DEF 14A 1 colm2016proxy.htm DEF 14A Document


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant   x                                  Filed by a Party other than the Registrant   o   
Check the appropriate box:
o  Preliminary Proxy Statement
o  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
x  Definitive Proxy Statement
o  Definitive Additional Materials
o  Soliciting Material under Rule 14a-12
COLUMBIA SPORTSWEAR COMPANY
(Name of registrant as specified in its charter)
(Name of person(s) filing proxy statement, if other than the registrant)
Payment of Filing Fee (Check the appropriate box):
x
No fee required.
o
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
 
(1)
Title of each class of securities to which transaction applies:

 
(2)
Aggregate number of securities to which transaction applies:

 
(3)
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 
(4)
Proposed maximum aggregate value of transaction:

 
(5)
Total fee paid:

o
Fee paid previously with preliminary materials.
o
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
(1)
Amount Previously Paid:

 
(2)
Form, Schedule or Registration Statement No.:

 
(3)
Filing Party:

 
(4)
Date Filed:

 




logoa03.jpg
Portland, Oregon
April 27, 2017
Dear Shareholders:
You are cordially invited to attend our annual meeting of shareholders at 3:00 p.m. Pacific Time on Tuesday, June 13, 2017, at our Lillehammer Events Center located at 14339 NW Science Park Drive, Portland, Oregon 97229. Details of the business to be conducted at the annual meeting are provided in the attached Notice of Annual Meeting and Proxy Statement. At the annual meeting, we will also report on the Company’s operations and respond to any questions you may have.
Your vote is very important. Whether or not you attend the annual meeting in person, it is important that your shares are represented and voted at the meeting.
If you are a shareholder of record: please promptly complete, sign, date, and return the enclosed proxy card. You may also grant a proxy by telephone or via the Internet by following the instructions on the enclosed proxy card.
If you hold your shares in street name: please vote your shares by following the instructions set forth in the Notice provided by your broker, bank, trust, or other holder of record. In most cases, you may be permitted to submit your voting instructions by mail, by telephone or via the Internet.
If you attend the meeting, you will have the right to revoke your proxy and vote your shares in person. Please read “How You Can Vote” and “How You Can Revoke Your Proxy or Change Your Vote” in the Proxy Statement for further information.

 
Very truly yours,
 
tboylesignature.jpg
 
Timothy P. Boyle
 
Chief Executive Officer




COLUMBIA SPORTSWEAR COMPANY
14375 NW Science Park Drive
Portland, Oregon 97229
(503) 985-4000
 
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
June 13, 2017
 

Dear Shareholders:
Our annual meeting will be held at 3:00 p.m. Pacific Time on Tuesday, June 13, 2017, at our Lillehammer Events Center located at 14339 NW Science Park Drive, Portland, Oregon 97229. The purpose of the meeting is:
1.
To elect directors for the next year;
2.
To ratify the selection of Deloitte & Touche LLP as our independent registered public accounting firm for 2017;
3.
To approve, by non-binding vote, executive compensation;
4.
To recommend, by non-binding vote, the frequency of executive compensation votes;
5.
To approve the 1997 Stock Incentive Plan, as amended;
6.
To approve the Executive Incentive Compensation Plan, as amended;
7.
To consider and act upon one shareholder proposal, if properly presented at the annual meeting; and
8.
To act upon any other matters that may properly come before the meeting.
Only shareholders of record at the close of business on April 17, 2017, are entitled to vote at the meeting. A list of shareholders will be available for inspection beginning April 18, 2017, at our corporate headquarters.
 
 
By Order of the Board of Directors
 
pbragdonsignaturea01.jpg
 
Peter J. Bragdon
 
Executive Vice President, Chief Administrative Officer, General Counsel, and Secretary
Portland, Oregon
April 27, 2017




TABLE OF CONTENTS
PROXY STATEMENT




COLUMBIA SPORTSWEAR COMPANY
 
PROXY STATEMENT
 
Annual Meeting of Shareholders
SUMMARY OF PROCEDURES
Proxy Statement Information. The Board of Directors of Columbia Sportswear Company, an Oregon corporation (“Columbia,” the “Company,” “we,” “us,” or “our”), is soliciting proxies to be used at the annual meeting of shareholders to be held at 3:00 p.m. Pacific Time on Tuesday, June 13, 2017, at Columbia’s Lillehammer Events Center, located at 14339 NW Science Park Drive, Portland, Oregon 97229, for the purposes set forth in the accompanying Notice of Annual Meeting of Shareholders (“Notice”). This Proxy Statement, our 2016 Annual Report to Shareholders and our form of proxy will be provided to shareholders on or about April 27, 2017. The expense of soliciting proxies, including the cost of preparing, assembling and mailing the Notice, Proxy Statement, 2016 Annual Report to Shareholders, and form of proxy, will be borne by Columbia. We will ask fiduciaries, custodians, brokerage houses, and similar parties to forward copies of proxy materials to beneficial owners of our Common Stock, and we will reimburse these parties for their reasonable and customary charges for distribution expenses. Proxies may be solicited by use of the mail and the Internet, and our directors, officers and employees may also solicit proxies by telephone, facsimile and personal contact. No additional compensation will be paid for these services.
Electronic Delivery of Proxy Materials. In accordance with Securities and Exchange Commission rules, Columbia’s proxy materials are available to all shareholders on the Internet. Instead of receiving paper copies of the Notice, 2016 Annual Report to Shareholders, Proxy Statement, and proxy card in the mail, you may access these communications electronically via the Internet. If you received any proxy materials in the mail this year and would like to receive the materials electronically next year, please write to us at Columbia Sportswear Company, Attention: Investor Relations, 14375 NW Science Park Drive, Portland, Oregon 97229. Once you provide your consent to receive electronic delivery of proxy materials via the Internet, your consent will remain in effect until you revoke it.
Householding of Proxy Materials. The Securities and Exchange Commission has adopted rules that permit companies and intermediaries to satisfy the delivery requirements for proxy statements with respect to two or more shareholders sharing the same address by delivering a single Notice or set of proxy materials addressed to those shareholders. This process, which is commonly referred to as “householding,” may be more convenient for shareholders and less expensive for companies. A number of brokers with accountholders who are Company shareholders will be householding our Notice or proxy materials. If you have received notice from Columbia or your broker that it will be householding communications to your address, householding will continue until you are notified otherwise or until you revoke your consent to householding. If you wish to receive a separate set of our proxy materials now or in the future, we will promptly deliver a separate copy of these materials to you upon written or oral request made to us at Columbia Sportswear Company, Attention: Investor Relations, 14375 NW Science Park Drive, Portland, Oregon 97229. You may also contact Investor Relations at (503) 985-4000 or colminvestorrelations@columbia.com. If at any time you no longer wish to participate in householding, please notify your broker or write to us at the address listed above. If you currently receive multiple copies of the proxy materials and would like to request householding, please contact your broker or write to us at the address above.

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Who Can Vote. Only shareholders of record at the close of business on April 17, 2017 (the “record date”) are entitled to notice of and to vote at the annual meeting or any adjournments of the annual meeting. At the close of business on April 17, 2017, 69,650,208 shares of our Common Stock, the only authorized class of voting security of the Company, were issued and outstanding. Because holders of Common Stock are entitled to one vote per share, a total of 69,650,208 votes are entitled to be cast at the annual meeting.
How You Can Vote. Shareholders may vote in person at our annual meeting or by proxy. To vote by proxy:
If you are a shareholder of record: please promptly complete, sign, date, and return the enclosed proxy card. You may also grant a proxy by telephone or via the Internet by following the instructions on the enclosed proxy card.
If you hold your shares in street name: please vote your shares by following the instructions set forth in the Notice provided by your broker, bank, trust, or other holder of record. In most cases, you may be permitted to submit your voting instructions by mail, by telephone or via the Internet.
All shares for which a proxy has been properly granted and not revoked will be voted at the annual meeting in accordance with your instructions. If you grant a proxy but do not give voting instructions, the shares represented by your proxy will be voted as recommended by the Board of Directors.
How You Can Revoke Your Proxy or Change Your Vote. If you are a shareholder of record, you can revoke your proxy at any time before it is voted at the annual meeting by:
Submitting to the Secretary a written notice of revocation bearing a later date than the date of your proxy;
Submitting to the Secretary a later-dated proxy relating to the same shares; or
Attending the annual meeting and voting in person.
If your shares are held in the name of a broker, bank, trust, or other nominee, you must obtain a proxy, executed in your favor, from the nominee to be able to vote at the meeting.
Any written notice revoking a proxy should be sent to Columbia Sportswear Company, Attention: Peter J. Bragdon, Executive Vice President, Chief Administrative Officer, General Counsel, and Secretary, 14375 NW Science Park Drive, Portland, Oregon 97229, or hand-delivered to the Secretary at or before the vote at the annual meeting.


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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of April 17, 2017, regarding the beneficial ownership of shares of our Common Stock by (i) each person known by us to own beneficially more than 5% of our Common Stock, (ii) each of our directors, (iii) each executive officer named in the Summary Compensation Table (each, a “named executive officer”), and (iv) all of our executive officers and directors as a group. The address for each of our executive officers and our directors is 14375 NW Science Park Drive, Portland, Oregon 97229. Except as otherwise noted, the persons listed below have sole investment and voting power with respect to the shares owned by them.
Name
Shares
Beneficially
Owned
 
Percentage
of Shares(1)
Timothy P. Boyle
25,754,190

(2)
36.98

Gertrude Boyle
9,846,143

 
14.14

Sarah A. Bany
2,562,080

(3)
3.68

John W. Stanton
519,444

(4)
*

Stephen E. Babson
191,744

(5)
*

Bryan L. Timm
139,954

(6)
*

Andy D. Bryant
85,870

(7)
*

Thomas B. Cusick
77,880

(8)
*

Edward S. George
72,730

(9)
*

Murrey R. Albers
72,496

(10)
*

Walter T. Klenz
50,956

(11)
*

Ronald E. Nelson
34,841

(12)
*

Franco Fogliato
18,846

(13)
*

Malia H. Wasson
2,838

(14)
*

Eaton Vance Management†
4,171,263

(15)
5.99

  2 International Place, Boston, MA 02110
 
 
 
All executive officers and directors as a group (17 persons)
41,346,615

(16)
58.86

 
 
*
Less than 1%
Based solely on information set forth in Schedule 13G for the year ended December 31, 2016, as filed with the Securities and Exchange Commission.
(1)
Shares that the person or group has the right to acquire within 60 days after April 17, 2017 are deemed to be outstanding in calculating the percentage ownership of the person or group but are not deemed to be outstanding as to any other person or group.
(2)
Includes (a) 834 shares held in trust for Mr. Boyle’s wife, for which she is trustee, (b) 2,247,862 shares held in eleven grantor retained annuity trusts for which Mr. Boyle is trustee and income beneficiary, (c) 2,000 shares held in the Boyle Columbia Sportswear Company Voting Trust (the “Voting Trust”), for which Mr. Boyle serves as initial trustee. The Voting Trust provides for the deposit of additional shares of Columbia Common Stock and the appointment of successor trustees in the event of Mr. Boyle’s death or incapacity (as defined in the voting trust agreement), and (d) 287,868 shares held in two generation skipping trusts, for which Mr. Boyle’s wife is the trustee, for the benefit of Mr. Boyle’s family.
(3)
Includes 804,418 shares held by DSRA, LLC and 31,792 shares subject to options exercisable within 60 days after April 17, 2017. Also includes 146,734 shares held by the Marie Lamfrom Charitable Foundation, for which Ms. Bany is a trustee. Ms. Bany disclaims beneficial ownership of these shares.
(4)
Includes 50,000 shares held by the Aven Foundation, for which Mr. Stanton is a trustee. Mr. Stanton disclaims beneficial ownership of these shares. Also includes 53,300 shares subject to options exercisable within 60 days after April 17, 2017, and 362 shares subject to restricted stock units (“RSUs”) that vest within 60 days after April 17, 2017.
(5)
Includes (a) 4,500 shares held by Babson Capital Partners, LP, for which Mr. Babson is general partner, (b) 11,000 shares held by the Jean McCall Babson Trust, for which Mr. Babson is trustee and whose beneficiaries include members of Mr. Babson’s family, (c) 2,000 shares held by Mr. Babson’s wife, and (d) 54,864 shares subject to options exercisable within 60 days after April 17, 2017, and 362 shares subject to RSUs that vest within 60 days after April 17, 2017.
(6)
Includes 60,317 shares subject to options exercisable within 60 days after April 17, 2017.

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(7)
Includes 53,486 shares subject to options exercisable within 60 days after April 17, 2017, and 362 shares subject to RSUs that vest within 60 days after April 17, 2017.
(8)
Includes 37,728 shares subject to options exercisable within 60 days after April 17, 2017.
(9)
Includes 28,564 shares held by Edward S. George and Vilora Lynn George, Trustees of the Amended and Restated George Family Trust, dated May 15, 2006. Also includes 41,804 shares subject to options exercisable within 60 days after April 17, 2017, and 362 shares subject to RSUs that vest within 60 days after April 17, 2017.
(10)
Includes 400 shares held by Mr. Alber’s wife. Also includes 48,432 shares subject to options exercisable within 60 days after April 17, 2017, and 362 shares subject to RSUs that vest within 60 days after April 17, 2017.
(11)
Includes 41,804 shares subject to options exercisable within 60 days after April 17, 2017, and 362 shares subject to RSUs that vest within 60 days after April 17, 2017.
(12)
Includes 29,711 shares subject to options exercisable within 60 days after April 17, 2017, and 362 shares subject to RSUs that vest within 60 days after April 17, 2017.
(13)
Includes 13,416 shares subject to options exercisable within 60 days after April 17, 2017.
(14)
Includes 2,114 shares subject to options exercisable within 60 days after April 17, 2017, and 362 shares subject to RSUs that vest within 60 days after April 17, 2017.
(15)
As reported, holder has sole power to vote or to direct the vote of 4,171,263 shares.
(16)
Includes 588,998 shares subject to options exercisable within 60 days after April 17, 2017, and 2,896 shares subject to RSUs that vest within 60 days after April 17, 2017.

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CORPORATE GOVERNANCE
Board Involvement in Risk Oversight. Columbia’s management team is responsible for identifying, assessing and managing the material risks facing Columbia. The Board of Directors generally oversees Columbia’s risk management practices and processes. The Board has delegated primary oversight of the management of (i) financial and accounting risk to the Audit Committee, (ii) compensation risk to the Compensation Committee and (iii) governance risk to the Nominating and Corporate Governance Committee. Oversight of compliance risk is shared by the Audit Committee and the Nominating and Corporate Governance Committee. Each of these committees routinely reports to the Board on the management of these specific risk areas. To permit the Board and its committees to perform their respective risk oversight roles, individual members of management who supervise Columbia’s risk management report directly to the Board or the relevant committee of the Board responsible for overseeing the management of specific risks, as applicable. For this purpose, management has a high degree of access and communication with independent directors. Because a majority of the Board consists of independent directors and each committee of the Board consists solely of independent directors, Columbia’s risk oversight structure conforms to the Board’s leadership structure discussed below and demonstrates Columbia’s belief that having a strong, independent group of directors is important for good governance.
The Board of Directors also oversees a process of risk assessment within Columbia that is designed to identify the most salient enterprise risks facing Columbia’s business, including interviews conducted seeking participants’ judgment and assessment of the relative likelihood and magnitude of risks identified. The overall assessment includes participation from Company executives and a broad selection of senior management. The results of the periodic assessment are reviewed by the entire Board. The Board believes that the process serves to identify material risks in a timely manner and to promote, when necessary, appropriate actions to address the management of these risks.
Finally, the Board oversees various organizational structures, policies and procedures at Columbia to promote ethical conduct and compliance with laws and regulations. For example, Columbia maintains a Code of Business Conduct and Ethics (the “Code”) for which a confidential compliance line has been established for employees or other stakeholders to report violations of the Code, and the chair of the Audit Committee receives copies of all reports.
Corporate Governance Guidelines. Columbia’s Board of Directors has adopted Corporate Governance Guidelines that address:
Director qualifications;
Director independence;
Director responsibilities;
Board committees;
Director access to officers, employees and others;
Director compensation;
Director orientation and continuing education;
Chief Executive Officer evaluation and management succession;
Annual board and committee performance evaluations; and
Annual review of the Corporate Governance Guidelines.
A copy of our Corporate Governance Guidelines is available on our website at www.columbia.com.
Independence. Under our Corporate Governance Guidelines, which adopt the standards for “independence” under applicable NASDAQ listing rules and Securities and Exchange Commission rules, a majority of the members of the Board of Directors must be independent, as determined by the Board of Directors. The Board of Directors has determined that Ms. Wasson and Messrs. Albers, Babson, Bryant, George, Klenz, Nelson, and Stanton are independent and, accordingly, a majority of the members of our Board are independent. In addition, the Board of Directors has determined that all members of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee are independent under the standards for independence applicable to members of each committee. There are no undisclosed transactions, relationships or arrangements that were considered by the Board of Directors in connection with the determination of whether any particular director is independent.

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Code of Business Conduct and Ethics. Our Board has adopted a Code of Business Conduct and Ethics that sets out basic principles to guide all of Columbia’s officers, directors and employees worldwide, as well as representatives, consultants, vendors, agents, and other third parties in their dealings with or on behalf of Columbia and our subsidiaries and affiliates. We have established a confidential compliance line operated by an outside agency through which stakeholders can report concerns anonymously. Our Code of Business Conduct and Ethics has been translated into various languages and is available to our employees. A copy of our Code of Business Conduct and Ethics is available on our website at www.columbia.com.
Communications with the Board. Any shareholder may communicate with the Board of Directors, individually or as a group, by writing to the member or members of the Board of Directors, c/o Peter J. Bragdon, Executive Vice President, Chief Administrative Officer, General Counsel, and Secretary, Columbia Sportswear Company, 14375 NW Science Park Drive, Portland, Oregon 97229. Communications should be sent by overnight or certified mail, return receipt requested. All communications will be compiled by the Secretary and submitted to the individual director or directors to whom the communications are addressed. Communications with the Board of Directors regarding recommendations of individuals for consideration by the Nominating and Corporate Governance Committee to become nominees for election to the Board of Directors must be made in accordance with the Director Nomination Policy described below.
Board Leadership. Under our Board structure, leadership is provided primarily by the persons in the following positions, each of whom performs a separate role:
Chairman of the Board;
Chief Executive Officer; and
Chair of the Nominating and Corporate Governance Committee.
Gertrude Boyle is Chairman of the Board and Timothy P. Boyle is our Chief Executive Officer. Most of the functions typically performed by a chairman, such as convening and presiding over meetings of the Board, are performed by our Chief Executive Officer rather than our Chairman. As Chairman, Mrs. Boyle is recognized as a leader, keeper of institutional knowledge and significant stakeholder of Columbia. As Chief Executive Officer, Mr. Boyle is primarily responsible for Columbia’s general operations and implementing its business strategy. Mr. Boyle is also Columbia’s largest shareholder. For these reasons, the Board believes that, at this time, Columbia and its shareholders are best served by having the Chief Executive Officer convene, establish agenda items for and preside over meetings of the Board.
Columbia believes that having a strong, independent group of directors is important for good governance, and the Board has been, and continues to be, a strong proponent of Board independence. Consequently, Columbia’s corporate governance structures and practices include several independent oversight mechanisms. For example,
eight of the Board’s eleven members and each of the members of the Board’s Audit, Compensation and Nominating and Corporate Governance Committees are independent directors under applicable NASDAQ listing rules;
each director is free to suggest the inclusion of items for the Board’s agenda and to raise at any Board meeting subjects that are not on the agenda for that meeting; and
the charters of each of the Board’s standing committees provide that each of these committees may seek legal, accounting or other expert advice from sources independent of Columbia’s management.
Moreover, the Board believes Columbia’s corporate governance practices ensure that strong and independent directors will continue to effectively oversee Columbia’s management and key issues related to long-range business plans, strategy and risks and integrity. Pursuant to these governance practices, the Chairman of the Nominating and Corporate Governance Committee, in addition to his role as chairman of that committee:
convenes and presides over meetings of the independent directors in executive session;
convenes and presides over an annual off-site meeting of the independent directors; and
is available for consultation and direct communication with shareholders, if requested.
In performing the duties described above, the Chairman of the Nominating and Corporate Governance Committee consults with the chairs of the appropriate Board committees and solicits their participation.
We intend to reexamine our Board leadership structure on an ongoing basis to ensure that it continues to meet Columbia’s needs.

6



Board Meetings. The Board of Directors met five times in 2016. Three executive sessions of the Board of Directors were held in 2016. Each director attended at least 75% of the total number of meetings of the Board of Directors and of each committee on which the director serves. We do not maintain a formal policy regarding director attendance at annual shareholder meetings. Three of our eleven directors attended our 2016 annual meeting of shareholders.
Board Committees. The Board of Directors has designated three standing committees. The Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee each operate under a written charter that is available for review on our website at www.columbia.com. The current membership of each committee and its principal functions, as well as the number of times it met during fiscal year 2016, are described below.
Audit Committee. The Audit Committee is composed of Messrs. Bryant, George, Nelson, and Ms. Wasson. The Board of Directors has determined that each member of the Audit Committee meets all applicable independence and financial literacy requirements. The Board has also determined that Ms. Wasson is an “audit committee financial expert” as defined in regulations adopted by the Securities and Exchange Commission. A description of the functions performed by the Audit Committee and Audit Committee activity is set forth below in “Report of the Audit Committee.” The Audit Committee met five times in 2016. Ms. Wasson chairs the Audit Committee.
Compensation Committee. The Compensation Committee is composed of Messrs. Albers, Babson, Klenz, and Stanton. The Compensation Committee determines compensation for the Company’s executive officers and administers the Company’s 1997 Stock Incentive Plan and any executive officer incentive compensation plans. The Compensation Committee’s processes and procedures for determining compensation for the Company’s executive officers and directors are described below in “Compensation Discussion and Analysis.” The Compensation Committee met five times in 2016. Mr. Babson chairs the Compensation Committee.
The Compensation Committee retained PricewaterhouseCoopers L.L.P. as its outside compensation consultant for 2016. The Committee chose PricewaterhouseCoopers primarily because of the competence, knowledge, background, and reputation of the representative who advises the Committee. The consultant reports directly to the Committee. Based on direction from the Committee, PricewaterhouseCoopers provides the Committee with:
information about market trends in executive officer compensation;
general information on compensation practices at other companies;
specific data on the compensation paid to executive officers at peer companies; and
analyses of performance measures used in incentive programs.
PricewaterhouseCoopers also:
assists the Committee in its evaluation of executive pay, practices and programs; and
advises the Committee on ad hoc issues related to broad-based compensation plans and international compensation issues.
PricewaterhouseCoopers reports on executive officer compensation matters and presents findings directly to the Compensation Committee but does not provide recommendations on compensation decisions for individual executive officers. From time to time our Senior Vice President and Chief Human Resources Officer provides information and feedback to PricewaterhouseCoopers on various compensation matters. Moreover, PricewaterhouseCoopers provides our Senior Vice President and Chief Human Resources Officer and our Chief Executive Officer with copies of the information provided to the Committee.
In 2016, management separately engaged PricewaterhouseCoopers to perform tax, audit and vendor assessment services. Tax, audit and vendor assessment arrangements are requested and approved by management separately from any work that is requested by the Compensation Committee. The PricewaterhouseCoopers representative who provides services to the Committee did not participate in these tax, audit or vendor assessment services. Also in 2016, Columbia subscribed to PricewaterhouseCoopers’ update service regarding regulatory developments in the European Union. The following is a summary of the approximate fees incurred by Columbia in 2016 for all services provided by PricewaterhouseCoopers, as categorized below:
 
2016
Executive and Director Compensation Consulting Fees(1)
$
157,866

Other Fees(2)
183,586

Total
$
341,452

 

7



(1)
Fees for services requested and approved by the Compensation Committee and billed to Columbia by PricewaterhouseCoopers L.L.P. in 2016 consisted of (i) industry survey and analysis of executive positions and industry survey and analysis of executive compensation and hiring packages; (ii) executive compensation trend analyses; (iii) equity plan design, calibration and analysis; and (iv) attendance at Compensation Committee meetings.
(2)
Other fees for services requested and approved by management consisted of vendor assessment, audit services, domestic and international tax consulting and transaction analyses and a regulatory update service.
Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee is composed of Messrs. Albers, Babson, Bryant, George, Klenz, Nelson, and Stanton, and Ms. Wasson. The Nominating and Corporate Governance Committee develops and recommends corporate governance guidelines and standards for business conduct and ethics, identifies individuals qualified to become Board members and makes recommendations regarding nominations for director. The Nominating and Corporate Governance Committee will consider individuals recommended by shareholders for nomination as director in accordance with the procedures described under “Director Nomination Policy” below. The Nominating and Corporate Governance Committee also oversees the annual self-evaluations of the Board and its committees and makes recommendations concerning the size, structure, composition, and membership of the Board of Directors and its committees. The Nominating and Corporate Governance Committee met four times in 2016. Mr. Bryant chairs the Nominating and Corporate Governance Committee.
In March 2017, Mr. Stanton informed the Board of Directors of his decision not to stand for re-election to our Board. Mr. Stanton’s current term expires at the Annual Meeting, at which time the Board size will be reduced from 11 to 10.
Director Nomination Policy. Shareholders may recommend individuals for consideration by the Nominating and Corporate Governance Committee to become nominees for election to the Board of Directors by submitting a written recommendation to the Nominating and Corporate Governance Committee, c/o Peter J. Bragdon, Executive Vice President, Chief Administrative Officer, General Counsel, and Secretary, Columbia Sportswear Company, 14375 NW Science Park Drive, Portland, Oregon 97229. Communications should be sent by overnight or certified mail, return receipt requested. Submissions must include sufficient biographical information concerning the recommended individual, including age, five-year employment history with employer names and a description of the employer’s business, whether the individual can read and understand financial statements, and board memberships, if any, for the Nominating and Corporate Governance Committee to consider. The submission must be accompanied by a written consent of the individual to stand for election if nominated by the Board and to serve if elected by the shareholders. Recommendations received by December 31, 2017 will be considered for nomination at the 2018 Annual Meeting of Shareholders. Recommendations received after December 31, 2017 and before the applicable deadline for the 2019 Annual Meeting of Shareholders will be considered for nomination at the 2019 Annual Meeting of Shareholders. In addition to shareholder recommendations, the Nominating and Corporate Governance Committee may identify potential director nominees through referrals by directors, officers, employees, and third parties, including search firms, and internal research and recruitment activities.
Director Selection and Qualifications. Following the identification of director candidates, the Nominating and Corporate Governance Committee meets to discuss and consider each candidate’s qualifications and determines by majority vote the candidates who the Committee believes will best serve Columbia, which candidates are then submitted to the Board for approval. In evaluating director candidates, the Committee considers a variety of factors, including the composition of the Board as a whole, the characteristics of each candidate, and the performance and continued tenure of incumbent Board members. The Committee considers these factors to evaluate potential candidates regardless of the source of the recommendation. The Committee believes that director candidates should possess high ethical character, business experience with high accomplishment in his or her respective field, the ability to read and understand financial statements, relevant expertise and experience, and the ability to exercise sound business judgment. Candidates must also be over 21 years of age. In addition, the Committee believes at least one member of the Board should meet the criteria for an “audit committee financial expert” as defined by the Securities and Exchange Commission rules, and that a majority of the members of the Board should meet the definition of “independent director” under the applicable NASDAQ listing requirements. The Committee also believes key members of our management should participate as members of the Board. See “Proposal 1: Election of Directors,” below.
As described above, our Board believes that maintaining a strong, independent group of directors that comprises a majority of our Board is important for good governance, and eight of our eleven directors qualify as independent. The Board believes that all of our independent directors (i) are financially literate and (ii) possess the other qualities described in our Corporate Governance Guidelines, including integrity and moral responsibility, the capacity to evaluate strategy and reach sound conclusions and the willingness and ability to devote the time required to fulfill the duties of a director. In addition, the Board places high value on the ability of individual directors to contribute to a constructive Board environment.
The Board believes that our directors, as a whole, provide the diversity of experience and skills necessary for a well-functioning board. All of our independent directors have substantial senior executive-level business experience. Each of Mrs. Boyle, Mr. Boyle and Ms. Bany are significant shareholders of Columbia, and as such their interests are aligned with other shareholders

8



for building long-term shareholder value. For a more complete description of individual backgrounds, professional experiences, qualifications, and skills, see the director profiles set forth under “Election of Directors” below.
Board Diversity. Columbia’s Corporate Governance Guidelines establish that the Nominating and Corporate Governance Committee of the Board is responsible for reviewing annually with the Board the desired skills and characteristics of new Board members and the composition of the Board as a whole. In assessing the appropriate composition of the Board, the Committee considers factors set forth in the Corporate Governance Guidelines, including diversity. Although the Board does not maintain a specific policy with respect to Board diversity, the Board believes that the Board should be a diverse body, and the Committee considers a broad range of background and experience in its assessment. The Committee considers these and other factors as it oversees the annual Board and committee assessments.
Compensation Committee Interlocks and Insider Participation. No member of our Compensation Committee is a past or present officer or employee of ours or any of our subsidiaries, nor has any member of our Compensation Committee had any relationship requiring disclosure under Item 404 of Regulation S-K under the Securities Exchange Act of 1934. Likewise, none of our executive officers has served on the board of directors or compensation committee (or other committee serving an equivalent function) of any other entity, where one of the other entity’s executive officers served on our Board of Directors or Compensation Committee.
Certain Relationships and Related Person Transactions. Joseph P. Boyle, son of Timothy P. Boyle and grandson of Gertrude Boyle, is employed by Columbia as the Senior Vice President of Columbia Brand Merchandising and Design. In 2016, Joseph P. Boyle received an annualized salary of $291,500 as Senior Vice President of Columbia Brand Merchandising and Design and was eligible to receive bonus, equity and employment benefits available to other executive officers. The Nominating and Corporate Governance Committee reviewed and ratified Joseph P. Boyle’s compensation arrangements.
Molly Boyle, daughter of Timothy P. Boyle and granddaughter of Gertrude Boyle, is employed by Columbia as a Retail Merchandise Manager. In 2016, Molly Boyle received an annualized salary of $66,950 as a Merchandiser and was eligible to receive bonus and employment benefits available to other employees until June 2016, when she was promoted to a Retail Merchandise Manager and began earning a base salary of $85,100 and became eligible to also receive equity benefits available to other employees of similar rank. The Nominating and Corporate Governance Committee reviewed and ratified Molly Boyle’s compensation arrangements.
In January 2016, Columbia entered into an aircraft arrangement, whereby it subleases an aircraft from Alvador, LLC, a limited liability company wholly owned by Timothy P. Boyle and his wife. Under the terms of the arrangement, Columbia has engaged an unaffiliated entity to provide pilot services for operation of the aircraft. Under the terms of the sublease, Columbia pays Alvador, LLC a monthly rental amount equal to $3,500 per flight hour. In 2016, Columbia paid Alvador, LLC $353,500 for use of the aircraft. Columbia also incurred expenses totaling $13,000 for pilot services and $8,987 for miscellaneous related flight crew services. We believe that these arrangements are on terms at least as fair to Columbia as those that would have been available in arm’s-length negotiated transactions.
Our Chairman, Gertrude Boyle, was the victim of a targeted crime, including an attempted kidnapping, in November 2010. In response to the incident, Columbia established security protocols recommended by an independent security review for Mrs. Boyle and hired a former police officer to oversee those protocols. The former police officer is an in-law of Timothy P. Boyle and received compensation of $50,116 in 2016, for which Mr. Boyle reimbursed Columbia in 2016.
Related Person Transactions Approval Process. Our Nominating and Corporate Governance Committee generally approves in advance any transactions with an officer, director, greater-than-5% shareholder, or any immediate family member of an officer, director, or greater-than-5% shareholder (“related person”) pursuant to our written related person transaction approval policy. A “related person transaction” is any actual or proposed transaction or series of transactions, either since the beginning of the last fiscal year or proposed, amounting to more than $120,000 in which Columbia was or is to be a participant, and in which a related person had or will have a direct or indirect material interest. Our policy requires that the Committee review the material facts of any transaction that could potentially qualify as a “related person transaction” and either approve or disapprove of our entry into the transaction. If advance Committee approval is not feasible, the related person transaction is considered, and if the Committee determines it to be appropriate, ratified at the Committee’s next regularly scheduled meeting. In determining whether to approve or ratify a transaction, the Committee takes into account, among other factors it deems to be appropriate, whether the

9



transaction is on terms no less favorable than terms generally available to an unaffiliated person in the same or similar circumstances and the extent of the related person’s direct or indirect interest in the transaction. If a related person transaction is ongoing, the Committee may establish guidelines for management to follow in its ongoing dealings with the related person. Thereafter, the Committee reviews and assesses ongoing relationships with the related person annually to confirm they are in compliance with the Committee’s guidelines and are appropriate.
Prohibition on Hedging or Pledging Columbia Securities. Columbia’s Insider Trading Policy prohibits the hedging or pledging of Columbia securities by the Board of Directors and officers. The policy is intended to prohibit any transaction that would enable an individual to lock in value for securities in exchange for protection against upside or downside movement in our Common Stock. The prohibition on pledging is intended to ensure that Columbia securities are not used as collateral.
Section 16(a) Beneficial Ownership Reporting Compliance. Section 16(a) of the Securities Exchange Act of 1934 requires our executive officers, directors and persons who own more than 10% of our Common Stock to file reports of ownership and changes in ownership with the Securities and Exchange Commission. Executive officers, directors and beneficial owners of more than 10% of our Common Stock are required to furnish to us copies of all Section 16(a) reports they file. Based solely on a review of reports that we received and on written representations from reporting persons regarding compliance, we believe all Section 16(a) transactions were reported on a timely basis in 2016.

10



DIRECTOR COMPENSATION
Our director compensation program is intended to enable us to:
attract and retain qualified non-employee directors by providing total compensation that is competitive with other companies; and
align directors’ interests with shareholders’ interests by including equity as a significant portion of each non-employee director’s compensation package.
In setting director compensation, we consider compensation offered to directors by other companies, the amount of time that our directors spend providing services to us and the experience, skill and expertise that our directors have. Directors who are employees of Columbia receive no separate compensation for their service as directors.
Each director who is not a Columbia employee receives:
a $60,000 annual board service fee;
a $10,000 annual committee service fee for each committee on which the director serves as a member;
a $15,000 annual committee chair fee for each committee (except the Audit Committee) that the director serves as chair;
a $20,000 annual Audit Committee chair fee if the director chairs the Audit Committee;
a $3,500 Company merchandise allowance;
reasonable out-of-pocket expenses incurred in attending meetings; and
an annual equity award as follows:
a stock option grant valued at $60,000 (using the Black-Scholes valuation method) to purchase shares of our Common Stock at an exercise price equal to the closing market price of our Common Stock on the date of grant; and
a grant of time-based restricted stock units valued at $60,000 based on the closing market price of our Common Stock on the date of grant, discounted by the present value of the future stream of dividends over the vesting period using the Black-Scholes valuation method.
One-third of the stock options become exercisable and one-third of the shares of restricted stock units vest annually (a) on the first anniversary of the first day of the first full calendar month following the date of grant (the “Vest Date”), and (b) on each of the subsequent two anniversaries following the first anniversary of the Vest Date. The date on which restricted stock units vest is referred to as a “vesting date.” If a vesting date falls on a weekend or any other day on which the NASDAQ Stock Market (“NSM”) or any national securities exchange on which the Common Stock then is principally traded (the “Exchange”) is not open, affected restricted stock units will vest on the next following NSM or Exchange business day, as the case may be. Directors may elect to receive equity compensation in lieu of all or half of the $60,000 annual board service fee, and may elect how they wish to allocate this amount between stock options or restricted stock unit awards that vest in full on the Vest Date. As described in more detail below, in 2016, four of our nine non-employee directors elected to receive equity compensation in lieu of half of their $60,000 annual board service fee for the twelve month period beginning June 10, 2016, and one of our nine non-employee directors elected to receive equity compensation in lieu of his entire $60,000 annual board service fee for the same period.
Non-employee directors who own more than $50 million of Columbia Common Stock may elect to receive cash in lieu of the annual equity award. Cash payments are made in a single lump sum based on the present value of $120,000 if paid over the three-year period applicable to the annual equity awards. Sarah A. Bany elected to receive cash in lieu of 2016 annual equity awards.



11



2016 Director Compensation Table
The following table summarizes the compensation earned by each non-employee director in 2016.
Name
Fees Earned
or Paid in Cash
($)
 
Stock Awards(1)
($)
 
Option
Awards(1)
($)
 
All Other
Compensation(2)
($)
 
Total
($)
Sarah A. Bany
177,921

 

 

 
3,500

 
181,421

Murrey R. Albers
52,500

 
90,052

 
60,013

 
3,500

 
206,065

Stephen E. Babson
22,500

 
90,052

 
90,014

 
3,383

 
205,949

Andy D. Bryant
55,000

 
90,052

 
60,013

 
3,500

 
208,565

Edward S. George
70,000

 
90,052

 
60,013

 
2,472

 
222,537

Walter T. Klenz
80,000

 
60,017

 
60,013

 
3,500

 
203,530

Ronald E. Nelson
50,000

 
75,062

 
75,022

 
3,500

 
203,584

John W. Stanton
50,000

 
60,017

 
60,013

 
1,252

 
171,282

Malia H. Wasson
85,000

 
60,017

 
60,013

 
3,456

 
208,486

 
 
(1)
The amounts set forth in the “Stock Awards” and “Option Awards” columns in the table above reflect the aggregate grant date fair value computed in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic No. 718, Compensation-Stock Compensation (FASB ASC Topic 718), excluding the effect of any estimated forfeiture rate. These amounts may not correspond to the actual value eventually realized by the director, which depends in part on the market value of our Common Stock in future periods. Assumptions used in the calculation of these amounts are described in the Notes to Consolidated Financial Statements included in Columbia’s Annual Report on Form 10-K for the year ended December 31, 2016, filed with the Securities and Exchange Commission. The following table sets forth the aggregate number of unvested stock awards and the aggregate number of option awards held as of December 31, 2016, by each of our directors.

Name
Stock
Awards
Outstanding
 
Option
Awards
Outstanding
Timothy P. Boyle

 

Gertrude Boyle

 

Sarah A. Bany

 
31,792

Murrey R. Albers
2,848

 
57,814

Stephen E. Babson
2,848

 
68,829

Andy D. Bryant
2,848

 
69,496

Edward S. George
2,848

 
54,278

Walter T. Klenz
2,313

 
47,650

Ronald E. Nelson
2,581

 
36,373

John W. Stanton
2,313

 
59,146

Malia H. Wasson
1,819

 
6,434


(2)
The amounts set forth in the “All Other Compensation” column consist of the clothing allowance accepted by the respective director.
The Compensation Committee biennially reviews our director compensation program and recommends any changes for Board approval. Due to modest movements in market data, in 2016 the Compensation Committee deferred review of director compensation until 2017.
Annual cash fees are paid quarterly beginning on the date the director is elected by shareholders at our annual meeting of shareholders. The 2016 Director Compensation Table does not include any amounts paid to the directors for reimbursement for reasonable out-of-pocket expenses incurred in connection with meeting attendance. Messrs. Albers, Bryant and George elected to receive equity compensation in the form of restricted stock units in lieu of $30,000 of the annual board service fee due to them for the twelve month period beginning June 10, 2016. Mr. Nelson elected to receive equity compensation in the form of restricted stock units and stock options in lieu of $30,000 of the annual board service fee due to him for the twelve month period beginning

12



June 10, 2016. Mr. Babson elected to receive equity compensation in the form of restricted stock units and stock options in lieu of $60,000 of the annual board service fee due to him for the twelve month period beginning June 10, 2016. Equity compensation granted to these directors in lieu of their annual board service fees is included in the “Stock Awards” and “Option Awards” columns of the 2016 Director Compensation Table.

13



PROPOSAL 1: ELECTION OF DIRECTORS
A Board of ten directors will be elected at the Annual Meeting. The directors are elected at each annual meeting to serve until the next annual meeting or until their successors are elected and qualified. Proxies received from shareholders, unless directed otherwise, will be voted FOR election of the following nominees: Mrs. Gertrude Boyle, Ms. Sarah A. Bany, Ms. Malia H. Wasson, and Messrs. Timothy P. Boyle, Murrey R. Albers, Stephen E. Babson, Andy D. Bryant, Edward S. George, Walter T. Klenz, and Ronald E. Nelson. Each nominee is now a director of Columbia. If any of the nominees for director becomes unavailable for election for any reason, the proxy holders will have discretionary authority to vote pursuant to a proxy for a substitute or substitutes. Set forth below are the name, age and occupation of each of the nominees. Specific skills contributing to the nominee’s overall qualifications as a member of the Board are also highlighted. Proxies may not be voted for a greater number of persons than the number of nominees named below.
Name, Principal Occupation, Other Directorships, and Qualification Highlights
Gertrude Boyle (age 93) has served as Chairman of the Board of Directors since 1970. Mrs. Boyle also served as Columbia’s President from 1970 to 1988. Mrs. Boyle is Timothy P. Boyle’s and Sarah A. Bany’s mother and Joseph P. Boyle’s grandmother. Mrs. Boyle has been involved in the business throughout its various stages and, in particular, she has been an active participant in Columbia’s promotional campaigns. Mrs. Boyle’s philanthropic endeavors and leadership in the Portland community have been widely recognized and honored, enhancing Columbia’s community relationships.
Timothy P. Boyle (age 67) has served on the Board of Directors since 1978. Mr. Boyle joined Columbia in 1971 as General Manager, served as President from 1988 to 2015 and has served as Chief Executive Officer since 1988. Mr. Boyle is also a member of the board of directors of Northwest Natural Gas Company (NYSE: NWN) and Craft Brew Alliance, Inc. (NASDAQ: BREW). Mr. Boyle is Gertrude Boyle’s son, Sarah A. Bany’s brother and Joseph P. Boyle’s father. Mr. Boyle has spent his entire business career growing Columbia into one of the largest outerwear companies in the world. Mr. Boyle’s customer relationships, market knowledge and breadth of experience performing nearly every function within Columbia has resulted in a deep understanding of the business issues facing Columbia.
Sarah A. Bany (age 58) has served on the Board of Directors since 1988. Since 2001, Ms. Bany has been a co-owner of Moonstruck Chocolate Company. From 1979 to August 1998, Ms. Bany held various positions at Columbia, including Director of Retail Stores. Ms. Bany is Gertrude Boyle’s daughter, Timothy P. Boyle’s sister and Joseph P. Boyle’s aunt. Ms. Bany’s years of service at Columbia and her brand development experience have resulted in a deep understanding of Columbia’s business, particularly with respect to brand enhancement and marketing.
Murrey R. Albers (age 76) has served on the Board of Directors since July 1993. Mr. Albers is Chief Executive Officer of United States Bakery, a bakery with operations in Oregon, Washington, Idaho, Montana, Alaska, and California. Mr. Albers, who has been in his current position since June 1985, joined United States Bakery as general manager of Franz Bakery in 1975. Mr. Albers’ executive experience provides Columbia with insights into operations, acquisitions and valuable business relationships in the region where Columbia operates its headquarters.
Stephen E. Babson (age 66) has served on the Board of Directors since July 2002. Mr. Babson chairs the Compensation Committee. Mr. Babson is a Managing Director of Endeavour Capital, a Northwest private equity firm, which he joined in 2002. Prior to 2002, Mr. Babson was an attorney at Stoel Rives LLP. Mr. Babson joined Stoel Rives in 1978, was a partner from 1984 to February 2002, and served as the firm’s chairman from July 1999 to February 2002. Mr. Babson serves on a number of boards of privately-held companies, including ESCO Corporation; Genesis Financial Solutions, Inc.; Good Food Holdings, LLC, owner of Bristol Farms and Metropolitan Market, LLC; New Seasons Market LLC; Pendleton Woolen Mills, Inc.; USNR, LLC; Vigor Industrial LLC; Zoom Management, Inc., dba ZoomCare; PMI (Pacific Market International, LLC); and OFD Foods, LLC. Mr. Babson brings a combination of financial and legal expertise to the Board. His experience in a private equity firm provides Columbia with valuable insights related to capital markets, strategic planning and financial integrity.
Andy D. Bryant (age 66) has served on the Board of Directors since 2005. Mr. Bryant chairs the Nominating and Corporate Governance Committee. Mr. Bryant was named Chairman of the Board of Intel Corporation (NASDAQ: INTC) in May 2012. Previously, Mr. Bryant was named a director and Vice Chairman of Intel in July 2011 and most recently served as Executive Vice President of Technology, Manufacturing and Enterprise Services and Chief Administrative Officer of Intel Corporation until January 2012. Mr. Bryant joined Intel in 1981 as Controller for the Commercial Memory Systems Operation, became the Chief Financial Officer in February 1994 and was promoted to Senior Vice President in January 1999. Mr. Bryant expanded his role to Chief Financial and Enterprise Services Officer in December 1999, and was promoted to Chief Administrative Officer in October 2007. Prior to joining Intel, Mr. Bryant held positions in finance at Ford Motor Company and Chrysler Corporation. Mr. Bryant served on the board of directors of Synopsys, Inc. (NASDAQ: SNPS) from 1999 to 2005 and is a member of the board of directors of McKesson Corporation (NYSE: MCK). Mr. Bryant’s years of experience at a large, global public company provide operational, strategic planning and financial expertise to the Board.

14



Edward S. George (age 80) has served on the Board of Directors since 1989. For 30 years, until his retirement, Mr. George worked in the banking industry. From 1980 to 1990, he was President and Chief Executive Officer of Torrey Pines Bank and from 1991 to 1998 he served as a financial consultant. Mr. George also served as a director of First National Bank of San Diego until its sale in September 2002. Mr. George’s banking experience provides the Board and the Audit Committee with valuable financial expertise.
Walter T. Klenz (age 71) has served on the Board of Directors since 2000. He served as Managing Director of Beringer Blass Wine Estates from 2001 until his retirement in 2005. Mr. Klenz became President and Chief Executive Officer of Beringer Wine Estates in 1990 and Chairman of its board of directors in August 1997, and he served in those positions until the 2000 acquisition of Beringer Wine Estates by Foster’s Group Limited. Mr. Klenz joined Beringer Wine Estates in 1976 as Director of Marketing for the Beringer brand, where he also served as Chief Financial Officer from 1981 to 1990. He served as a director of America West Airlines from 1998 until 2005. Mr. Klenz also serves as a director of Vincraft Group, Free Flow Wines and J. Lohr Winery, all privately-held wine companies, and Sonoma State University Wine Business Institute, a non-profit organization. Mr. Klenz brings a combination of global branding, distribution, financial, and operational expertise to the Board.
Ronald E. Nelson (age 74) has served on the Board of Directors since 2011. He joined NIKE, Inc. in 1976 and went on to serve as Vice President from 1982 to 1997, overseeing a wide variety of operations, including NIKE’s early advertising, promotions and retail operations, global footwear sourcing and financing, and the global apparel division, and he served as President of NIKE’s Japanese subsidiary from 1995 to1997, retiring from NIKE in 1997. Mr. Nelson served as an advisory board member to Columbia in the 1970s and today serves as an informal advisor to several small companies. Mr. Nelson’s broad and deep experience within the apparel and footwear industry provides the Board with insights and guidance regarding our global supply chain, marketing and growth strategies.
Malia H. Wasson (age 58) was elected to the Board of Directors in 2015. Ms. Wasson chairs the Audit Committee, and the Board has designated Ms. Wasson as an “audit committee financial expert.” Ms. Wasson worked at U.S. Bank of Oregon for over 25 years, serving as President of Oregon and Southwest Washington from 2005 to 2015. She served as U.S. Bank’s senior executive in the region and led the U.S. Bank Board in Portland. In addition to her role as President, she led the Oregon Commercial Banking group for U.S. Bank, which provides a wide variety of financial services to middle market companies. Prior to joining U.S. Bank, Ms. Wasson held various commercial lending positions with the former Oregon Bank and Security Pacific Bank of Oregon. Currently, Ms. Wasson is the President of Sand Creek Advisors LLC, which provides business consulting to CEOs of public and private companies. Ms. Wasson currently serves as a member of the board of directors of Northwest Natural Gas Company (NYSE: NWN). She is also a director of the Oregon Business Council and member of the Oregon Business Plan Steering Committee. Ms. Wasson formerly served on the boards of Oregon Health & Science University Foundation, Inc., OHSU Knight Cancer Institute, Portland Business Alliance, Greater Portland Inc. and as a Senior Fellow of the American Leadership Forum. Ms. Wasson’s extensive experience in commercial banking, finance and accounting, as well as local and regional leadership, enables her to provide insight and advice to Columbia on strategic matters including mergers and acquisitions, consumer and commercial businesses, regulatory, marketing, public and government policy and relations, and human resources and diversity.

15



RECOMMENDATION BY THE BOARD OF DIRECTORS
The Board of Directors recommends that shareholders vote FOR election of the nominees named in this Proxy Statement. If a quorum of shareholders is present at the annual meeting, the ten nominees for election as directors who receive the greatest number of votes cast at the meeting will be elected directors. Abstentions and broker non-votes are counted for purposes of determining whether a quorum exists at the annual meeting, but will have no effect on the results of the vote. If any of the nominees for directors at the annual meeting becomes unavailable for election for any reason, the proxy holders will have discretionary authority to vote pursuant to the proxy for a substitute or substitutes. Shares held through a broker or other nominee who is a New York Stock Exchange member organization will only be voted in favor of the director nominees if the shareholder provides specific voting instructions to the broker or other nominee to vote the shares in favor of that proposal.

16



AUDIT COMMITTEE REPORT
Management is responsible for the preparation, presentation and integrity of the Company’s financial statements and for maintaining appropriate financial reporting controls and procedures designed to reasonably ensure such integrity. As described more fully in its charter, the Audit Committee’s role is to assist the Board in its governance, guidance and oversight regarding the financial information provided by the Company to the public or governmental bodies, the Company’s systems of internal controls, and the Company’s auditing, accounting and financial reporting processes in general. A copy of the Audit Committee’s charter, which is reviewed and reassessed by the Audit Committee on an annual basis, is available at www.columbia.com.
Deloitte & Touche LLP, the Company’s independent registered public accounting firm, is responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) and expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. The Audit Committee oversees the relationship between the Company and its independent registered public accounting firm, including appointment of the independent registered public accounting firm, reviewing and pre-approving the scope of services and related fees to be paid to the independent registered public accounting firm, and assessing the independent registered public accounting firm’s independence. The Audit Committee regularly meets with management and the Company’s independent registered public accounting firm to discuss, among other things, the preparation of the financial statements, including key accounting and reporting issues.
The Audit Committee has:
reviewed and discussed with management and Deloitte & Touche LLP the audited financial statements and audit of internal control over financial reporting;
discussed with Deloitte & Touche LLP the matters required to be discussed under the standards of the Public Company Accounting Oversight Board (Communication with Audit Committees);
received the written disclosures and the letter from Deloitte & Touche LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence and discussed with Deloitte & Touche LLP the independent registered public accounting firm’s independence from the Company and its management; and
reviewed and approved the fees paid to Deloitte & Touche LLP for audit and non-audit services, and discussed whether Deloitte & Touche LLP’s provision of non-audit services was compatible with maintaining its independence.
In considering the nature of the non-audit services provided by Deloitte & Touche LLP, the Audit Committee determined that these services are compatible with the provision of independent audit services.
Based on the Audit Committee’s review and the meetings, discussions and communications described above, and subject to the limitations of the Audit Committee’s role and responsibilities referred to above and in the Audit Committee charter, the Audit Committee recommended to the Board that the Company’s audited consolidated financial statements for the year ended December 31, 2016 be included in the Company’s Annual Report on Form 10-K.

 
Members of the Audit Committee:
 
 
 
Malia H. Wasson—Chairman
 
Andy D. Bryant
 
Edward S. George
 
Ronald E. Nelson

17



PROPOSAL 2: RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has selected Deloitte & Touche LLP as our independent registered public accounting firm for the 2017 fiscal year, subject to ratification of the selection by our shareholders at our annual meeting.
Principal Accountant Fees and Services
For work performed in regard to fiscal years 2015 and 2016, we incurred the following fees for services provided by Deloitte & Touche LLP, as categorized below: 
 
2015
 
2016
Audit Fees(1)
$
2,108,353

 
$
2,132,638

Tax Fees(2)
247,915

 
222,080

Total
$
2,356,268

 
$
2,354,718

 
 
(1)
Fees for audit services billed to Columbia by Deloitte & Touche LLP in 2015 and 2016, which services consisted of:
audit of Columbia’s annual financial statements and Sarbanes-Oxley Act Section 404 related services;
reviews of Columbia’s quarterly financial statements; and
statutory audits, agreed upon procedures and other services related to Securities and Exchange Commission matters.
(2)
Fees for tax services billed to Columbia by Deloitte & Touche LLP in 2015 and 2016, which services consisted of:
federal and state tax return compliance assistance; and
foreign tax compliance, planning and advice.
Representatives of Deloitte & Touche LLP are expected to be present at the annual meeting and will be available to respond to appropriate questions. They do not plan to make a statement but will have an opportunity to make a statement if they wish.
Pre-Approval Policy
All of the services performed by Deloitte & Touche LLP in 2016 were pre-approved in accordance with the pre-approval policy and procedures adopted by the Audit Committee. This policy describes the permitted audit, audit-related, tax, and other services (collectively, the “Disclosure Categories”) that the independent auditors may perform. The policy requires the Audit Committee to review at each regularly scheduled Audit Committee meeting (a) a description of the services provided or expected to be provided by the independent registered public accounting firm in each of the Disclosure Categories and the related fees and costs, and (b) a list of newly requested services subject to pre-approval since the last regularly scheduled meeting. Generally, pre-approval is provided at regularly scheduled meetings; however, the authority to pre-approve services between meetings, as necessary, has been delegated to the Chairman of the Audit Committee. The Chairman provides an update to the Audit Committee at the next regularly scheduled meeting of any services for which she granted specific pre-approval.

18



RECOMMENDATION BY THE BOARD OF DIRECTORS
The Board of Directors recommends that shareholders vote FOR ratification of the selection of Deloitte & Touche LLP as Columbia’s independent registered public accounting firm for the 2017 fiscal year. This proposal will be approved if a quorum is present at the meeting and the votes cast in favor of this proposal exceed the votes cast opposing this proposal. Abstentions and broker non-votes are counted for purposes of determining whether a quorum exists at the annual meeting, but will have no effect on the results of the vote. The proxies will be voted on this proposal in accordance with the instructions specified on the proxy form. If no instructions are given, proxies will be voted for approval of the adoption of this proposal.

19



COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K and, based on its review and the discussions, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 and this Proxy Statement.

 
Members of the Compensation Committee:
 
 
 
Stephen E. Babson—Chairman
 
Murrey R. Albers
 
Walter T. Klenz
 
John W. Stanton

20



EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
This Compensation Discussion and Analysis, or CD&A, discusses our compensation program for our Chief Executive Officer, or CEO, our Chief Financial Officer, or CFO, and our three other most highly compensated executive officers in 2016, whom we collectively refer to as our named executive officers. Our named executive officers for 2016 were:
Timothy P. Boyle, CEO;
Gertrude Boyle, Chairman of our Board of Directors;
Bryan L. Timm, President and Chief Operating Officer (or COO);
Thomas B. Cusick, Executive Vice President of Finance, CFO and Treasurer; and
Franco Fogliato, Senior Vice President and General Manager of the Company’s Europe, Middle East and Africa (“EMEA”) geographic segment.
In this CD&A, the terms “we,” “us,” “our,” “Columbia,” and “the Company” refer to Columbia Sportswear Company and not to the Compensation Committee. The compensation programs for our named executive officers, except for Mr. Fogliato who is employed at our Geneva, Switzerland office, also generally apply to our other senior officers, who are based in the U.S., and references in this CD&A to executive officers generally include the named executive officers and the other senior officers who are based in the U.S.
Executive Summary
In 2016, Columbia’s net sales increased 2% compared to 2015, to $2.38 billion. Our full year operating margin was 10.8%, an increase from 10.7% for 2015.
Columbia’s executive compensation program aims to reward performance; our executive officers realize a significant portion of their compensation only when we achieve annual and long-term business goals and when our stock price increases. Outside of the U.S., we provide compensation components based on compensation practices for the applicable local geographic region. The following are highlights related to Columbia’s 2016 compensation program for our named executive officers:
For each named executive officer other than our Chairman of the Board, more than 55% of the officer’s actual 2016 compensation was “at-risk,” or subject to performance requirements.
Columbia’s 2016 net sales increased over 2015 net sales by $50.9 million, or 2%, to $2.38 billion, and 2016 earnings per diluted share were $2.72, compared to $2.45 per diluted share in 2015. The Company’s performance in 2016, when compared to targets set by the Compensation Committee at the beginning of the year, resulted in the achievement of 94.9% of the target established under the Executive Incentive Compensation Plan.
The named executive officers, other than Mrs. Boyle and Mr. Boyle, receive annual long-term equity awards in the form of stock options and restricted stock units (“RSUs”) that constitute a substantial portion of each executive’s total compensation opportunity. These awards are generally subject to long-term vesting requirements and a significant portion of Mr. Timm’s and Mr. Cusick’s RSUs vest based on achievement of specified long-term performance goals. Mr. Fogliato, who is based outside the U.S., receives stock options and time-based RSUs, rather than performance-based RSUs. Neither Mrs. Boyle nor Mr. Boyle receive equity compensation grants since both already hold a significant amount of our Common Stock.
Mr. Boyle was granted a long-term incentive cash award in 2016 that is intended to tie a portion of Mr. Boyle’s compensation to the same multi-year operating goals to which the vesting of performance-based RSU awards for other executive officers based in the U.S. are subject.
Mr. Fogliato was granted a long-term incentive cash award pursuant to the terms of his employment agreement that vested, in part, based on performance for 2015 and 2016, and the remaining award will vest based on performance for 2017.
Based on the achievement of above-target three-year cumulative operating income and three-year average return on invested capital, 162.3% of the performance-based RSUs awarded to Messrs. Timm and Cusick for the 2014 through 2016 performance period vested and Mr. Boyle similarly received 162.3% of the long-term incentive cash award granted to Mr. Boyle for the 2014 through 2016 performance period.

21



Mr. Boyle’s total cash compensation (salary and short-term and long-term cash incentives) for 2016 was $2,265,070, of which $848,020 was earned upon achieving performance objectives established under the Executive Incentive Compensation Plan and $494,204 was earned upon achieving performance objectives established for his long-term incentive cash award under the 1997 Stock Incentive Plan.
Each of our executive officers based in the U.S. is employed “at will” and we have no employment or similar agreements with any of our named executive officers based in the U.S., other than a change in control and severance plan approved by the Board of Directors, in which neither Mrs. Boyle nor Mr. Boyle is eligible to participate. We entered into an employment agreement with Mr. Fogliato upon joining the Company, as is customary for employees in Europe.
In 2016, shareholders approved executive compensation by advisory vote and no changes were made to compensation programs as a result.
Overview of Executive Compensation Program
In this CD&A, we describe our overall compensation philosophy, objectives and practices. Our compensation philosophy and objectives generally apply to all of our employees, and most of our key employees are eligible to participate in the three main components of our compensation program: base salary, annual cash bonus and long-term incentives. The relative value of each of these components of our compensation program varies from year to year and for each individual employee, depending on our financial and stock price performance and the employee’s role and responsibilities. 
Compensation Objectives
Leadership and motivation of our executive officers are critical to our long-term success and the market for high-quality executive officers in our industry remains competitive. Our challenge is to offer a compensation program that is competitive and at the same time reinforces our corporate values: enjoy an active life, compete to win, relentless improvement, culture of honesty, respect and trust, and doing the right thing for consumers, customers, employees, the Company, and our communities in support of our corporate strategies and operating plans.
Compensation Program Design
Our compensation program for our executive officers is designed to reward our executive officers competitively when they achieve targeted annual performance goals, increase shareholder value and maintain long-term careers with us. In our view, a competitive pay package in our industry includes a salary that provides for a minimum level of compensation for an executive officer, a meaningful bonus tied to achievement of corporate, individual and, outside the U.S., regional objectives, equity and long-term incentives that offer significant rewards if the market price of our Common Stock increases in the future, and benefits that aim to be competitive with what are offered by companies similar to ours. The total compensation package for our executive officers who are based in the U.S. is substantially weighted toward incentive compensation tied to corporate and individual performance. Therefore, when targeted performance levels are not achieved or our stock price decreases, executive officer compensation is substantially reduced. When targeted performance levels are exceeded or our stock price increases, executive officer compensation is substantially increased. In addition, the desire to attract and hire key talent can cause near-term compensation to exceed annualized levels for certain program design components. For Mr. Fogliato, we provide a competitive compensation package for the applicable local geographic market that differs in structure from those for our executive officers based in the U.S., including a bonus structure that includes a meaningful regional performance component.
Risk and Compensation
We believe our compensation programs for executive officers are designed to encourage prudent risk taking to achieve long-term growth in shareholder value. A variety of principles and practices contribute to the alignment of our executive compensation programs with our overall risk profile, including:
 

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Principle
 
Practice
 
Governance
ž
all Compensation Committee members are independent, non-employee Board members
 
Program Design
ž
our programs are designed to drive achievement of our strategic objectives, short- and long-term financial performance and growth in shareholder value, while also promoting the attraction and retention of executive talent
ž
our programs balance strategic, financial and shareholder measures
ž
our programs balance short- and long-term performance and cash and equity compensation
ž
the vesting periods of long-term incentives provide long-term alignment with shareholders
ž
maximum amounts payable are established under performance-based incentive programs
 
Program Implementation and
Management
ž
our Compensation Committee establishes both strategic and financial measures at the beginning of a performance period and evaluates them at the end of a performance period
ž
our Compensation Committee annually reviews all elements of executive compensation, with the assistance of our independent compensation consultant
ž
base salaries and annual adjustments for executive officers other than Mrs. Boyle, whose salary is established in proportion to Mr. Boyle’s salary, generally are based on market practices and our financial condition and aim to provide total compensation that is competitive with other similarly sized companies
ž
annual cash incentive payouts have varied over time, commensurate with business and individual executive performance
ž
long-term incentive payouts have varied over time based on both the Company’s financial performance and stock price performance, which align management interests with shareholder interests by tying executive officer compensation in part to long-term shareholder returns
 
ž
our executive compensation program processes are consistent with those established by the Compensation Committee and are monitored by the Company’s human resources, finance and legal functions
Components of Compensation
We have a relatively simple compensation program. For 2016, our compensation program for named executive officers included the following four main components:
base salary;
annual, short-term incentive compensation;
long-term cash incentive compensation; and
long-term, equity-based incentive compensation consisting of stock options and time-based RSUs, and, for our named executive officers based in the U.S., performance-based RSUs.
These components constitute what we refer to as “total direct compensation” with respect to each named executive officer. We also provide compensation for our named executive officers based in the U.S. in the form of various other employee benefits and perquisites that are generally available to all of our U.S. employees.
Mr. Fogliato is the only named executive officer based outside the U.S. Accordingly, in addition to the elements of base salary; annual, short-term incentive compensation; long-term incentive cash compensation; and long-term equity-based incentive compensation consisting of stock options and time-based RSUs provided to our U.S. based named executive officers, Mr. Fogliato also receives various other employee benefits and perquisites, some of which are available to other management employees in Europe. We entered into an employment agreement with Mr. Fogliato upon joining the Company, as is customary for employees in Europe.
Each of the elements of our compensation program helps us achieve the objectives of our program, and we believe that, together, they have been and will continue to be effective in achieving our overall objectives.

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Compensation Process
The Board of Directors or the Compensation Committee approves all executive officer compensation decisions. Each year, the Compensation Committee reviews and evaluates the compensation paid to our executive officers and determines the base salary, target bonus and the long-term cash and equity related grants for each executive officer.
The use and weight of each compensation component is based on a subjective determination by the Compensation Committee of the importance of each component in meeting our overall objectives. In general, for our named executive officers, we seek to put a significant amount of each named executive officer’s potential total direct compensation “at risk” based on corporate, individual and stock price, and, outside the U.S., regional, performance. As a result, compensation paid on an ongoing, current basis in the form of base salary, benefits and perquisites generally represents less than half of each such named executive officer’s potential total direct compensation at target performance levels. We believe annual compensation paid to our named executive officers based in the U.S., other than Mrs. Boyle and Mr. Boyle, in the form of cash generally should represent approximately 60% to 65%, and consequently non-cash compensation generally should represent approximately 35% to 40%, of each such named executive officer’s potential total compensation at target performance levels. Our CEO, who currently holds approximately 37% of our outstanding Common Stock, and our Chairman, who currently holds approximately 14% of our outstanding Common Stock, have not historically received, and in 2016 did not receive, any equity compensation awards. Mr. Fogliato, who is not based in the U.S., receives approximately 80% of his annual compensation in the form of cash and approximately 20% as non-cash compensation.
Although we do not engage in traditional benchmarking, as part of our process for determining compensation for our named executive officers, we review compensation analyses provided by our independent compensation consultant, PricewaterhouseCoopers L.L.P. As described in more detail below, the analyses include an estimate of the 25th percentile, median and 75th percentile positions for base salary, target total cash compensation (base salary plus target bonus) and target total direct compensation (base salary plus target bonus plus long-term incentive compensation) for each of our named executive officers. In determining competitive, reasonable and appropriate levels of compensation for our named executive officers, the Compensation Committee subjectively considers the relationship between the amount of each named executive officer’s compensation and the approximate median for each of these compensation elements. The Compensation Committee also considers several other factors when determining appropriate compensation levels for each executive officer, including:
the Compensation Committee’s analyses of competitive compensation practices;
individual performance and contributions to the Company’s financial and strategic objectives;
individual leadership, experience, expertise, skills, and knowledge;
labor market conditions in the relevant geography (which affect the compensation required to attract key talent); and
analyses and advice from our independent compensation consultant.
The Compensation Committee’s approach to evaluating these factors is subjective and not formulaic, and the Compensation Committee may place more or less weight on a particular factor when determining a specific executive officer’s compensation. For Mr. Fogliato, our executive officer not based in the U.S., the Compensation Committee primarily considered the competiveness of his package based on applicable, local geographic market compensation levels necessary to attract talent in Europe.
In determining the total compensation for each executive officer other than our CEO and Senior Vice President and Chief Human Resources Officer, the Compensation Committee considers the specific recommendations of our CEO and our Senior Vice President and Chief Human Resources Officer and other factors it deems relevant. Recommendations to the Compensation Committee typically include discussion of the role and responsibilities of the executive officer within the Company, the performance of the executive officer, the expected future contributions of the executive officer, the executive officer’s own expectations, and competitive and market considerations. Although our CEO and our Senior Vice President and Chief Human Resources Officer make recommendations regarding the executive officers, neither participates in the discussions concerning his or her own compensation.
The Compensation Committee may consider, in addition to the factors described above:
the individual’s accumulated vested and unvested equity awards;
the current value and potential value over time using stock appreciation assumptions for vested and unvested equity awards;
the vesting schedule of the individual’s outstanding equity awards;

24



a comparison of individual equity awards between executive officers and in relation to other compensation elements;
shareholder dilution;
total accounting expense as part of its annual evaluation of executive compensation; and
shareholders’ advisory votes on executive compensation.
The amount of past compensation, including annual bonus awards and amounts realized or realizable from prior equity awards, is considered but is generally not the most significant factor in the Compensation Committee’s evaluation because bonuses are awarded for annual performance and equity awards are granted as part of the target total direct compensation the Compensation Committee establishes each year.
Competitive survey information
The Compensation Committee reviews aggregated data from multiple compensation survey sources analyzed by its independent compensation consultant, including general industry surveys, retail/wholesale surveys and consumer retail industry surveys. Data represented in these surveys are submitted confidentially by participating companies. Each survey provides a comprehensive list of all companies that participated in the survey, but compensation information is reported statistically without identifying Company participants by name. We do not benchmark against specific companies or a specific peer group of companies. We participate in the Willis Towers Watson (retail/wholesale and general industry) and IPAS® (consumer retail industry) specialty surveys. Our independent compensation consultant compiles the data from these sources and from surveys purchased from Mercer Human Resource Consulting (general industry) and Willis Towers Watson (general industry). These surveys include participating companies that are both smaller and larger than we are based on annual revenues and market capitalization. We generally focus on a subset of companies within a comparable range of revenues (typically between 50% and 200% of our annual revenues) or apply revenue-based regression analysis to the survey data for comparability purposes. The result of our analysis is an approximate “market composite” for each element of compensation for each executive officer. Although the Compensation Committee does not use this data formulaically, it considers the median, or 50th percentile, of the composite data as one among many factors in its subjective analysis regarding the appropriate amounts and types of executive compensation.
Tax deductibility
Section 162(m) of the Internal Revenue Code limits the amount that we may deduct for compensation paid to our CEO and to each of our three most highly compensated officers (other than the CEO and the CFO) to $1,000,000 per person in any year. Compensation that qualifies as “performance-based” is excluded for purposes of calculating the amount of compensation subject to the $1,000,000 limit.
The Compensation Committee reviews and considers the deductibility of executive compensation under Section 162(m) when determining the compensation of executive officers. Compensation paid under our executive officer incentive plans for our executive officers is generally designed in a manner intended to satisfy the requirements under Section 162(m) for qualified performance-based compensation. In some circumstances, however, the Compensation Committee may approve compensation that will not meet these requirements as a means to ensure competitive levels of total compensation for our executive officers and promote varying corporate goals. For example, in 2014 the Compensation Committee awarded Mr. Fogliato a long-term incentive cash award, a portion of which may not be deductible under Section 162(m). In any event, the Compensation Committee intends to maintain an approach to executive officer compensation that strongly links pay to performance.
Analysis of 2016 Named Executive Officer Compensation
General
Our competitive compensation analyses for 2016 identified relevant market survey data for all our named executive officers except Mrs. Boyle. The Compensation Committee, with the concurrence of our independent compensation consultant, determined that the available competitive market survey data did not adequately reflect Mrs. Boyle’s role, scope of work and responsibilities. Mrs. Boyle plays a prominent role in our marketing and civic and community relations activities. The Compensation Committee determined that establishing Mrs. Boyle’s target total direct compensation relative to that of our CEO is an appropriate approach in the absence of relevant competitive market survey data. For 2016, the Compensation Committee determined that Mrs. Boyle’s target total direct compensation should be approximately between 60% and 70% of our CEO’s target total direct compensation.
The 2016 Target Total Direct Compensation table below summarizes the target total direct compensation levels established by the Compensation Committee. Following the table, we discuss each compensation element summarized in the table.

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2016 Target Total Direct Compensation
 
Name
Annual Salary
($)
 
Target Long-Term Cash
Incentive Compensation($)
 
Target Bonus
(as a % of
Annual Salary)
 
Target Total Cash
Compensation($)
 
Target Equity
Incentive
Compensation(1)
($)
 
Target Total Direct
Compensation($)
Timothy P. Boyle
927,000

 
324,450

 
110
%
 
2,271,150

 

 
2,271,150

   CEO
 
 
 
 
 
 
 
 
 
 
 
Gertrude Boyle
870,000

 

 
50
%
 
1,305,000

 

 
1,305,000

   Chairman of the
   Board
 
 
 
 
 
 
 
 
 
 
 
Bryan L. Timm
721,000

 

 
80
%
 
1,297,800

 
760,016

 
2,057,816

   President and COO
 
 
 
 
 
 
 
 
 
 
 
Thomas B. Cusick
554,140

 

 
70
%
 
942,038

 
430,019

 
1,372,057

   Executive Vice
   President of
   Finance, CFO and
   Treasurer
 
 
 
 
 
 
 
 
 
 
 
Franco Fogliato (2)
451,214

 
100,000

 
50
%
 
776,821

 
200,007

 
976,828

   Senior Vice
   President and
   General Manager of
   EMEA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)
Target Equity Incentive Compensation equals the estimated and probable fair value of 2016 stock options and time-based and performance-based RSU awards.
(2)
Compensation for Mr. Fogliato is paid in Swiss francs and amounts have been converted to U.S. dollars using the exchange rate in effect on December 31, 2016 (1 Swiss franc = .9809 U.S. dollar). Mr. Fogliato does not receive performance-based RSU awards.
As part of the Compensation Committee’s analysis in establishing 2016 compensation, it noted that, assuming that the target short-term and long-term cash incentive compensation levels and equity-based incentives performance targets were achieved for Messrs. Timm, Cusick and Fogliato, total direct compensation (annual salary plus short-term and long-term cash incentive compensation plus the estimated and probable fair value of equity incentives) ranged between 17% below and 2% above the competitive market median. Mr. Boyle’s total direct compensation was substantially below the competitive market median, reflecting the fact that Mr. Boyle does not receive grants of equity-based incentives because he owns a substantial amount of our Common Stock.
Excluding our Chairman and our CEO, neither of whom received equity-based incentives, the total direct compensation of our named executive officers based in the U.S. for 2016 consisted, on average, of the following proportions of components: 37% in base salary, 28% in target short-term incentive compensation and 35% in equity-based incentives. The total direct compensation for Mr. Fogliato consisted of 46% in base salary, 33% in target short-term and long-term incentive compensation and 21% in equity-based incentives. We believe that our compensation program for named executive officers is aligned with shareholders’ interests as a result of the significant variable and long-term structure of target total direct compensation and the manner in which the variable compensation is determined.
Base salary
We provide an annual base salary to each named executive officer based in large part on job responsibility, experience level, individual performance, and the amount and nature of the other compensation paid to the named executive officer. The Compensation Committee reviews each named executive officer’s salary annually and makes adjustments when appropriate to reflect competitive market factors and the individual factors described above under “Compensation Process.”
Short-term incentive compensation
We have established an Executive Incentive Compensation Plan for executive officers that provides for the payment of annual cash bonuses to motivate and reward achievement of corporate and personal objectives. We may also award discretionary cash bonuses. Any discretionary cash bonuses are made outside of the Executive Incentive Compensation Plan.

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The following table summarizes the various components of the potential 2016 bonus payouts under the plan as approved by the Compensation Committee.
2016 Target Bonus Components
 
Name
Target
Bonus
(as a % of
Annual
Salary)
 
Company
Performance Component
(as a % of
Actual
Bonus)
 
Individual
Performance
Component
(as a % of
Actual
Bonus)(1)
 
Individual
Performance
Component
(as a % of
Annual
Salary)(1)
 
Threshold
Company
Performance
Component
(as a % of
Annual Salary)(2)
 
Target
Company
Performance
Component
(as a % of
Annual
Salary)
 
Stretch
Company
Performance
Component
(as a % of
Annual
Salary)(3)
Timothy P. Boyle
110
%
 
80
%
 
20
%
 
22
%
 
24
%
 
88
%
 
176
%
   CEO
 
 
 
 
 
 
 
 
 
 
 
 
 
Gertrude Boyle
50
%
 
80
%
 
20
%
 
10
%
 
20
%
 
40
%
 
80
%
   Chairman of the
   Board
 
 
 
 
 
 
 
 
 
 
 
 
 
Bryan L. Timm
80
%
 
80
%
 
20
%
 
16
%
 
32
%
 
64
%
 
128
%
   President and COO
 
 
 
 
 
 
 
 
 
 
 
 
 
Thomas B. Cusick
70
%
 
80
%
 
20
%
 
14
%
 
28
%
 
56
%
 
112
%
   Executive Vice
   President of Finance,
   CFO and Treasurer
 
 
 
 
 
 
 
 
 
 
 
 
 
Franco Fogliato (4)
50
%
 
80
%
 
20
%
 
10
%
 
20
%
 
40
%
 
80
%
   Senior Vice
   President and
   General Manager of
   EMEA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)
The Individual Performance Component is paid out to the extent individual performance objectives are met or exceeded and Company performance is at least 65% of the Company pre-tax income target established by the Compensation Committee.
(2)
The Threshold Company Performance Component is paid out if 80% of the Company pre-tax income target set by the Compensation Committee is achieved and constitutes the minimum Company performance component required by the Compensation Committee.
(3)
The Stretch Company Performance Component is paid out if 120% of the Company pre-tax income target set by the Compensation Committee is achieved and constitutes the maximum Company performance component.
(4)
Mr. Fogliato’s Company Performance Component, as a percent of actual bonus, is payable based on achieving global (20%) and regional (60%) performance targets, and as a percent of annual salary is payable based on achieving global (10%) and regional (30%) performance targets.
We considered market composite data as one among many factors in our subjective analysis regarding the appropriate bonus target for each executive officer. Assuming the target bonus levels were achieved, Mr. Boyle’s total annual cash compensation (annual salary plus target cash incentive plus target bonus) for 2016 was 12% above the competitive market median total cash compensation. Mrs. Boyle’s total cash compensation was set at approximately 60% of our CEO’s total cash compensation. Total cash compensation for each of our other named executive officers ranged between 9% above and 25% above the market median of the competitive market data reviewed by the Compensation Committee.
The amount of the actual cash bonus paid under the plan to each named executive officer is based on the extent to which (i) the Company meets or exceeds a Company performance target and, for Mr. Fogliato, a regional performance target, each approved by the Compensation Committee, and (ii) the named executive officer meets or exceeds individual performance objectives. For our named executive officers based in the U.S., the Company performance component for 2016 was based on achieving a specified level of Company pre-tax net income, excluding bonus payments and specified extraordinary items, to align with our strategic plan and expectations regarding our performance. For 2016, the Company pre-tax income target set by the Compensation Committee was $300,657,000 before income tax and bonus expense and excluding specific extraordinary items. The global performance target for Mr. Fogliato’s Company performance component, was identical to those applicable to U.S.-based named executive officers, and the regional performance target was based on achieving a specified level of Columbia Europe direct operating income, before bonus payments and after shared services allocations. Given recent market and operational challenges in Europe, the regional performance target was meant to be moderately difficult to attain and Mr. Fogliato substantially exceeded the target.

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During 2015, the Company achieved Europe direct operating income performance at approximately 117% of target but did not achieve the maximum of 120% of target performance. During 2016, the Company achieved Europe direct operating income performance over the maximum of 120% of target performance.
Over the past five years, for named executive officers based in the U.S., we have achieved:
performance in excess of the global Company performance target three times and achieved the maximum, “stretch” performance level one time; and
an average payout percentage of 107.8% of the global Company performance target award opportunity for the five years in which the minimum threshold was met and a payout was made.
The Compensation Committee intends to set the threshold and stretch Company performance target levels so that the relative difficulty of achieving the Company performance target level is consistent from year to year.
The remaining portion of the total bonus for each named executive officer was based on the named executive officer’s individual performance during the year. The maximum individual performance component for each named executive officer is limited to 20%. The individual performance objectives, other than those of the CEO, were set early in 2016 by our CEO and consist of financial, operational, brand and product, and individual goals. The amount of actual cash bonus paid to each named executive officer under this portion of the bonus is based in large part on our CEO’s assessment of the named executive officer’s performance against those objectives. The Compensation Committee makes its own determination about whether Mr. Boyle has met or exceeded his individual performance objectives, which were set early in 2016 by the Compensation Committee and consist of short-term operational goals, long-term strategic goals and leadership objectives. To the extent that a named executive officer has met or exceeded the individual performance objectives and Company performance was at least 65% of the Company pre-tax income target under the Executive Incentive Compensation Plan, the Compensation Committee may award to the named executive officer this portion of the bonus amount based on achievement of the individual performance objectives. If the Compensation Committee determines that a named executive officer has not met the individual performance objectives, the corresponding bonus amount may be reduced or eliminated.  
For 2016, we achieved 94.9% of the Company performance target set by the Compensation Committee. Accordingly, for each named executive officer based in the U.S., the Company performance component was earned and payable at between the threshold and target level, and the individual performance component was eligible to be payable, under the plan. The table below summarizes the actual bonus payouts for 2016. Based on the CEO’s assessments, each of the named executive officers, other than the Chairman, CEO and President and COO, was awarded 100% of his individual performance component target bonus. The President and COO was awarded 90% of his individual performance component target bonus. Based on the Compensation Committee’s assessment of each of the Chairman and the CEO’s performance for 2016, the Compensation Committee awarded the Chairman 100% of her individual performance component target bonus, and the Compensation Committee awarded the CEO 90% of his individual performance component target bonus. For European employees, achievement of the awards for both global and regional performance, if applicable, is based on discrete thresholds without interpolation. Therefore, Mr. Fogliato achieved 94% of the global performance target and 120% of the regional performance target.
2016 Actual Bonuses
Name
Individual
Performance
Component of
Plan Bonus ($)
 
Company
Performance
Component of
Plan Bonus ($)
 
Total Bonus ($)
Timothy P. Boyle
183,546

 
664,474

 
848,020

CEO
 
 
 
 
 
Gertrude Boyle
87,000

 
303,630

 
390,630

Chairman of the Board
 
 
 
 
 
Bryan L. Timm
103,824

 
402,606

 
506,430

President and COO
 
 
 
 
 
Thomas B. Cusick
77,580

 
270,753

 
348,332

Executive Vice President of Finance, CFO and Treasurer
 
 
 
 
 
Franco Fogliato (1)
45,121

 
309,082

 
354,203

Senior Vice President and General Manager of EMEA
 
 
 
 
 
 
 
 
(1)
Mr. Fogliato’s bonus for the Company performance component includes $38,353 earned based on achieving global performance targets and $270,729 earned based on achieving regional performance targets. Mr. Fogliato’s regional performance target was paid at 120% of target, which is the maximum he is eligible to receive. Compensation for

28



Mr. Fogliato is paid in Swiss francs and amounts have been converted to U.S. dollars using the exchange rate in effect on December 31, 2016 (1 Swiss franc = .9809 U.S. dollar).
Long-term cash and equity-based incentives
Equity-based incentives represent a direct link between executive officer compensation and shareholder returns. In light of this, we believe that offering equity incentives to our executive officers that become more valuable if the market price of our Common Stock increases provides an appropriate additional incentive to the executive officers to work toward this goal. Our equity awards to named executive officers based in the U.S., excluding our Chairman and our CEO who each do not receive equity awards, take the form of stock options and both performance-based and time-based RSUs. Mr. Fogliato receives equity awards in the form of stock options and time-based RSUs.
Stock options are a primary component of our long-term incentive compensation awards. Stock options offer the possibility of substantial gains if our stock appreciates significantly, but no value and little incentive if our stock price drops. Stock options granted under our equity compensation plan have exercise prices not less than 100% of the closing market price of our Common Stock on the date of the option grant. RSUs, both time-based and performance-based, offer similar incentives to stock options since they reward increases in the market price of our Common Stock and, in that way, tie the interests of executive officers to our shareholders’ interests. Unlike stock options, however, RSUs can provide retention value even if our stock price does not increase. Additionally, RSUs subject executive officers to downside risk similar to that experienced by shareholders. We also believe that RSUs and restricted stock are being used increasingly by other companies as a significant portion of equity incentives for executives and that we need to offer these types of incentives to remain competitive in attracting and retaining executive officers.
We have established appropriate written policies and practices regarding the timing and pricing of equity awards.
The Compensation Committee has established the following mix of forms of annual equity awards for named executive officers based in the U.S., other than our Chairman and our CEO, for delivering the expected value of overall long-term incentives:
 
Expected % of Equity Value
Stock Options
45%
Performance-Based Restricted Stock Units
30%
Time-Based Restricted Stock Units
25%
Total
100%
The Compensation Committee chose these types of awards and established these relative weights to provide an effective incentive for the executive officers, based on the recommendation of our independent compensation consultant.
For Mr. Fogliato’s equity incentive compensation, the Compensation Committee awarded 50% stock options and 50% time-based RSUs, but he does not receive performance-based RSUs. The Compensation Committee awarded a competitive value of RSUs and stock options that, when added to Mr. Fogliato’s target total cash compensation, resulted in a target total direct compensation level that the Compensation Committee determined was reasonable and appropriate.
As a result of how the grant date fair value of long-term equity incentive awards must be calculated for accounting purposes, the estimated fair value of our equity-based incentives reflected in the Summary Compensation Table and the 2016 Grants of Plan-Based Awards Table may not reflect the actual value received or that may be received by our named executive officers with respect to these awards. Periodically the Compensation Committee reviews realized income from previous grants in order to monitor the effectiveness of its granting practices. The potential appreciation in the value of these equity-based incentives if the market price of our Common Stock increases is designed to motivate our executive officers.
The Compensation Committee also made a separate, long-term incentive cash award to our CEO in March 2016. The long-term incentive cash award is intended to tie a portion of Mr. Boyle’s compensation to the same multi-year operating goals to which the vesting of performance-based RSU awards for other executive officers based in the U.S. is subject.
The number of performance-based RSUs that vest, and the percentage of Mr. Boyle’s long-term incentive cash award that vests, are determined by reference to achievement of specified performance goals during the performance period. For performance-based RSU grants for the 2016 through 2018 performance period, if cumulative operating income and average return on invested capital are realized above minimum levels, each named executive officer may be awarded from 15% to 180% of the number of shares targeted, depending on the relative achievement of the target levels. If minimum levels of cumulative operating income and average return on invested capital are not met, rather than the RSUs being forfeited, a percentage of the RSUs nonetheless will vest if our average operating margin over the 2016 through 2018 period exceeds the 25th percentile rank relative to a three-year

29



average operating margin of a specified peer group of companies. Generally, the Compensation Committee intends to set the minimum and maximum levels of cumulative operating income and average return on invested capital so that the relative difficulty of achieving these levels is consistent over each performance period. The Compensation Committee intended that the secondary measure of relative three-year average operating margin performance against an industry peer group would provide a means of earning performance shares during periods of significant volatility and provide a reward for managing through difficult business cycles, controlling for industry effects. Under this secondary performance measure, if Columbia’s three-year average operating margin is below the 25th percentile of the peer group, no RSUs vest. The percentage of the shares subject to the three-year average operating margin performance criteria that vest if this secondary measure is used and our three-year operating margin is above the 25th percentile of the peer group is as follows:
 
Columbia’s Percentile Rank
% of RSUs that Vest
25-39
20%
40-54
50%
55-69
80%
70-84
110%
85+
140%
 
The relative operating margin measure compares our three-year average operating margin to a peer group consisting of the following companies: Carters, Inc., Deckers Outdoor Corporation, Hanesbrands Inc., Kate Spade & Company, NIKE Inc., Oxford Industries, Philips-Van Heusen, Polo Ralph Lauren Corporation, Under Armour Inc., VF Corporation, and Wolverine World Wide Inc. The companies in the peer group were approved by the Compensation Committee, and were chosen based on their comparability with our business.
If data becomes unavailable for any company during the three-year cycle, due to a sale transaction or otherwise, operating margin for that company will be averaged over the period for which data is available.
In 2014, the Compensation Committee granted RSU awards for the 2014 through 2016 performance period, with amounts to be earned following the Compensation Committee’s certification of performance in early 2017, and with the following targets:
(a)
100% of the award subject to increase or forfeiture based on cumulative operating income and average return on invested capital of Columbia in the performance period, as defined below:
 
Cumulative Operating Income (2014-2016)
 
(dollars in millions)
 
At
Least
 
$425
 
$505
 
$585
 
$655
 
$725
Average Return on Invested Capital (2014-2016)
10.0
%
 
40
%
 
65
%
 
80
%
 
90
%
 
105
%
 
12.5
%
 
65
%
 
90
%
 
100
%
 
115
%
 
130
%
 
15.0
%
 
80
%
 
105
%
 
120
%
 
135
%
 
150
%
 
17.5
%
 
90
%
 
115
%
 
135
%
 
150
%
 
165
%
 
20.0
%
 
95
%
 
125
%
 
145
%
 
165
%
 
185
%
 
(b)
If cumulative operating income and average return on invested capital results in forfeiture of 100% of the award, notwithstanding the forfeiture, 100% of the award is subject to increase or forfeiture based on the average operating margin of the Company relative to the average operating margin of companies in the Company’s peer group in the performance period under the criteria set forth above.
The minimum levels of operating income and return on invested capital were exceeded for the 2014 through 2016 performance period. Each eligible named executive officer received 162.3% of his initial award following certification of results by the Compensation Committee on March 7, 2017. Because awards were paid out under the operating income and return on invested capital measure, no awards were payable under the secondary measure of average operating margin against our peer group. As a result, on March 7, 2017, Mr. Timm earned 8,528 shares and Mr. Cusick earned 4,876 shares of Columbia Common Stock. Mr. Boyle earned a cash award of $494,204.
In accordance with Mr. Fogliato’s employment agreement, he was awarded a long-term incentive cash award pursuant to which he is eligible to receive a cash payment equal to one-third (1/3) of the total award for performance in each of 2015, 2016 and 2017. The payout each year will be subject to adjustment from 0% to 150% of the annual award amount, depending on the actual achievement of the Columbia Europe direct operating income target for the prior fiscal year. Given market and operational

30



challenges in our Europe direct business, the targets were intended to be moderately difficult to attain, and actual performance substantially exceeded the targets in 2015 and 2016. During 2015, the Company achieved Europe direct operating income performance at approximately 112% of target but did not achieve the maximum of 120% of target performance. During 2016, the Company achieved Europe direct operating income performance over the maximum of 120% of target performance. For the 2016 performance period, the target levels of operating income were exceeded and Mr. Fogliato received the maximum award possible, or 150% of the target amount payable. As a result, on December 31, 2016, Mr. Fogliato earned approximately $147,135.
Change in control severance plan
Specified key employees, including the named executive officers based in the U.S., based on level of position, are eligible to participate in a change in control severance plan that offers income protection in the event that the participant’s employment with us is involuntarily terminated other than for cause. The plan also secures for the benefit of Columbia the services of the eligible employees, including the named executive officers based in the U.S., in the event of a potential or actual change in control. Mr. Boyle and Mrs. Boyle are not eligible to participate in the plan. Mr. Fogliato is entitled to receive certain severance payments pursuant to his employment agreement. The Board believes these types of arrangements are common for companies against which we compete for talented key personnel and are beneficial for management recruitment purposes. For a description of the benefits to which the participating named executive officers would be entitled under the plan, see “Potential Payments upon Termination or Change in Control,” below.
2016 Summary Compensation Table
Name and Principal Position
Year
 
Salary(1)
($)
 
Bonus
($)
 
Stock
Awards(2)
($)
 
Option
Awards(2)
($)
 
Non-Equity
Incentive Plan
Compensation
($)
 
All Other
Compensation(3)
($)
 
Total
($)
Timothy P. Boyle
2016
 
922,846

 

 

 

 
1,342,224

 
16,757

 
2,281,827

CEO
2015
 
928,846

 

 

 

 
2,130,255

 
21,046

 
3,080,147

 
2014
 
702,885

 

 

 

 
1,722,600

 
24,842

 
2,450,327

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gertrude Boyle
2016
 
870,000

 

 

 

 
390,630

 
14,285

 
1,274,915

Chairman of the Board
2015
 
899,231

 

 

 

 
675,120

 
14,168

 
1,588,519

 
2014
 
766,462

 

 

 

 
763,200

 
17,552

 
1,547,214

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bryan L. Timm
2016
 
745,500

 

 
418,012

 
342,004

 
506,430

 
84,601

 
2,096,547

President and COO
2015
 
729,394

 

 
495,028

 
405,008

 
869,120

 
77,754

 
2,576,304

 
2014
 
590,643

 

 
385,042

 
315,008

 
721,791

 
81,855

 
2,094,339

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Thomas B. Cusick
2016
 
572,970

 

 
236,514

 
193,505

 
348,332

 
60,259

 
1,411,580

Executive Vice President of Finance, CFO
and Treasurer
2015
 
560,539

 

 
330,042

 
270,006

 
584,483

 
51,113

 
1,796,183

 
2014
 
453,077

 

 
220,082

 
180,000

 
396,000

 
53,222

 
1,302,381

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Franco Fogliato (4)
2016
 
451,214

 

 
100,000

 
100,007

 
501,338

 
94,189

 
1,246,748

Senior Vice President and General Manager of EMEA
2015
 
451,214

 
390,300

 
75,026

 
75,008

 
147,135

 
94,220

 
1,232,903

 
2014
 
451,214

 
655,241

 
75,027

 
75,003

 

 
94,898

 
1,351,383

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)
For 2016, amounts include employee contributions deferred under our 401(k) Excess Plan.

(2)
The amounts set forth in the “Stock Awards” and “Option Awards” columns reflect the aggregate grant date fair value computed in accordance with the requirements of FASB ASC Topic 718—Stock Compensation, excluding the effect of

31



any estimated forfeitures. These amounts may not correspond to the actual value eventually realized by each named executive officer, which depends on the extent to which performance conditions are ultimately met and the market value of our Common Stock in future periods. The maximum payout amounts for the 2016 performance restricted stock units reported in the “Stock Awards” column above are as follows: Mr. Timm, $410,404 and Mr. Cusick, $232,216. Assumptions used in the calculation of amounts set forth in the “Stock Awards” and “Option Awards” columns are described in the Notes to Consolidated Financial Statements for each of the years ended December 31, 2014, 2015 and 2016, included in Columbia’s Annual Report on Form 10-K filed with the Securities and Exchange Commission.
(3)
The amounts set forth in the “All Other Compensation” column for 2016 consist of the following:
Name
 
Matching
Contributions
under the
Company’s
401(k) Profit
Sharing Plan
 
Matching
Contributions
under the
Company’s
401(k)
Excess Plan
 
Executive
Officer
Excess
Disability
Insurance
Premium
Payments
 
Payments
for Health
Care
Benefits
Not
Provided
to Other
Employees
Other Personal Benefits(a)
Timothy P. Boyle
 
$
13,250

 

 

 
*


Gertrude Boyle
 
$
13,250

 

 

 
*


Bryan L. Timm
 
$
13,250

 
$
67,481

 
*

 


Thomas B. Cusick
 
$
13,250

 
$
44,623

 
*

 


Franco Fogliato
 
$

 

 

 

$
94,189

 
 
*
The value of each of these items is less than $10,000, or less than the greater of $25,000 and 10% of the aggregate value of all personal benefits received by the named executive officer, as applicable.

(a)
Consists of annual housing allowance of $39,244, allowance for personal use of company car of $6,284, dependent medical allowance of $14,125, employer contributions to Swiss Pension Plan of $31,377, and reimbursement for tax assistance services of $3,159.
(4)
Compensation for Mr. Fogliato is paid in Swiss francs and amounts for calendar years 2014, 2015 and 2016 have been converted to U.S. dollars using the exchange rate in effect on December 31, 2016 (1 Swiss franc = .9809 U.S. dollar).


32



2016 Grants of Plan-Based Awards Table
 
 
 
 
Estimated Possible Payouts
Under Non-Equity Incentive
Plan Awards
 
Estimated Future Payouts
Under Equity Incentive
Plan Awards
 
All Other
Stock
Awards:
Number
of
Securities
(#)
 
All Other
Option
Awards:
Number of
Securities
Underlying
Units
(#)
 
Exercise
or Base
Price of
Option
Awards
($/Sh)
 
Grant
Date
Fair
Value of
Stock
and
Option
Awards
($)
Name
Grant
Date
 
Threshold
($)
 
Target
($)
 
Maximum
($)
 
Threshold
(#)(2)
 
Target
(#)
 
Maximum
(#)
 
Timothy P. Boyle
 
 
222,480

 
815,760

 
1,631,520

 

 

 

 

 

 

 

 
 
 

 
203,940

(1)

 

 

 

 

 

 

 

 
 
 
0

(2)
324,450

 
584,010

 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gertrude
Boyle
 
 
174,000

 
348,000

 
696,000

 

 

 

 

 

 

 

 
 
 

 
87,000

(1)

 

 

 

 

 

 

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bryan L.
Timm
 
 
230,720

 
461,440

 
922,880

 

 

 

 

 

 

 

 
 
 

 
115,360

(1)

 

 

 

 

 

 

 

 
1/28/2016
 

 

 

 

 

 

 
3,747

 

 

 
190,010

 
1/28/2016
 

 

 

 

 

 

 

 
27,745

 
53.35

 
342,004

 
3/1/2016
 

 

 

 
0

 
3,927

 
7,069

 

 

 

 
228,002

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Thomas B. Cusick
 
 
155,159

 
310,318

 
620,637

 

 

 

 

 

 

 

 
 
 

 
77,580

(1)

 

 

 

 

 

 

 

 
1/28/2016
 

 

 

 

 

 

 
2,120

 

 

 
107,505

 
1/28/2016
 

 

 

 

 

 

 

 
15,698

 
53.35

 
193,505

 
3/1/2016
 

 

 

 
0

 
2,222

 
4,000

 

 

 

 
129,009

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Franco Fogliato (3)
 
 
67,682

 
180,486

 
360,971

 

 

 

 

 

 

 

 
 
 

 
45,121

(1)

 

 

 

 

 

 

 

 
1/28/2016
 

 

 

 

 

 

 
1,972

 

 

 
100,000

 
1/28/2016
 

 

 

 

 

 

 

 
8,113

 
53.35

 
100,007

 
 
(1)
Amount represents individual component target for achieving individual performance objectives under the Executive Incentive Compensation Plan. The target amount for the individual component also is a maximum amount under the plan.
(2)
At threshold performance no performance-based RSUs or long-term incentive cash compensation will be earned.
(3)
Compensation for Mr. Fogliato is paid in Swiss francs and amounts have been converted to U.S. dollars using the exchange rate in effect on December 31, 2016 (1 Swiss franc = .9809 U.S. dollar).


33



Narrative Disclosure to Summary Compensation Table and 2016 Grants of Plan-Based Awards Table
Salary
Salaries paid to our named executive officers are set forth in the Summary Compensation Table. The amounts set forth in the “Salary” column of the Summary Compensation Table include payments in 2016 for cash-out of personal time off. As a result, the salary paid to a named executive officer during the year (as reported on a cash basis in the Summary Compensation Table) may vary from the executive officer’s annualized salary. For fiscal 2016, salaries paid to our named executive officers (including the cash-out for personal time off) accounted for the following percentages of each named executive officer’s total compensation, as reported in the “total” column of the Summary Compensation Table: Mr. Boyle (40%), Mrs. Boyle (68%), Mr. Timm (36%), Mr. Cusick (41%), and Mr. Fogliato (36%). Any salary increases are effective in March of each respective year.
Bonus
Discretionary bonuses paid to our named executive officers are set forth in the 2016 Summary Compensation Table. The discretionary bonuses are described in further detail under the caption “Compensation Discussion and Analysis—Overview of Executive Compensation Program—Analysis of 2016 Named Executive Officer Compensation—Short-term incentive compensation” above.
Stock awards
We awarded both time-based and performance-based RSUs to our named executive officers based in the U.S., other than our Chairman and CEO, and we awarded time-based RSUs to Mr. Fogliato, in each case under our 1997 Stock Incentive Plan. The amounts set forth in the “Estimated Future Payouts Under Equity Incentive Plan Awards” column of the 2016 Grants of Plan-Based Awards Table represent the threshold, target and maximum number of performance-based RSUs that may be earned by each of the named executive officers based in the U.S. during the January 1, 2016 through December 31, 2018 performance period, depending on the extent to which Company performance goals are met or exceeded. RSUs earned during the performance period will vest approximately in March 2019, upon approval by the Compensation Committee. The amounts set forth in the “All Other Stock Awards” column of the 2016 Grants of Plan-Based Awards Table represent the number of time-based RSUs granted to each named executive officer, of which 25% of the RSUs vest annually (a) on the first anniversary of the first day of the first full calendar month following the date of grant (the “Vest Date”), and (b) on each of the subsequent three anniversaries following the first anniversary of the Vest Date. The date on which RSUs vest is referred to as a “vesting date.” The RSUs become vested on a respective vesting date only to the extent the recipient is an employee of the Company continuously from the award date to the vesting date. If a vesting date falls on a weekend or any other day on which the NSM or Exchange is not open, affected RSUs will vest on the next following NSM or Exchange business day, as the case may be.
Option awards
We awarded stock options to our named executive officers, other than our Chairman and CEO, under our 1997 Stock Incentive Plan. The options granted to our named executive officers are set forth in the “All Other Option Awards” column of the 2016 Grants of Plan-Based Awards Table and vest and become exercisable with respect to 25% of the shares on each of the first four anniversaries of the grant date.
Non-equity incentive plan compensation
The amounts set forth in the “Non-Equity Incentive Plan Compensation” column of the 2016 Summary Compensation Table consist of payments made pursuant to non-equity incentive plan awards granted to our named executive officers under our Executive Incentive Compensation Plan, as well as pursuant to long-term incentive cash awards granted to Mr. Boyle and Mr. Fogliato, respectively. A discussion of the corporate performance targets that were achieved for 2016 for awards under our Executive Incentive Compensation Plan is set forth under the caption “Compensation Discussion and Analysis—Analysis of 2016 Named Executive Officer Compensation—Short-term incentive compensation” above. A discussion of the performance targets that were achieved for 2016 for long-term incentive cash awards granted to Mr. Boyle and Mr. Fogliato, respectively, are set forth under the caption “Compensation Discussion and Analysis—Analysis of 2016 Named Executive Officer Compensation—Long-term cash and equity-based incentives” above.
We may or may not award an annual cash bonus under the Executive Incentive Compensation Plan, and any amount actually paid generally varies according to the achievement of Company and individual performance objectives.
The Compensation Committee establishes targets for our incentive programs early in the fiscal year based upon current forecasts, business strategies and expectations. The Compensation Committee has the discretion, at or prior to the time it sets the

34



performance target, to include or exclude any extraordinary items affecting the performance target and to adjust the performance target to take into account changes in accounting.
The Compensation Committee also generally may reduce or completely eliminate the amount payable under the Executive Incentive Compensation Plan to a named executive officer based on factors that it determines warrant such a reduction or elimination. Historically, the Compensation Committee has not exercised this discretion to any significant degree. Under the plan, the Compensation Committee has no discretion to increase any amount payable to a named executive officer.
The amounts set forth in the “Estimated Possible Payouts Under Non-Equity Incentive Plan Awards” column of the 2016 Grants of Plan-Based Awards Table include the threshold, target and maximum payout amounts payable for achieving the corporate and individual performance objectives under the Company’s Executive Incentive Compensation Plan for 2016 awards.
For Mr. Boyle, the amounts set forth in the “Estimated Possible Payouts Under Non-Equity Incentive Plan Awards” column of the 2016 Grants of Plan-Based Awards Table also include the threshold, target and maximum payout amounts payable for his long-term incentive cash award for the January 1, 2016 through December 31, 2018 performance period, depending on the extent to which Company performance goals are met or exceeded. We anticipate that the Compensation Committee will determine the amount Mr. Boyle earns under his long-term incentive cash award for this performance period in March 2019.
For fiscal 2016, the aggregate value of bonuses paid to our named executive officers under our Executive Incentive Compensation Plan and under long-term incentive cash awards accounted for the following percentages of each named executive officer’s total compensation reported in the “Total” column of the Summary Compensation Table: Mr. Boyle (59%), Mrs. Boyle (31%), Mr. Timm (24%), Mr. Cusick (25%), and Mr. Fogliato (40%).
All other compensation
All other compensation of our named executive officers is set forth in the Summary Compensation Table for Fiscal 2016 and described in greater detail in footnote 3 to the table.
Our 401(k) Profit Sharing Plan is our tax qualified retirement savings plan pursuant to which our U.S. employees, including the named executive officers based in the U.S., are able to make pre-tax contributions from their cash compensation. Typically, we make matching contributions for all participants each year equal to 100% of their elective deferrals up to 4% of their total eligible compensation and 50% of their elective deferrals from 4% to 6% of eligible annual compensation. We also may make annual profit sharing contributions to the accounts of our employees under the 401(k) Profit Sharing Plan. The contribution consists of amounts that are allocated among eligible employees based on a percentage of their annual salaries. The total profit sharing contribution, if any, is determined each year by the Board of Directors. For 2016, the Board of Directors did not approve any profit sharing contribution. The Internal Revenue Code limits the amount of compensation that can be deferred under the 401(k) Profit Sharing Plan and also limits the amount of salary and bonus with respect to which matching contributions and profit sharing contributions can be made under that plan. Accordingly, we provide our executive officers and other highly compensated employees with the opportunity to defer their compensation, including amounts in excess of the tax law limit, under our nonqualified 401(k) Excess Plan. Under the plan, the participants may elect to defer up to 70% of eligible compensation and we may make matching contributions for the participants equal to 100% of their elective deferrals up to 4% of their total eligible compensation and 50% of their elective deferrals from 4% to 6% of their total eligible compensation, minus the matching contribution the participant would have been eligible to receive under the qualified 401(k) Profit Sharing Plan. See the “2016 Nonqualified Deferred Compensation” table below. Mr. Fogliato does not participate in our 401(k) Profit Sharing Plan or 401(k) Excess Plan. 
We provide our named executive officers with competitive benefits, and we generally do not provide perquisites or tax reimbursements or other benefits to the named executive officers based in the U.S. that are not available to other employees based in the U.S. In addition to our 401(k) Profit Sharing Plan and 401(k) Excess Plan described above, in 2016, our named executive officers based in the U.S. were offered other benefits that were substantially the same as those offered to all of our U.S. employees. These benefits included medical, dental and vision insurance. We also provide an enhanced long-term disability benefit to our named executive officers based in the U.S. This benefit is designed to provide additional protection to our named executive officers in the event of catastrophic illness or disability. We provide our Chairman, our CEO and our CEO’s qualifying family members with medical insurance at no cost to those individuals. In accordance with his employment agreement, Mr. Fogliato receives additional perquisites, some of which are customary for management employees in his geographic location, including: a monthly housing allowance; allowance for personal use of company car (this benefit is also available to all of our European directors); a dependent medical allowance (this benefit is also available to all of our European directors); and reimbursement for tax assistance up to approximately $5,000 per year for the duration of his employment. In 2016, the Compensation Committee reviewed a compensation analysis provided by our independent compensation consultant, PricewaterhouseCoopers L.L.P., covering all aspects of Mr. Fogliato’s compensation, including perquisites.


35



2016 Outstanding Equity Awards at Fiscal Year-End Table
 
 
 
OPTION AWARDS
 
STOCK AWARDS
Name
(a)
Grant
Date
(b)
 
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable(1)
(c)
 
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable(1)
(d)
 
 
 
Option
Exercise
Price
($)
(e)
 
Option
Expiration
Date
(f)
 
Number
of
Shares
or Units
of Stock
That
Have
Not
Vested
(#)
(g)
 
 
 
Market
Value
of
Shares
or
Units of
Stock
That
Have
Not
Vested
($)(4)
(h)
 
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#)(5)
(i)
 
Equity
Incentive
Plan
Awards:
Market
or Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
($)(5)
(j)
Bryan L. Timm
1/20/2011
 
17,070

 

 
(1a)
 
29.985

 
1/19/2021

 

 
 
 

 

 

 
1/20/2011
 
53,720

 

 
(1b)
 
29.985

 
1/19/2021

 

 
 
 

 

 

 
1/26/2012
 
9,964

 

 
 
 
23.850

 
1/25/2022

 

 
 
 

 

 

 
1/31/2013
 

 

 
 
 

 

 
1,834

 
(2)
 
106,922

 

 

 
1/31/2013
 
41,662

 
13,886

 
 
 
25.545

 
1/30/2023

 

 
 
 

 

 

 
1/30/2014
 

 

 
 
 

 

 
2,416

 
(2)
 
140,853

 

 

 
1/30/2014
 
19,430

 
19,428

 
 
 
38.155

 
1/29/2024

 

 
 
 

 

 

 
3/3/2014
 

 

 
 
 

 

 
8,528

 
(3)
 
497,182

 

 

 
1/29/2015
 

 

 
 
 

 

 
3,192

 
(2)
 
186,094

 

 

 
1/29/2015
 
9,337

 
28,010

 
 
 
43.450

 
1/28/2025

 

 
 
 

 

 

 
2/9/2015
 

 

 
 
 

 

 
943

 
(2)
 
54,977

 

 

 
2/9/2015
 
2,781

 
8,342

 
 
 
42.110

 
2/8/2025

 

 
 
 

 

 

 
2/27/2015
 

 

 
 
 

 

 

 
 
 

 
0

 
0

 
1/28/2016
 

 

 
 
 

 

 
3,747

 
(2)
 
218,450

 

 

 
1/28/2016
 

 
27,745

 
 
 
53.350

 
1/27/2026

 

 
 
 

 

 

 
3/1/2016
 

 

 
 
 

 

 

 
 
 

 
0

 
0

 
 
 
153,964

 
97,411

 
 
 
 
 
 
 
20,660

 
 
 
1,204,478

 

 

Thomas B. Cusick
1/26/2012
 
7,174

 

 
 
 
23.850

 
1/25/2022

 

 
 
 

 

 

 
1/31/2013
 

 

 
 
 

 

 
1,048

 
(2)
 
61,098

 

 

 
1/31/2013
 
15,808

 
7,934

 
 
 
25.545

 
1/30/2023

 

 
 
 

 

 

 
1/30/2014
 

 

 
 
 

 

 
1,380

 
(2)
 
80,454

 

 

 
1/30/2014
 
11,104

 
11,100

 
 
 
38.155

 
1/29/2024

 

 
 
 

 

 

 
3/3/2014
 

 

 
 
 

 

 
4,876

 
(3)
 
284,271

 

 

 
1/29/2015
 

 

 
 
 

 

 
1,824

 
(2)
 
106,339

 

 

 
1/29/2015
 
5,336

 
16,005

 
 
 
43.450

 
1/28/2025

 

 
 
 

 

 

 
2/9/2015
 

 

 
 
 

 

 
943

 
(2)
 
54,977

 

 

 
2/9/2015
 
2,781

 
8,342

 
 
 
42.110

 
2/8/2025

 

 
 
 

 

 

 
2/27/2015