aggregate number of stock awards outstanding for each of our non-employee directors as of December 31, 2020. Stock awards consist of vested but not settled RSUs and any deferrals of vested RSUs under the Director DCP. Our directors held no outstanding stock option awards as of December 31, 2020.

Name       Aggregate Stock Awards
Outstanding as of
December 31, 2020
R. Todd Bradley 34,330
Adriana Cisneros 32,515
Michael Dolan 34,330
Diana Ferguson 11,418
Soren Laursen 28,971
Ann Lewnes 34,330
Roger Lynch 32,515
Dominic Ng 75,072
Dr. Judy Olian 31,686
Vasant Prabhu   0
(3)

The “All Other Compensation” column reflects the gifts made by the Mattel Children’s Foundation pursuant to the Board of Directors Recommended Grants and Matching Recommended Grants Program, as described below, for the applicable director.

(4)

Mr. Prabhu did not stand for re-election at the 2020 Annual Meeting.

Narrative Disclosure to Director Compensation Table

Recommended and Matching Grants Program

Subject to certain limitations, each director may recommend that the Mattel Children’s Foundation (the “Foundation”) make grants of up to a total of $7,500 per year to one or more nonprofit public charities that help fulfill the Foundation’s mission of serving children in need. The Foundation also will match up to $7,500 per year for any personal gifts made by the director, subject to certain limitations. This program may not be used to satisfy any pre-existing commitments of the director or any member of the director’s family.

Director DCP

The Director DCP allows directors to defer their Board cash retainers and the common stock underlying their annual RSU grants. Cash retainers deferred in the Director DCP are maintained in account balances that are deemed invested in one or more of a number of externally managed institutional funds that are similarly available under the executive Mattel, Inc. Deferred Compensation and PIP Excess Plan (the “DCP”). Mattel common stock deferred in the Director DCP is deemed invested in Mattel stock equivalents.

Distribution of amounts deferred under the Director DCP may be paid in a lump sum or in ten annual installments, with payment made or commencing in April following the later of a director ceasing service with the Board or the director achieving a specified age not to exceed 72. As of December 31, 2020, the following directors had the following aggregate number of Mattel stock equivalents in the Director DCP, including deferred vested RSUs: Ms. Cisneros: 12,601; Mr. Lynch: 25,168; and Mr. Ng: 145,367.

Expense Reimbursement Policy

Mattel reimburses directors for expenses incurred while traveling for Board business and permits directors to use Company-selected aircraft when traveling for Board business, as well as commercial aircraft, charter flights, and non-Mattel private aircraft. These expenses are not considered perquisites, as they are limited to travel for Board business. In the case of travel by a non-Mattel private aircraft, the amount reimbursed is generally limited to variable costs or direct operating costs relating to travel for Mattel Board business and generally does not include fixed costs such as a portion of the flight crew’s salaries, monthly management fee, capital costs, or depreciation.

Non-Employee Director Stock Ownership

The Board has adopted guidelines regarding non-employee director stock ownership. Within five years after joining the Board, non-employee members of the Board must attain stock ownership equivalent in value to five times the annual cash retainer. For this purpose, Mattel common stock holdings are valued at the greater of actual cost or current market value. Cash retainers and equity grants deferred into Mattel stock equivalents in the Director DCP receive credit and are valued at the current market value. Each of the Board members who had served on the Board for five years as of 2020 met the targeted stock ownership level in 2020.

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Audit Matters

Proposal
2

    Ratification of Selection of Independent Registered Public Accounting Firm
 

The Board recommends a vote FOR the ratification of the selection of PricewaterhouseCoopers LLP as Mattel’s Independent Registered Public Accounting Firm.

The Audit Committee of the Board has selected PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2021. Representatives of PricewaterhouseCoopers LLP are expected to be present at the 2021 Annual Meeting to respond to appropriate questions and will have an opportunity to make a statement if they desire to do so.

Stockholder ratification of the selection of PricewaterhouseCoopers LLP as our independent registered public accountants is not required by our Restated Certificate of Incorporation, our Bylaws, or otherwise. However, the Board is submitting the selection of PricewaterhouseCoopers LLP to the stockholders for ratification because we believe it is a matter of good corporate practice. If our stockholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain PricewaterhouseCoopers LLP, but may still retain them. Even if the selection is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in Mattel’s best interests and that of our stockholders.

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Audit Matters

Report of the Audit Committee

The following Report of the Audit Committee shall not be deemed to be “soliciting material” or to be “filed” with the Securities and Exchange Commission (“SEC”) or subject to Regulations 14A or 14C of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or the liabilities of Section 18 of the Exchange Act. The Report of the Audit Committee shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent Mattel specifically incorporates it by reference.

The Audit Committee’s responsibility is to assist the Board in its oversight of:

The quality and integrity of Mattel’s financial reports;
The independence, qualifications, and performance of PricewaterhouseCoopers LLP (“PwC”), Mattel’s independent registered public accounting firm;
The performance of Mattel’s internal audit function; and
The compliance by Mattel with legal and regulatory requirements.

Management of Mattel is responsible for Mattel’s consolidated financial statements as well as Mattel’s financial reporting process and internal control over financial reporting, including Mattel’s disclosure controls and procedures.

PwC is responsible for performing an integrated audit of Mattel’s annual consolidated financial statements and of its internal control over financial reporting.

In this context, the Audit Committee has reviewed and discussed with management, the principal internal auditor of Mattel, and PwC, the audited financial statements of Mattel as of and for the year ended December 31, 2020 and Management’s Report on Internal Control Over Financial Reporting. Management has confirmed to the Audit Committee that, as required by Section 404 of the Sarbanes-Oxley Act, management has evaluated the effectiveness of Mattel’s internal control over financial reporting using the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations (“COSO”) of the Treadway Commission. Based on this evaluation, management concluded that Mattel’s internal control over financial reporting was effective as of December 31, 2020.

PwC has expressed its opinion that:

Mattel’s consolidated financial statements present fairly, in all material respects, its financial position as of December 31, 2020 and 2019, and its results of operations and cash flows for each of the three years in the period ended December 31, 2020 in conformity with accounting principles generally accepted in the United States of America; and
Mattel has maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated Framework issued by COSO.

In addition, Mattel’s Chief Executive Officer and Chief Financial Officer reviewed with the Audit Committee, prior to filing with the SEC, the certifications that were filed pursuant to the requirements of the Sarbanes-Oxley Act and the disclosure controls and procedures management has adopted to support the certifications. The Audit Committee periodically meets in executive sessions and in separate private sessions with management, including the Chief Executive Officer, the Chief Financial Officer, and/or the Chief Legal Officer, the principal internal auditor, and PwC. Each of the Chief Executive Officer, the Chief Financial Officer, the Chief Legal Officer, the principal internal auditor, and PwC has unrestricted access to the Audit Committee.

The Audit Committee has discussed with PwC the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (the “PCAOB”) and the SEC. In addition, the Audit Committee has received the written disclosures and the letter from PwC required by the PCAOB regarding the firm’s independence from Mattel, and the Audit Committee has also discussed with PwC the firm’s independence from Mattel.

The Audit Committee has also considered whether PwC’s provision of non-audit services to Mattel is compatible with maintaining the firm’s independence from Mattel.

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Audit Matters

The members of the Audit Committee are not engaged in the accounting or auditing profession and, consequently, are not experts in matters involving accounting or auditing, including the subject of auditor independence. As such, it is not the duty of the Audit Committee to plan or conduct audits or to determine that Mattel’s consolidated financial statements fairly present Mattel’s financial position, results of operations and cash flows, and are in conformity with accounting principles generally accepted in the United States of America and applicable laws and regulations. Each member of the Audit Committee is entitled to rely on:

The integrity of those persons within Mattel and of the professionals and experts (such as PwC) from which the Audit Committee receives information;
The accuracy of the financial and other information provided to the Audit Committee by such persons, professionals, or experts absent actual knowledge to the contrary; and
Representations made by management or PwC as to any information technology services of the type described in Rule 2-01(c)(4)(ii) of Regulation S-X and other non-audit services provided by PwC to Mattel.

Based on the reports and discussions described above, the Audit Committee recommended to the Board that the audited financial statements be included in Mattel’s Annual Report on Form 10-K for the year ended December 31, 2020, for filing with the SEC.

AUDIT COMMITTEE

Diana Ferguson (Chair)
R. Todd Bradley
Roger Lynch
Dominic Ng

March 23, 2021

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Audit Matters

Fees Incurred for Services by PricewaterhouseCoopers LLP

The following table summarizes the fees accrued by Mattel for audit and non-audit services provided by PwC for fiscal years 2020 and 2019:

Fees       2020
($)
      2019
($)
Audit fees(1) 7,539,000 8,305,000
Audit-related fees(2) 223,000 197,000
Tax fees(3) 1,700,000 2,368,000
All other fees
Total 9,462,000 10,870,000
(1)

Audit fees consisted of fees for professional services provided in connection with the integrated audit of Mattel’s annual consolidated financial statements and the audit of internal control over financial reporting, the performance of interim reviews of Mattel’s quarterly unaudited financial information, comfort letters, consents, and statutory audits required internationally.

(2)

Audit-related fees consisted primarily of the fees related to the audits of employee benefit plans and compliance audits in 2020 and 2019.

(3)

Tax fees principally included (i) tax compliance and preparation fees (including fees for preparation of original and amended tax returns, claims for refunds, and tax payment-planning services) of $813,000 for 2020 and $685,000 for 2019, and (ii) other tax advice, tax consultation, and tax planning services of $887,000 for 2020 and $1,683,000 for 2019.

The Audit Committee charter provides that the Audit Committee pre-approves all audit services and permitted non-audit services to be performed for Mattel by its independent registered public accounting firm, subject to the de minimis exceptions for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act.

In addition, consistent with SEC rules regarding auditor independence, the Audit Committee has adopted a Pre-Approval Policy, which provides that the Audit Committee is required to pre-approve the audit and non-audit services performed by our independent registered public accounting firm. The Pre-Approval Policy sets forth procedures to be used for pre-approval requests relating to audit services, audit-related services, tax services, and all other services and provides that:

The term of the pre-approval is 12 months from the date of pre-approval, unless the Audit Committee specifically provides for a different period or the services are specifically associated with a period in time;
The Audit Committee may consider the amount of estimated or budgeted fees as a factor in connection with the determination of whether a proposed service would impair the independence of the registered public accounting firm;
Requests or applications to provide services that require separate approval by the Audit Committee are submitted to the Audit Committee by both the independent registered public accounting firm and the CFO and Corporate Controller or Senior Vice President, Tax (for tax services), and must include a joint statement as to whether, in their view, the request or application is consistent with the rules of the SEC and PCAOB on auditor independence;
The Audit Committee may delegate pre-approval authority to one or more of its members, and if the Audit Committee does so, the member or members to whom such authority is delegated shall report any pre-approval decisions to the Audit Committee at its next scheduled meeting; and
The Audit Committee does not delegate to management its responsibilities to pre-approve services performed by the independent registered public accounting firm.

All services provided by our independent registered public accounting firm in 2020 and 2019 were pre-approved in accordance with the Audit Committee’s Pre-Approval Policy.

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Compensation at Mattel

Proposal
3

    Advisory Vote to Approve Named Executive Officer Compensation (“Say-On-Pay”)
 

The Board recommends a vote FOR approval of the executive compensation of Mattel’s named executive officers.

We are asking our stockholders to approve, on a non-binding, advisory basis, the compensation of our NEOs as described in the Compensation Discussion and Analysis and set forth in the executive compensation tables and narrative discussion on pages 56 through 90.

The Board believes that the information provided in the Compensation Discussion and Analysis and the executive compensation tables and narrative discussion demonstrates that our executive compensation programs are designed appropriately, emphasize pay-for-performance, and are working to ensure that management’s interests are aligned with our stockholders’ interests to support long-term stockholder value creation.

The Board has determined to hold a “Say-on-Pay” advisory vote every year. In accordance with this determination and Section 14A of the Exchange Act, and as a matter of good corporate governance, we are asking our stockholders to approve the following advisory resolution at the 2021 Annual Meeting:

“RESOLVED, that the stockholders of Mattel approve, on an advisory basis, the compensation of Mattel’s named executive officers, as disclosed in the Compensation Discussion and Analysis, executive compensation tables, and narrative discussion of this Proxy Statement.”

The Say-on-Pay vote is advisory and, therefore, not binding on Mattel, the Compensation Committee, or the Board. Although non-binding, the Compensation Committee and the Board will review and consider the voting results when making future decisions regarding our executive compensation programs.

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Compensation at Mattel

Executive Officers

The current executive officers of Mattel are as follows:

Name       Age       Position       Executive Officer Since
Ynon Kreiz(1) 56 Chairman of the Board and Chief Executive Officer 2018
Richard Dickson 53 President and Chief Operating Officer 2014
Anthony DiSilvestro 62 Chief Financial Officer 2020
Jonathan Anschell 53 Executive Vice President, Chief Legal Officer, and Secretary 2021
Roberto Isaias 53 Executive Vice President and Chief Supply Chain Officer 2019
Amanda Thompson 45 Executive Vice President and Chief People Officer 2017
Steve Totzke 51 Executive Vice President and Chief Commercial Officer 2020

     

Mr. Dickson has been President and Chief Operating Officer since April 2015. From January 2015 to April 2015, he served as President, Chief Brands Officer. He served as Chief Brands Officer from May 2014 to January 2015. From February 2010 to May 2014, he served as President and CEO of Branded Businesses at The Jones Group, Inc. From August 2008 to February 2010, he served as General Manager and Senior Vice President of the Barbie Brand at Mattel. From 2000 to 2008, he was Senior Vice President at Mattel overseeing Consumer Products, Marketing, Media, Entertainment, and Packaging. Prior to Mattel, he served as Vice President of Brand Management and Merchandising at Estee Lauder Companies, Inc. and was Principal with Gloss.com, an e-commerce beauty website he helped develop and manage until its acquisition by Estee Lauder. Mr. Dickson started his career and spent nearly a decade with Bloomingdale’s, a leading U.S. fashion retailer.

Mr. DiSilvestro has been Chief Financial Officer since August 2020.(2) From May 2014 to September 2019, he served as Senior Vice President and Chief Financial Officer of Campbell Soup Company, a manufacturer and marketer of branded food and beverage products. Mr. DiSilvestro held several leadership roles at Campbell Soup Company from 1996 to 2014, including Senior Vice President – Finance, Vice President – Controller, Vice President – Finance and Strategy, Campbell International, Vice President – Strategic Planning and Corporate Development, Vice President – Finance, North America Division, and Vice President and Treasurer. Earlier in his career, Mr. DiSilvestro held leadership roles at Scott Paper Company and the Continental Group.

Mr. Anschell has been Executive Vice President, Chief Legal Officer, and Secretary since January 2021. From December 2019 to December 2020, he served as Executive Vice President and General Counsel, ViacomCBS Media Networks, a mass media company. From January 2016 to December 2019, he served as Executive Vice President, Deputy General Counsel and Secretary of CBS Corporation. From September 2004 to December 2019, he served as Executive Vice President and General Counsel of CBS Broadcasting Inc. Prior to that, Mr. Anschell was a partner with the law firm White O’Connor Curry.


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Mr. Isaias has been Executive Vice President and Chief Supply Chain Officer since February 2019. From April 2014 to February 2019, he served as Senior Vice President and Managing Director – Latin America. From December 2011 to April 2014, he served as Senior Vice President and General Manager – Latin America (except Brazil). From September 2007 to December 2011, he served as Vice President and General Manager – Mexico. From March 2005 to September 2007, he served as General Manager Latin America – South Cone (Chile, Argentina, Peru, Uruguay, Paraguay, and Bolivia). From August 2002 to March 2005, he was Senior Sales & Trade Marketing Director – Mexico. From August 2001 to August 2002, he served as Head of Commercial for Traditional Trade at Procter & Gamble Mexico. Prior to that, he served as Associate Director for the Modern Trade, Drug Distributors, and Key Regions at Procter & Gamble Mexico. Mr. Isaias’ full legal name is Roberto J. Isaias Zanatta.

Ms. Thompson has been Executive Vice President and Chief People Officer since September 2017. From 2012 to 2017, she served as Chief People Officer of TOMS Shoes, a designer, manufacturer, and distributor of shoes, apparel, and accessories. Ms. Thompson held several executive and leadership roles at Starbucks Coffee Company from 2006 to 2012, including Vice President of Human Resources, China and the Asia Pacific Region; Vice President of Human Resources, Strategic Initiatives; and, Vice President of Human Resources, Seattle’s Best Coffee. From 2003 to 2006, Ms. Thompson was Senior Director, Employee and Organization Development at Ticketmaster Corporation. Prior to that, she served as Director, Human Resources, at CitySearch.com. From 2017 to 2019, Ms. Thompson served on the Board of Directors of Feed the Children.

Mr. Totzke has been Executive Vice President and Chief Commercial Officer since July 2018. From February 2016 to July 2018, he served as Executive Vice President and Chief Commercial Officer – North America. From May 2014 to February 2016, he served as Senior Vice President, Sales and Shopper Marketing, and from April 2012 to May 2014, he served as Senior Vice President, U.S. Sales. From January 2010 to April 2012, he served as Vice President and General Manager, Australia, and from February 2008 to December 2009, he served as General Manager, Australia/New Zealand. Prior to that, he served as Senior Director of Sales and Vice President, Canada.

(1)

Information regarding Mr. Kreiz is provided in the “Proposal 1 – Election of Directors” section of this Proxy Statement.

(2)

Mr. DiSilvestro joined Mattel as an Executive Advisor on June 29, 2020 and commenced service as CFO effective August 11, 2020.


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Compensation at Mattel

Compensation Discussion and Analysis

2020 Named Executive Officers

Our fiscal year 2020 Named Executive Officers, or NEOs, were:

Ynon Kreiz
Chief Executive Officer

Richard Dickson
President and Chief Operating Officer

Anthony DiSilvestro
Chief Financial Officer

Steve Totzke
Executive Vice President and Chief Commercial Officer

Roberto Isaias
Executive Vice President and Chief Supply Chain Officer

Per SEC rules, our former Chief Financial Officer, Joseph Euteneuer, was also an NEO for fiscal year 2020.

Overview

2020 Strategic Overview and Business Highlights

In spite of the challenges, particularly with respect to the first half of the year, 2020 was another milestone year as we continued to make significant progress on restoring profitability, regaining topline growth, and growing global market share. This performance drove a stock price improvement of 29% for the year, well above the median performance of both the S&P 500 Index constituents and the Company’s executive compensation peers.

Mattel’s management teams and business were highly resilient in navigating COVID-19 related challenges in 2020, restoring profitability and topline growth, and achieving growth that outpaced the broader industry. Mattel today is a much stronger company creatively, operationally, competitively, and culturally, than it has been in many years. As we continue to advance our goal to transform Mattel into an IP-driven, high-performing toy company, we remain committed to our strategy and creation of long-term stockholder value.

We successfully executed on our executive transition plan.
On June 19, 2020, we appointed Anthony DiSilvestro as our Chief Financial Officer (“CFO”) effective on August 11, 2020, the date following the filing of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2020. As part of our previously announced transition plan, we further determined that Joseph Euteneuer would cease to serve as our CFO upon Mr. DiSilvestro’s appointment. To ensure a smooth transition, Mr. DiSilvestro joined Mattel on June 29, 2020 and served as Executive Advisor until the date that he became our CFO.

Pay-For-Performance

Our executive compensation decisions and programs continue to reflect our commitment to pay-for-performance and compensation governance best practices.

The Compensation Committee annually evaluates the overall competitiveness of our senior executives’ annual TDC and remains focused on ensuring pay and performance alignment, which incentivizes actions that support our strategic priorities and drive long-term stockholder value. See “Reviews and Process – Market Competitiveness and Peer Group Review” below for further discussion, including the Compensation Committee’s decision in February 2020 to hold our CEO’s 2020 target TDC unchanged from 2019.

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Our compensation programs continued to reflect our commitment to pay-for-performance and long-term stockholder value creation by emphasizing at-risk performance-based compensation in the form of annual cash incentives (“MIP”) and annual LTIs. As a result, our CEO’s annual target TDC continued to be delivered primarily in the form of performance-based LTI, with a continued annual LTI mix of 75% Performance Units and 25% stock options. Our other NEOs continued to receive an annual LTI mix of 50% Performance Units, 25% stock options, and 25% RSUs. The chart below shows the 2020 target TDC mix for our CEO, Mr. Kreiz, and the average 2020 target TDC mix for our other NEOs:

A Significant Portion of 2020 Target TDC* is At Risk
CEO       Other NEOs**
* TDC is the sum of 2020 year-end annual base salary, MIP target incentive opportunity, and Annual LTI Value (i.e., grant value of Performance Units granted under the 2020-2022 LTIP, stock options, and RSUs).
** In light of Mr. Euteneuer’s departure in August 2020, this chart excludes his compensation.

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Key Elements of Our 2020 Executive Compensation Programs

2020 Compensation 2020 Objective, Structure, and Performance Measures Portion of 2020 Target TDC
CEO Other NEOs*

Base Salary

Provide fixed cash compensation based on individual role, skill set, market data, and internal pay equity

Annual Cash Incentive (“MIP”)

Incentivize and motivate senior executives to achieve our short-term strategic and financial objectives that we believe will drive long-term stockholder value
Our 2020 MIP financial measures focused on restoring profitability, regaining topline growth, and improving our working capital position. The 2020 MIP was structured as follows:
50% MIP-Adjusted EBITDA
20% MIP-Adjusted Net Sales
15% MIP-Adjusted Gross Margin
15% MIP-Adjusted Inventory & Accounts Receivable
Individual Performance Multiplier of 0%-125%
Equity Long-Term Incentives (“LTIs”)

75%
Performance
Units

50%
Performance
Units

Performance Units

Incentivize and motivate senior executives to achieve key long-term strategic financial objectives and stock price outperformance
Three-Year Cumulative Adjusted Free Cash Flow Goal
Three-Year Relative TSR vs. S&P 500 Multiplier of 67%-133%

Stock Options

Align senior executives’ interests with stockholders’ interests and drive focus on increasing long-term stockholder value
Vest in approximately equal annual installments over three years

25%
Stock Options

25%
Stock Options

RSUs

Encourage senior executive stock ownership
Stockholder-aligned retention
Vest in approximately equal annual installments over three years

0%
RSUs

25%
RSUs

* In light of Mr. Euteneuer’s departure in August 2020, this chart excludes his compensation.

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2020 Pay Outcomes Reflected Our Pay-For-Performance Philosophy

The compensation outcomes in 2020 reflected our pay-for-performance philosophy by rewarding progress on restoring profitability and regaining topline growth, and improved stock price performance.

2020 MIP Earnout Reflects Continued Progress on Restoring Profitability and Regaining Topline Growth.

Our 2020 MIP financial measures focused on our short-to-mid term strategy of restoring profitability, regaining topline growth, and improving our working capital position.

In 2020, we continued to make significant progress on restoring profitability, with MIP-Adjusted Gross Margin increasing by 480-basis points to 49.2%, and MIP-Adjusted EBITDA increasing by 66% to $720 million. This broad-based success was driven by the commitment of the entire organization and several key strategic initiatives, including $1 billion in cost savings through 2020, primarily driven by our multi-year Structural Simplification and Capital Light programs, which were key drivers in restoring profitability. We also made meaningful progress towards regaining topline growth in 2020, achieving a 1% increase in MIP-Adjusted Net Sales versus prior year – our second consecutive year of MIP-Adjusted Net Sales growth.

For our NEOs, the 170% Company financial performance earnout under the MIP was based on our maximum achievement against goals for MIP-Adjusted EBITDA, MIP-Adjusted Net Sales, and MIP-Adjusted Gross Margin, and below threshold achievement for MIP-Adjusted Inventory & Accounts Receivable (no earnout). The Company earnout was then adjusted by a multiplier of 0% to 125% based on our CEO’s assessment of each executive’s progress, and the Compensation Committee’s assessment of our CEO’s progress, against pre-established individual goals that tied to the execution of our short-to-mid term strategy (“Individual Performance Multiplier”). For 2020, the Individual Performance Multiplier for our CEO was 125% and for our other NEOs ranged from 100% to 125%. Please see “2020 Individual Performance Assessments” on page 64.

Earnout of MIP Target Opportunity for our CEO: 200%
Earnout of MIP Target Opportunity for our Other NEOs: 170% to 200%

2018-2020 LTIP Earnout Reflects Improvements in Adjusted Free Cash Flow and Stock Price Performance.

By continuing to make significant progress on restoring profitability, we achieved three-year cumulative Adjusted Free Cash Flow of $300 million, exceeding the maximum goal of $209 million and resulting in a maximum performance earnout of 150% for the three-year performance period ended December 31, 2020 under our 2018-2020 LTIP. At the end of the performance period, our relative TSR was at the 32nd percentile, resulting in a TSR multiplier adjustment of 76% and a total earnout of 114% of target Performance Units granted.

Earnout of 2018-2020 LTIP Target Performance Units: 114%

Stockholder Input and 2020 “Say-on-Pay” Advisory Vote

As part of its annual compensation review process, the Compensation Committee carefully considers both the input received from stockholders on our executive compensation programs through our stockholder engagement program and the results of our annual Say-on-Pay vote. Last spring, our Say-on-Pay proposal received the support of over 86% of the votes cast. In addition, over the course of the year, we engaged with stockholders representing approximately 70% of our outstanding shares, during which investors expressed their general support for the current design and structure of our executive compensation programs. We believe our stockholders’ support for Mattel’s executive compensation programs reflects our continued focus on closely aligning pay with performance and maintaining compensation governance best practices. Going forward, the Compensation Committee will continue to prioritize input from our investors when considering potential refinements to Mattel’s executive compensation programs. For more information on Mattel’s ongoing and active stockholder engagement program, see “Board Accountability and Effectiveness – Stockholder Engagement,” above.

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Pay-For-Performance Philosophy

Our executive compensation programs reflect our pay-for-performance philosophy.

The guiding principles of our executive compensation programs include:

Paying for performance;
Aligning the financial interests of senior executives with those of our stockholders;
Attracting and retaining the best talent; and
Upholding compensation governance best practices.

The Compensation Committee has designed our executive compensation programs so that a significant percentage of annual compensation is performance-based and at risk, with incentive earnouts based on Company financial, individual, and stock price performance. Further, a large portion of this performance-based annual compensation is delivered in the form of equity, rather than cash, which promotes alignment with stockholders’ interests by creating incentives for long-term performance and stockholder value creation.

Elements of Compensation

Base Salary

The base salary component of our annual executive compensation provides fixed cash compensation based on individual role, skill set, market data, and internal pay equity.

The Compensation Committee reviews the base salaries of our CEO and his direct reports (including NEOs) at its first meeting each year. Our CEO typically provides the Compensation Committee with recommendations regarding base salary increases for his direct reports (including NEOs), which are driven primarily by his evaluation of impact and criticality of role, individual experience, market competitive factors, and internal pay equity. Our CEO’s base salary is determined by the Compensation Committee, with input from FW Cook also based on the above factors, in an executive session without the presence of our CEO.

2020 Pay Decisions
The 2020 base salary for Mr. Kreiz was established based on a review of competitive market practices and remained unchanged from the salary that was established when he commenced employment as our CEO in April 2018.

The 2020 base salary of Mr. DiSilvestro, who commenced service as Executive Advisor on June 29, 2020 and transitioned to CFO on August 11, 2020, was established based on a review of competitive market practices and the compensation required to attract him to Mattel. Mr. DiSilvestro’s base salary for his service as our CFO was set at $900,000, the same amount as our former CFO.

The Compensation Committee approved an annual base salary increase of 23% to $800,000 for Mr. Totzke, and an annual base salary increase of 15% to $575,000 for Mr. Isaias, in each case, as supported by competitive market practices data provided by FW Cook.

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Annual Cash Incentive

Our annual cash incentive plan, or MIP, provides our NEOs and approximately 7,700 other global employees with the opportunity to earn annual cash incentive compensation based on achievement of our short-term strategic and financial objectives, as well as individual goals, that are intended to drive long-term stockholder value creation. The objectives of the MIP include:

Link pay to financial performance and put a meaningful portion of compensation at risk based on our financial success;
Incentivize and motivate senior executives to achieve our short-term strategic and financial objectives on an annual basis, which we believe over time will drive long-term stockholder value creation;
Provide a competitive target annual cash incentive opportunity to attract and retain key talent;
Promote team orientation by encouraging collaboration across the organization to achieve Company-wide goals; and
Provide appropriate reward leverage and risk for threshold to maximum performance.

2020 MIP Payout Formula

Target
Opportunity ($)

×

Financial
Performance
Earnout (%)

×

Individual
Performance
Multiplier (%)

= MIP Payout ($)*

* NEOs’ payouts were capped at 200% of MIP target opportunity and subject to achievement of a profitability-based funding requirement of 10% of target MIP-Adjusted EBITDA, which was achieved.

2020 Target MIP Opportunity
Mr. DiSilvestro’s target MIP opportunity was set at 100% of base salary, the same target as our former CFO. Due to the criticality and impact of Mr. Totzke’s role as EVP and Chief Commercial Officer, and in light of competitive market practices data provided by FW Cook, his target MIP opportunity was increased from 70% to 80% of base salary in 2020. There were no other changes to 2020 target MIP opportunities for our other NEOs, including our CEO.

The following table shows the 2020 target MIP opportunities for our NEOs, expressed as a percentage of base salary.

Name and Position       2020 Target MIP
Opportunity as a
% of Base Salary
(%)
Ynon Kreiz, CEO 150
Richard Dickson, President and COO 100
Anthony DiSilvestro, CFO 100
Steve Totzke, EVP and Chief Commercial Officer 80
Roberto Isaias, EVP and Chief Supply Chain Officer 65
Joseph Euteneuer, Former CFO* 100
* Mr. Euteneuer’s service with the Company ended in August 2020. In accordance with the Severance Plan (as modified by his participation letter agreement), Mr. Euteneuer’s payout under the 2020 MIP was prorated based on the number of days in 2020 through his separation date.

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2020 MIP Performance Measures & Weightings
To align with our strategic priorities of restoring profitability and regaining topline growth, the Compensation Committee approved an annual cash incentive design under the MIP with the following performance measures and weightings:

The amount that could be earned under each financial measure was 35% of target for threshold performance, 100% for target performance, and 200% of target for maximum performance. Linear interpolation from threshold to target performance and from target to maximum performance was applied for each measure. No amount could be earned under any financial measure for below threshold performance.

In order to differentiate individual performance and to encourage accountability, the Compensation Committee approved individual goals for our CEO and his direct reports (including NEOs) that tied to the execution of our short-to-mid term strategy, and approved an Individual Performance Multiplier with a range of 0% to 125%, based on a performance assessment of each NEO’s progress against these goals, to determine the final amount earned by each NEO under the MIP. In no event, however, could an NEO’s payout amount exceed 200% of target MIP opportunity.

2020 Financial Performance Goals and Results
In prior years, the Compensation Committee has typically approved the annual financial performance goals for the MIP in March. Due to the uncertainty of the COVID-19 pandemic and resulting global economic disruption beginning in the first quarter of 2020, the Compensation Committee determined to delay approval of the financial performance goals for the 2020 MIP. The Compensation Committee instead established such performance goals in mid-May 2020, at a time when our first quarter 2020 Net Sales and Gross Sales were down 14% versus 2019 with potential further decline as we continued to confront the significant global economic disruption caused by the COVID-19 pandemic. In this context, the Compensation Committee established target goals that were within pre-established plan parameters but generally lower than actual performance in 2019 and thereby consistent with the uncertain impact of the COVID-19 pandemic on our business. Further, the Compensation Committee set higher maximum performance levels versus the 2019 MIP for MIP-Adjusted EBITDA, MIP-Adjusted Net Sales, and MIP-Adjusted Gross Margin performance goals, reflecting the global economic uncertainty while maintaining performance metrics that promote long-term stockholder value creation. These considerations were balanced with the importance of continued execution of our strategic transformation, with a particular focus on restoring profitability and regaining topline growth. The Compensation Committee set the Company’s 2020 financial measure performance goals, along with accompanying changes to performance bands (range of threshold and maximum goals from target), as follows:

2020 MIP-Adjusted EBITDA target goal was set at $402 million, which was approximately 7% lower than 2019 MIP-Adjusted EBITDA performance of $434 million. The performance band was widened to +$198/-$73 million from the 2019 band of +/-$75 million, increasing the range from target to maximum performance levels but generally maintaining the range from threshold to target performance levels.
2020 MIP-Adjusted Net Sales target goal was set at $3,987 million, which was approximately 12% lower than 2019 MIP-Adjusted Net Sales performance of $4,516 million and was informed by the negative impact of the COVID-19 pandemic on Net Sales in the first quarter of 2020. The performance band was widened to +11.5%/-4.5% from the 2019 band of +3.5%/-3.6%.

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2020 MIP-Adjusted Gross Margin target goal was set at 45.8%, an increase of 132 basis points from 2019 MIP-Adjusted Gross Margin performance of 44.4%. The performance band was widened to +200/-150 basis points from the 2019 band of +/-150 basis points, increasing the range from target to maximum performance levels but maintaining the range from threshold to target performance levels.
2020 MIP-Adjusted Inventory & Accounts Receivable target goal was set at 1,339 million, a decrease (improvement) of 7% from 2019 MIP-Adjusted Inventory & Accounts Receivable performance of $1,446 million. The performance band remained unchanged at +/-10%.

In setting the above goals, the Compensation Committee focused on establishing financial performance targets under the MIP that would be challenging but achievable in light of the negative impact of the pandemic on Net Sales in the first quarter of 2020 and uncertain impact of the pandemic on our business.

The largest driver of our 2020 MIP above-target earnout was our MIP-Adjusted EBITDA performance, which reflected our significant progress on restoring profitability. This broad-based success was driven by the commitment of the entire organization and several key strategic initiatives, including $1 billion in cost savings through 2020 primarily driven by our multi-year Structural Simplification and Capital Light programs, which were key drivers in restoring profitability. Our 2020 MIP earnout reflected performance above maximum for MIP-Adjusted Net Sales resulting from our meaningful progress towards regaining topline growth, with MIP-Adjusted Net Sales up almost $50 million. Our 2020 MIP earnout also reflected the 480-basis point improvement in MIP-Adjusted Gross Margin from 44.4% to 49.2%.

These financial results yielded a Company earnout of 170% of target MIP opportunity, based on the following pre-established threshold, target, and maximum performance goals and weightings:

Financial Measure       Weighting       Threshold
(35% earned)
Target
(100% earned)
Max
(200% earned)
% Earned
before
weighting
      % Earned
after
weighting
MIP-Adjusted EBITDA 50% 200% 100%
MIP-Adjusted Net Sales 20% 200% 40%
MIP-Adjusted Gross Margin 15% 200% 30%
MIP-Adjusted Inventory &
Accounts Receivable
15% 0% 0%
TOTAL EARNED 170%

$ in millions.

The table above reflects actual performance as adjusted from GAAP results consistent with the pre-established plan parameters, which were approved by the Compensation Committee. Such adjustments are intended to ensure that events outside the control of management do not unduly influence the achievement of the performance measures, while also ensuring that they are aligned with stockholders’ interests. All financial measures for the MIP are based on actual amounts including the effect of foreign exchange, with foreign exchange collars for individuals at or above the level of EVP. For the 2020 MIP, actual results for EBITDA, Net Sales, and Gross Margin were adjusted for severance and restructuring costs, equity compensation expense, certain litigation costs, foreign exchange, tax disputes, and out-of-period adjustments, all as set forth in the MIP definitions approved by the Compensation Committee. For 2020, there were no adjustments to the MIP-Adjusted Inventory & Accounts Receivable financial measure and no adjustments to any financial measure relating to the impact of the COVID-19 pandemic.

These financial measure adjustments are an integral part of the MIP, ensuring employees are not penalized for the impact of unusual items that are unforeseeable or unquantifiable at the time the annual operating plan is set. Each measure is defined under “Glossary of Non-GAAP Financial Measures & Key Performance Indicator and Non-GAAP Reconciliations.”

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2020 Individual Performance Assessments
For our NEOs, the earnout under the MIP for Company financial performance was then adjusted by an Individual Performance Multiplier of 0% to 125%:

0% earned for Results Below Expectations rating
90% earned for Accomplished Results (-) rating
100% earned for Accomplished Results rating
110% earned for Accomplished Results (+) rating
125% earned for Exceeded Results rating

In no event, however, could an NEO’s payout exceed 200% of target MIP opportunity.

As in prior years, the Compensation Committee utilized pre-established individual goals in order to ensure a comprehensive performance assessment of our NEOs, which included objectives critical to our transformation tied to the execution of our short-to-mid term strategy not otherwise rewarded or incentivized in the MIP financial measures.

Our CEO performed an assessment of each NEO’s performance towards their individual goals. He presented his assessments and recommendations regarding performance ratings and associated Individual Performance Multipliers to the Compensation Committee, who concurred with the CEO’s assessments and recommendations. The Compensation Committee separately evaluated the CEO’s performance and determined, with input from FW Cook, in an executive session without the presence of our CEO, his performance rating and associated Individual Performance Multiplier.

Ynon Kreiz
CEO
     
Led Mattel to achieve a second year of consecutive topline growth and significant improvement in profitability, exceeding full year 2020 performance goals
Advanced Mattel’s strategy to capture the full value of its IP through franchise management and online retail and e-commerce
Led the Company’s response to the COVID-19 pandemic, protecting the health and safety of the global workforce and mitigated against business disruption
Accelerated corporate citizenship impact through critical advancements in environmental sustainability and diversity and inclusion
Drove continued efficiencies throughout the enterprise resulting in significant and sustainable cost savings
Richard Dickson
President and COO
Led the design and development of a strong product pipeline, including new product innovation across the portfolio
Drove strong performance across category flagship properties, securing the world’s #1 Toy property (Barbie), #1 Vehicle brand (Hot Wheels), and #1 Game (UNO), and remained the #1 ITPS manufacturer (Fisher-Price) for 2020, per NPD
Strengthened relationships with key partners, broadened existing licenses and acquired new licenses to capture the value of Mattel IP
Advanced Mattel’s content strategy significantly by tripling television content in 2020, establishing a pipeline for 2021 and beyond, and securing new deal structures for key properties such as Barbie and Thomas & Friends
Anthony DiSilvestro
CFO
Drove execution of financial and operating plan that significantly over-delivered MIP-Adjusted EBITDA goal and exceeded MIP-Adjusted Gross Margin goal
Advanced training and implementation of new IT systems to further optimize operations
Developed Optimizing for Growth program, designed to optimize operations and drive greater productivity to accelerate growth and generate sustainable cost savings
Steve Totzke
EVP and Chief
Commercial Officer
Led Mattel to gain market share and be recognized as the #1 toy manufacturer in the U.S., per NPD
Accelerated topline growth, leading all commercial markets to exceed profitability goals
Drove significant growth in online retail and e-commerce channels across all toy categories
Grew market share of global toy properties with notable growth across all categories, outpacing expectations in all regions
Roberto Isaias
EVP and Chief Supply
Chain Officer
Optimized operations by increasing supply chain efficiency and performance across all metrics
Advanced the Capital Light program and delivered sustainable improvements to cost structure
Closed underutilized production facilities and transitioned manufacturing to more efficient operating locations
Managed production and logistics to meet increased product demands

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The following table summarizes the resulting incentive payouts expressed as a percentage of target MIP opportunity, and the cash incentive payouts under the MIP. To induce Mr. DiSilvestro to join Mattel in June 2020 and to drive immediate accountability for full 2020 fiscal-year results, his 2020 MIP payout was not prorated based on his hire date, as set forth in the offer letter agreement he entered into upon his commencement of employment with Mattel.

Name       Financial
Performance
Earnout
(%)
      Individual
Performance
Multiplier
(%)
      Final % of MIP
Opportunity
Earned
(%)
      MIP
Payout
Ynon Kreiz 170 125 200 $ 4,500,000
Richard Dickson 170 125 200 $ 2,000,000
Anthony DiSilvestro 170 100 170 $ 1,530,000
Steve Totzke 170 125 200 $ 1,280,000
Roberto Isaias 170 125 200 $ 747,500
Joseph Euteneuer* 170 100 170 $ 932,229
* Mr. Euteneuer’s service with the Company ended in August 2020. In accordance with the Severance Plan (as modified by his participation letter agreement), Mr. Euteneuer’s payout under the 2020 MIP was prorated based on the number of days in 2020 through his separation date.

Equity-Based Long-Term Incentives

Our LTIs are equity-based and aimed at focusing our senior executives on achieving our key long-term financial goals and strategic objectives, while rewarding relative growth in stockholder value that is sustained over several years. We believe our equity-based LTIs align our senior executives’ interests with those of our stockholders, emphasize long-term stockholder value creation, and provide important retention value.

Our portfolio approach to LTIs continues to be comprised of three components:

 

Performance Units

Performance Units are granted under our LTIP and earned based on the Company’s performance against a three-year financial performance measure, modified by our relative TSR over the three-year performance period.

Stock Options

Stock options have value only with stock price appreciation and continued service over time, thereby aligning interests with our stockholders. Our stock options typically vest in approximately equal installments on each of the first three anniversaries of the grant date, subject to continued service through such date. Stock options have ten-year terms.

RSUs

RSUs assist our senior executives in meeting stock ownership requirements and serve as a stockholder-aligned retention tool. Our RSUs typically vest in approximately equal installments on each of the first three anniversaries of the grant date, subject to continued service through such date.

Our CEO does not receive RSUs, as his LTI mix is entirely performance-based and at risk with 75% Performance Units and 25% stock options.

 

We do not provide dividend equivalents on stock options or RSUs for executives.

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2020 LTI Mix and Grant Values
100% Performance-Based and at-Risk Annual LTI Mix for Our CEO

The Compensation Committee remains focused on ensuring our LTIs continue to closely align with our long-term strategic objectives and incentivize actions that drive long-term stockholder value. To continue emphasizing pay-for-performance alignment and incentivize long-term stockholder value creation, the Compensation Committee determined in February 2020 to continue to provide our CEO with an LTI mix entirely performance-based and at risk – 75% Performance Units, 25% stock options, and no RSUs. In July 2020 (June 2020 for Mr. DiSilvestro), the Compensation Committee determined that the 2020 LTI mix for each of the other senior executives would continue to be composed of 50% Performance Units, 25% stock options, and 25% RSUs, subject to our Choice Program discussed below.

Since 2017, we have maintained our Choice Program, which allows senior executives (currently, other than our CEO, COO, and CFO) the ability to make an election prior to the grant date to allocate the grant value of the time-based component (stock options and RSUs) of their Annual LTI mix to a self-selected mix of stock options and RSUs in 25% increments (representing 12.5% of Annual LTI Value). Under our Choice Program, of the 50% Annual LTI Value allocated to stock options and RSUs, our CEO direct reports and other Section 16 officers must allocate at least 25% of such value to the stock option portion. This Choice Program was designed and implemented to strengthen executive engagement, investment, and retention at this critical time in our transformation. The LTI mix for our COO and CFO is fixed at 50% Performance Units, 25% stock options, and 25% RSUs, while the mix for our CEO is fixed at 75% Performance Units and 25% stock options.

2020 Annual LTI Grant Values
In March 2020, the uncertainty of the COVID-19 pandemic and resulting global economic disruption prompted the Compensation Committee to delay approval of the performance goals for the 2020-2022 LTIP from March to July 2020. The Compensation Committee also determined that all annual 2020 equity awards were to be granted on July 31, 2020, to continue to have a single annual grant date that coincides with the historical grant date for our time-based grants (stock options and RSUs), and to continue to proactively manage the Company’s equity plan share reserve. As a result, the 2020-2022 Performance Units were granted on July 31, 2020, subject to the measures and goals also approved in July 2020, along with the grants of stock options and RSUs.

In February 2020, the Compensation Committee also determined to hold Mr. Kreiz’s 2020 target TDC, including his LTI value, unchanged from 2019, as described further below in “Reviews and Process – Market Competitiveness and Peer Group Review.” In July 2020, the Compensation Committee also determined that, except with respect to Mr. Totzke, the 2020 LTI Value for our NEOs would not change from their 2019 Annual LTI Values. In the case of Mr. Totzke, due to the criticality and impact of his role as EVP and Chief Commercial Officer, and also in light of competitive market practices data provided by FW Cook, his 2020 LTI Value was increased from $1.2 million to $1.5 million. In the case of Mr. DiSilvestro, the terms of his 2020 LTI Value were set forth in the offer letter agreement he entered into upon his commencement of employment with Mattel. Informed by competitive market practices data provided by FW Cook, this offer letter provided for a grant with a value of $2.1 million. In light of Mr. Euteneuer’s separation from the Company, which was announced in October 2019, he did not receive any equity grants in 2020.

The following table summarizes the 2020 LTI Values set and granted by the Compensation Committee and reflects the allocation of Performance Units under the 2020-2022 LTIP, as well as stock option and RSU grants for eligible participants under our Choice Program discussed above.

Name       2020-2022
Performance Units
($)
      2020
Stock Options
($)
      2020
RSUs
($)
      2020
LTI Value
($)
Ynon Kreiz 7,162,500 2,387,500 0 9,550,000
Richard Dickson 2,250,000 1,125,000 1,125,000 4,500,000
Anthony DiSilvestro 1,050,000 525,000 525,000 2,100,000
Steve Totzke 750,000 375,000 375,000 1,500,000
Roberto Isaias 525,000 131,250 393,750 1,050,000
Joseph Euteneuer

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Long-Term Incentive Program (“LTIP”)

Three-Year Cumulative Adjusted Free Cash Flow Performance Earnout (%) × Three-Year Relative TSR Performance Multiplier (%) = LTIP Total Earnout (%)

The earnout percentage resulting from the three-year cumulative Adjusted Free Cash Flow performance measure is 37% for threshold performance, 100% for target performance, and 150% for maximum performance, with linear interpolation between such performance levels. No amount can be earned under the LTIP for below threshold performance for the Adjusted Free Cash Flow measure. The Adjusted Free Cash Flow earnout percentage will then be adjusted up or down based on our relative three-year TSR performance versus the companies in the S&P 500 Index, with a multiplier ranging from 67% for performance of 25th percentile or below to 133% for performance of 75th percentile or above. The relative TSR performance measure continues to provide a balance between absolute and relative performance measures in the LTIP. No amount can be earned above 200% of target Performance Units granted, consistent with all of our incentive programs, and the minimum amount that can be earned based on threshold performance is 25% (unless threshold performance for the Adjusted Free Cash Flow measure is not achieved, in which case no amount can be earned). Actual results are adjusted for the impact of specified unusual items in order to ensure that events outside the control of management do not unduly influence the achievement of performance measures and to ensure alignment with stockholders’ interests. For 2020, there were no adjustments to any financial measure relating to the impact of the COVID-19 pandemic.

The outstanding Performance Units have dividend equivalent rights that are converted to shares of Mattel common stock only when and to the extent the underlying Performance Units are earned and paid. Dividend equivalents are accumulated in shares of stock attributed to each Performance Unit based upon the number of shares earned, assuming each dividend is reinvested in shares as of the closing stock price on the ex-dividend date and participate in future dividend distributions for all dividends during the three-year performance period.

In July 2020, the Compensation Committee approved the design of the 2020-2022 LTIP consistent with prior LTIP cycles, employing three-year cumulative Adjusted Free Cash Flow as the financial measure and a three-year relative TSR multiplier.

2018-2020 LTIP Financial Performance Goals and Results
By continuing to make significant progress on restoring profitability, we achieved three-year cumulative Adjusted Free Cash Flow of $300 million, exceeding the maximum goal of $209 million and resulting in a maximum earnout of 150% for the three-year performance period ended December 31, 2020. As of the end of the performance period, our relative TSR was at the 32nd percentile, resulting in a TSR multiplier adjustment of 76% and a total earnout of 114% of target Performance Units granted.

Financial Measure* Threshold
(37% earned)
Target
(100% earned)
Max
(150% earned)
% Earned
Three-Year Cumulative Adjusted Free Cash Flow* 150%
Effect of TSR Multiplier Actual at
December 31, 2020
Mattel TSR Relative to S&P 500 ≤25th 50th ≥75th 32nd
TSR Multiplier** 67% 100% 133% 76%
TOTAL EARNED 114%
*

Adjusted Free Cash Flow is a non-GAAP measure under the SEC’s rules. Please see “Glossary of Non-GAAP Financial Measures & Key Performance Indicator and Non-GAAP Reconciliations” on page 114 for a description of the adjustments under the LTIP.

**

The TSR Multiplier for TSR levels achieved between the 25th, 50th, and 75th percentiles is linearly interpolated.

The Compensation Committee approved the 2018-2020 LTIP financial performance goals consistent with internal forecasts at the time of grant so that they would be challenging but achievable. In particular, the Compensation Committee established rigorous cumulative Adjusted Free Cash Flow goals that would require meaningful improvement over the three-year performance period.

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The following table summarizes the 2018-2020 LTIP payout. Mr. DiSilvestro was hired in 2020 after 2018-2020 Performance Units were granted and is therefore excluded from the table.

Name       Target Performance
Units Granted
      Actual Shares
Earned
Ynon Kreiz 273,042 311,268
Richard Dickson 142,293 162,214
Steve Totzke 27,304 31,127
Roberto Isaias 10,997 12,537
Joseph Euteneuer* 89,359 87,721
*

Mr. Euteneuer’s service with the Company ended in August 2020. In accordance with the Severance Plan (as modified by his participation letter agreement) and his grant agreement, Mr. Euteneuer’s payout under the 2018-2020 LTIP was prorated based on the number of full months in the three-year performance period through his separation date.

Other Forms of Compensation

Perquisites and Other Personal Benefits
We offer the following perquisites to our NEOs to attract and retain key executive talent:

Car Allowance – We provide a monthly car allowance to allow our senior executives to fulfill their job responsibilities that involve travel to the offices of customers and business partners. The monthly amount of the allowance is a set amount based on the executive’s job level. We provide the use of a Company car instead of a car allowance to our CEO. Mr. Isaias was provided the use of a Company car only during January 2020. Starting in February 2020, he was paid a monthly car allowance based on his job level.
Financial Counseling and Tax Return Services – We provide to our CEO, COO, and CFO the choice of financial counseling and tax return preparation services through a Company-selected third-party financial service or up to an annual $10,000 reimbursement for such services through a company of the executive’s choice. We believe that providing these services gives our most senior executives a better understanding of their compensation and benefits, allowing them to focus their attention on Mattel’s future success.
Executive Physical – We provide our senior executives with comprehensive executive physical examinations and diagnostic services. We believe that these physical examinations and diagnostic services help ensure the health of our executives and provide a retention tool at a reasonable cost to Mattel.

Relocation Assistance – We provide relocation assistance to newly hired and current senior executives who must relocate to accept our job offer or a new role within Mattel. Such relocation assistance is generally pursuant to Mattel’s relocation program, which is designed to cover the costs directly resulting from the Company-requested relocation, including travel, shipment of household goods, two months of temporary housing, and participation in a home sale program (which covers certain costs, but not loss, on the sale of the executive’s home). On limited occasions, in order to recruit new hires or promote or transfer into new positions, we will provide additional, special relocation payments.

The executives are required to repay relocation program benefits and payments if they resign or their employment is terminated for cause within one year or two years of the relocation date, as applicable. We provide tax gross-up payments for taxable relocation benefits under our relocation program. Our relocation program and special relocation payments benefit Mattel, are business-related, and are primarily intended to eliminate or lessen the expenses that the executive incurs as a result of the Company’s request to relocate. They are important tools for us to recruit and retain key management talent and allocate our talent as best fits Mattel’s needs.

In February 2020, in connection with his relocation from Mexico to our headquarters in California, we entered into a letter agreement with Mr. Isaias, memorializing his current salary, MIP bonus opportunity, and eligibility to participate in our executive compensation programs, including our commitment to provide relocation assistance and services in accordance with our standard International Transfer Program, which includes travel, temporary accommodations, and shipment of household goods. Pursuant to Mattel’s International Transfer Program, Mr. Isaias was eligible to receive tax gross-up payments on such relocation benefits. In addition, we provided Mr. Isaias with a transition payment in February 2020 in the amount of $120,000 to facilitate his move. In accordance with our repayment provisions, Mr. Isaias is required to repay the full transition payment and relocation costs incurred by us for these benefits if he resigns or his employment is terminated with cause within one year following the relocation date and/or transition payment date, and repay 50% of the transition payment and relocation costs if such resignation or termination occurs during the second year following such relocation and/or transition payment date.


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Retirement Plans
Our NEOs participate in the same broad-based benefit plans as our other U.S. employees. In addition, we provide our NEOs certain executive benefits, which are not provided to other employees generally, to promote tax efficiency or to replace benefit opportunities that are not available to executives because of regulatory limits. This includes the DCP, our non-qualified deferred compensation plan, which generally provides our U.S.-based executives with a mechanism to defer compensation in excess of the amounts that are permitted to be deferred under our 401(k) Plan. Together, the 401(k) Plan and the DCP allow participants to set aside amounts as tax-deferred savings for their retirement. Similar to the 401(k) Plan, the DCP provides for Company automatic contributions and matching contributions, both of which are at the same levels as the Company contributions in the 401(k) Plan. In light of the rapidly evolving COVID-19 pandemic, the Company suspended the automatic contribution to the DCP and the 401(k) Plan in May 2020 but restored the contribution, effective as of November 2020, as the negative business impact from the COVID-19 pandemic abated. The Compensation Committee believes the opportunity to defer compensation under the DCP is a competitive benefit that enhances our ability to attract and retain talented executives while strengthening plan participants’ long-term commitment to Mattel. The return on the deferred amounts is linked to the performance of market-based investment choices made available in the DCP.

No Poor Pay Practice of Tax Gross-Ups on Perquisites and Benefits
Mattel generally does not provide tax gross-up payments to our senior executives in connection with perquisites and benefits. Mattel, however, does provide to senior executives and other employees tax gross-up payments for relocation assistance costs under our relocation program, and any related international tax compliance and tax equalization costs and payments, because such expenses are incurred as a result of Mattel’s request to relocate.

Severance and Change-of-Control Benefits

Best Practices in Severance Arrangements – We maintain executive severance arrangements that reflect current compensation best practices, which include:

Double-trigger cash severance and equity acceleration that requires both a change of control and a qualifying termination of employment.
Severance benefits set at competitive levels not greater than 2x annual base salary plus annual bonus.
No excise tax gross-ups.

We have two executive severance arrangements in which our NEOs participate: (i) the Mattel, Inc. Executive Severance Plan B (the “Severance Plan”) and (ii) an executive severance practice. Mr. Kreiz participates in the Severance Plan, as modified by the terms of his participation letter agreement with us, Messrs. Dickson and DiSilvestro participate in the Severance Plan, and Messrs. Totzke and Isaias are eligible for benefits under our current executive severance practice. We do not pay any excise tax gross-up payments under our severance arrangements.

Mr. Euteneuer participated in the Severance Plan, as modified by the terms of his participation letter agreement with us, and his separation from service in August 2020 constituted a “Covered Termination” under the Severance Plan and his participation letter agreement thereby entitling him to the severance payments and benefits set forth in such arrangement. See “Potential Payments Upon Termination or Change of Control – Euteneuer Separation Agreement” for a more detailed description of such severance payments and benefits.

At the time of adopting the Severance Plan, the Compensation Committee reviewed competitive severance benefit data prepared by FW Cook. The Compensation Committee believes that the benefits provided by the Severance Plan are reflective of current compensation market practices and trends.

The Compensation Committee believes that our executive severance arrangements are key to our ability to recruit, retain, and develop key, high-quality management talent in a competitive market because such arrangements provide reasonable protection to the executive in the event he or she is not retained under specific circumstances. In addition, our tiered approach to severance arrangements allows us to tailor our arrangements as appropriate to each executive job level based on market practice.

More details regarding our executive severance arrangements are provided below under “Potential Payments Upon Termination or Change of Control.”

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How Compensation is Determined

Roles and Expert Independent Advice

Independent Compensation Committee
Our executive compensation programs are designed and administered under the direction and control of the Compensation Committee. The Compensation Committee is comprised solely of independent directors, who review and approve our overall executive compensation plans, programs, and practices, and set the compensation of our senior executives.

Independent Compensation Consultant
FW Cook is the Compensation Committee’s independent compensation consultant. The Compensation Committee has determined that FW Cook is independent and does not have any conflicts of interests with the Company. FW Cook provides a number of services to the Compensation Committee throughout the year and typically provides a comprehensive market analysis of our compensation programs each year. Our last review occurred in November 2020 in order to take into account the updated comparative data that was then available from SEC filings. See “Corporate Governance at Mattel – Board Structure – Board Committees – Compensation Committee” for a more detailed description of the services provided by FW Cook in 2020.

CEO and the HR Department
While the Compensation Committee has overall responsibility for establishing the elements, levels, and administration of our executive compensation programs, our CEO and members of our Human Resources (“HR”) Department routinely participate in this process. Our CEO makes recommendations to the Compensation Committee regarding adjustments to base salary, target and actual annual cash incentives, and target and actual Annual LTI Values. Our CEO also provides an assessment of his direct reports’ performance against their annual individual goals and his recommendation of their annual individual performance ratings. Our CEO’s recommendations are one of the factors considered by the Compensation Committee in making its compensation decisions. When appropriate, the Compensation Committee meets in executive session without management, including when CEO compensation is being approved. The Compensation Committee also makes recommendations to the Board regarding our executive compensation programs and practices and informs the Board of its decisions regarding compensation for our CEO, the CEO’s direct reports, and other Section 16 officers.

Reviews and Process

Market Competitiveness and Peer Group Review
The Compensation Committee annually evaluates the overall competitiveness of our senior executives’ annual TDC, comprised of annual base salary, MIP target incentive opportunity, and Annual LTI Value, as well as the composition of our benchmarking peer group. The Compensation Committee remains focused on ensuring pay and performance alignment, which incentivizes actions that support our strategic priorities and drive long-term stockholder value.

Every year, FW Cook evaluates our senior executives’ annual target TDC as compared to the annual target TDC of similarly-situated senior executives in our peer group, based on information from their most recent SEC filings and, if applicable, custom selections of certain appropriate market surveys. FW Cook’s report includes the base salaries, target annual cash incentives, bonus leverage, LTI grant values, and target TDC, as well as short-term and long-term incentive program design and aggregate LTI detail, at our peer group companies and in the custom surveys, where available. In February 2020, the Compensation Committee determined to hold Mr. Kreiz’s target TDC unchanged from 2019. In comparison to the CEOs of our peer group companies, Mr. Kreiz’s 2020 target TDC was set between the median and 75th percentile. To continue emphasizing pay-for-performance alignment and incentivize long-term stockholder value creation, the Compensation Committee determined to continue to provide Mr. Kreiz with an LTI mix entirely performance-based and at risk of 75% Performance Units, 25% stock options, and no RSUs. Since a high percentage of Mr. Kreiz’s compensation is performance-based and at risk, he is incentivized to create long-term stockholder value by attaining the three-year operating goal and relative TSR performance established for the LTIP cycles. The Compensation Committee believes that delivering LTI value to Mr. Kreiz primarily in the form of Performance Units is more closely aligned with our peer group’s practices and provides greater alignment with stockholders’ interests.

The Compensation Committee, in conjunction with FW Cook, reviews the makeup of our peer group annually and makes adjustments as it deems appropriate. Our peer group companies are intended to be similar to us in their orientation, business model, cost structure, size (as measured by revenue, net income growth, employees, and market capitalization), and global reach, and are considered to compete with us for executive talent or investor capital. The Compensation Committee believes it is appropriate to have a more diverse peer group beyond toy companies, as there are not enough publicly-reporting toy companies that are comparable to us in size. In addition, the Compensation Committee also considers whether the companies in our peer group have similar pay models and reasonable compensation practices, as well as whether the companies are listed as peers of our other peer group companies, and whether they are listed in peer groups used for us by proxy advisory firms. Our peer group is used to evaluate the market competitiveness of our compensation but is not used for financial performance goal comparisons under our incentive plans.

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When setting target amounts for CEO compensation, the Compensation Committee takes into consideration the Company’s global compensation framework, which incorporates marked-based compensation programs and pay ranges based on an objective set of factors, such as local market demand for each position, the location of the role, and years of experience for all Company employees. Pay parity is a key component of our ongoing market pay review to ensure that pay decisions are applied consistently and in line with our total pay philosophy.

Peer Group Composition Reflects Stockholder Feedback
In response to stockholder feedback on the size of our benchmarking peers, in November 2018, the Compensation Committee, with the guidance of FW Cook, revised our peer group to position us closer to median on key size metrics, eliminate over-representation of certain industries, and recognize the strategic focus on branded content and home entertainment.

The revised peer group approved in November 2018, which remained unchanged following FW Cook’s subsequent review in September 2019 and therefore informed 2020 target TDC decisions, was redesigned to include:

Companies generally between approximately 0.4x to 2.5x Mattel’s trailing four quarter revenues and 0.25x to 4x the then current and 2-year average market capitalization;
A reduction of companies in the Apparel & Accessories industry and an increase of companies in the Home Entertainment/Media industry and branded content;
The addition of four companies, three of which were smaller than Mattel in terms of revenue and market capitalization: Lions Gate Entertainment, Spin Master, Tupperware Brands, and Viacom; and
The removal of five companies, three of which had market capitalizations greater than 5x Mattel: Estee Lauder, Gap, General Mills, L Brands, and V.F. Corporation.

The Compensation Committee approved the peer group in September 2019 with no changes from the revised peer group approved in November 2018. As of September 2019, Mattel’s revenue was close to the peer group 40th percentile and its market capitalization was near the peer group 25th percentile.

Our peer group for 2020 was comprised of the following 22 companies:

Executive Compensation Benchmarking Peer Group to Inform 2020 Target TDC Decisions

Activision Blizzard, Inc.
Campbell Soup Company
Church & Dwight Co., Inc.
The Clorox Company
Edgewell Personal Care Company
Electronic Arts Inc.
Hanesbrands Inc.
Hasbro, Inc.

The Hershey Company
The J.M. Smucker Company
Kellogg Company
Lions Gate Entertainment Corp.
Newell Rubbermaid, Inc.
PVH Corp
Ralph Lauren Corporation
Spectrum Brands, Inc.

Spin Master
Take-Two Interactive Software, Inc.
Tapestry, Inc. (formerly Coach, Inc.)
Tiffany & Co.
Tupperware Brands Corporation
Viacom Inc.

Tally Sheets
As part of the Compensation Committee’s annual compensation review process, our HR Department prepares and reviews, with the Compensation Committee and FW Cook, comprehensive tally sheets detailing the total compensation for the most recent two years of our CEO and his direct reports (including NEOs). The tally sheets also include each executive’s holdings of Mattel common stock and accumulated value and unrealized gains under prior equity grants at various stock prices (realized and realizable pay). In conjunction with the review of tally sheets, the Compensation Committee reviews the potential severance and change-of-control benefits that would be payable to senior executives pursuant to our executive severance arrangements.

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Important Policies, Governance, and Guidelines

Stock Ownership Guidelines

We have had stock ownership guidelines for our NEOs and other direct reports of the CEO in place since 2001. Under our current stock ownership guidelines, the targeted stock ownership is established as shares of Mattel common stock with a value equal to a multiple of base salary, as set forth below for each NEO (other than Mr. Euteneuer, who separated from service in August 2020).

Name Salary
Multiple
Deadline
Ynon Kreiz 6x 4/30/2023
Richard Dickson 4x 12/31/2019
Anthony DiSilvestro 4x 6/30/2025
Steve Totzke 3x 1/31/2024
Roberto Isaias 3x 2/29/2024

Generally, executives have five years from the later of (a) the date the new targeted levels were established (January 2014) or (b) the date of promotion or hiring to meet the guidelines. If the targeted ownership levels are not met within the compliance deadline, the executives are required to retain 100% of after-tax shares acquired from equity grants until the guidelines are met. Based on input from FW Cook, the Compensation Committee believes that our stock ownership guidelines align with best practices.

All of our NEOs are in compliance with the guidelines either because they have attained the targeted ownership level or are still within their compliance period.

Shares counted towards ownership guidelines include shares of Mattel common stock directly owned, beneficially owned, or held in the Mattel Stock Fund of the 401(k) Plan, and phantom shares of Mattel common stock held in the Mattel Stock Equivalent Fund of our DCP.

Compensation Risk Review

On behalf of the Compensation Committee, FW Cook annually conducts a detailed risk assessment of our executive compensation plans, policies, and programs (our “Compensation Programs”) to determine whether they encourage excessive risk taking. FW Cook employed a framework to assist the Compensation Committee in ascertaining any potential material adverse risks and how they may link with our Compensation Programs. The results of FW Cook’s assessment, along with our HR Department’s assessment of our Compensation Programs, were presented to our Compensation Committee in September 2020. FW Cook and our HR Department advised the Compensation Committee that our Compensation Programs did not present any risks that are reasonably likely to have a material adverse effect on Mattel. As part of its review and assessment, our Compensation Committee also considered the following characteristics of our Compensation Programs, among others, that discourage excessive or unnecessary risk taking:

Our Compensation Programs appropriately balance short- and long-term incentives and fixed and variable pay.
Long-term incentives provide a portfolio approach using Performance Units, stock options, and RSUs.
Under our MIP, we use performance measures from the income statement and balance sheet that are defined at the beginning of the performance period, with specific adjustments addressed in detail. In addition, performance against individualized strategic objectives is taken into account.
Our Compensation Committee may apply negative discretion in determining annual cash incentives earned under our MIP.
Cash and shares earned under our MIP and LTIP, respectively, are capped.
An established performance evaluation approach based on quantitative and qualitative performance is used on a Company-wide basis.
Market competitive stock ownership guidelines for our most senior executives, which are reviewed annually by our Compensation Committee for individual compliance.
We have a Clawback Policy, Insider Trading Policy, and formal equity grant process in place.

Based on this assessment, the Compensation Committee believes that our Compensation Programs do not present any risk that is reasonably likely to have a material adverse effect on the Company.

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No Hedging or Pledging Permitted

Mattel’s Insider Trading Policy prohibits Board members, officers, and employees from (i) engaging in hedging, monetization, or speculative transactions in Mattel common stock (including zero-cost collars, forward sale contracts, short sales, transactions in publicly-traded options and other derivative securities), and (ii) holding Mattel shares in a margin account, pledging Mattel shares, or using Mattel shares owned as collateral for loans.

Recoupment of Compensation

Our Clawback Policy provides for forfeiture or reimbursement of certain cash and equity incentive compensation that was paid, granted, or vested based on financial results that, when recalculated to include the impact of a material financial restatement, were not achieved. The Clawback Policy applies to all Section 16 officers and other direct reports to the CEO and covers incentive compensation (cash and equity) paid, granted, or vested within three years preceding the material financial restatement. The Compensation Committee may recover a portion or the full amount of such incentive compensation provided to a covered employee based on whether such employee engaged in misconduct in connection with the material financial restatement.

In addition, our Amended 2010 Plan provides that, subject to certain limitations, Mattel may terminate outstanding grants, rescind exercises, payments, or deliveries of shares pursuant to grants, and/or recapture proceeds of a participant’s sale of shares of Mattel common stock delivered pursuant to grants if the participant violates specified confidentiality and IP requirements or engages in certain activities against the interest of Mattel or any of its subsidiaries and affiliates. These provisions apply only to grants made to participants for services as employees, and they do not apply to participants following any severance that occurs within 24 months after a change of control.

Equity Grant Process

The Compensation Committee has adopted the following equity grant process:

Annual Equity Grants – The Compensation Committee approves annual equity grants to the CEO and CEO direct reports and other Section 16 officers, and the Equity Grant Allocation Committee (“EGAC”) approves annual equity grants to employees below the CEO direct report level (SVPs and below), other than Section 16 officers. Specific recommendations regarding the aggregate annual equity grant pool to be allocated to employees, and the value and mix of grant types to be granted to employees per job level, previously reviewed by FW Cook, are presented to the Compensation Committee for approval. Typically, the Compensation Committee approves the annual grant values for the CEO and CEO direct reports and other Section 16 officers at its July meeting, but in all events before the grant date, as well as the methodology for converting the grant values to shares or units. The typical grant date for annual grants is August 1st. In July 2020, the Compensation Committee confirmed the annual grant values for the Performance Units, stock options, and RSUs for the CEO and CEO direct reports and other Section 16 officers with a grant date of July 31, 2020, given that August 1st occurred on a Saturday in 2020.
EGAC – For equity grants to employees below the CEO direct report level (SVPs and below) that are not Section 16 officers, the Board has delegated the authority to the EGAC to, subject to certain limitations, approve annual and off-cycle equity grants (such as grants to employees who are newly hired or promoted). The Board generally appoints our CEO as the sole member of the EGAC. Accordingly, Mr. Kreiz has been the sole member of the EGAC since April 2018.
Off-Cycle Grants – The Compensation Committee approves new-hire or other off-cycle equity grants for the CEO and CEO direct reports and other Section 16 officers, and the grant date is generally the last trading day of the month of the later of the (i) hire or promotion date or (ii) Compensation Committee approval date.
The EGAC approves new-hire or other off-cycle grants to employees below the CEO direct report level (SVPs and below) that are not Section 16 officers, with a grant date of: (a) for VPs and above, the last trading day of the month of hire and (b) for employees below the VP level, the last trading day of the month following the month of hire. For certain other off-cycle grants, the grant date is the last trading day of the month in which the EGAC approval occurs.

Tax and Accounting Considerations

Section 162(m) of the Internal Revenue Code disallows a tax deduction for compensation in excess of $1 million paid to named executive officers generally. As a result, we cannot take a deduction for compensation paid to our NEOs in excess of $1 million.

Mattel accounts for stock-based compensation in accordance with FASB ASC Topic 718, which requires us to recognize compensation expense for share-based payments (including stock options and other forms of equity compensation). The impact of FASB ASC Topic 718 has been taken into account by the Compensation Committee in determining to use a portfolio approach to equity grants, including Performance Units, stock options, and RSUs.

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Executive Compensation Tables

Summary Compensation Table

The following table sets forth information concerning total compensation earned by or paid to our NEOs.

Name, Principal
Position, and Year
Salary(1)
($)
Bonus
($)
Stock
Awards(2)
($)
Option
Awards(2)
($)
Non-Equity
Incentive Plan
Compensation(3)
($)
Change In
Pension Value
and Nonqualified
Deferred
Compensation
Earnings(4)
($)
All Other
Compensation(5)
($)
Total
($)
Ynon Kreiz
Chief Executive Officer
2020 1,500,000 7,162,498 2,387,502 4,500,000 73,432 15,623,432
2019 1,500,000 7,162,507 2,387,499 4,346,100 118,891 15,514,997
2018 1,027,397 6,657,261 6,506,946 2,695,384 68,672 16,955,660
Richard Dickson
President and Chief Operating Officer
2020 1,000,000 3,374,997 1,125,002 2,000,000 105,541 7,605,540
2019 1,000,000 3,557,773 1,125,002 1,931,600 132,169 7,746,544
2018 1,000,000 500,000 3,539,878 1,125,000 1,749,000 126,857 8,040,735
Anthony DiSilvestro
Chief Financial Officer
2020 457,377 1,574,999 525,001 1,530,000 41,591 4,128,968
Steve Totzke
Executive Vice President and Chief Commercial Officer
2020 800,000 1,124,999 375,001 1,280,000 74,147 3,654,147
Roberto Isaias
Executive Vice President and Chief Supply Chain Officer
2020 606,753 918,754 131,250 747,500 316,445 2,720,702
2019 441,629 1,071,179 256,251 636,800 227,943 2,633,802
Joseph Euteneuer
Former Chief Financial Officer
2020 548,361 932,229 1,373,407 2,853,997
2019 900,000 200,000 2,025,004 675,000 1,580,400 223,687 5,604,091
2018 900,000 2,070,558 674,999 1,431,000 265,020 5,341,577

(1)

Salary. Represents all amounts earned as salary during the applicable year. For Mr. DiSilvestro, the amount for 2020 represents the base salary paid for the period commencing on June 29, 2020 and ending on December 31, 2020. For Mr. Euteneuer, the amount for 2020 represents the base salary paid for the period commencing on January 1, 2020 and ending on August 10, 2020. For Mr. Isaias, the amount for 2020 also includes the payout of his accrued but unused vacation time during his employment in Mexico. Prior to his relocation from Mexico to our headquarters in California, Mr. Isaias received his base salary in Mexican Pesos (“MXN”), and he began receiving his base salary in U.S. Dollars (“USD”) on February 1, 2020. The portion of the base salary amount attributable to the period commencing on January 1, 2020 and ending on January 31, 2020, as well as the accrued vacation payout, have been converted to USD from MXN using the exchange rate of 0.05027 USD to 1 MXN as of December 31, 2020.

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(2)
Amounts shown represent the grant date fair value of RSUs, Performance Units, and stock options granted in the year indicated as computed in accordance with FASB ASC Topic 718.
Stock Awards. Amounts shown under the “Stock Awards” column for 2020 include the grant date fair value for RSUs as well as Performance Units under the 2020-2022 LTIP granted in 2020. The RSUs are valued based on our closing stock price of either $11.11 for annual grants made on July 31, 2020 or $9.67 for Mr. DiSilvestro’s new-hire grant on June 30, 2020. The 2020-2022 Performance Units are valued based upon our closing stock price of $11.11 on July 31, 2020, the probable outcome of the performance-related component over the three-year performance period (target performance), and the fair value of the market-related component over the three-year performance period, as determined using a Monte Carlo simulation in accordance with applicable accounting rules. The market-related component could result in up to a 133% adjustment for a maximum earnout of 200% of target Performance Units. Assuming that the maximum level of performance conditions will be achieved for all Performance Units, the grant date fair values for Messrs. Kreiz, Dickson, DiSilvestro, Totzke, and Isaias would be $14,324,995, $4,499,996, $2,099,990, $1,500,007, and $1,050,007, respectively. In light of Mr. Euteneuer’s separation from the Company, which was announced in October 2019, he did not receive any RSUs or Performance Units in 2020.
Option Awards. Amounts shown under the “Options Awards” column are calculated using the Black-Scholes option-pricing method. While the amounts shown are computed in accordance with FASB ASC Topic 718, the actual value, if any, that an executive may realize from the options are contingent upon the excess of the stock price over the exercise price, if any, on the date the award is exercised. Thus, there is no assurance that the value, if any, eventually realized by the executive will correspond to the amount shown. For a discussion of the assumptions made in the valuation of options granted in 2020, see Note 8 to Mattel’s Consolidated Financial Statements for 2020 contained in our Form 10-K. In light of Mr. Euteneuer’s separation from the Company, which was announced in October 2019, he did not receive any stock options in 2020.
(3)
Non-Equity Incentive Plan Compensation. Amounts shown represent the performance-based annual cash compensation earned under the MIP, our annual cash incentive plan. See “Compensation Discussion and Analysis – Elements of Compensation – Annual Cash Incentive” for a more complete description of the MIP.
(4)
Change in Nonqualified Deferred Compensation Earnings. No amount is included with respect to nonqualified deferred compensation earnings because there were no above-market earnings on nonqualified deferred compensation.
(5)
All Other Compensation. The dollar amounts for each perquisite and each other item of compensation shown in the “All Other Compensation” column and in this footnote represent Mattel’s incremental cost of providing the perquisite or other benefit to our NEOs. See the “Compensation Discussion and Analysis – Elements of Compensation – Other Forms of Compensation” section of this Proxy Statement for additional discussion of these benefits. Amounts include the following perquisites and other items of compensation provided to our NEOs in 2020.

All Other Compensation

All Other Compensation Kreiz
($)
Dickson
($)
DiSilvestro
($)
Totzke
($)
Isaias
($)
Euteneuer
($)
Car Allowance/Company Car(1) 5,355 24,000 12,000 24,000 37,479 15,000
Relocation Assistance(2) 1,463 217,677
Relocation Tax Gross-up(3) 924 37,590
Financial Counseling and Tax Return Services 10,000 15,165 10,000 10,000
Other Perquisites(4) 5,000 2,914 6,353
Total Perquisites 20,355 42,079 24,387 24,000 299,099 25,000
Contributions to 401(k) Plan 17,100 25,650 7,512 24,792 17,175 28,500
Savings Fund 171
Contributions to DCP 35,977 37,812 9,692 25,355 13,495
Severance Payments and Benefits(5) 1,306,412
Total “All Other Compensation” 73,432 105,541 41,591 74,147 316,445 1,373,407
(1)
Represents the amount of the monthly car allowance for all NEOs (except Mr. Kreiz) and, for Messrs. Kreiz and Isaias, the use of a Company car. The amount of car allowance is based on the executive’s job level and is intended to cover all automobile expenses and mileage reimbursement. For Messrs. Kreiz’s and Isaias’ personal use of a Company car, the amount represents the lease value, and also the cost of insurance, maintenance, permits, and gasoline. In addition, Mr. Isaias purchased a vehicle from the Company for which he paid 60% of the fair market value per Company car policy in Mexico. The amount reported for Mr. Isaias therefore includes the 40% discount that Mr. Isaias received upon purchasing this vehicle, which has been converted to USD from MXN using the exchange rate of 0.05027 USD to 1 MXN as of December 31, 2020.
(2)
For Mr. DiSilvestro, the amount shown reflects relocation management fees and home search expenses under our standard relocation program. For Mr. Isaias, the amount shown includes payments of $160,905 to help facilitate his relocation from Mexico to our headquarters in California (the “transition payment”), in addition to amounts attributable to relocation assistance and services in accordance with our standard International Transfer Program that include relocation management fees, home search expenses, a relocation allowance, transitional tax assistance, immigration costs, and temporary accommodations. Prior to his relocation from Mexico to our headquarters in California, Mr. Isaias received a portion of the transition payment in MXN, and this amount has been converted to USD $40,905 from MXN using the exchange rate of 0.05027 USD to 1 MXN as of December 31, 2020. The rest of the transition payment and relocation amounts were paid in USD.
(3)
Represents a tax gross-up under our standard relocation program for Mr. DiSilvestro, and our standard International Transfer Program for Mr. Isaias, related to the relocation assistance benefits described above.
(4)
For Mr. Kreiz, the amount shown represents attributable income under the Board of Directors Recommended Grants and Matching Recommended Grants Program fostering charitable contributions, which is more fully described in the “Director Compensation” section of this Proxy Statement. For Mr. Dickson, the amount shown reflects an executive physical examination. For Mr. Isaias, the amount shown represents grocery vouchers, food vouchers, a Christmas bonus, and a vacation premium, as provided annually to all Mattel employees in Mexico, all of which were discontinued in connection with his relocation from Mexico to our headquarters in California on February 1, 2020.
(5)
Represents the value of severance payments, including the value of shares delivered in connection with the accelerated vesting of equity awards, paid to Mr. Euteneuer pursuant to the terms of the Severance Plan (as modified by his participation letter agreement) through December 31, 2020. See the “Estimated Potential Payments” table for details as to the total severance payments and benefits to be paid to Mr. Euteneuer, including the value of his accelerated equity awards.

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Narrative Disclosure to Summary Compensation Table

We have entered into offer letters with each of our NEOs in connection with their commencement of employment with us, setting forth their annual base salary, target MIP opportunity, and the terms and conditions of new-hire and other equity grants. Certain of these terms, pursuant to which we had ongoing obligations as of 2020, are described in more detail below. For a description of our February 2020 letter agreement with Mr. Isaias in connection with his relocation from Mexico to our California headquarters, see “Compensation Discussion and Analysis – Elements of Compensation – Other Forms of Compensation.”

Kreiz Offer Letter
Mr. Kreiz was appointed to serve as our CEO effective as of April 26, 2018. In connection with this appointment, we entered into an offer letter with Mr. Kreiz that included the following key provisions: (i) an annual base salary of $1,500,000; (ii) a target MIP opportunity of 150% of eligible base salary up to a maximum of 300%; (iii) a new-hire grant of performance-based stock options with a value of $5,000,000 with a three-year performance period beginning on April 26, 2018, the date Mr. Kreiz commenced employment as our CEO, subject to continued service and Mattel achieving a relative TSR that is equal to or greater than the 65th percentile as compared to the companies in the S&P 500 Index; and (iv) eligibility to receive annual equity grants. Mr. Kreiz is also eligible to receive perquisites (including a monthly allowance for his automobile expenses, an annual comprehensive physical examination, and Company-paid financial counseling and tax return services), participate in the DCP, and participate in our employee benefit programs (including the 401(k) Plan). Pursuant to his offer letter, Mr. Kreiz is also eligible to participate in the Severance Plan as modified by the terms of his participation letter agreement.

DiSilvestro Offer Letter
Mr. DiSilvestro was appointed to serve as Executive Advisor effective as of June 29, 2020, until his transition to CFO on August 11, 2020, the date following the filing of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2020. In connection with this appointment, we entered into an offer letter with Mr. DiSilvestro that includes the following key provisions: (i) an annual base salary of $900,000; (ii) a target MIP opportunity of 100% of eligible base salary up to a maximum of 200%; (iii) new-hire equity grants in the form of RSUs valued at $525,000 and stock options valued at $525,000, with such grants vesting as to approximately one-third of the shares subject thereto on each of the first three anniversaries of the grant date, subject to continued service through each applicable vesting date; (iv) Performance Units valued at $1,050,000 under our LTIP; and (v) eligibility to receive an annual equity grant beginning in 2021. Mr. DiSilvestro was not provided any guaranteed payments or inducement equity grants in connection with his appointment.

Mr. DiSilvestro is also eligible to receive perquisites (including a monthly allowance for his automobile expenses and Company-paid financial counseling and tax return services), participate in the DCP, and participate in our employee benefit programs (including the 401(k) Plan). The offer letter further provides relocation benefits in accordance with the terms of our standard relocation program. Pursuant to his offer letter, Mr. DiSilvestro is also eligible to participate in the Severance Plan.

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Compensation at Mattel

Grants of Plan-Based Awards in 2020

The following table shows information about the non-equity incentive awards and equity-based awards granted to our NEOs in 2020.




Estimated Possible Payouts
Under Non-Equity Incentive
Plan Awards(1)
Estimated Future Payouts
Under Equity Incentive Plan
Awards(2)

All Other
Stock
Awards:
Number of
Shares
of Stock
or Units(3)

All Other
Option
Awards:
Number of
Securities
Underlying
Options(4)

Exercise
or Base
Price of
Option
Awards
($)

Grant Date
Fair Market
Value of
Stock and
Option
Awards(5)
($)
Name and
Grant Date
Committee
Action Date
Threshold
($)
Target
($)
Maximum
($)
Threshold Target Maximum
Ynon Kreiz
787,500 2,250,000 4,500,000
7/31/2020 7/29/2020     150,094 600,377 1,200,754 7,162,498
7/31/2020 7/29/2020 523,575 11.11 2,387,502
Richard Dickson  
350,000 1,000,000 2,000,000
7/31/2020 7/29/2020 47,150 188,600 377,200 2,249,998
7/31/2020 7/29/2020 246,711 11.11 1,125,002
7/31/2020 7/29/2020 101,260 1,124,999
Anthony DiSilvestro  
315,000 900,000 1,800,000
7/31/2020 7/29/2020 22,003 88,013 176,026 1,049,995
6/30/2020 6/8/2020 133,249 9.67 525,001
6/30/2020 6/8/2020 54,292 525,004
Steve Totzke  
224,000 640,000 1,280,000
7/31/2020 7/29/2020 15,717 62,867 125,734 750,003
7/31/2020 7/29/2020 82,237 11.11 375,001
7/31/2020 7/29/2020 33,753 374,996
Roberto Isaias  
130,813 373,750 747,500
7/31/2020 7/29/2020 11,002 44,007 88,014 525,004
7/31/2020 7/29/2020 28,783 11.11 131,250
7/31/2020 7/29/2020 35,441 393,750
Joseph Euteneuer(6)
(1) The awards shown represent the potential value of annual cash incentive awards that could be earned for fiscal year 2020 (and paid in 2021) under the MIP for each NEO assuming threshold performance (35% of target MIP opportunity), target performance (100% of target MIP opportunity), and maximum performance (200% of target MIP opportunity). See the “Compensation Discussion and Analysis – Elements of Compensation – Annual Cash Incentive” section of this Proxy Statement for a more complete description of the MIP.
(2)

The threshold amounts shown represent 25% of the Performance Units under the 2020-2022 LTIP that may be earned at threshold Adjusted Free Cash Flow performance of 37% multiplied by 67% for threshold relative TSR performance. The target amounts shown represent the number of Performance Units under the 2020-2022 LTIP that may be earned at the end of the three-year performance period if target performance is achieved. The maximum amounts shown represent 200% of the Performance Units under the 2020-2022 LTIP that may be earned at maximum Adjusted Free Cash Flow performance of 150% multiplied by 133% for maximum relative TSR performance. See the “Compensation Discussion and Analysis – Elements of Compensation – Equity-Based Long-Term Incentives” section of this Proxy Statement for a more complete description of the 2020-2022 LTIP.

(3) The awards shown are RSUs granted under our Amended 2010 Plan that vest approximately one-third on each of the first three anniversaries of the grant date. These RSUs do not earn dividend equivalents.
(4)

The awards shown are stock options granted under our Amended 2010 Plan that vest approximately one-third on each of the first three anniversaries of the grant date. Stock options do not earn dividend equivalents.


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(5)

Amounts shown represent the fair market value per share as of the grant date of the award determined pursuant to FASB ASC Topic 718 multiplied by the number of shares (at target, for the Performance Units). The RSUs are valued based on our closing stock price of either $11.11 for annual grants made on July 31, 2020, or $9.67 for Mr. DiSilvestro’s new-hire grant on June 30, 2020. See footnote (2) to the Summary Compensation Table for more information on the grant date fair value of the 2020-2022 LTIP Performance Units. For a discussion of the stock option assumptions made in the valuation reflected in this column, see Note 8 to Mattel’s Consolidated Financial Statements for 2020 contained in our Form 10-K.

(6)

Mr. Euteneuer’s service with the Company ended in August 2020. In accordance with the Severance Plan (as modified by his participation letter agreement), Mr. Euteneuer’s payout under the 2020 MIP was prorated based on the number of days during 2020 through his separation date. In light of his separation from the Company, which was announced in October 2019, Mr. Euteneuer did not receive a grant of Performance Units, RSUs, or stock options under our Amended 2010 Plan in 2020.

Outstanding Equity Awards at 2020 Year End

The following table shows the outstanding equity-based awards that were held by our NEOs as of December 31, 2020.

Option Awards    Stock Awards
Name and
Grant Date
for Options
Number of
Securities
Underlying
Unexercised
Options
Exercisable
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
Option
Exercise
Price
($)
Option
Expiration
Date
Grant
Date for
Stock
Awards
Number
of Shares
or Units
of Stock
That
Have Not
Vested
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested(1)
($)
  Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares,
Units or Other
Rights That
Have Not
Vested(1)
($)
RSUs    Performance Units
Ynon Kreiz  
7/31/2020 523,575 (5) 11.11 7/31/2030  
8/1/2019 154,182 313,039 (6) 13.59 8/1/2029  
8/1/2018 248,403 127,966 (7) 15.78 8/1/2028  
4/30/2018 1,068,376 (8) 14.80 4/30/2028  
7/31/2020   1,200,754 (2) 20,953,157
8/1/2019   962,056 (3) 16,787,877
8/1/2018 44,440 (7) 775,478  
6/11/2018   81,429 (4) 1,420,936
4/30/2018   229,839 (4) 4,010,691
Richard Dickson  
7/31/2020 246,711 (5) 11.11 7/31/2030  
8/1/2019 72,651 147,506 (6) 13.59 8/1/2029  
8/1/2018 135,492 69,800 (7) 15.78 8/1/2028  
8/1/2017 544,959