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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 §240.14a-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 ALL BOXES THAT APPLY):
  No fee required
Fee paid previously with preliminary materials
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

 

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Dear Fellow Stockholders,

2021 was another exceptional year for Mattel in which we exceeded expectations and achieved strong financial results. With Net Sales up 19%, the highest growth rate in decades, and Operating Income up 95% versus prior year, we executed on our strategy to improve profitability and accelerate topline growth.

Our strong performance was broad-based and our products resonated with consumers at levels we have not seen in years. We worked in close collaboration with our retail partners to meet extraordinary demand. We grew Gross Billings* in six of seven categories, in each of our three Power Brands (Barbie, Hot Wheels, and Fisher Price and Thomas & Friends), as well as American Girl, and in all four regions. In 2021, we outpaced the industry in every measured market and increased share for the second consecutive year**.

In the midst of major supply chain disruption and significant retail closures, we demonstrated the strength and resilience of our operations. We continued to increase productivity and improve efficiency through our Optimizing for Growth program, announced in February 2021, which is expected to reach $250 million in incremental savings by 2023, and we have already achieved $97 million of savings in 2021. We believe our supply chain expertise and scale are a competitive advantage for Mattel and that our restructured operating platform will continue to support more growth going forward.

We strengthened our position as a partner of choice for the major entertainment companies. In addition to our own intellectual properties (“IP”), we now have a formidable line-up of evergreen properties from Microsoft, Nickelodeon, Nintendo, Universal, Warner Brothers, WWE, and Disney. The return of Disney Princess and Frozen franchises to our portfolio in 2023 is a fitting recognition of our strength and capabilities.

It was also a year where we continued to make important progress toward capturing the full value of our IP. We launched four new film projects including UNO, Rock ‘Em, Sock ‘Em Robots, Polly Pocket, and Christmas Balloon, our first film based on original IP. In total, we have announced the development of 14 films and are currently in production on the Barbie movie. We debuted more television content than in any prior year, including a new Masters of the Universe series, two new animated Barbie movies, and a Thomas & Friends series. We also ramped up our digital games offerings through licensed partnerships, mobile game publishing through Mattel163, our joint venture with NetEase, and a standalone release of Hot Wheels Unleashed, which sold over one million games in its first quarter of release.

Importantly, we accomplished all this while maintaining our commitment as a responsible corporate citizen to support the communities where we live, work, and play. We published our 2020 Citizenship Report, which included our updated Environmental, Social, and Governance (“ESG”) strategy and goals, with the aim to contribute to a more diverse, equitable, inclusive, and sustainable future.

We exceeded our goal to achieve 95% recycled or Forest Stewardship Council (“FSC”)-certified content in the paper and wood fiber used in our products and packaging, and were honored by the FSC with a 2021 Leadership Award of Excellence. We launched several more sustainable products, as well as the Mattel PlayBack initiative, a toy takeback program to recover and reuse materials from old Mattel toys for future products in several key markets. We have also taken significant steps toward reducing energy consumption and absolute Scope 1 and 2 greenhouse gas emissions across our manufacturing footprint.

Our work continued toward our global Diversity, Equity & Inclusion goals of increasing representation of women and diverse talent at Mattel, and we have achieved 100% base pay equity by gender globally and by ethnicity in the U.S.+ We gave back to the community through Mattel Children’s Foundation, supporting organizations globally through product donations, employee volunteerism, gifts and grants, and disaster relief efforts.

 

Ynon Kreiz

 

Michael Dolan

 


 

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We have continued to prioritize our culture by creating a working environment fueled by leadership behaviors of collaboration, innovation, and execution. As a result, Mattel was recognized for its workplace culture in 2021 by several important organizations, including Forbes, Fast Company, and the Great Place to Work Institute. In addition, for the third year in a row we received a perfect score of 100 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 support of the execution of our strategy, the Board remains committed to 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.

Active, year-round stockholder engagement remains a key focus area for our Board. During 2021, we engaged with stockholders representing approximately 70% of Mattel’s outstanding shares, with Michael participating as Independent Lead Director in all meetings. Investor feedback was shared with our Governance and Social Responsibility Committee and Board, providing visibility into stockholder perspectives on Mattel’s business strategy and corporate governance, ESG, and compensation practices. We look forward to continuing these dialogues in the coming year.

Looking at all that has been achieved, Mattel today is an IP-driven, high-performing toy company. Our turnaround is now complete and we are in growth mode. With that, we have evolved our strategy and aim to grow Mattel’s IP-driven toy business and expand our entertainment offering.

We see significant opportunities in our toy business to accelerate topline through scaling our portfolio, growing our franchise brands, advancing our e-commerce and direct-to-consumer business, and increasing profitability by continuing to optimize operations.

We are beginning to capture the full value of our IP in highly accretive business verticals, including content, consumer products, gaming and digital experiences, which are directly adjacent to the toy industry. While still at an early stage, we are very excited about the progress we are making.

As always, we are committed to Mattel’s purpose to empower the next generation to explore the wonder of childhood and reach their full potential, and to our mission to create innovative products and experiences that inspire, entertain, and develop children through play.

At the time of this writing, we are watching the devastating impact of the war in Ukraine on innocent children and families. We hope for a peaceful resolution and our thoughts are with all those who are suffering.

We look forward to sharing our progress on our evolved strategy. We believe we are well-positioned to continue our strong momentum and create sustainable, long-term stockholder value.

It is a privilege to lead Mattel on your behalf.

Sincerely,

Ynon Kreiz

Chairman and Chief Executive Officer

Michael Dolan

Independent Lead Director


*Gross Billings is a key performance indicator under the SEC’s rules. Please see “Glossary of Non-GAAP Financial Measures & Key Performance Indicator and Non-GAAP Reconciliations” on page 105.
**Source: The NPD Group/Retail Tracking Service/G12/JAN 2020 - DEC 2021/Total Toys/Projected USD
+Representation as of April 23, 2021 for employees performing similar work with comparable roles and experience in similar markets, excluding manufacturing labor and temporary and seasonal employees.

2 Mattel, Inc.


 

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Mattel, Inc.
Notice of 2022 Annual Meeting of Stockholders

Date and Time

May 25, 2022

at 1:00 p.m.

(Los Angeles time)

   

Virtual Meeting

You may attend the virtual meeting by visiting: www. virtualshareholdermeeting. com/MAT2022

   

Record Date

Holder of record of Mattel common stock at the close of business on
March 29, 2022

How To Vote

Internet

www.ProxyVote.com (prior to May 25, 2022) 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 25, 2022. The proxy statement and the annual report are available at https://investors. mattel.com/financial-information/ annual-reports-proxies.

We will consider and act on the following matters of business at our 2022 annual meeting of stockholders (“2022 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, 2022 FOR
Proposal 3: Advisory vote to approve named executive officer compensation (“Say-on-Pay”) FOR
Proposal 4: Approval of the Sixth Amendment to the Mattel, Inc. Amended and Restated 2010 Equity and Long-Term Compensation Plan FOR
Proposal 5: Stockholder Proposal Regarding Our Special Stockholder Meeting Bylaw, if properly presented AGAINST
Such other business as may properly come before the 2022 Annual Meeting  

This year, in light of continuing concerns related to the COVID-19 pandemic, we made the decision to again conduct a virtual annual meeting of stockholders. Stockholders of record as of the close of business on March 29, 2022 will be able to attend the 2022 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/MAT2022. 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 2022 Annual Meeting with the 16-digit control number 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 2022 Annual Meeting) and obtain a “legal proxy” in order to be able to attend, participate in, or vote at the 2022 Annual Meeting. You will not be able to attend the 2022 Annual Meeting in person.

Whether or not you expect to attend the 2022 Annual Meeting online, please vote as soon as possible so that your shares will be represented and voted at the 2022 Annual Meeting.

By Order of the Board of Directors

 

Jonathan Anschell

Secretary

El Segundo, California

April 12, 2022

2022 Proxy Statement 3

 

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Table of Contents

2021 Strategic Overview and Financial Business Highlights       6
Key Financial and Business Highlights 6   Citizenship at Mattel 8
Mattel Strategy Evolved 7      
         
Proxy Summary       10
Voting Matters and Board Recommendations 10   Corporate Governance Highlights 12
Board Composition 11   Ongoing Stockholder Engagement Program 13
Director Nominees Snapshot 12   Executive Compensation Highlights 14
         
Corporate Governance at Mattel       17
 Proposal 1  Election of Directors 17   Board’s Role and Responsibilities 36
Board Composition and the Director Nomination Process 30   Board Accountability and Effectiveness 39
Board Structure 31   Non-Employee Director Compensation 41
         
Audit Matters       44
 Proposal 2  Ratification of Selection of
Independent Registered Public
Accounting Firm for 2022
44   Fees Incurred for Services by PricewaterhouseCoopers LLP 47
Report of the Audit Committee 45      
         
Compensation at Mattel       48
 Proposal 3   Advisory Vote to Approve Named
Executive Officer Compensation
(“Say-on-Pay”)

48
  Executive Compensation Tables 68
  Summary Compensation Table 68
  Grants of Plan-Based Awards in 2021 70
Executive Officers 49   Outstanding Equity Awards at 2021 Year End 71
Compensation Discussion and Analysis 51   Option Exercises and Stock Vested in 2021 73
2021 Named Executive Officers 51   2021 Nonqualified Deferred Compensation 73
Overview 51   Potential Payments Upon Termination or  
Pay-For-Performance Philosophy 54   Change of Control 75
Elements of Compensation 54   Estimated Potential Payments 79
2021 Individual Performance Assessments 57   Pay Ratio of CEO to Median Employee 81
How Compensation is Determined 63   Report of the Compensation Committee 81
Important Policies, Governance, and Guidelines 65      
         
 Proposal 4  Approval of the Sixth Amendment
to the Mattel, Inc. Amended and
Restated 2010 Equity and Long-Term
Compensation Plan

82
  Current Overview of Outstanding Equity Information 83
  Summary of the Amended Plan 84
  Estimate of Benefits; New Plan Benefits 90
Background and Purpose of the Amended Plan 82   Certain Material U.S. Federal Income Tax Consequences 91

 

4 Mattel, Inc.

 

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Stockholder Proposal       93
 Proposal 5  Stockholder Proposal Regarding Our Special Stockholder Meeting Bylaw 93   Board’s Statement AGAINST Stockholder Proposal 93
Stock Ownership and Reporting       95
Principal Stockholders 95   Equity Compensation Plan Information 97
Security Ownership of Management and the Board 96      
         
2022 Annual Meeting and Voting Information       98
General Meeting Information 98   Deadline for 2023 Proposals and Nominations 103
Important Notice Regarding the Availability of Proxy Materials for the 2022 Annual Meeting 99      
   
Glossary of Non-GAAP Financial Measures & Key Performance Indicator and Non-GAAP Reconciliations 105
   
Other Matters that May Come Before the 2022 Annual Meeting 108
   
Appendix A - Sixth 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

 

2022 Proxy Statement 5

 

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2021 Strategic Overview and Financial Business Highlights 

2021 Overview

2021 was another exceptional year for Mattel in which we exceeded expectations and achieved strong financial results. With Net Sales up 19% as reported and 18% in constant currency*, and Operating Income up 95% versus prior year, we executed on our strategy to improve profitability and accelerate topline growth. Our strong performance was broad-based and our products resonated with consumers at levels we have not seen in years. It was also a year where, in the midst of major supply chain disruption and significant retail closures, we demonstrated the strength and resilience of our operations. We continued to increase productivity and improve efficiency through our Optimizing for Growth program, announced in February 2021, which is expected to reach $250 million in incremental savings by 2023, and we have achieved $97 million of such savings in 2021.

In addition, we strengthened our position as a partner of choice for the major entertainment companies, and continued to make important progress toward capturing the full value of our intellectual property (“IP”). As a result of all that has been achieved, Mattel today is an IP-driven, high-performing toy company. Our turnaround is now complete and we are in growth mode.

Key Financial and Business Highlights

We have made consistent and meaningful progress since beginning our turnaround and transformation in 2018 and, in 2021, we saw significant year-over-year improvement in several key financial metrics: 

Net Sales       Operating (Loss)
Income
      Cash Flow from
Operations
YOY Change
Constant Currency*
in millions
in millions
 
Gross Profit
Operating (Loss)
Income Margin
Earnings Per Share
in millions
 
in millions

2018-2020 key financial metrics reflect the impact of immaterial revisions to the financial statements. 2017 key financial metrics were not revised to reflect the impact of immaterial adjustments.

*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 105.

6 Mattel, Inc.

 

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OUR 2021 PERFORMANCE WAS BROAD-BASED:

Net Sales increased in all four regions;
Worldwide Gross Billings* increased in all three of our Leader Categories, including Dolls, Vehicles, and Infant, Toddler, and Preschool, as well as our American Girl segment;
Worldwide Gross Billings increased for all three of our Power Brands – Barbie, Hot Wheels, and Fisher Price and Thomas & Friends – with each exceeding $1 billion in Gross Billings;
Worldwide Gross Billings for our Challenger Categories, which includes Action Figures, Building Sets, Games and Other increased, as a whole;
We outpaced the industry in every measured market and increased share for the second consecutive year in 2021**;
In addition to our own IP, we now have a formidable line-up of evergreen properties from Microsoft, Nickelodeon, Nintendo, Universal, Warner Brothers, WWE, and Disney, including the return of Disney Princess and Frozen franchises to our portfolio in 2023; and
We continued to make progress toward our environmental, social, and governance (”ESG”) goals and priorities, and employee sentiment remained strong and above industry benchmark, according to employee engagement industry benchmarking data from Glint, despite continued disruption due to COVID-19.

WE CONTINUED TO MAKE IMPORTANT PROGRESS TOWARD CAPTURING THE FULL VALUE OF OUR IP:

Mattel Films announced four new film projects, for a total of 14 films, and we are currently in production on the Barbie movie;
Mattel Television debuted more television content than in any prior year, including a new Masters of the Universe series, two new animated Barbie movies, and a Thomas & Friends series; and
We increased our digital games offerings through licensed partnerships, mobile game publishing through Mattel163, our joint venture with NetEase, and a standalone release of Hot Wheels Unleashed.
*Gross Billings is a key performance indicator under the SEC’s rules. Please see “Glossary of Non-GAAP Financial Measures & Key Performance Indicator and Non-GAAP Reconciliations” on page 105.
**Source: The NPD Group/Retail Tracking Service/G12/JAN 2020 - DEC 2021/Total Toys/Projected USD

Mattel Strategy Evolved

With our turnaround complete, we have evolved our strategy to grow Mattel’s IP-driven toy business and expand our entertainment offering. We see significant opportunities in our toy business to:

  Accelerate topline through scaling our portfolio;

  Grow our franchise brands;

  Advance our e-commerce and direct-to-consumer (“DTC”) business; and

  Increase profitability by continuing to optimize operations.

We are also beginning to capture the full value of our IP in highly accretive business verticals, including content, consumer products, and digital experiences, which are directly adjacent to the toy industry. In success, we believe this can be transformative.

This evolved strategy builds upon tangible results and a strong growth trajectory and positions us to continue to create long-term stockholder value.

GROW IP-DRIVEN TOY BUSINESS AND EXPAND ENTERTAINMENT OFFERING

 
Our mission is to create innovative products and experiences
that inspire, entertain and develop children through play

 

2022 Proxy Statement 7

 

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2021 Strategic Overview and Financial Business Highlights

Citizenship at Mattel

At Mattel, we are committed to being a responsible corporate citizen and actively supporting the communities in which we live, work, and play. Our aim is to contribute to a more diverse, equitable, inclusive, and sustainable future.

ESG Strategy and Goals

In 2021, we updated our ESG strategy and goals based on a comprehensive analysis of the key socioeconomic, technological, and sustainability trends that we believe affect our company. Our updated ESG strategy and goals are organized in three pillars to represent the ESG areas where we believe we can have the greatest impact.

Sustainable Design
and Development

What we do
   

Responsible Sourcing
and Production

How we do it

   

Thriving and Inclusive
Communities

Those we impact

             

Strategy:

Develop innovative products and experiences that are better for our world by integrating sustainable materials and principles of product stewardship and circular design.

Goals:

   Achieve 100% recycled, recyclable, or bio-based plastic materials in our products and packaging by 2030

   Achieve and maintain 95% recycled or Forest Stewardship Council (FSC)-certified content in the paper and wood fiber used in our products and packaging

   

 

Optimize our resource use in operations to reduce environmental effects and promote ethical sourcing practices and worker health and safety throughout our supply chain.

 

   Reduce absolute Scope 1 + 2 GHG Emissions 50% by 2030 (versus 2019 baseline)*

   Achieve Zero manufacturing waste** by 2030

   

 

Create positive social impact through purposeful play and by supporting diverse, equitable, and inclusive communities where we live, work, and play.

 

   Achieve and maintain 100% pay equity for all employees performing similar work globally

   Increase representation of women at all levels of the organization

   Increase representation of ethnicity at all levels of the organization

             
             
Priorities:            

   Product Quality and Safety

   Sustainable Materials in Toys

   Sustainable Packaging

   Business Model Innovation

   

    Ethical Sourcing, Human Rights, Fair Labor, and Environmental Standards in the Supply Chain

    Worker Health and Safety

    Energy/Climate Action

    Waste Management

    Ethics and Compliance

   

   Purposeful Play

   Diversity, Equity & Inclusion

   Family-Friendly Workplace

   Philanthropy

   Child Online Safety and Privacy

   Responsible Marketing to Children

*Absolute Scope 1 + 2 GHG Emissions defined as total Scope 1 GHG emissions from on-site fossil fuel consumption and fleet fuel consumption, and total Scope 2 GHG emissions from purchased electricity, steam, heat, or cooling; applies to all Mattel-owned and/or -operated sites, including manufacturing facilities, distribution centers, corporate locations, and retail stores over 20,000 square feet.
**Defined as 90% of manufacturing waste being either diverted from the landfill or incinerated with energy recovery, except where otherwise directed by local regulations.

8 Mattel, Inc.

 

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ESG Oversight at Mattel
 
Board of Directors
 

Governance and Social Responsibility Committee

   Periodically receives reports from management and reports to the full Board
 

ESG Executive Council

   Chaired by Mattel’s Chairman of the Board of Directors and Chief Executive Officer (“CEO”) and comprised of key senior executives
   Defines ESG strategy and goals, and evaluates and approves ESG programs and plans that advance Mattel’s practices in support of the Company’s purpose and objectives
   Meets monthly to provide updates on progress toward goals and review new programs, plans, and recommendations on various ESG workstreams
   Reports to the Board’s Governance and Social Responsibility Committee on a periodic basis

2021 Notable ESG Accomplishments

Honored by Forest Stewardship Council with a 2021 Leadership Award for Excellence for use of FSC-certified products and commitment to responsible forest management
For the third consecutive year, 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
Ranked among Forbes 2021 World’s Best Employers and Best Employers for Women
Named to Fast Company’s List of the 100 Best Workplaces for Innovators in 2021
Recognized as Great Place to Work for 2021

2022 Proxy Statement 9

 

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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 2021 financial performance, please review our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2022 (the “Form 10-K”). We made this Proxy Statement available to stockholders beginning on April 12, 2022.

Voting Matters and Board Recommendations

Proposal The Board’s
Recommendations
Page
       
1 Election of Ten Director Nominees

FOR each
Director Nominee

17
       
       
2 Ratification of PricewaterhouseCoopers LLP as our Independent Accounting Firm for the Year Ending December 31, 2022 FOR 44
       
       
3 Advisory Vote to Approve Named Executive Officer Compensation (“Say-on-Pay”) FOR 48
       
       
4 Approval of the Sixth Amendment to the Mattel, Inc. Amended and Restated 2010 Equity and Long-Term Compensation Plan FOR 82
       
       
5 Stockholder Proposal Regarding Our Special Stockholder Meeting Bylaw AGAINST 93
       

How To Vote

Internet
www.ProxyVote.com (prior to May 25, 2022) 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


10 Mattel, Inc.

 

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Board Composition

Ynon Kreiz

Director Since: 2017

 

Michael Dolan

Director Since: 2004

 

R. Todd Bradley

Director Since: 2018

         
Chairman of the Board
Committee Memberships:
Stock Grant
 

Independent Lead Director
Committee Memberships:
Compensation (Chair); Executive (Chair);
Governance and Social Responsibility

 

Committee Memberships:
Audit; Compensation

  

         

Adriana Cisneros

Director Since: 2018

 

Diana Ferguson

Director Since: 2020

 

Soren Laursen

Director Since: 2018

         

Committee Memberships:
Governance and Social Responsibility

 

Committee Memberships:
Audit (Chair), Executive

  

 

Committee Memberships:
Finance; Governance and
Social Responsibility

         

Ann Lewnes

Director Since: 2015

 

Roger Lynch

Director Since: 2018

 

Dominic Ng

Director Since: 2006

         

Committee Memberships:
Governance and Social Responsibility

(Chair); Executive

 

Committee Memberships:
Audit; Finance

  

 

Committee Memberships:
Finance (Chair); Audit; Executive

  

         

Dr. Judy Olian

Director Since: 2018

           
             

Committee Memberships:
Compensation; Governance and
Social Responsibility

           
Independent
Audit Committee Financial Expert

2022 Proxy Statement 11

 

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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 provided below.

Director Nominees Skills and Experience

Brand and
Marketing
Corporate
Citizenship/ESG
Entertainment/
Media
Finance,
Accounting, or
Financial Reporting
Human Capital
Management
7 of 10 nominees 6 of 10 nominees 6 of 10 nominees 7 of 10 nominees 6 of 10 nominees
         
Industry International/Global
Operations
Senior Leadership Supply Chain Technology/
E-Commerce
6 of 10 nominees 10 of 10 nominees 10 of 10 nominees 4 of 10 nominees 4 of 10 nominees

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 CEO’s 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


12 Mattel, Inc.

 

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Ongoing Stockholder Engagement Program

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, a stockholder engagement effort focused on corporate governance, ESG, and executive compensation is also led by an independent director, with management, once or twice a year. In Fall 2021 and Winter 2022, our Independent Lead Director, Mr. Dolan, participated in all such meetings with members of senior management. Mr. Dolan’s participation in these meetings allows for a direct line of communication with our Board.

INVESTOR ENGAGEMENT CYCLE    

SPRING

   In-season stockholder engagement meetings conducted to understand stockholder views on proposals, if needed

   Ongoing stockholder dialogue conducted by Investor Relations

WINTER

   Continue to conduct off-season engagement, and consider enhancements to corporate governance, ESG, and executive compensation practices

   Ongoing stockholder dialogue conducted Investor Relations

SUMMER

   Annual meeting vote results and feedback reviewed

   Plan for off-season stockholder engagement

   Ongoing stockholder dialogue conducted by Investor Relations

FALL

   Off-season stockholder engagement meetings conducted, focused on corporate governance, ESG, and executive compensation

   Stockholder input shared with Board and Board committees and enhancements considered

   Ongoing stockholder dialogue conducted by Investor Relations


Input received from our stockholders during these stockholder engagement meetings is shared with the Governance and Social Responsibility Committee, the Compensation Committee, as appropriate, and the full Board, who take this input into account when considering governance changes.

TOTAL PERCENTAGE OF STOCKHOLDERS
CONTACTED IN FALL 2021 AND WINTER 2022
  TOTAL PERCENTAGE OF STOCKHOLDERS
ENGAGED IN FALL 2021 AND WINTER 2022
     
 

Our substantive conversations with stockholders in these governance engagement meetings covered a variety of topics, including:

Business Strategy   Environmental Sustainability   Diversity, Equity & Inclusion
         
Board Structure   Governance Practices   Executive Compensation Programs

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 2022 and beyond.


2022 Proxy Statement 13

 

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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 an annual short-term cash incentive (Mattel Incentive Plan or “MIP”) and annual stock-based long-term incentives (“LTIs”).

The chart below shows the 2021 target total direct compensation (“TDC”)* mix for our CEO and the average 2021 target TDC mix for our other named executive officers (“NEOs”):

A Significant Portion of 2021 Target TDC is At Risk

CEO   Other NEOs
 
*TDC is the sum of 2021 year-end annual base salary, MIP target incentive opportunity, and Annual LTI Value (i.e., grant value of Performance Units granted under the 2021-2023 Long-Term Incentive Program (“LTIP”), stock options, and RSUs).
2021 Compensation   2021 Objective, Structure, and Performance Measures
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 2021 MIP financial measures focused on restoring profitability, regaining topline growth, and alignment with our cost savings programs. The 2021 MIP was structured as follows:

o   65% MIP-Adjusted EBITDA Less Capital Charge

o   20% MIP-Adjusted Net Sales

o   15% MIP-Adjusted Gross Margin

o   Multiplier of 0%-125% based on Individual Performance

Stock-Based Long-Term Incentives (LTIs)
Performance-Based Restricted Stock Units (“Performance Units”)  

   Incentivize and motivate senior executives to achieve key long-term strategic financial objectives and stock price outperformance. The Performance Units granted under the 2021-2023 LTIP were structured as follows:

o   Three-Year Cumulative Adjusted Free Cash Flow

o   Multiplier of 67%-133% based on Three-Year Relative Total Stockholder Return (“TSR”) vs. S&P 500 Constituents

Stock Options  

   Align senior executives’ interests with stockholders’ interests and drive focus on increasing long-term stockholder value

   Vest in annual installments over three years

Time-Based Restricted Stock Units (“RSUs”)  

   Encourage senior executive stock ownership

   Support stockholder-aligned retention

   Vest in annual installments over three years


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2021 Pay-For-Performance Results

The compensation outcomes in 2021 reflect our pay-for-performance philosophy by rewarding progress on improving profitability and accelerating topline growth, as well as improved stock price performance.

2021 MIP Earnout Reflects Continued Progress on Improving Profitability and Accelerating Topline Growth

Our 2021 performance and progress on improving profitability and accelerating topline growth resulted in a Company financial performance earnout of 190.3%.*

MIP-Adjusted EBITDA Less Capital Charge

65%

 

MIP-Adjusted Net Sales

20%

 

MIP-Adjusted Gross Margin

15%

         
   

*The table 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 107 and each measure is defined under “Glossary of Non-GAAP Financial Measures & Key Performance Indicator and Non-GAAP Reconciliations.”

For our NEOs, the 190.3% 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 performance, and the Compensation Committee’s assessment of our CEO’s performance, against pre-established individual goals linked to the execution of our strategy (“Individual Performance Multiplier”). For 2021, the Individual Performance Multiplier for our CEO was 125% and for our other NEOs ranged from 100% to 125%. Please see “2021 Individual Performance Assessments” on page 57.

2019-2021 LTIP Earnout Reflects Significant Improvements in Adjusted Free Cash Flow Generation and Stock Price Performance

By continuing to improve profitability and our stock price performance, we achieved a total earnout of 170%.

Three-Year Cumulative Adjusted Free Cash Flow*   Relative TSR Percentile
     
 
     

*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 105 for a description of the adjustments under the LTIP.

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Proxy Summary

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 senior executives’ interests with stockholders’ interests:

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”)

What We Do Not Do

xNo excise tax gross-ups on severance or other payments in connection with a change of control
xNo poor pay practice of tax gross-ups on perquisites and benefits
xNo hedging or pledging by Board members, officers, or employees permitted
xNo repricing of stock options without stockholder approval

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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 2022 Annual Meeting, all of whom are currently directors. If elected, 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:

       
Ynon Kreiz   Michael Dolan   R. Todd Bradley   Adriana Cisneros   Diana Ferguson
                 
       
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 2022 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, may reduce the size of the Board. We presently believe that each of the nominees will be available to serve.


2022 Proxy Statement 17

 

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Corporate Governance at Mattel

Director Nominees Attributes

BOARD DIVERSITY MATRIX (AS OF APRIL 12, 2022)

Total Number of Directors: 10

The following chart provides self-identified diversity information related to our Board, in accordance with Nasdaq requirements.

  Female Male Non-Binary Did Not Disclose
Gender
Gender Identity        
Directors 4 5 - 1
Demographic Background        
African American or Black 1 - - -
Alaskan Native or Native American - - - -
Asian - 1 - -
Hispanic or Latinx 1 - - -
Native Hawaiian or Pacific Islander - - - -
White 2 4 - -
Two or More Races or Ethnicities - - - -
LGBTQ+     -  
Did Not Disclose Demographic Background     1  

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 strategy.

70%

of our director nominees joined our Board within the last 5 years.


                         
2017 2018 2019 2020 2021
•   Ynon Kreiz    

•   R. Todd Bradley

•   Adriana Cisneros

•   Soren Laursen

•   Roger Lynch

•   Dr. Judy Olian

          •   Diana Ferguson      

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Director Nominees Skills, Experience, and Attributes

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.

                         
Skills and Experience

 

Brand and Marketing

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

     
 

Corporate Citizenship/ESG

We benefit from directors with experience with sustainability initiatives designed to achieve long-term stockholder value through a responsible, sustainable business model.

       
 

Entertainment and Media

We value experience in the entertainment/media industries, which provide important insight as we seek to capture the full value of our IP by monetizing our brands and franchises through film, television, digital gaming, live events, and music.

       
 

Finance, Accounting, or Financial Reporting

We value directors with experience in finance, accounting, and/or financial reporting, as we measure our operating and strategic performance by reference to certain financial measures and are subject to various accounting and public company rules and requirements. Accordingly, we seek to have a number of directors who qualify as audit committee financial experts (as defined by SEC rules).

     
 

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 an understanding of human capital management obtained from experience as a senior leader in a large organization.

       
 

Industry

Directors with experience in our industry provide valuable perspective on issues specific to our products and the operation of our business.

       
 

International/Global Operations

As our business is worldwide in scope, we benefit from directors having experience as a senior leader in a large organization with international operations.

 

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.

 

Supply Chain

As a global consumer goods company, we benefit from directors with experience in supply chain management or oversight, including international manufacturing, sourcing, inventory management, transportation and logistics, and supplier/vendor relationships.

           
 

Technology and E-Commerce

Experience with technology/e-commerce helps our Board oversee Mattel’s cybersecurity and advise management as we further strengthen and accelerate our e-commerce business, including our DTC business.

           

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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.

Ynon Kreiz

Chairman of the Board

Age: 57

Director Since: 2017

Mattel Committee Memberships: Stock Grant Committee

Other Current Public Directorships: Warner Music Group Corp.

Skills:

Brand and Marketing
Corporate Citizenship/ESG
Entertainment/Media
Finance, Accounting, or Financial Reporting
Human Capital Management
Industry
International/Global Operations
Senior Leadership
Supply Chain

Key Experience/Director Qualifications

Mr. Kreiz brings to Mattel’s Board significant corporate leadership, operational, restructuring, 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)
Director, LootCrate (May 2017 – December 2017)
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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Michael Dolan

Age: 75

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

Skills:

Brand and Marketing
Entertainment/Media
Finance, Accounting, or Financial Reporting
Human Capital Management
Industry
International/Global Operations
Senior Leadership

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 – 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, Altos Planos, Inc. since 2019
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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Corporate Governance at Mattel

R. Todd Bradley

Age: 63

Director Since: 2018

Mattel Committee Memberships:

Audit Committee, Compensation Committee

Other Current Public Directorships: Commvault Systems, Inc., One Equity Partners Open Water I Corp.

Skills:

Brand and Marketing
Finance, Accounting, or Financial Reporting
Human Capital Management
Industry
International/Global Operations
Senior Leadership
Supply Chain
Technology/E-Commerce

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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Adriana Cisneros

Age: 42

Director Since: 2018

Mattel Committee Memberships: Governance and Social Responsibility Committee

Skills:

Brand and Marketing
Corporate Citizenship/ESG
Entertainment/Media
International/Global Operations
Senior Leadership
Technology/E-Commerce

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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Corporate Governance at Mattel

Diana Ferguson

Age: 59

Director Since: 2020

Mattel Committee Memberships: Audit Committee (Chair), Executive Committee

Other Current Public Directorships: Gartner, Inc., Sally Beauty Holdings, Inc.

Skills:

Finance, Accounting, or Financial Reporting
Human Capital Management
Industry
International/Global Operations
Senior Leadership
Supply Chain

Key Experience/Director Qualifications

Ms. Ferguson brings to Mattel’s Board significant leadership, finance, human capital management, strategy, and consumer products experience. As a former Chief Financial Officer in several consumer products businesses, she brings valuable perspective on managing large organizations, complex accounting principles and judgments, internal controls and financial reporting requirements, and evaluating the financial results and financial reporting processes of complex companies. Ms. Ferguson also has extensive board experience in publicly traded and nonprofit boards.

 

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 division of Proctor and Gamble

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

Gartner, Inc. since August 2021
Sally Beauty Holdings, Inc. since 2019; also chairs Compensation and Talent Committee and serves on Audit Committee
Invacare Corporation (2018 – 2022); also served on Audit Committee and Nominating and Governance Committee
Frontier Communications Corporation (2014 – 2021); chaired Compensation Committee and served on Nominating and Corporate Governance Committee
TreeHouse Foods, Inc. (2008 – 2016); chaired Audit 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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Soren Laursen

Age: 58

Director Since: 2018

Mattel Committee Memberships: Finance Committee,
Governance and Social Responsibility Committee

Skills:

Brand and Marketing
Corporate Citizenship/ESG
Industry
International/Global Operations
Senior Leadership
Supply Chain

Key Experience/Director Qualifications

Mr. Laursen brings to Mattel’s Board 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

Credo Partners AS, an investment firm focusing on mid-size companies

Head of Denmark since October 2019

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
Board member, Postevand Aps since 2015; also serves as Chairman since 2019
Chairman, BørneRiget Fonden since 2020
Board Member, BoeBeauty (2020 – 2022)

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Corporate Governance at Mattel

Ann Lewnes

Age: 60

Director Since: 2015

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

Skills:

Brand and Marketing
Corporate Citizenship/ESG
Entertainment/Media
International/Global Operations
Senior Leadership
Technology/E-Commerce

Key Experience/Director Qualifications

As a global media and marketing leader in the technology industry, Ms. Lewnes brings to Mattel’s Board her significant leadership experience in branding, advertising, direct-to-consumer/ecommerce, digital marketing, and corporate strategy. 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 corporate responsibility, global marketing campaigns, and the company’s website, customer insights, corporate strategy and M&A, 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 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

Trustee, Lehigh University since 2021
Director, Sundance Institute since 2020
Director, Advertising Council (2009-2019)

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Roger Lynch

Age: 59

Director Since: 2018

Mattel Committee Memberships: Audit Committee, Finance Committee

Skills:

Brand and Marketing
Entertainment/Media
Finance, Accounting, or Financial Reporting
International/Global Operations
Senior Leadership
Technology/E-Commerce

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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Corporate Governance at Mattel

Dominic Ng

Age: 63

Director Since: 2006

Mattel Committee Memberships: Finance Committee (Chair), Audit Committee, Executive Committee

Other Current Public Directorships: East West Bancorp, Inc.

Skills:

Corporate Citizenship/ESG
Entertainment/Media
Finance, Accounting, or Financial Reporting
Human Capital Management
Industry
International/Global Operations
Senior Leadership

Key Experience/Director Qualifications

As the Chief Executive Officer of the largest independent bank headquartered in Southern California, 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, 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
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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Dr. Judy Olian

Age: 70

Director Since: 2018

Mattel Committee Memberships: Compensation Committee, Governance and Social Responsibility Committee

Other Current Public Directorships: Ares Management LLC and United Therapeutics Corp.

Skills:

Corporate Citizenship/ESG
Finance, Accounting, or Financial Reporting
Human Capital Management
International/Global Operations
Senior Leadership

Key Experience/Director Qualifications

As the President of Quinnipiac University, and former Dean of the UCLA Anderson School of Management for over 12 years, 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 at, 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 and Conflicts Committee
United Therapeutics Corp. since 2016; also serves on Compensation 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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Corporate Governance at Mattel

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 Chair 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 in the context of 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 talent base, skills, areas of expertise and experience, diversity, including diversity with respect to demographics such as gender, race, ethnic and national background, geography, age, and sexual orientation, 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 Chair 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 an independent third-party search firm to locate candidates who may meet the needs of the Board. Candidates who the committee expresses interest in pursuing must interview with at least two members of the committee before being recommended to the Board for nomination. The committee recommends to the Board the director nominees for election at each annual meeting of stockholders.

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;
A 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
A 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 upon a determination that such change is in the best interests of the Company and its stockholders and a recommendation of such change is made to the full Board by the Governance and Social Responsibility Committee. 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 103 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 the Company’s leadership structure so that there is strong, independent Board leadership in place to provide effective oversight of management. The Governance and Social Responsibility Committee also periodically reviews the Board’s leadership structure and recommends changes to the Board as appropriate, and makes a recommendation to the independent directors regarding the election of the Independent Lead Director. The Board evaluates its structure periodically, as well as when warranted by specific circumstances, such as the appointment of a new CEO, in order to assess which structure is in the best interests of Mattel and its stockholders based on the evolving needs of the Company. This approach provides the Board appropriate flexibility to determine the leadership structure best suited to support the dynamic demands of our business.

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 of the Board and CEO, counterbalanced by a strong, independent Board led by Mr. Dolan, as Independent Lead Director.

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Corporate Governance at Mattel

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 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 annually elect an Independent Lead Director when the Chairman is not independent. Our Independent Lead Director has specificallyenumerated 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 2021, 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.

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. 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.

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The Compensation Committee members also qualify as “non-employee directors” within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

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 Stock Grant 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 Stock Grant
Non-Employee Directors
R. Todd Bradley
Adriana Cisneros
Michael DolanILD
Diana Ferguson
Soren Laursen
Ann Lewnes
Roger Lynch
Dominic Ng
Dr. Judy Olian
Employee Director
Ynon Kreiz

 

Chair
ILD Independent Lead Director
Audit Committee Financial Expert
Member

 

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Corporate Governance at Mattel

The primary responsibilities, membership, and meeting information for the committees of the Board during 2021 are summarized below.

 

Audit Committee

Members in 2021:

 

Diana Ferguson (Chair)

R. Todd Bradley
Roger Lynch
Dominic Ng

Meetings in 2021: 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, compliance, and cyber 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, critical accounting policies, and critical audit matters
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 2021:

 

Ann Lewnes (Chair)
Adriana Cisneros
Michael Dolan
Soren Laursen
Dr. Judy Olian

Meetings in 2021: 5

 

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, global manufacturing principles, public policy matters, environmental, health and safety issues, and diversity and equal opportunity matters
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

 

 

Compensation Committee

Members in 2021:

 

Michael Dolan (Chair)
R. Todd Bradley
Dr. Judy Olian

Meetings in 2021: 6

 

The Board has determined that each member meets applicable Nasdaq and Mattel independence standards and qualifies 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 cash incentive and stock 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-employee 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

 

 

Finance Committee

Members in 2021:

 

Dominic Ng (Chair)
Soren Laursen
Roger Lynch

Meetings in 2021: 5

 
 
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

 

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Corporate Governance at Mattel

Other Board Committees


The Executive Committee did not hold any meetings in 2021. The members of the Executive Committee are Mses. Ferguson and Lewnes and Messrs. Dolan and Ng. 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 a Stock Grant Committee (formerly, the Equity Grant Allocation Committee) (“SGC”) with Mr. Kreiz as the current sole member. The SGC’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 stock grants to employees below the Executive Vice President (“EVP”) level (Senior Vice Presidents (“SVPs”) and below) who are not Section 16 officers.

 

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 and experience with Mattel held by 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.

 

Board Meetings

During 2021, the Board held six 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 2021 annual meeting of stockholders (“2021 Annual Meeting”) and eight 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 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.

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

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Risk Oversight

 

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Corporate Governance at Mattel

 

Human Capital Management Oversight

We believe recruiting, developing, and motivating a talented global workforce are key to the Company’s long-term growth and success, and we are committed to fostering a culture where all employees have the opportunity to realize their full potential. The Company values and shares a wide range of ideas and voices that help evolve and broaden its perspectives, with a reach that extends to consumers, customers, business partners, and suppliers. Through our focus on employee engagement, diversity, equity, and inclusion, training and development, health and safety, and employee well-being, we endeavor to create a supportive and rewarding environment where employees are encouraged to explore, innovate, grow, and lead.

Our Board and the Governance and Social Responsibility Committee are actively involved in the oversight of how the Company fosters its culture and receives regular updates on the Company’s workforce management, including its diversity, equity, and inclusion initiatives.

We regularly collect feedback to measure employee engagement through our annual global engagement survey, which measures employee job satisfaction and is used to help improve the employee experience and strengthen our workplace culture.

In August 2021, we published our 2020 Citizenship Report, which described goals and initiatives related to our diversity, equity, and inclusion efforts, including initiatives such as Play Fair, which articulates the actions Mattel is taking to address racism, injustice, and violence against the Black community, as well as our support of our Employee Resource Groups (“ERGs”), which we believe to be an integral component of fostering an inclusive culture and enhancing engagement at Mattel. Mattel employees have created and lead ten ERGs that bring together members and allies of underrepresented identities across the global organization. The ERGs organize learning opportunities, cultural celebrations, and community outreach, elevate important issues, encourage open and honest conversations, and collect critical feedback.

Our 2020 Citizenship Report also highlighted our near-term progress toward achieving our goals, including the following achievements: 

  100% 100% 58% 42%
 

Base Pay Ratio by

Gender*

Base Pay Ratio by

Ethnicity**

Total Representation

of Women+

Total Representation

of Ethnically Diverse

Employees+


* Representation as of April 23, 2021 for employees performing similar work with comparable roles and experience in similar markets, excluding manufacturing labor and temporary and seasonal employees
** Representation as of April 23, 2021 for U.S. employees performing similar work with comparable roles and experience in similar markets, excluding manufacturing labor and temporary and seasonal employees
+ Representation as of April 23, 2021 (excludes manufacturing labor)

Mattel has been recognized for its diversity, equity, and inclusion efforts, including by the Human Rights Campaign Foundation as one of the country’s top places to work for LGBTQ+ equality. For the third 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. Mattel was also ranked among Forbes 2021 World’s Best Employers and Best Employers for Women; named to Fast Company’s List of the 100 Best Workplaces for Innovators in 2021 and Newsweek’s 100 Most Loved Workplaces for 2021; and recognized as a Great Place to Work for 2021.

We are focused on creating a safe and healthy workplace for all of our employees. In 1997, Mattel became one of the first companies to create standards for responsible manufacturing. Since then, these principles have become the foundation for Mattel’s Responsible Supply Chain Commitment, a comprehensive set of standards and oversight processes that establish Mattel’s expectations for responsible factory working conditions, environmental protections, social compliance, health, and safety in both its own manufacturing facilities and those of its supply chain partners.

Over the course of the COVID-19 pandemic, we prioritized protecting the health and safety of our employees while at the same time mitigating the disruption to our business. We implemented stringent health and safety measures, process controls, operating procedures, and training to help provide a safe and sanitary working environment for employees. We also transitioned employees, as appropriate based on role, to a work-from-home system and increased the use of virtual meeting technologies. In 2021, the Board continued to oversee the implementation of enhanced protocols to provide a safe and sanitary working environment for employees.

Mattel offers several benefits to promote employee well-being, including flexible work hours and/or paid time off, health and welfare insurance options, retirement plans, and basic and supplemental employee life insurance for eligible individuals. To supplement Mattel’s comprehensive health and wellness programs, we introduced specific programs targeted at unique issues arising during the pandemic, including working from home, maintaining work/life balance, and improving health and happiness. 

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Board Accountability and Effectiveness

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    

Improvements in Board Effectiveness due to Evaluations

       
  Board operations and meeting effectiveness       Enhanced agenda item selection
  Board accountability       Improved discussion formats
  Board committee performance       Greater interaction with our CEO and management team

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.

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Corporate Governance at Mattel

 

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.

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, Auditing, and Federal Securities Law 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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Non-Employee Director Compensation

Independent Consultant Review

On an annual basis, the Compensation Committee reviews, with the assistance of its independent compensation consultant, Frederic W. Cook  & Co. (“FW Cook’”), our non-employee director compensation program. In May 2021, FW Cook conducted an independent review of our non-employee director compensation program and recommended certain increases in the annual compensation for our non-employee directors to more closely align with the median of our then current peer group. As a result, our Compensation Committee determined, based in part on FW Cook’s recommendations, that the annual cash retainer should be increased by $5,000 to $105,000, the value of the annual stock grant should be increased by $15,000 to $155,000, and the annual cash retainer for the Independent Lead Director of the Board should be increased by $5,000 to $35,000. FW Cook did not recommend any changes to our non-employee director compensation program structure, which FW Cook has indicated 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 stock versus cash;
Annual stock 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 stock and cash compensation in the stockholder approved stock plan; and
No major benefits or perquisites other than modest charitable gift matching.

Cash Retainers

For 2021, non-employee directors received:

Annual cash retainer $ 105,000
Additional cash retainer for the Independent Lead Director of the Board $ 35,000
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 Non-Employee Director Compensation Table – Deferred Compensation Plan for Non-Employee Directors.” Each of our non-employee directors who were elected at our 2021 Annual Meeting on May 26, 2021, received his or her total cash retainer shortly thereafter, except Ms. Lewnes and 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.

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Corporate Governance at Mattel

Stock Compensation

For 2021, non-employee directors received:

Annual stock grant of deferred vested RSUs (intended fixed grant value) $155,000

Each of our non-employee directors elected at our annual meeting of stockholders received the annual grant of deferred vested RSUs on the annual meeting date. For non-employee directors commencing service on the Board other than at our annual meeting of stockholders, annual stock grants are prorated for service until the next annual meeting of stockholders. 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 RSUs until the earlier of the third anniversary of the grant date or the date he or she ceases to be a director. 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.

Non-Employee Director Compensation Table

The following table shows the compensation of the members of the Board who served at any time during 2021, 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 115,000 155,002 270,002
Adriana Cisneros 105,000 155,002 11,500 271,502
Michael Dolan 175,000 155,002 330,002
Diana Ferguson 135,000 155,002 8,500 298,502
Soren Laursen 105,000 155,002 7,500 267,502
Ann Lewnes 120,000 155,002 15,000 290,002
Roger Lynch 115,000 155,002 15,000 285,002
Dominic Ng 130,000 155,002 15,000 300,002
Dr. Judy Olian 105,000 155,002 15,000 275,002
(1) For Ms. Lewnes and Messrs. Lynch and Ng, the amount shown was deferred under the Director DCP.
(2) Each of our non-employee directors received an annual stock grant of 7,539 RSUs under our Amended and Restated 2010 Equity and Long-Term Compensation Plan (the “Amended 2010 Plan”). 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 $20.56 on May 26, 2021.

The table below shows the aggregate number of stock awards outstanding for each of our non-employee directors as of December 31, 2021. Stock awards consist of vested but not settled RSUs and any deferrals of RSU shares under the Director DCP. Our directors held no outstanding stock option awards as of December 31, 2021.

Name       Aggregate Stock Awards
Outstanding as of
December 31, 2021
R. Todd Bradley 32,707
Adriana Cisneros 32,707
Michael Dolan 32,707
Diana Ferguson 18,957
Soren Laursen 27,348
Ann Lewnes 32,707
Roger Lynch 32,707
Dominic Ng 82,611
Dr. Judy Olian 32,707
(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.

 

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Narrative Disclosure to Non-Employee Director Compensation Table

Recommended Grants and Matching Recommended 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.

Deferred Compensation Plan for Non-Employee Directors

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. Cash retainers deferred into Mattel stock equivalents in the Director DCP are deemed invested in Mattel stock equivalents, which accrue dividend equivalent rights in the same way as RSUs.

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 year in which a director ceases service with the Board or the later of the year in which (a) a director ceases service with the Board or (b) the director achieves a specified age not to exceed 72. As of December 31, 2021, the following directors had the following aggregate number of Mattel stock equivalents in the Director DCP, including deferred RSU shares: Ms. Cisneros: 20,140; Ms. Lewnes: 7,539; Mr. Lynch: 35,504; and Mr. Ng: 159,230.

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, nonemployee 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 acquisition value or current market value. Cash retainers and RSU shares deferred into Mattel stock equivalents in the Director DCP receive credit and are valued at the current market value. Each of the Board members has met the targeted stock ownership level other than Ms. Ferguson who joined the Board mid-year during fiscal 2020 and is within the five-year compliance period.

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Audit Matters

Proposal 2: Ratification of Selection of Independent Registered Public Accounting Firm for the Year Ending December 31, 2022

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, 2022. Representatives of PricewaterhouseCoopers LLP are expected to be present at the 2022 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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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, 2021 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, 2021.

PwC has expressed its opinion that:

Mattel’s consolidated financial statements present fairly, in all material respects, its financial position as of December 31, 2021 and 2020 and its results of operations and cash flows for each of the three years in the period ended December 31, 2021 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, 2021, 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 the SEC’s 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, 2021, for filing with the SEC.

AUDIT COMMITTEE

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

March 22, 2022

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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 2021 and 2020:

Fees       2021
($)
      2020
($)
Audit fees(1) 7,808,000 7,539,000
Audit-related fees(2) 238,000 223,000
Tax fees(3) 1,707,000 1,700,000
All other fees(4) 1,000
Total 9,754,000 9,462,000
(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 2021 and 2020.

(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 $615,000 for 2021 and $813,000 for 2020, and (ii) other tax advice, tax consultation, and tax planning services of $1,092,000 for 2021 and $887,000 for 2020.

(4)

All other fees consisted of software license fees.

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 2021 and 2020 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 51 through 81.

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 continue to align senior executives’ interests with 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 2022 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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Executive Officers

The current executive officers of Mattel are as follows:

Name       Age       Position       Executive Officer Since
Ynon Kreiz(1) 57 Chairman of the Board and Chief Executive Officer 2018
Richard Dickson 54 President and Chief Operating Officer 2014
Anthony DiSilvestro 63 Chief Financial Officer 2020
Steve Totzke 52 President and Chief Commercial Officer 2020
Jonathan Anschell 54 Executive Vice President, Chief Legal Officer, and Secretary 2021
Roberto Isaias 54 Executive Vice President and Chief Supply Chain Officer 2019
Amanda Thompson 46 Executive Vice President and Chief People Officer 2017

 


Richard Dickson
President and Chief
Operating Officer
     

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.


Anthony DiSilvestro
Chief Financial Officer
     

Mr. DiSilvestro has been Chief Financial Officer since August 2020. 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.


Steve Totzke
President and Chief Commercial Officer

Mr. Totzke has been President and Chief Commercial Officer since April 2022. From July 2018 to March 2022, he served as Executive Vice President and Chief Commercial Officer. 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.


Jonathan Anschell
EVP, Chief Legal
Officer, and Secretary
     

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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Compensation at Mattel


Roberto Isaias
EVP and Chief
Supply Chain Officer
     

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.


Amanda Thompson
EVP and Chief
People Officer

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.

(1)

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

 

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Compensation Discussion and Analysis

2021 Named Executive Officers

Our fiscal year 2021 Named Executive Officers, or NEOs, were:

       

Ynon Kreiz
Chairman and Chief
Executive Officer

 

Richard Dickson
President and Chief Operating Officer

 

Anthony DiSilvestro
Chief Financial Officer

 

Steve Totzke
President and Chief Commercial Officer*

 

Jonathan Anschell
EVP, Chief Legal Officer, and Secretary

*Mr. Totzke served as EVP and Chief Commercial Officer during all of fiscal year 2021. He was promoted to President and Chief Commercial Officer on April 5, 2022.

Overview

2021 Strategic Overview and Business Highlights

2021 was another exceptional year for Mattel in which we exceeded expectations and achieved strong financial results. With Net Sales up 19% as reported and 18% in constant currency*, and Operating Income up 95% versus prior year, we executed on our strategy to improve profitability and accelerate topline growth. Our strong performance was broad-based and our products resonated with consumers at levels we have not seen in years. It was also a year where, in the midst of major supply chain disruption and significant retail closures, we demonstrated the strength and resilience of our operations. We continued to increase productivity and improve efficiency through our Optimizing for Growth program, announced in February 2021, which is expected to reach $250 million in incremental savings by 2023, and have achieved $97 million of such savings in 2021. Mattel’s TSR for the year was 24%, which approximated the median of the S&P 500 constituents and was at the 70th percentile of our peer group for 2021.

We have made consistent and meaningful progress since beginning our turnaround and transformation in 2018. For more information on the significant year-over-year improvement in key financial metrics we saw in 2021, see “Key Financial and Business Highlights,” above. As a result of all that has been achieved, Mattel today is an IP-driven, high-performing toy company. Our turnaround is now complete and we are in growth mode.

*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 105.

Pay-For-Performance

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

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 an annual cash incentive (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, subject to our Choice Program discussed below. The chart below shows the 2021 target TDC* mix for our CEO, Mr. Kreiz, and the average 2021 target TDC mix for our other NEOs:

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Compensation at Mattel

A Significant Portion of 2021 Target TDC is At Risk
CEO       Other NEOs
* TDC is the sum of 2021 year-end annual base salary, MIP target incentive opportunity, and Annual LTI Value (i.e., grant value of Performance Units granted under the 2021-2023 LTIP, stock options, and RSUs).

Key Elements of Our 2021 Executive Compensation Programs

2021 Compensation 2021 Objective, Structure, and Performance Measures

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 2021 MIP financial measures focused on restoring profitability, regaining topline growth, and improving our working capital position. The 2021 MIP was structured as follows:
o 65% MIP-Adjusted EBITDA Less Capital Charge
o 20% MIP-Adjusted Net Sales
o 15% MIP-Adjusted Gross Margin
o Multiplier of 0%-125% based on Individual Performance
Stock-Based Long-Term Incentives (LTIs)

Performance Units

Incentivize and motivate senior executives to achieve key long-term strategic financial objectives and stock price outperformance. The Performance Units granted under the 2021-2023 LTIP were structured as follows:
o Three-Year Cumulative Adjusted Free Cash Flow
o Multiplier of 67%-133% based on Three-Year Relative TSR vs. S&P 500 Constituents

Stock Options

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

RSUs

Encourage senior executive stock ownership
Support stockholder-aligned retention
Vest in annual installments over three years

 

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2021 Pay Outcomes Reflect Our Pay-For-Performance Philosophy

The compensation outcomes in 2021 reflect our pay-for-performance philosophy by rewarding progress on improving profitability and accelerating topline growth, as well as improved stock price performance.

2021 MIP earnout reflects our continued progress on improving profitability and accelerating topline growth.

In 2021, we continued to improve profitability, with MIP-Adjusted EBITDA1 increasing by 45% to $1,046 million. This strong bottom-line performance was driven by higher sales volume, pricing actions, and cost savings, including $97 million in cost savings generated by our Optimizing for Growth program. We also accelerated topline growth, achieving a 20% increase in MIP-Adjusted Net Sales versus prior year.

For our NEOs, the 190.3% Company financial performance earnout under the MIP was based on our maximum achievement against goals for MIP-Adjusted EBITDA Less Capital Charge and MIP-Adjusted Net Sales, and between target and maximum achievement for MIP-Adjusted Gross Margin. The Company earnout was then adjusted by a multiplier of 0% to 125% based on our CEO’s assessment of each executive’s performance, and the Compensation Committee’s assessment of our CEO’s performance, against pre-established individual goals linked to the execution of our strategy (“Individual Performance Multiplier”). For 2021, the Individual Performance Multiplier for our CEO was 125% and for our other NEOs ranged from 100% to 125%. Please see “2021 Individual Performance Assessments” on page 57.

Earnout of 2021 MIP Target Opportunity for our CEO: 200%
Earnout of 2021 MIP Target Opportunity for our Other NEOs: 190.3% to 200%

 

2019-2021 LTIP earnout reflects significant improvements in Adjusted Free Cash Flow generation and stock price performance.

By continuing to improve profitability, we achieved three-year cumulative Adjusted Free Cash Flow2 of $721 million, exceeding the maximum goal of $350 million and resulting in a maximum performance earnout of 150% for the three-year performance period ended December 31, 2021 under our 2019-2021 LTIP. Our relative TSR during the three-year performance period was at the 60th percentile of the S&P 500 constituents, resulting in a TSR multiplier of 113%, and a total earnout of 170% of target.

Earnout of 2019-2021 LTIP Target Performance Units: 170%

Stockholder Input and 2021 “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 ongoing and active 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 92% of the votes cast. In addition, over the course of the year, we engaged with stockholders representing approximately 70% of our outstanding shares on governance matters, 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 “Proxy Summary – Ongoing Stockholder Engagement Program” above.

1For this purpose, MIP-Adjusted EBITDA is calculated based on the MIP-Adjusted EBITDA component of MIP-Adjusted EBITDA Less Capital Charge. The adjustments under the MIP are described on page 107 and each measure is defined under “Glossary of Non-GAAP Financial Measures & Key Performance Indicator and Non-GAAP Reconciliations.”
2Adjusted 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 105 for a description of the adjustments under the LTIP.

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Compensation at Mattel

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 executives’ financial interests with stockholders’ interests;
Attracting and retaining the best talent;
Upholding compensation governance best practices; and
Recognizing leadership behaviors that support Mattel’s purpose, mission, strategy, and values.

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 stock, 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.

2021 Pay Decisions
The base salaries of all continuing NEOs remained unchanged for 2021, including our CEO. The Compensation Committee made this determination based on a review of market data provided by FW Cook.

The 2021 base salary of Mr. Anschell, who commenced service as EVP, Chief Legal Officer, and Secretary on January 1, 2021, was established based on a review of market practices and the compensation required to attract him to Mattel. Mr. Anschell’s base salary was set at $700,000.

Annual Cash Incentive

Our annual cash incentive plan, the MIP, provides our NEOs and approximately 7,600 other global employees with the opportunity to earn annual cash incentive compensation based on achievement of the Company’s short-term strategic and financial objectives, as well as individual goals, that are intended to drive long-term stockholder value creation. In addition, such individual goals are linked to our objective to amplify our culture and purpose through responsible leadership, including by advancing our ESG strategy, goals, and priorities. The guiding principles 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 employees 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 objectives; and
Provide appropriate payout levels for threshold to maximum performance.

2021 MIP PAYOUT FORMULA

Target
Opportunity ($)

x

Financial
Performance
Earnout (%)

x

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 based on the MIP-Adjusted EBITDA component of MIP-Adjusted EBITDA Less Capital Charge. MIP-Adjusted EBITDA of $700 million was required to trigger funding of the MIP, which was achieved.

 

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2021 Target MIP Opportunity
There were no changes to 2021 target MIP opportunities for our continuing NEOs, including our CEO. In connection with his commencement of employment as our EVP, Chief Legal Officer, and Secretary, Mr. Anschell’s 2021 target MIP opportunity was set at 70% of his annual base salary based on a review of market practices and the compensation required to attract him to Mattel.

The following table shows the 2021 target MIP opportunities for our NEOs, expressed as a percentage of base salary.

Name and Position       2021 Target MIP Opportunity
as a % of Base Salary
(%)
Ynon Kreiz, Chairman and Chief Executive Officer 150
Richard Dickson, President and Chief Operating Officer 100
Anthony DiSilvestro, Chief Financial Officer 100
Steve Totzke, President and Chief Commercial Officer 80
Jonathan Anschell, EVP, Chief Legal Officer, and Secretary 70

2021 MIP Performance Measures & Weightings
To align with our strategic priorities, the Compensation Committee approved an annual cash incentive design under the MIP with the following performance measures and weightings:

    Why This Measure Was Chosen

For 2021, the Committee determined to combine the prior MIP-Adjusted Inventory & Accounts Receivable measure (formerly 15% weighting) and MIP-Adjusted EBITDA measure (formerly 50% weighting) into one MIP-Adjusted EBITDA Less Capital Charge measure to address the limitations of a working capital measure in high growth scenarios. This change is designed to allow for future growth while continuing to focus on disciplined cash management. 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.

2021 Financial Performance Goals and Results
The Compensation Committee set the Company’s 2021 financial measure performance goals and performance bands (range of threshold and maximum goals from target) as follows:

The 2021 MIP-Adjusted EBITDA Less Capital Charge (new for 2021) target goal was set at $516 million, with a performance band of +$100/-$100 million. The 2021 MIP-Adjusted EBITDA component of the target goal was $800 million, which was approximately 11% higher than 2020 MIP-Adjusted EBITDA performance of $720 million.
2021 MIP-Adjusted Net Sales target goal was set at $4,855 million, which was approximately 6.4% higher than 2020 MIP-Adjusted Net Sales performance of $4,565 million. The performance band returned to a more balanced range of +3.5%/-3.5% from the 2020 band of +11.5%/-4.5%.

2021 MIP-Adjusted Gross Margin target goal was set at 48.1%, 110 basis points lower than 2020 MIP-Adjusted Gross Margin performance of 49.2% due to the anticipated impact of inflation at the time the goal was established. The performance band returned to a more balanced range of +125 bps/-125 bps from the 2020 band of +200/-150 bps.


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Compensation at Mattel

In setting the above goals, the Compensation Committee focused on establishing financial performance targets under the MIP that would be challenging but achievable.

The largest driver of our 2021 MIP above-target earnout was our performance against the MIP-Adjusted EBITDA Less Capital Charge measure, which reflected our continued progress on improving profitability. Mattel’s strong bottom-line performance was driven by higher sales volume, pricing actions, and cost savings, including $97 million in cost savings generated by our Optimizing for Growth program. Our 2021 MIP earnout reflected above-maximum performance for MIP-Adjusted Net Sales resulting from our accelerated topline growth, with MIP-Adjusted Net Sales up over $900 million from the prior year.

These financial results yielded a Company earnout of 190.3% 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 Less Capital Charge 65% 200% 130%
MIP-Adjusted Net Sales 20% 200% 40%
MIP-Adjusted Gross Margin 15% 135.1% 20.3%
TOTAL EARNED 190.3%

$ 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 2021 MIP, actual results for EBITDA, Capital Charge, Net Sales, and Gross Margin were adjusted for severance and restructuring costs, stock compensation expense, foreign exchange, certain litigation costs, certain import duties, and benefit plan settlements, all as set forth in the MIP definitions approved by the Compensation Committee.

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” on page 105.

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2021 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, differentiate individual performance, and encourage accountability. The individual goals included key actions linked to the execution of our strategy not otherwise rewarded or incentivized in the MIP financial measures. In addition, the Compensation Committee measured NEO performance against individual goals linked to our objective to amplify our culture and purpose through responsible leadership, including by advancing our ESG strategy, goals, and priorities.

Our CEO performed an assessment of each NEO’s performance against 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

 

Chairman and Chief Executive Officer

 

Responsible for the general management and control of the affairs and business of Mattel and, as Chairman, presides at all meetings of stockholders and of Mattel’s Board of Directors.

2021 Performance

 

Led Mattel to achieve strong performance across key financial metrics, including a third consecutive year of topline growth and significant improvement in profitability
Led Mattel to increase market share globally for the second consecutive year and in every measured market in 2021, per The NPD Group*
Advanced Mattel’s strategy to capture the full value of its IP through expanded entertainment offerings in film and television
Led the Company through major global supply chain disruption, strengthening Mattel’s supply chain and increasing production and productivity
Drove continued efficiencies throughout the enterprise resulting in significant and sustainable cost savings and doubling Free Cash Flow (component of Adjusted Free Cash Flow)
Significantly improved Mattel’s capital structure by refinancing and redeeming debt to reduce Leverage Ratio**
Advanced Mattel’s ESG strategy, goals, and priorities, including by serving as Chair of Mattel’s ESG Executive Council and overseeing the publication of Mattel’s 2020 Citizenship Report
*Source: The NPD Group/Retail Tracking Service/G12/JAN 2019-DEC 2021 & JAN 2020-DEC 2021/Total Toys/Projected USD
**Leverage Ratio 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 105 for a definition.

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Compensation at Mattel

 

Richard Dickson

 

President and Chief Operating Officer

 

Leads brand and innovation strategy, design and development, marketing, global franchise operations and management, which includes licensing, content creation and distribution, live events and digital gaming, for Mattel’s portfolio of global brands.

2021 Performance

 

Led the design and development of a strong product pipeline, including new product innovation across Mattel’s brand portfolio
Led Mattel to increase market share globally for the second consecutive year and in every measured market in 2021, per The NPD Group*
Drove strong performance across categories, remaining the world’s #1 Toy property (Barbie), #1 Vehicle property (Hot Wheels), #1 Card Game (UNO), and #1 Infant, Toddler, and Preschool property (Fisher-Price) for 2021 (ranking per The NPD Group**)
Drove growth in turnaround brands including Fisher-Price Core, Thomas & Friends, MEGA and American Girl
Strengthened relationships with key partners, broadened existing licenses and acquired new licenses
Advanced Mattel’s content strategy significantly with original television content; strengthened Mattel’s digital gaming business across key properties, such as Hot Wheels and Barbie, including through Mattel 163 joint venture
Advanced Mattel’s ESG strategy, goals, and priorities, including by serving on Mattel’s ESG Executive Council, and by leading the launch of a number of sustainable products, such as Barbie Loves the Ocean
*Source: The NPD Group/Retail Tracking Service/G12/JAN 2019-DEC 2021 & JAN 2020-DEC 2021/Total Toys/Projected USD
**Source: The NPD Group/Retail Tracking Service/G12/JAN 2020-DEC 2021/Total Toys, Vehicles Supercategory, Card Games Class, Infant Toddler & Preschool Supercategory/Projected USD

 

Anthony DiSilvestro

 

Chief Financial Officer

 

Oversees the Company’s finance organization, which includes brand finance, commercial finance, financial planning and analysis, global insights and analytics, global shared services, global strategic planning, internal audit, investor relations, mergers and acquisitions, tax, and treasury.

2021 Performance

 

Drove execution of financial and operating plan that significantly overdelivered MIP-Adjusted EBITDA goal (component of MIPAdjusted EBITDA Less Capital Charge) and exceeded MIP-Adjusted Gross Margin goal
Launched multi-year Optimizing for Growth program designed to optimize operations and drive greater productivity to accelerate growth, generating significant cost savings in 2021 with additional savings expected in future years
Initiated “NextGen Finance” program, a comprehensive transformation program designed to improve overall efficiency and effectiveness of the Finance organization
Significantly improved capital structure by leading the refinancing and redemption of debt, resulting in an aggregate annualized benefit of approximately $59 million, with a benefit of approximately $39 million in 2021, and a reduction in Mattel’s Leverage Ratio from 4.1x at the end of 2020 to 2.6x at the end of 2021
Advanced Mattel’s ESG strategy, goals, and priorities, including by serving on Mattel’s ESG Executive Council and supporting the publication of Mattel’s 2020 Citizenship Report

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Steve Totzke

 

President and Chief Commercial Officer

 

Oversees all of the Company’s commercial operations and is responsible for driving Mattel’s growth in markets domestically and worldwide.

2021 Performance

 

Led Mattel to gain market share and be recognized as the #1 toy manufacturer in the U.S. for the full year and globally in the fourth quarter of 2021 (ranking per The NPD Group*)
Accelerated topline growth with the highest annual growth rate in decades, with growth in six categories as well as each Power Brand, and achieved profitability in all segments
Drove growth in online retail and e-commerce channels across all toy categories and executed on direct-to-consumer growth plan
Directly contributed to Optimizing for Growth initiatives to improve business operations
Advanced Mattel’s ESG strategy, goals, and priorities, including by serving on Mattel’s ESG Executive Council, serving as a Mattel Children’s Foundation board member, and leading internal discussions on diversity, equity, and inclusion
*Source: The NPD Group/Retail Tracking Service/US JAN-DEC 2021/G12 OCT-DEC 2021/Total Toys/Projected USD

 

Jonathan Anschell

 

EVP, Chief Legal Officer, and Secretary

 

Oversees all legal responsibilities for the Company’s operations and transactions, as well as corporate governance, securities, intellectual property, labor and employment, litigation and privacy. He also is responsible for compliance and government affairs.

2021 Performance

 

Optimized business operations by successfully resolving a number of ongoing litigation matters
Facilitated acceleration in topline growth through partnership with business teams
Advanced Mattel’s strategy to capture the full value of its IP rights in film, television, digital gaming, and technology/e-commerce with enhanced licensing agreements and processes
Streamlined corporate structure to yield cost savings
Advanced Mattel’s ESG strategy, goals, and priorities, including by serving on Mattel’s ESG Executive Council and supporting the publication of Mattel’s 2020 Citizenship Report

The following table summarizes the resulting incentive earnouts expressed as a percentage of target MIP opportunity, and the cash incentive payouts under the MIP.

Name and Position       Financial
Performance
Earnout
(%)
      Individual
Performance
Multiplier
(%)
      Final % of MIP
Opportunity
Earned
(%)
      MIP
Payout
Ynon Kreiz, Chairman and Chief Executive Officer 190.3 125 200 $ 4,500,000
Richard Dickson, President and Chief Operating Officer 190.3 110 200 $ 2,000,000
Anthony DiSilvestro, Chief Financial Officer 190.3 110 200 $ 1,800,000
Steve Totzke, President and Chief Commercial Officer 190.3 125 200 $ 1,280,000
Jonathan Anschell, EVP, Chief Legal Officer, and Secretary 190.3 100 190.3 $ 932,470

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Compensation at Mattel

Stock-Based Long-Term Incentives

Our LTIs are stock-based and aimed at focusing our senior executives on achieving our key long-term strategic financial objectives, while rewarding relative growth in stockholder value that is sustained over several years. We believe our stock-based LTIs align our senior executives’ interests with stockholders’ interests, 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 senior executives’ interests with stockholders’ interests. Our stock options vest in 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 stockholderaligned retention tool. Our RSUs vest in 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 these stock options or RSUs.

2021 LTI Mix

To emphasize pay-for-performance alignment and incentivize long-term stockholder value creation, the Compensation Committee determined in February 2021 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 May 2021, the Compensation Committee determined that the 2021 LTI mix for each other senior executive would 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 in 2021 allowed senior executives (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 EVPs 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.

2021 LTI Grant Values

Performance Units were granted to the NEOs on March 23, 2021, in order to align with the timing of our LTIP goal setting and the anticipated move of the annual stock grant date for all employees to a single grant date starting in April 2022. Time-based stock awards were granted on August 2, 2021, which is consistent with the annual grant date for prior years.

In February 2021, the Compensation Committee determined that, except with respect to Messrs. Kreiz and Totzke, the 2021 LTI Value for our continuing NEOs would not change from their 2020 LTI Values. In the case of Messrs. Kreiz and Totzke, due to the criticality and impact of their roles as Chairman and CEO, and EVP and Chief Commercial Officer, respectively, and also in light of market data provided by FW Cook and performance during 2020, their 2021 LTI Values were increased as follows: Mr. Kreiz — $9.55 million to $10 million and Mr. Totzke — $1.5 million to $2.0 million. In the case of Mr. Anschell, the terms of his 2021 LTI Value were set forth in the offer letter agreement he entered into upon his commencement of employment with Mattel. In recognition of the value of stock compensation forfeited by Mr. Anschell in connection with his resignation from his prior employer, his offer letter provided for a onetime make-whole grant valued at $675,000. In addition, based on a review of market practices and the compensation required to attract him to Mattel, his offer letter provided for a 2021 annual grant with a value of $1.3 million.

The following table summarizes the 2021 LTI Values set and granted by the Compensation Committee and reflects the allocation of Performance Units under the 2021-2023 LTIP, as well as stock option and RSU grants for eligible participants under our Choice Program discussed above.

Name and Position       2021-2023
Performance Units
($)
      2021
Stock Options
($)
      2021
RSUs
($)
      2021 Total
LTI Value
($)
Ynon Kreiz, Chairman and Chief Executive Officer 7,500,000 2,500,000 10,000,000
Richard Dickson, President and Chief Operating Officer 2,250,000 1,125,000 1,125,000 4,500,000
Anthony DiSilvestro, Chief Financial Officer 1,050,000 525,000 525,000 2,100,000
Steve Totzke, President and Chief Commercial Officer 1,000,000 500,000 500,000 2,000,000
Jonathan Anschell, EVP, Chief Legal Officer, and Secretary 650,000 500,000 825,000 1,975,000

 

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LONG-TERM INCENTIVE PROGRAM (LTIP)

In March 2021, the Compensation Committee approved the design of the 2021-2023 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. 

LTIP Earnout Formula

Three-Year Cumulative Adjusted Free Cash Flow Performance Earnout (%) x Three-Year Relative TSR Performance Multiplier (%) = LTIP 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 S&P 500 constituents, with a multiplier ranging from 67% for performance at or below 25th percentile to 133% for performance at or above the 75th percentile. 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 the MIP, 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.

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.

2019-2021 LTIP Financial Performance Goals and Results
By continuing to improve profitability, we achieved three-year cumulative Adjusted Free Cash Flow of $721 million, exceeding the maximum goal of $350 million and resulting in a maximum earnout of 150% for the three-year performance period ended December 31, 2021. As of the end of the performance period, our relative TSR was at the 60th percentile of the S&P 500 constituents, resulting in a TSR multiplier of 113%, and a total earnout of 170% 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 Relative TSR Multiplier Actual at
December 31, 2021
Mattel TSR Relative to S&P 500 ≤25th 50th ≥75th 60th
TSR Multiplier** 67% 100% 133% 113%
TOTAL EARNED 170%
*

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 105 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 2019-2021 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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Compensation at Mattel

The following table summarizes the 2019-2021 LTIP payout for Messrs. Kreiz, Dickson, and Totzke. Messrs. DiSilvestro and Anschell are not included in table, as they were each hired after 2019-2021 Performance Units were granted.


Name       Target Performance
Units Granted
      Actual Shares
Earned
Ynon Kreiz, Chairman and Chief Executive Officer 481,028 817,748
Richard Dickson, President and Chief Operating Officer 151,108 256,884
Steve Totzke, President and Chief Commercial Officer 40,296 68,503

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.
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. 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.

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 to promote tax efficiency or to replace benefit opportunities that are not available to executives because of regulatory limits. This includes the Mattel, Inc. Deferred Compensation and PIP Excess Plan (“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 the 401(k) Plan. Together, the 401(k) Plan and the DCP allow participants to set aside amounts as taxdeferred 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. 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 the Company’s request to relocate. 

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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 stock 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.

Our NEOs are eligible to receive severance payments and benefits under different arrangements. Mr. Kreiz participates in the Mattel, Inc. Executive Severance Plan B (the “Severance Plan”), as modified by the terms of his participation letter agreement with us. Messrs. Dickson and DiSilvestro also participate in the Severance Plan. Mr. Totzke is eligible for benefits under our current executive severance practice. Mr. Anschell’s severance payments and benefits are set forth in his offer letter with us. We do not pay any excise tax gross-up payments under our severance arrangements.

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 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.”

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 EVPs and above, and other Section 16 officers.

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 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 has not raised 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 plan 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 2021, FW Cook assisted the Compensation Committee on the following matters.

Analyze and advise on:
  o The base salaries, target and actual annual cash incentives, target and actual annual LTIs, TDC, and all other compensation for EVPs and above as compared to the market and compensation of their counterparts in our peer group;
  o Our MIP and LTI designs, provisions, and practices; and
  o The compensation of the Board as compared to the board compensation at our peer group companies.

 

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Review and advise on the composition of our peer group;
Assess if our compensation plans, policies, and programs present potential material risk to the Company;
Review and advise on our 2021 Proxy Statement;
Provide executive compensation regulatory and legislative updates; and
Advise with respect to proxy advisory firms’ voting policies and market trends.

CEO and the HR Function
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 function (“HR”) routinely participate in this process. Our CEO makes recommendations to the Compensation Committee for EVPs and above regarding adjustments to base salary, target and actual annual cash incentives, and target and actual Annual LTI Values, which are driven primarily by his evaluation of impact and criticality of role, individual experience, market data provided by FW Cook and/or internal pay equity, and for actual annual cash incentives, individual performance. When appropriate, the Compensation Committee meets in executive session without management, including when CEO compensation is being approved. The Compensation Committee also reports and, as appropriate, makes recommendations to the Board regarding our executive compensation programs and practices and informs the Board of its decisions regarding compensation for EVPs and above, and other Section 16 officers.

Reviews and Process

Market Competitiveness and Peer Group Review
The Compensation Committee annually evaluates the overall competitiveness of annual TDC for EVPs and above, comprised of annual base salary, annual cash target incentive opportunity, and Annual LTI Value, as well as the composition of our 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 annual target TDC of EVPs and above 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, Annual LTI grant values, and target TDC, as well as short- and long-term incentive program design and aggregate LTI detail, in our peer group and custom surveys, where available. In February 2021, the Compensation Committee approved an increase Mr. Kreiz’s target TDC by increasing his 2021 LTI Value from $9.55 million to $10 million. In comparison to the CEOs in our peer group, Mr. Kreiz’s 2021 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 Annual LTI mix entirely performance-based and at risk — 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 financial 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 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 peer group companies or 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.

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

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Peer Group Composition
In September 2020, with guidance from FW Cook, the Compensation Committee refined our peer group as follows for purposes of our 2021 target TDC decisions:

The removal of Viacom due to its acquisition by CBS Corporation and the addition of ViacomCBS (the combined company), which is above Mattel’s typical revenue range but was included because it was considered a direct business competitor to Mattel’s expanding entertainment business. In February 2022, ViacomCBS changed its name to Paramount Global.
The removal of Activision Blizzard, Inc., which meets applicable revenue criteria, however, its market capitalization and growing size are too large for Mattel’s competitive comparison purposes.

Our peer group for 2021 target TDC decisions was comprised of the following 21 companies:

 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.
 Paramount Global (formerly ViacomCBS)
 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

As of September 2020, when the relevant peer group was approved, Mattel’s revenue was at the peer group 35th percentile and its market capitalization was at the peer group 32nd percentile.

Important Policies, Governance, and Guidelines

Stock Ownership Guidelines

We have had stock ownership guidelines for our NEOs, and other EVPs and above, 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.

Name and Position Salary
Multiple
Deadline
Ynon Kreiz, Chairman and Chief Executive Officer 6x 4/30/2023
Richard Dickson, President and Chief Operating Officer 4x 12/31/2019
Anthony DiSilvestro, Chief Financial Officer 4x 6/30/2025
Steve Totzke, President and Chief Commercial Officer 3x 1/31/2024
Jonathan Anschell, EVP, Chief Legal Officer, and Secretary 3x 1/1/2026

Generally, executives have five years from the date of promotion or hire to meet the guidelines. For this purpose, Mattel common stock holdings are valued at the greater of acquisition value or current market value. 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 stock 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 toward 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 the DCP. Shares subject to unexercised stock options, or unvested and/or unearned stock grants do not count toward the guidelines. 

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Compensation Risk Review

At the request 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 HR’s assessment of our Compensation Programs, were presented to our Compensation Committee in September 2021. FW Cook and HR 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.
LTIs 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 goals 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.
We have 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 stock 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.

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 as collateral for loans.

Recoupment of Compensation

Our Clawback Policy provides for forfeiture or reimbursement of certain cash and stock 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 stock) 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.

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Stock Grant Process

The Compensation Committee has adopted the following stock grant process:

Annual Stock Grants – The Compensation Committee approves annual stock grants to EVPs and above, and other Section 16 officers, and the Stock Grant Committee (“SGC”) approves annual stock grants to SVPs and below, other than Section 16 officers. Specific recommendations regarding the aggregate annual stock grant pool to be allocated to employees, and the value and mix of grant types to be granted to employees per job level, as reviewed by FW Cook, are presented to the Compensation Committee for approval. Typically, the Compensation Committee approves the annual grant values for EVPs and above, and other Section 16 officers, as well as the methodology for converting the grant values to shares or units, at its July meeting. The typical grant date for annual grants to employees is August 1st. If August 1st is a Saturday, then the grant date is set for the last preceding business day, and if August 1st is a Sunday, then the grant date is set for the next following business day.

In March 2021, the Compensation Committee approved the grant values for the Performance Unit grants to SVPs and above with a grant date of March 23, 2021. In July 2021, the Compensation Committee approved the annual grant values for the time-based awards to EVPs and above, and other Section 16 officers, with a grant date of August 2, 2021, given that August 1st occurred on a Sunday in 2021.
Stock Grant Committee – For stock grants to SVPs and below, other than Section 16 officers, the Board has delegated the authority to the SGC to, subject to certain limitations, approve annual and off-cycle stock grants (such as grants to employees who are newly hired). The Board generally appoints our CEO as the sole member of the SGC. Accordingly, Mr. Kreiz has been the sole member of the SGC since April 2018.
Off-Cycle Grants – The Compensation Committee approves new-hire or other off-cycle stock grants to EVPs and above, 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 date or (ii) Compensation Committee approval date.

The SGC approves new-hire stock grants to SVPs and below, other than Section 16 officers, with a grant date of: (a) for Vice Presidents and above, the last trading day of the month of hire and (b) for employees below the Vice President level, the last trading day of the month following the month of hire. For other off-cycle stock grants, the grant date is the last trading day of the month in which the SGC 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 stock 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 stock 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)
($)
    Bonus(2)
($)
    Stock
Awards(3)
($)
    Option
Awards(3)
($)
    Non-Equity
Incentive Plan
Compensation(4)
($)
    Change In
Pension Value
and Nonqualified
Deferred
Compensation
Earnings(5)
($)
    All Other
Compensation(6)
($)
    Total
($)
 
Ynon Kreiz                                  
Chairman and Chief Executive Officer                        
2021   1,500,000     7,500,001   2,499,996   4,500,000     128,898   16,128,895  
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  
Richard Dickson                                  
President and Chief Operating Officer                        
2021   1,000,000     3,374,982   1,125,001   2,000,000     129,770   7,629,753  
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  
Anthony DiSilvestro                                  
Chief Financial Officer                        
2021   900,000     1,575,018   524,999   1,800,000     107,495   4,907,512  
2020   457,377     1,574,999   525,001   1,530,000     41,591   4,128,968  
Steve Totzke                                  
President and Chief Commercial Officer                        
2021   800,000     1,500,007   499,995   1,280,000     98,320   4,178,322  
2020   800,000     1,124,999   375,001   1,280,000     74,147   3,654,147  
Jonathan Anschell                                  
EVP, Chief Legal Officer, and Secretary                        
2021   700,000   200,000   1,475,004   499,997   932,470     85,980   3,893,451  
(1) Salary. Represents all amounts earned as salary during the applicable year.
(2) Bonus. Amount shown for Mr. Anschell represents a signing bonus paid in January 2021, which was deemed earned upon his completion of one year of service.
(3) 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 2021 include the grant date fair value for RSUs as well as Performance Units under the 2021-2023 LTIP granted in 2021. The RSUs are valued based on our closing stock price of either $21.91 for annual grants made on August 2, 2021, or $18.12 for Mr. Anschell’s make-whole grant on January 29, 2021. The 2021-2023 Performance Units are valued based upon our closing stock price of $20.14 on March 23, 2021, 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 Anschell would be $15,000,002, $4,499,982, $2,100,002, $1,999,997, and $1,300,005, respectively.
  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 is 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 2021, see Note 8 to Mattel’s Consolidated Financial Statements for 2021 contained in our Form 10-K.
(4) 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.
(5) 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.
(6) All Other Compensation. Amounts shown for 2021 consist of Company contributions to the 401(k) Plan of $26,100 for each NEO other than Messrs. Kreiz and DiSilvestro, and $20,300 for Mr. Kreiz and $29,000 for Mr. DiSilvestro, and Company contributions to the DCP of $84,700, $63,900, $42,700, $45,900, and $35,880 for Messrs. Kreiz, Dickson, DiSilvestro, Totzke, and Anschell, respectively. Amounts shown also represent perquisites and personal benefits, including a monthly car allowance (or use of a Company car for Mr. Kreiz), financial counseling and tax return services, executive physical examinations, and relocation assistance for Mr. DiSilvestro, including a tax gross-up of $795 under our standard relocation program. In addition, for Mr. Kreiz, the amount shown includes attributable income under the Board of Directors Recommended Grants and Matching Recommended Grants Program fostering charitable contributions, which is more fully described in the “Non-Employee Director Compensation” section of this Proxy Statement.

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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. Certain key terms of these letters, pursuant to which we had ongoing obligations as of 2021, are described below.

Kreiz Offer Letter

Mr. Kreiz was appointed to serve as our CEO on April 26, 2018. In connection with this appointment, we entered into an offer letter with Mr. Kreiz that includes 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%; and (iii) eligibility to receive annual stock 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 our CFO on August 11, 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 stock grants in the form of RSUs valued at $525,000 and stock options valued at $525,000, with such grants vesting as to 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 stock grant beginning in 2021. Mr. DiSilvestro was not provided any guaranteed payments or inducement stock 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.

Anschell Offer Letter

Mr. Anschell was appointed to serve as our EVP, Chief Legal Officer, and Secretary, effective as of January 1, 2021. In connection with this appointment, we entered into an offer letter with Mr. Anschell that includes the following key provisions: (i) an annual base salary of $700,000; (ii) a target MIP opportunity of 70% of eligible base salary up to a maximum of 140%; (iii) make-whole stock grants in the form of RSUs valued at $337,500 and stock options valued at $337,500, with such grants vesting as to 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; and (iv) eligibility to receive an annual stock grant beginning in 2021 with the 2021 annual grant valued at $1,300,000. In addition, Mr. Anschell received a signing bonus of $200,000, which was deemed earned upon his completion of one year of service but was subject to recoupment if he had voluntarily terminated employment or had been discharged for “cause” within one year of his hire date.

Mr. Anschell is also eligible to receive perquisites (including a monthly allowance for his automobile expenses), participate in the DCP, and participate in our employee benefit programs (including the 401(k) Plan). Pursuant to his offer letter, Mr. Anschell is also eligible to receive severance payments and benefits.

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Grants of Plan-Based Awards in 2021

The following table shows information about the non-equity incentive awards and equity-based awards granted to our NEOs in 2021.

Name,   Committee   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
  All Other
Option
Awards:
Number of
Securities
  Exercise
or Base
Price of
Option
  Grant Date
Fair Market
Value of
Stock and
Option
 
Position, and
Grant Date
    Action
Date
    Threshold
($)
    Target
($)
    Maximum
($)
    Threshold     Target     Maximum     of Stock
or Units(3)
    Underlying
Options(4)
    Awards
($)
    Awards(5)
($)
 
Ynon Kreiz                                              
Chairman and Chief Executive Officer                                    
        787,500   2,250,000   4,500,000                              
3/23/2021   3/23/2021               81,842   327,368   654,736               7,500,001  
8/2/2021   7/19/2021                               265,957   21.91   2,499,996  
Richard Dickson                                              
President and Chief Operating Officer                                    
        350,000   1,000,000   2,000,000                              
3/23/2021   3/23/2021               24,553   98,210   196,420               2,249,991  
8/2/2021   7/19/2021                               119,681   21.91   1,125,001  
8/2/2021   7/19/2021