DEF 14A 1 tm212648-1_def14a.htm DEF 14A tm212648-1_def14a - none - 10.8906746s
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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PetIQ, Inc.
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April 30, 2021
Dear Fellow Stockholder:
You are cordially invited to attend the 2021 Annual Meeting of Stockholders (the “Annual Meeting”) of PetIQ, Inc. (“PetIQ”) to be held at our corporate headquarters at 923 S. Bridgeway Place, Eagle, Idaho on Tuesday, June 29, 2021 at 9:00 a.m. Mountain Daylight Time.
In 2020, like many organizations around the world, we faced unique challenges due to the global pandemic. Our number one priority always is to protect the health and safety of our employees, customers, and partners. This resulted in the closure of all our wellness centers and community clinics in March 2020, and at the same time, we all learned how to be productive working from home. Importantly, the diversification of our business model and the complementary nature of how we connect with pet parents across our Products and Services businesses has never been more evident.
During 2020, consumer purchasing habits evolved and we maintained flexibility to ensure we could serve pet parents and their pets where and when they needed to fulfill their pet health and wellness needs. I am incredibly proud of our team’s resiliency in an unprecedented operating environment. Their efforts helped us to ensure pet parents maintained their access to PetIQ’s affordable animal health products and services.
We generated record full year net sales of $780.1 million and adjusted EBITDA of $67.8 million, an increase of nearly 12%. The financial strength that our Products segment provides our broader business is an important component of the resilient nature of PetIQ. The Products segment fueled our financial results for the year. While we started reopening a small number of our Services locations in May, we still had certain regions, for example California, where our clinics and wellness centers were not reopened until early in the fourth quarter based on the local and state regulations and restrictions.
2020 was also yet another year where PetIQ was able to complete a very strategic acquisition. In July, we purchased the Capstar® family of pet products. This marks the fourth acquisition for our company in the last three years. From a balance sheet and cash perspective, we continue to have ample liquidity and financial flexibility with cash on hand, cash generation, and existing availability under our revolving credit facilities to support our future growth.
In a year of change, what has remained consistent are robust industry tailwinds, including humanization of pets and continued significant growth in our categories as pet parents are taking better care of their pets' health and wellness needs. We are fortunate to be in an industry that continues to experience rising pet adoption, increases in dollar spend per pet, and an emphasis on affordable convenient pet healthcare. We believe PetIQ's mission of delivering smarter options for pet parents to help enrich their pets' lives through convenience and affordable access to veterinarian products and services has never been stronger.
Looking ahead, we have had a robust start to 2021, and expect our diversified business model will enable us to emerge from this period of disruption in an even stronger position with broader capabilities to bring convenient and affordable pet health and wellness products and services to pet parents in the formats that best fit their lives. We believe PetIQ’s differentiated position in the animal health industry will continue to fuel our growth for many years to come.
On behalf of the Board of Directors, I thank you for your support and investment in PetIQ.
Sincerely,
[MISSING IMAGE: sg_mccordchristensen-k.jpg]
McCord Christensen
Chairman & Chief Executive Officer
This Proxy Statement is dated April 30, 2021 and is first being made available to stockholders on May 20, 2021.

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NOTICE OF 2021 ANNUAL MEETING
OF STOCKHOLDERS
To Be Held on June 29, 2021
To the Stockholders of PetIQ, Inc.:
Time and Date:
Tuesday, June 29, 2021 at 9:00 a.m. Mountain Daylight Time
Place:
The Company’s headquarters at 923 S. Bridgeway Place, Eagle, Idaho 83616
Record Date:
April 30, 2021 (the “Record Date”)
Items to be Voted On:
1.
To elect two Class I directors, to serve until the third annual meeting next succeeding their election and until their successor is elected and qualified (Proposal One);
2.
To ratify the selection of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021 (Proposal Two);
3.
To approve, on an advisory, non-binding basis, the compensation of our named executive officers (Proposal Three);
4.
To approve the amendment and restatement of our Amended and Restated 2017 Omnibus Incentive Plan (the “Omnibus Plan”) (Proposal Four);
5.
To approve, on an advisory, non-binding basis, the frequency (every one, two or three years) of stockholder advisory approval of the compensation of our named executive officers (Proposal Five); and
6.
To transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.
How to Vote:
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THIS ANNUAL MEETING. EVEN IF YOU PLAN TO ATTEND THE ANNUAL MEETING, WE HOPE THAT YOU WILL PROMPTLY VOTE AND SUBMIT YOUR PROXY BY TELEPHONE, MAIL OR VIA THE INTERNET, AS DESCRIBED IN THE PROXY STATEMENT. THIS WILL NOT LIMIT YOUR RIGHTS TO ATTEND OR VOTE AT THE ANNUAL MEETING.
Our board of directors has fixed the close of business on April 30, 2021 as the record date for determining holders of our Class A Common Stock and Class B Common Stock entitled to notice of, and to vote at, the Annual Meeting or any adjournments or postponements thereof. A complete list of such stockholders will be available for examination at our offices in Eagle, Idaho during normal business hours for a period of ten days prior to the Annual Meeting.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE ANNUAL MEETING TO BE HELD ON JUNE 29, 2021.
We are furnishing proxy materials to our stockholders primarily via the Internet, instead of mailing printed copies of those materials to each stockholder. By doing so, we save costs and reduce the environmental impact of our Annual Meeting. We will mail a Notice of Internet Availability of Proxy Materials to certain of our stockholders. This Notice contains instructions about how to access our proxy materials and vote online or vote by telephone. If you would like to receive a paper copy of our proxy materials, please follow the instructions included in the Notice of Internet Availability of Proxy Materials. If you previously chose to receive our proxy materials electronically, you will continue to receive access to these materials via e-mail unless you elect otherwise.
By Order of the Board of Directors
[MISSING IMAGE: sg_rmichaelherman-k.jpg]
R. Michael Herrman
General Counsel and Secretary
Eagle, Idaho
Date: April 30, 2021

TABLE OF CONTENTS
1
1
1
1
2
2
3
3
3
PROPOSAL ONE
ELECTION OF DIRECTOR
4
4
5
5
6
6
8
10
10
10
10
11
11
12
12
12
14
14
15
15
16
16
17
17
17
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 18
20
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS 21
21
21
21
22
PROPOSAL TWO
RATIFICATION OF THE APPOINTMENT OF THE COMPANY’S INDEPENDENT AUDITORS
24
24
25
25
25
25
25
26
26
30
30
31
32
32
35
35
35
36
37
37
37
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL 38
39
Stock Option and Restricted Stock Unit Awards Agreements 39
40
PROPOSAL THREE
ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION SET FORTH IN THIS PROXY STATEMENT
41
PROPOSAL FOUR
APPROVAL OF AMENDED AND RESTATED OMNIBUS
PLAN
42
42
42
44
45
PROPOSAL FIVE
ADVISORY VOTE TO APPROVE THE FREQUQNCY OF THE ADVISORY VOTE ON EXECUTIVE COMPENSATION
47
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING 48
STOCKHOLDER PROPOSALS FOR 2022 ANNUAL MEETING OF STOCKHOLDERS 53
54
54
APPENDIX A RECONCILIATION OF NON-GAAP FINANCIAL MEASURES A-1
APPENDIX B PETIQ, INC. AMENDED AND RESTATED 2017 OMNIBUS INCENTIVE PLAN B-1
i   PetIQ, Inc.

2021 Proxy Statement Summary​
2021 PROXY STATEMENT SUMMARY
This summary highlights information contained elsewhere in the Proxy Statement. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting. For more complete information regarding the PetIQ Inc.’s (the “Company’s”) 2020 performance, please review our 2020 Annual Report on Form 10-K (“Annual Report”).
2021 Annual Meeting Information
Date and Time
Tuesday, June 29, 2021 at 9:00 a.m. Mountain Daylight Time
Location
PetIQ’s corporate headquarters, 923 S. Bridgeway Place, Eagle, Idaho 83616
Record Date
April 30, 2021
Shares Outstanding as
of the Record Date
29,138,853 shares of Common Stock outstanding, comprised of 28,372,028 shares of Class A Common Stock (the “Class A Common Stock”) and 766,825 shares of Class B Common Stock (the “Class B Common Stock” and, together with the Class A Common Stock, the “Common Stock”). Our Class A Common Stock and Class B Common Stock vote together on each of the matters set forth in this Proxy Statement.
Voting
You are entitled to one (1) vote for each share of Common Stock you own, on each matter to be voted upon at the Annual Meeting of the Stockholders (the “Annual Meeting”).
Items to be Voted on
Proposal
Board Recommendation
Election of directors (page 4)
FOR
Ratification of Selection of Independent Registered Public Accounting Firm (page 24)
FOR
Approval on an advisory, non-binding basis of our executive compensation (page 41)
FOR
Amended and Restated Omnibus Plan (page 42)
FOR
Advisory, non-binding vote on frequency of future advisory votes on executive compensation every one year (page 47)
ONE YEAR
Board of Directors
Board Committees(2)
Name
Director
Class(1)
Director
Since
Independent
Compensation
Audit
Nominating
and
Corporate
Governance
McCord Christensen
III
2017
Larry Bird
II
2018
X
C
X
Mark First
II
2017
X
C
C
Scott Huff
II
2019
X
X
X
Ronald Kennedy
I
2017
X
X
X
Sheryl Oloughlin
I
2021
X
X
Kimberly Lefko
III
2021
X
X
(1)
Class I directors have a term that expires at the Annual Meeting and Mr. Kennedy and Ms. Oloughlin have been nominated for re-election. Class II directors have a term that expires at the 2022 annual meeting of stockholders. Class III directors have a term that expires at the 2023 annual meeting of stockholders.
(2)
“C” = Chair of Committee; “X” = Member of Committee
2021 Proxy Statement   1

2021 Proxy Statement Summary
About PetIQ
PetIQ is a leading pet medication and wellness company delivering a smarter way for pet parents to help their pets live their best lives through convenient access to affordable veterinary products and services. We engage with customers through more than 60,000 points of distribution across retail, including veterinary, and e-commerce channels with our branded distributed medications, which is further supported by our own world-class medication manufacturing facility in Omaha, Nebraska.
Our national service platform, VIP Petcare (“VIP”), operates in over 2,900 retail partner locations in 41 states providing cost effective and convenient veterinary wellness services. PetIQ believes that pets are an important part of the family and deserve the best products and care we can give them.
2020 Financial Highlights
Net sales were $780.1 million, a compounded annual growth rate of 43% since 2017

Product sales were $725.7 million, an increase of 17.6% from 2019

Services revenue was $54.4 million
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Adjusted EBITDA(1) was $67.8 million, a compounded annual growth rate of 44.9% since 2017

Product Adjusted EBITDA(1) was $117.2 million
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(1)
Adjusted EBITDA is a financial measure that is not calculated in accordance with accounting principles generally accepted in the United States
2   PetIQ, Inc.

2021 Proxy Statement Summary​
(“GAAP”). For more information regarding Adjusted EBITDA and a reconciliation to net income, the most directly comparable GAAP measure, see Appendix A, “Reconciliation of Non-GAAP Financial Measure.”
2020 Business Highlights
The diversification of the PetIQ business model and the complementary nature of how we connect with pet parents across our Products and Services segments has never been more evident than during the COVID-19 pandemic.

Generated a record full year net sales of $780.1M while operating much of the year with our wellness centers and community clinics temporarily closed due to the COVID-19.

Opened 27 wellness centers during the year, for a total of 126 wellness centers and 37 regional offices in operation as of year-end.

Outpaced the flea and tick category by growing 13% while picking up 40 basis points of share. Share gains were driven by ecommerce where our brands grew by 63%, including Capstar, which grew by 73%, and Pet Armor Plus, which grew by 41%.

Completed the acquisition of Capstar®, the #1 oral OTC flea treatment product in the United States, from Elanco Animal Health, Inc.

As of December 31, 2020, the Company had cash equivalents of $33.5 million, plus everyday availability of its revolving credit facility of $95.0 million, equating to $128.5 million, which the Company defines as total liquidity.
Corporate Governance Highlights

Board independence (6 of 7 directors are independent)

All of our Audit, Compensation and Nominating and Corporate Governance Committee members are 100% independent

Excellent track record of attendance at all Board and committee meetings in 2020

Risk oversight by full Board and committees

Comprehensive Corporate Governance Guidelines

Strong Lead Independent Director

Annual review of committee charters and Corporate Governance Guidelines

Independent directors, led by Lead Independent Director, meet in executive sessions without management present

Annual Board and committee self-evaluations

Adopted majority voting for the election of directors in uncontested elections in 2021

Added two female directors in 2021
Executive Compensation Highlights

Independent compensation consultant for the Compensation Committee

Clawback policy applicable to incentive compensation

Policy prohibiting hedging or pledging of Company stock by insiders

No single-trigger change-in-control severance or vesting of equity awards
2021 Proxy Statement   3

Proposal 1: Election of Directors
PROPOSAL ONE:
ELECTION OF DIRECTORS
Our Board is currently comprised of seven directors. In accordance with our Amended and Restated Certificate of Incorporation and our Amended and Restated Bylaws (the “Bylaws”), our Board is divided into three classes, the members of each of which serve for staggered three-year terms. Only one class of directors will be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year terms. We believe this classified board structure is appropriate for the Company. Obtaining a three-year commitment from our directors assists us in retaining highly qualified directors who have experience and familiarity with our business and the market in which we operate. The Board believes that such long-term institutional knowledge benefits the Company and enables the Board to better consider and provide long-term strategic planning.
Our directors are divided among the three classes as follows:

the Class I directors are Ronald Kennedy and Sheryl Oloughlin, and their terms will expire at the Annual Meeting;

the Class II directors are Mark First, Larry Bird and Scott Huff, and their terms will expire at the annual meeting of stockholders to be held in 2022; and

the Class III directors are McCord Christensen and Kimberly Lefko, and their terms will expire at the annual meeting of stockholders to be held in 2023.
The Nominating and Corporate Governance Committee has recommended, and the Board has nominated, Ronald Kennedy and Sheryl Oloughlin to stand for election as Class I directors.
The name of each nominee, certain biographical information about each nominee, and the experiences, qualifications, attributes or skills that caused the Nominating and Corporate Governance Committee to recommend each nominee, are set forth below. Mr. Kennedy and Ms. Oloughlin each have agreed to be nominated and to serve as a director if elected.
Class I Director Nominees
RONALD KENNEDY
Director
Independent
Class I Director since: 2017
Age: 74
Board Committees:
Compensation
Audit
Mr. Kennedy has served as a director since our IPO. Prior to our IPO, Mr. Kennedy served as a member of PetIQ Holdings, LLC’s board of managers from May 2012 until July 2017. From 2010 until the formation of PetIQ Holdings, LLC in 2012, Mr. Kennedy served as a director of PetIQ, LLC. Mr. Kennedy is the owner of the investment firm Kennedy Ventures and a founder of Western Benefit Solutions, an employee benefits consulting firm, which he sold in 2010. He was a board member of Ameriben, Inc., a human resource consulting and benefits administration service company until 2014. Mr. Kennedy holds a Bachelor of Science in Business Administration from Brigham Young University and a Master of Business Administration from Arizona State University. We believe Mr. Kennedy’s qualifications to serve as a director of our Company include his experience in corporate strategy, investment matters and corporate leadership.
4   PetIQ, Inc.

Proposal 1: Election of Directors​
Sheryl Oloughlin
Director
Independent
Class I Director since: 2021
Age: 54
Board Committees:
Compensation
Ms. Oloughlin has served as a director since March 2021. Ms. Oloughlin has served as the co-founder of the Women on Boards Project and the JEDI (Justice, Equity, Diversity and Inclusion) Collaborative since 2019. She served as the CEO and President of REBBL Inc., a premium, organic beverage brand powered by super herbs, from January 2015 to June 2019. Ms. Oloughlin is the co-founder and former CEO of Plum Organics and former CEO of Clif Bar & Company and previously served as the Executive Director for Entrepreneurial Studies at Stanford Graduate School of Business. Ms. Oloughlin is the author of Killing It: An Entrepreneurs’ Guide to Keeping Your Head Without Losing Your Heart. Ms. Oloughlin has served as a member of the Board of Advisors at S. Martinelli & Company since 2019. She has also served on the Board of Directors at One Step Closer to an Organic Sustainable Community (OSC2) since 2019. Ms. Oloughlin was a member of multiple Boards of Directors including Foodstirs Inc, Gardein Inc, ThinkThin LLC, Sugar Bowl Bakery as well as Boards of Advisors’ positions including Rip Van Wafels, the American Sustainable Business Council and the Harvest Summit, an annual event inviting cross-industry executives and innovators of all types to connect and collaborate from 2011 through 2020. She was a faculty member at Sonoma State University and earned a Bachelor of Business Administration in Marketing from the University of Michigan in 1989 and an MBA in Marketing and Finance from the Kellogg School of Management in 1994. We believe Ms. Oloughlin’s qualifications to serve as a director of our Company include her experience in the consumer and retail industries.
Vote Required
The director nominees must receive the affirmative vote of a majority of the votes cast to be elected (i.e., the number of shares voted “for” a director nominee must exceed the number of votes cast “against” that nominee) as directors to serve until our annual meeting of stockholders to be held in 2024 or until their successors, if any, are duly elected and qualified, or until their earlier death, resignation or removal. Unless you otherwise instruct, proxies will be voted FOR election of each nominee
who is listed above as a director nominee. The Company has no reason to believe that either nominee will be unable to serve, but in the event that either nominee is unwilling or unable to serve as a director and the Board does not, in that event, choose to reduce the size of the Board, the persons voting your proxy may vote for the election of another person in accordance with their judgment.
Recommendation of the Board
The Board recommends that stockholders vote “FOR” the election of each director nominee.
2021 Proxy Statement   5

Proposal 1: Election of Directors
DIRECTORS AND MANAGEMENT
The following table sets forth the names and titles of PetIQ’s directors and executive officers following the Annual Meeting.
Name
Position
McCord Christensen Chief Executive Officer and Chairman
Susan Sholtis President
John Newland Chief Financial Officer
Michael Smith Executive Vice President, Products
R. Michael Herrman General Counsel and Secretary
Larry Bird Director
Mark First Lead Independent Director
Scott Huff Director
Ronald Kennedy Director
Kimberly Lefko Director
Sheryl Oloughlin Director
Board of Directors
The names of our directors, certain biographical information about our directors, and the experiences, qualifications, attributes or skills that the Nominating and Corporate Governance Committee considered when recommending the directors for nomination, are set forth below (other than Mr. Kennedy and Ms. Oloughlin, whose information is set forth above under “— Proposal One: Election of Directors”).
MCCORD CHRISTENSEN
Chief Executive Officer and Chairman
Class III Director since: 2017
Age: 48
Board Committees:
None
Mr. Christensen co-founded PetIQ in 2010 and has served as our Chief Executive Officer since our inception and as Chairman of our Board since our IPO. In addition to his leadership responsibilities as Chairman and CEO, Mr. Christensen’s expertise in retail and consumer products has enabled PetIQ to deliver targeted and well-executed commercial programs and products across the retail industry. Prior to founding PetIQ, Mr. Christensen gained extensive retail and management experience working at Albertson’s and as an executive in consumer product companies selling to leading U.S. retailers. Mr. Christensen holds a Bachelor of Science in Finance from Boise State University. We believe Mr. Christensen’s qualifications to serve as a director of our Company include his role of Chief Executive Officer of the Company, his experience in the consumer and retail industries, his expertise in corporate strategy and development, his demonstrated business acumen and his extensive experience identifying, consummating and integrating acquisitions.
6   PetIQ, Inc.

Proposal 1: Election of Directors​
LARRY BIRD
Director
Independent
Class II Director since: 2018
Age: 66
Board Committees:
Audit
Nominating and Corporate
   Governance
Mr. Bird has served as a director and as a member of the Company’s Audit Committee since March 2018. He has also served as a member of the Board of Directors of Blue Cross of Idaho since February 2018. Mr. Bird previously served as Senior Audit Partner at Deloitte & Touche LLP until his retirement in June 2017. As a Deloitte Audit Partner since 1989, Mr. Bird was actively engaged as the Lead Audit Partner responsible for planning and supervising audits for larger private companies and PCAOB Integrated Audits for publicly held companies spanning a variety of industries. Mr. Bird earned a Bachelor of Business Administration from the Idaho State University College of Business. We believe that Mr. Bird’s qualifications to serve as a director of our Company include his extensive financial acumen and detailed experience as Lead Audit Partner in a variety of industries.
MARK FIRST
Director
Independent
Class II Director since: 2017
Age: 56
Board Committees:
Compensation (Chair)
Nominating and Corporate
   Governance (Chair)
Mr. First has served as our Lead Independent Director since our IPO. Prior to our IPO, Mr. First served as a member of PetIQ Holdings, LLC’s board of managers from 2012 until July 2017. Mr. First is a Managing Director of Eos Management, L.P., an affiliate of ECP Helios Partners IV, L.P. and Eos Partners, L.P. (the “Eos Funds”), where he has been employed since March 1994. Mr. First was previously an investment banker with Morgan Stanley & Co. Incorporated from August 1991 until March 1994. Mr. First is a director of several privately owned companies and has been a director of Addus HomeCare, Inc. (NASDAQ: ADUS) since 2009. Mr. First holds a Bachelor of Science from The Wharton School of the University of Pennsylvania and a Master of Business Administration from Harvard Business School. We believe Mr. First’s qualifications to serve as a director of our Company include his experience as a director of other public companies and his experience in business, corporate strategy, acquiring and integrating business and investment matters.
SCOTT HUFF
Director
Independent
Class II Director since: 2019
Age: 49
Board Committees:
Audit
Nominating and Corporate
   Governance
Mr. Huff has served as a director since August 2019. Mr. Huff currently is the owner of a retail consulting firm, Amplify Retail Consulting LLC, which he started in June 2017. He previously served as Executive Vice President of the Consumables and Health & Wellness divisions at Walmart Stores, Inc. until his retirement in June 2017. Mr. Huff joined Walmart Stores, Inc. in 1994 and served in a variety of roles, including as Merchandise Manager, Divisional Merchandise Manager, Vice President and Regional Vice President. Mr. Huff earned a Bachelor of Science in Marketing from Missouri State University. Mr. Huff’s qualifications to serve as a director include his retail experience and knowledge of the pet health and wellness sector.
2021 Proxy Statement   7

Proposal 1: Election of Directors
KIMBERLY LEFKO
Director
Class III Director since: 2021
Age: 48
Board Committees:
Audit
Ms. Lefko has served as the Chief Marketing Officer of Ace Hardware Corporation since 2018. She held positions with Weber-Stephen Products LLC including Chief Marketing Officer, General Manager and Executive Vice President of Marketing from 2013 to 2018. Ms. Lefko served as Senior Vice President of Sales and Company Officer of Marketing at Radio Flyer in 2010 to 2013. Prior to that, she served in positions at Graco Children’s Products (a Newell Rubbermaid Company) from 2001 to 2010. Ms. Lefko earned a Bachelor of Applied Science in Marketing and Economics from Cornell University in 1995, completed Pricing and P&L Management curriculum in 2004 from the Wharton School of the University of Pennsylvania and Transformational Strategy program from the Kellogg School of Management in 2016. Ms. Lefko’s qualifications to serve as a director include her retail and marketing experience.
Executive Officers
The names and certain biographical information about our executive officers are set forth below (other than Mr. Christensen, whose information is set forth above under “— Proposal One: Election of Director”).
JOHN NEWLAND
Chief Financial Officer
Age: 57
Mr. Newland has served as our Chief Financial Officer since 2014 and as our Corporate Secretary from 2015 until March 2019. Prior to joining PetIQ, Mr. Newland gained extensive retail and consumer products experience working for Albertson’s, Inc. and SuperValu, Inc. in a range of finance roles. Mr. Newland is a retired fighter pilot and Commander in the Idaho Air National Guard, where he served from 1985 to 2013. Mr. Newland holds a Bachelor of Science degree in corporate finance from the University of Idaho and is a graduate of the United States Air Force Air War College.
SUSAN SHOLTIS
President
Age: 54
Ms. Sholtis has served as President since October 2018. She previously served as a director from March 2018 to October 2018. Prior to her appointment as President, Ms. Sholtis served as Global Marketing Head in the Health Division at Reckitt Benckiser since 2017. From 2016 to 2017, Ms. Sholtis served as Head of North America Commercial Operations at Merial and was responsible for transitioning North America operations to Merial’s new owner, Boehringer Ingelheim. Prior to that, from 2006 to 2016, Ms. Sholtis served in a number of positions at Mead Johnson Nutrition, most recently as Head of Global Marketing. Ms. Sholtis earned a Bachelor’s degree from Butler University and a Masters of Business Administration from Emory University.
MICHAEL SMITH
Executive Vice President, Products
Age: 43
Mr. Smith has served as Executive Vice President, Products since July 2019. Prior to joining the PetIQ, Mr. Smith served in various leadership roles within the Pet and Personal Care categories for Walmart, Inc., since January 2015, most recently as Senior Buying Manager — Pets from February 2017 until May 2019. He previously worked as a Director for Colgate Palmolive October 2013 to January 2015. Prior to that, he served in various roles with Walmart, Procter & Gamble and Energizer. Mr. Smith earned a Bachelor of Science in Business Administration from the University of Arkansas.
8   PetIQ, Inc.

Proposal 1: Election of Directors​
R. MICHAEL HERRMAN
General Counsel and Secretary
Age: 53
Mr. Herrman has served as General Counsel and Secretary since February 2019. He previously worked as the Executive Director and the Head of Legal for Boehringer Ingelheim’s Animal Health business in Latin America from 2017 to 2019 and as the Executive Director and the Head of Legal for Boehringer Ingelheim’s Animal Health business in the United States from 2007 to 2017. Beginning in 2003, Mr. Herrman served in a number of positions at Boehringer Ingelheim and gained extensive experience in both the human pharmaceuticals business, and specifically the animal health business and industry, including as Executive Director, Executive Division Counsel and as a Director and Senior Counsel of Legal Operations He began his career practicing law at McDermott, Will & Emery. Mr. Herrman earned a Bachelor’s degree from the University of Connecticut, as well as a Master’s degree from S.I. Newhouse School of Public Communications and a law degree from Syracuse University College of Law. Prior to that, Mr. Herrman served in the United States Army.
2021 Proxy Statement   9

Corporate Governance
CORPORATE GOVERNANCE
Corporate Governance Highlights

Board independence (6 of 7 directors are independent)

All of our Audit, Compensation and Nominating and Corporate Governance Committee members are 100% independent

Excellent track record of attendance at all Board and committee meetings in 2020

Risk oversight by full Board and committees

Comprehensive Corporate Governance Guidelines

Strong Lead Independent Director

Annual review of committee charters and Corporate Governance Guidelines

Independent directors, led by Lead Independent Director, meet in executive sessions without management present

Annual Board and committee self-evaluations

Adopted majority voting for the election of directors in uncontested elections in 2021

Added two female directors to the Board in 2021
Structure of the Board of Directors
Our business and affairs are managed under the direction of our Board. Our Board currently consists of seven members and is divided into three classes with staggered three-year terms. The term of our Class I directors, Ronald Kennedy and Sheryl Oloughlin, will expire at this Annual Meeting. The term of our Class II directors, Mark First, Larry Bird and Scott Huff, will expire at our 2022 annual meeting of stockholders. The term of our Class III directors, McCord Christensen and Kimberly Lefko, will expire at our 2023 annual meeting of stockholders.
Any additional directorships resulting from an increase in the authorized number of directors will be distributed
among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. This classification of our Board may have the effect of delaying or preventing changes in our control or management.
Pursuant to our Bylaws, our directors are elected by a plurality of the voting power of the shares present in person or represented by proxy and entitled to vote on the election of directors. Our directors hold office until their successors have been elected and qualified or until their earlier resignation or removal.
Board Diversity
The Board understands the importance of adding diverse, experienced talent to the Board in order to establish an array of experience and strategic views. The Nominating and Corporate Governance Committee is committed to refreshment efforts to ensure that the composition of the Board and each of its committees encompasses a wide range
of perspectives and knowledge. In furtherance of this objective, the Board recently added Mses. Oloughlin and Lefko as directors. The Nominating and Corporate Governance Committee views diversity broadly to include diversity of experience, skills and viewpoints, as well as traditional diversity concepts such as race and gender.
10   PetIQ, Inc.

Corporate Governance​
Criteria for Selection of Directors
The Nominating and Corporate Governance Committee is responsible for:

searching for, identifying, evaluating and recommending to the Board candidates to fill new positions or vacancies on the Board and reviewing any candidates recommended to the Board by stockholders if such recommendations are made in compliance with the requirements set forth in the Bylaws and

making recommendations to the Board regarding the selection and approval of nominees for director to be submitted to a stockholder vote at the annual meeting of stockholders of the Company.
Pursuant to our Corporate Governance Guidelines, directors should possess personal and professional integrity, have good business judgment, relevant experience and skills and be an effective director in conjunction with the full Board in collectively serving the long-term interests of Company stockholders. Directors should be committed to devoting sufficient time and energy to diligently performing their duties as directors.
In evaluating director candidates, our Corporate Governance Guidelines provide that the following general criteria will be considered by the Nominating and Corporate Governance Committee and the Board:

current or recent experience as a senior executive of a public company or as a leader of another major complex organization;

business and financial expertise;

experience as a director of a public company;

current or prior animal health or pet industry experience;

government entity or regulatory experience;

independence;

current employment;

diversity with respect to viewpoints, background, experience, skill, education, national origin, gender, race, age, culture and current affiliations; and

personal and professional ethics and integrity, independent thought, practical wisdom and mature judgment.
None of these criteria should be construed as minimum qualifications for director selection nor is it expected that director nominees will possess all of the criteria identified. Rather, these criteria represent the range of complementary talents, backgrounds and experiences that the Board believes would contribute to the effective functioning of the Board. In addition, in composing a well-rounded Board, the Board and the Nominating and Corporate Governance Committee look for those individuals who would bring a variety of complementary skills to allow formation of a Board that possesses the appropriate skills and experience to oversee the Company’s business.
Board and Committee Self-Evaluations
Our Board conducts an annual self-evaluation of itself and its committees to assess its effectiveness and to identify opportunities for improvement. Our Board believes that
this process supports continuous improvement and provides opportunities to strengthen Board and committee effectiveness.
[MISSING IMAGE: tm212648d1_fc-nominatek.jpg]
2021 Proxy Statement   11

Corporate Governance
Director Independence
Our Corporate Governance Guidelines provide that a majority of the members of our Board and each member of our Audit, Compensation and Nominating and Corporate Governance Committee meet the independence criteria under NASDAQ Global Market (“NASDAQ”) listing standards. Our Board, following consultation with our Nominating and Corporate Governance Committee, has undertaken a review of the independence of the directors and nominees for director and considered whether any director or nominee has a material relationship with us that could compromise his or her ability to exercise judgment in
carrying out his or her responsibilities. As a result of this review, our Board determined that six of our seven current directors, Messrs. Bird, First, Huff and Kennedy and Mses. Oloughlin and Lefko, are “independent directors” as defined under the applicable requirements of NASDAQ listing standards and the Securities and Exchange Commission (“SEC”) rules and regulations. In making that determination, our Board considered whether each director and nominee has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.
Meetings of the Board of Directors
The Board met 13 times during 2020. Each of the members of the Board that served during 2020 participated in over 75% of the meetings of the Board and committees on which each Board member respectively served. Members of the Board are expected to attend each Board meeting. The
non-management directors of the Company meet at least quarterly in executive sessions of the Board without management present. Mr. First, the Lead Independent Director presides over non-management sessions.
Committees of the Board of Directors
Our Board has a standing Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee. The Board determines the membership of each of these committees from time to time, and pursuant to our Corporate Governance Guidelines only outside, independent directors serve on these committees. The current members of each committee are identified in the table below:
Board Committees(1)
Name
Compensation
Audit
Nominating and
Corporate
Governance
McCord Christensen
Larry Bird
C
X
Mark First
C
C
Scott Huff
X
X
Kimberly Lefko
X
Ronald Kennedy
X
X
Sheryl Oloughlin
X
(1)
“C” = Chair of Committee; “X” = Member of Committee
Audit Committee
Our Audit Committee is composed of Messrs. Bird, Huff and Kennedy and Ms. Lefko, with Mr. Bird serving as chairman. Our Board has determined that each of Messrs. Bird, Huff and Kennedy and Ms. Lefko meets the independence requirements of Rule 10A-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and NASDAQ listing standards. Our Board has also
determined that each of Messrs. Bird, Huff and Kennedy and Ms. Lefko qualifies as an “audit committee financial expert” within the meaning of SEC regulations.
The primary purpose of the Audit Committee is to discharge the responsibilities of our Board with respect to our accounting, financial and other reporting and internal control practices and to oversee our independent
12   PetIQ, Inc.

Corporate Governance​
registered public accounting firm and internal audit function. Specific responsibilities of our Audit Committee include:

appointing, compensating, retaining and overseeing the work of the independent registered public accounting firm;

evaluating the performance of our independent registered public accounting firm and determining whether to retain or terminate its services;

determining and pre-approving the engagement of our independent registered public accounting firm to perform audit services and any permissible non-audit services;

reviewing and discussing with management and our independent registered public accounting firm the results of the annual audit;

reviewing and discussing with management and our independent registered public accounting firm the Company’s quarterly and annual financial statements, including the Company’s disclosures under Management’s Discussion and Analysis;

reviewing with management and our independent registered public accounting firm significant issues that arise, if any, regarding accounting principles and financial statement presentation;

reviewing and discussion with management and our independent registered public accounting firm
the Company’s significant accounting policies and practices and any changes thereto;

conferring with management regarding the scope, adequacy and effectiveness of our internal control over financial reporting;

discussing with management the process for assessing and managing risks, including the Company’s major financial risk exposures and the steps management has taken to monitor and control such expenses;

establishing procedures for the receipt, retention and treatment of any complaints we receive regarding accounting, internal accounting controls or auditing matters, and reviewing any such complaints received by the Company;

overseeing the Company’s internal audit function, including a review of ongoing assessments of the Company’s risk assessment;

reviewing and approving related party transactions; and

overseeing compliance with the requirements of the SEC.
Our Audit Committee met four times in 2020.
Compensation Committee
Our Compensation Committee is composed of Messrs. First and Kennedy and Ms. Oloughlin, with Mr. First serving as chairman. Our Board has determined that each of Messrs. First and Kennedy and Ms. Oloughlin is “independent” within the meaning of applicable NASDAQ listing standards, is a “non- employee director” as defined in Rule 16b-3 under the Exchange Act and is an “outside director” as that term is defined in Section 162(m) of the Internal Revenue Code of 1986, as amended. The primary purpose of our Compensation Committee is to discharge the responsibilities of our Board to oversee our compensation policies, plans and programs and to review and determine the compensation to be paid to our executive officers, directors and other senior management, as appropriate. Specific responsibilities of our Compensation Committee include:

reviewing and approving corporate performance goals and objectives relevant to the compensation
of our Chief Executive Officer and other executive officers and evaluating performance in light thereof;

determining the compensation and other terms of employment of our Chief Executive Officer;

in consultation with the Chief Executive Officer, determining the compensation and other terms of employment of our other executive officers;

administering our stock plans and other incentive compensation plans;

reviewing and approving the terms of any employment agreements, severance arrangements, change-of-control protections and any other compensatory arrangements for our executive officers and other senior management, as appropriate; and

reviewing and recommending to our Board the compensation of our directors.
2021 Proxy Statement   13

Corporate Governance
The Compensation Committee also has the authority, in its sole discretion, to select and retain any compensation consultant to be used by the Company to assist with the execution of the Compensation Committee’s duties and responsibilities, or to engage independent counsel or other
advisors as it deems necessary or appropriate to carry out its duties.
Our Compensation Committee met two times in 2020.
Nominating and Corporate Governance Committee
Our Nominating and Corporate Governance Committee is composed of Messrs. First, Huff and Bird, with Mr. First serving as chairman. The responsibilities of the Nominating and Corporate Governance Committee include:

identifying individuals qualified to become members of our Board, consistent with criteria included in our Corporate Governance Guidelines;

recommending director nominees to the Board;

recommending members and chairpersons of committees to the Board;

recommending executive officers to the Board;

reviewing and making recommendations to the Board regarding the appropriate size, performance, composition, duties, responsibilities and classes of the Board;

overseeing the annual self-evaluation of the Board and its committees; and

overseeing the Company’s corporate governance practices and procedures.
Our Nominating and Corporate Governance Committee met three times in 2020.
Other Committees
Our Board may establish other committees as it deems necessary or appropriate from time to time.
Committee Charters
Each of our Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee operates under written charters adopted by the Board. These charters are posted on the “Investor Relations” page of our website, http://ir.petiq.com. The contents of our
website are not intended to be incorporated by reference into this Proxy Statement or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.
Compensation Committee Interlocks and Insider Participation
None of the members of our Compensation Committee has, at any time, been one of our executive officers or employees.
None of our executive officers currently serves, or has served during the last completed year, as a member of the
Board or Compensation Committee (or other committee serving an equivalent function) of another entity that had one or more of its executive officers serving as a member of our Board.
Risk Oversight
The Board’s role in risk oversight at the Company is consistent with the Company’s leadership structure, with management having day-to-day responsibility for assessing and managing risk exposure and the Board and its committees overseeing those efforts. Management has formed a risk committee representing key functions, including human resources, legal, information technology, finance, Services segment, Products segment, operations, and including each of the Company’s significant locations.
Board of Directors Risk Oversight
The Board oversees our risk management processes directly and through its committees. The full Board also considers specific risk topics, including risks associated with our strategic plan, business operations, capital structure and liquidity, acquisition and capital allocation program, organizational structure, cybersecurity and data privacy. In addition, each committee oversees specific areas of risk
14   PetIQ, Inc.

Corporate Governance​
and reports to the full Board, as appropriate, including if and when a matter rises to the level of a material or enterprise level risk.
Committee Risk Oversight
Audit Committee
Compensation Committee
Nominating and Corporate
Governance Committee
The Board has delegated to the Audit Committee oversight of our risk management processes. The Audit Committee also performs central oversight with respect to financial and compliance risks. The Compensation Committee oversees risks associated with the Company’s compensation policies and practices. The Nominating and Corporate Governance Committee oversees risks associated with corporate governance and board management.
Board of Directors’ Leadership Structure
Our Corporate Governance Guidelines provide that the role of Chairman of the Board may be held by both management and non-management directors, as recommended by the Nominating and Corporate Governance Committee. The Chairman of our Board is currently our Chief Executive Officer, McCord Christensen. The Board believes that Mr. Christensen is best situated to serve as Chairman because he founded the Company, is the director most familiar with our business and is best suited to lead the discussion and execution of our strategy.
Because Mr. Christensen is our Chairman and Chief Executive Officer, our Board has appointed Mr. First to serve as Lead Independent Director to preside over meetings of our independent directors, serve as the liaison between our Chairman and the independent directors and perform additional duties as our Board may otherwise determine or delegate from time to time. While serving as Lead Independent Director, Mr. First has followed governance practices established by the Board that support effective communication and effective Board performance. The Lead Independent Director role fosters a Board culture of open discussion and deliberation, with thoughtful evaluation of risks and opportunities to support sound decision-making.
The Board has determined that the current Board leadership structure is appropriate for PetIQ for the following reasons:

the current structure is working well and the Lead Independent Director is highly effective in his role;

there are effectiveness and efficiency advantages of having a Chairman of the Board with the Chief Executive Officer’s significant knowledge of the Company’s history, customers and market opportunities, and extensive retail industry strategy experience;

the Board has open discussions and thoughtful deliberations, especially in the evaluation of risk and in support of sound decision-making;

the current size, focus, and organizational structure of the Company allows the Chairman of the Board and Chief Executive Officer roles to be effectively combined; and

the independent directors meet regularly in private sessions to discuss issues regarding the Company under the leadership of the Lead Independent Director.
Corporate Governance Documents
The Board has adopted Corporate Governance Guidelines, a Code of Ethics for Senior Financial Officers and a Code of Business Conduct and Ethics. We are committed to high standards of business integrity and corporate governance. All of the Company’s corporate governance documents are published on the Company’s website at http://ir.petiq.com and are also available upon request from the Corporate Secretary. The Board regularly reviews corporate governance developments and modifies the Company’s
corporate governance documents from time to time. We will post any modifications of our corporate governance documents on our website. The contents of our website are not intended to be incorporated by reference into this Proxy Statement or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.
2021 Proxy Statement   15

Corporate Governance
Communications with the Board of Directors
The Board welcomes communications from the Company’s stockholders and other interested parties. Pursuant to or Corporate Governance Guidelines, stockholders and any other interested parties may send communications to the Board, any committee of the Board, the Chairman of the Board, the Lead Director (if applicable) or any other director in particular to PetIQ, Inc., Attention: Corporate Secretary, 923 S. Bridgeway Place, Eagle, Idaho 83616. Stockholders and any other interested parties should mark the envelope containing each communication as “Stockholder Communication with Directors” and clearly identify the intended recipient(s) of the communication. The Secretary of the Company will review each communication received from stockholders and other interested parties and will forward the communication, as expeditiously as reasonably practicable, to the addressees
if: (1) the communication complies with the requirements of any applicable policy adopted by the Board relating to the subject matter of the communication; and (2) the communication falls within the scope of matters generally considered by the Board. To the extent the subject matter of a communication relates to matters that have been delegated by the Board to a committee or to an executive officer of the Company, then the Secretary may forward the communication to the executive officer or Chairman of the committee to which the matter has been delegated. The acceptance and forwarding of communications to the members of the Board or an executive officer does not imply or create any fiduciary duty of the Board members or executive officer to the person submitting the communications.
Director Nomination by Shareholder Procedures
The Nominating and Corporate Governance Committee has the responsibility for reviewing and recommending to the Board candidates for director positions. The Nominating and Corporate Governance Committee will consider nominations made by stockholders. There are no differences in the manner in which the Nominating and Corporate Governance Committee evaluates nominees for director, as described above under “— Criteria for Selection of Directors,” based on whether the nominee is recommended by a stockholder or whether the recommendation comes from another source. Pursuant to Section 1.11 of our Bylaws, nominations of persons for election to the Board at an annual meeting of stockholders may be made by any stockholder of the Company entitled to vote for the election of directors at the meeting who sends a timely notice in writing to our Corporate Secretary. To be timely, a stockholder’s notice must be delivered to, or mailed and received by, our Corporate Secretary at the Company’s principal executive offices not less than 90 nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that if the annual meeting is more than 30 days prior to the anniversary of the preceding year’s annual meeting or more than 60 days after such
anniversary date, notice by the stockholder must be delivered not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which “public announcement” of the date of such annual meeting is made by the Company. For purposes of the Bylaws, “public announcement” means disclosure in a press release reported by a national news service or in a document publicly filed by us with the SEC.
The stockholder’s notice or recommendation is required to contain certain prescribed information about each person whom the stockholder proposes to recommend for election as a director, the stockholder giving notice and the beneficial owner, if any, on whose behalf notice is given. The stockholder’s notice must also include the consent of the person proposed to be nominated and to serve as a director if elected. Recommendations or notices relating to director nominations should be sent to PetIQ, Inc., Attention: Corporate Secretary, 923 S. Bridgeway Place, Eagle, Idaho 83616. A copy of our Bylaws has been filed as Exhibit 3.1 to our Current Report on Form 8-K with the SEC on February 24, 2021.
16   PetIQ, Inc.

Director Compensation​
DIRECTOR COMPENSATION
Summary of Director Compensation Arrangements
In 2019, the Compensation Committee engaged FW Cook, the Compensation Committee’s independent compensation consultant, to review and make recommendations regarding the Company’s non-employee director compensation program. Based on FW Cook’s recommendations, the Company’s director compensation program consists of the following components, which became effective January 1, 2020:

Annual Cash Retainer — for 2020, each non-employee director was entitled to receive an annual cash retainer of $60,000 in consideration for his or her service on the Board. Prior to 2020, the retainer was $30,000, and directors received per-meeting cash fees ranging from $500 to $1,000 (the per-meeting fees were eliminated).

Committee Chair Retainers — in addition, for 2020, each non-employee director serving as the chairman of a committee of the Board received a cash fee, as applicable, of $10,000 (for the chairs of
the Compensation and Nominating and Corporate Governance Committees) or $20,000 (for the chair of the Audit Committee). Prior to 2020, the committee chair retainers were $5,000 and $10,000, respectively.

Equity Grants — finally, each non-employee director received an annual restricted stock unit award in 2020 with a grant date fair value of $90,000, vesting on the one-year anniversary of the date of grant based on continued service as a director through such date. Prior to 2020, the restricted stock unit award had a grant date fair value of $20,000, and each new non-employee director received a one-time, initial restricted stock unit award with a grant date fair value of $50,000, subject to annual vesting over the three years from the date of grant, based on continued service as a director through each vesting date. The initial equity grant was eliminated.
2020 Director Compensation
The following table presents information regarding the compensation earned or paid during 2020 to our non-employee directors who served on the Board during the year. Employee directors do not receive compensation for their service as members of the Board.
Name
Fees Earned or
Paid in Cash
($)
Stock Awards
($)(1)
Total
($)
Mark First(2) 70,000 90,000 160,000
Gary Michael(3) 40,000 40,000
James Clarke(4) 70,000 90,000 160,000
Ronald Kennedy 60,000 90,000 150,000
Larry Bird 70,000 90,000 160,000
Scott Huff 60,000 90,000 150,000
(1)
The amounts reported in this column represent the grant date fair value of the annual restricted stock unit award granted to each non-employee director (other than Mr. Michael) on August 11, 2020, which vests on the first anniversary of the grant date, provided that the applicable director continues to serve as a director through such date. The grant date fair value of each award was calculated in accordance with FASB ASC Topic 718. For a discussion of the assumptions and methodologies used in calculating the grant date fair value of the restricted stock unit awards, please see Note 9 to the Company’s consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020. As of December 31, 2020, the following non-employee directors held outstanding equity awards: (i) Mr. First — 3,069 unvested restricted stock units; (ii) Mr. Kennedy — 3,069 unvested restricted stock units; (iii) Mr. Bird — 3,737 unvested restricted stock units; and (iv) Mr. Huff — 4,029 unvested restricted stock units. Neither Mr. Michael nor Mr. Clarke held any outstanding equity awards as of December 31, 2020, as Mr. Michael was no longer in service and Mr. Clarke ceased serving on the Board effective December 31, 2020, at which time he forfeited 3,069 unvested restricted stock units.
(2)
The cash fees owed to Mr. First were paid to an affiliate of the Eos Funds.
(3)
Mr. Michael retired from the Board as of the date of our 2020 annual meeting of stockholders.
(4)
Mr. Clarke ceased serving on the Board effective December 31, 2020.
2021 Proxy Statement   17

Security Ownership of Certain Beneficial Owners and Management
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of our Common Stock as of April 30, 2021 by:

each person, or group of affiliated persons, who is known by us to beneficially own more than 5% of our Common Stock, on an as-converted basis;

each of our named executive officers;

each of our directors and director nominees; and

all of our executive officers and directors as a group.
We have determined beneficial ownership in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities. In addition, the rules include shares of common stock issuable pursuant to the
exercise of stock options that are either immediately exercisable or exercisable within 60 days of April 30, 2021. These shares are deemed to be outstanding and beneficially owned by the person holding the applicable options for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them. The percentage of shares beneficially owned shown in the table below is based upon 29,138,853 shares of Common Stock outstanding as of April 30, 2021, comprised of 28,372,028 shares of Class A Common Stock and 766,825 shares of Class B Common Stock.
Except as otherwise noted below, the address for persons listed in the table is c/o PetIQ, Inc., 923 S. Bridgeway Place, Eagle, Idaho 83616.
Shares of Class A
Common Stock
Beneficially Owned
Shares of Class B
Common Stock
Beneficially Owned
Combined
Voting Power
Number
Percentage
Number
Percentage
5% Stockholders
Eos Funds(1) 1,972,687 7.0% 6.8%
Geneva Capital Management LLC(2) 1,409,930 5.0% 4.8%
Ivy Investment Management Company(3) 2,747,526 9.7% 9.4%
Alger Associates, Inc.(4) 3,848,771 13.6% 13.2%
Wasatch Advisors, Inc.(5) 1,548,457 5.5% 5.3%
BlackRock, Inc.(6) 2,142,966 7.6% 7.4%
Named Executive Officers and Directors
Larry Bird 3,794 * *
McCord Christensen(7) 7,015 * 214,027 27.9% *
Mark First(1) 1,974,479 7.0% 6.8%
Scott Huff 479 * *
Ronald Kennedy(8) 138,254 * 109,956 14.3% *
Kimberly Lefko
Sheryl Oloughlin
R. Michael Herrman 2,728 * *
John Newland 76,682 * *
Susan Sholtis 4,487 * *
Michael Smith(9) 4,962 * *
Total Executive Officers and Directors as a Group (11 Persons) 2,212,880 7.8% 323,983 42.2% 8.7%
*
less than 1%
18   PetIQ, Inc.

Security Ownership of Certain Beneficial Owners and Management​
(1)
Includes 1,660,344 shares of Class A Common Stock held by Eos Helios Partners IV, L.P. and 312,343 shares of Class A Common Stock held by Eos Partners, L.P. (collectively, the “Eos Funds”), which are affiliates of Eos Management, L.P. As Managing Director of Eos Management, L.P., Mr. First has voting and investment control over and may be considered the beneficial owner of the Class A Common Stock owned by the Eos Funds. Mr. First disclaims any beneficial ownership of the Class A Common Stock owned by the Eos Funds. The principal business address for the Eos Funds is 437 Madison Avenue, New York, NY 10022.
(2)
These securities are beneficially owned by one or more institutional and individual clients of Geneva Capital Management LLC (“Geneva”). The principal business address for Geneva is 100 E Wisconsin Ave., Suite 2550, Milwaukee, WI 53202. Information contained in the table above and this footnote is based solely on a report on Schedule 13G filed with the SEC on February 12, 2021.
(3)
Includes 2,747,526 shares of Class A Common Stock beneficially owned by one or more open-end investment companies or other managed accounts which are advised or sub-advised by Ivy Investment Management Company (“IICO”), an investment advisory subsidiary of Waddell & Reed Financial, Inc. (“WDR” and, together with IICO, the “Waddell Funds”). The principal business address of the Waddell Funds is 6300 Lamar Avenue, Overland Park, KS 66202. Information contained in the table above and this footnote is based solely on a report on Schedule 13G/A filed with the SEC on March 10, 2021.
(4)
These securities are beneficially owned by one or more open-end investment or other managed accounts that are investment management clients of Fred Alger Management, LLC (“FAM”) and Weatherbie Capital, LLC (“WC”), registered investment advisors. FAM and WC are 100% owned subsidiaries of Alger Group Holdings, LLC (“AGH”), a holding company. AGH is a 100% owned subsidiary of Alger Associates, a holding company (together with FAM and AGH, collectively, the “Alger Entities”). The principal business address of the Alger Entities is 360 Park Avenue South, New York, NY 10010. Information contained in the table above and this footnote is based solely on a report on Schedule 13G filed with the SEC on February 16, 2021.
(5)
The principal business address of Wasatch Advisors, Inc. is 505 Wakara Way, Salt Lake City, UT 84108. Information contained in the table above and this footnote is based solely on a report on Schedule 13G/A filed with the SEC on February 11, 2021.
(6)
The principal business address of BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055. Information contained in the table above and this footnote is based solely on a report on Schedule 13/A filed with the SEC on January 29, 2021.
(7)
Shares of Class B Common Stock held by Christensen Ventures, LLC (“Ventures”). Mr. Christensen is the manager of Ventures and exercises voting and investment control over all shares held by Ventures.
(8)
Shares held by Kennedy Family Investments, LLC (“Investments”). Mr. Kennedy is the manager of Investments and exercises voting and investment control over the shares held by Investments.
(9)
Includes 3,877 shares of Class A common stock issuable upon vesting of restricted stock units on May 28, 2021
2021 Proxy Statement   19

Section 16(a) Beneficial Ownership Reporting Compliance
DELINQUENT SECTION 16(a) REPORTS
Section 16(a) of the Exchange Act requires our officers and directors, and persons who own more than ten percent of a registered class of our equity securities, to file reports of securities ownership and changes in such ownership with the SEC. Officers, directors and greater than ten percent stockholders are also required by SEC rules to furnish us with copies of all Section 16(a) forms they file.
Based solely on a review of the reports furnished to the Company and written representations from reporting persons that all reportable transaction were reported, the Company believes that during the fiscal year ended
December 31, 2020 the Company’s officers, directors and greater than ten percent owners timely filed all reports they were required to file under Section 16(a) of the Exchange Act, except: a Form 4 for Mr. Santana filed on March 10, 2020 with respect to a transaction that occurred on March 4, 2020 and a Form 8-K for Mr. Kennedy filed on November 6, 2020 with respect to a transaction that occurred on October 30, 2020. All aforementioned parties have subsequently filed the applicable Form 3 or Form 4 reports.
20   PetIQ, Inc.

Certain Relationships and Related Party Transactions​
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Policies and Procedures for Related Party Transactions
Our Board has a written related party transaction policy setting forth the policies and procedures for the review and approval or ratification of related person transactions. The policy covers any transactions, arrangements or relationships, or any series of similar transactions, arrangements or relationships, in which we are to be a participant and our executive officers, directors, nominees for election as a director, beneficial owners of more than 5% of any class of our Common Stock and any members of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, as determined by the Audit Committee. Related party transactions include, without limitation, purchases of goods or services by or from the related person or entities in which the related party has a material interest, and
indebtedness, guarantees of indebtedness or employment by us of a related party. All related party transactions must be presented to our Audit Committee for review, consideration and approval. In approving or rejecting any such proposal, our Audit Committee is to consider the material facts of the transaction, including, but not limited to, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances as well as the extent of the related party’s interest in the transaction.
All related party transactions described in this section occurred prior to adoption of this policy and as such, these transactions were not subject to the approval and review procedures set forth in the policy.
Tax Distributions
Pursuant to the HoldCo LLC Agreement, the Company has accrued tax distributions that are payable to certain HoldCo members to facilitate such members’ periodic estimated tax obligations. At December 31, 2020, the Company had
paid $30,000 in advance for estimated tax distributions, which are included in accounts payable on the Company’s consolidated balance sheets.
Brokerage Fees
Chris Christensen, the brother of our CEO, acts as the Company’s agent at Moreton Insurance (“Moreton”), which acts as a broker for a number of the Company’s insurance policies. The Company’s annual premium expense, paid to Moreton and subsequently transferred to insurance
providers, was approximately $2,800,000 in 2020. Chris Christensen was paid a Commission of approximately $140,000 by Moreton for the sale of such insurance policies to the Company.
VIP Acquisition
In connection with the acquisition VIP, the Company has a note payable due to VIP Petcare Holdings, Inc. (“VIPH”) for a principal amount of $27.5 million, as of December 31, 2020. The note payable was repaid in full in April 2021. In addition, the Company leased office and warehouse space from a company under common control with VIPH
through January 2021 and incurred rent expenses of $365,000 for the year ended December 31, 2020. Will Santana, a director of the Company during 2020 owns 50% of the equity interests of VIPH. Mr. Santa ceased to serve as a director effective July 1, 2020.
2021 Proxy Statement   21

Audit Committee Report
AUDIT COMMITTEE REPORT
The Audit Committee serves as the representative of the Board with respect to its oversight of:

the integrity of the Company’s financial statements

our accounting and financial reporting processes;

audits of the Company’s financial statements;

the integrity of our consolidated financial statements;

systems of internal control over financial reporting;

compliance with legal and regulatory financial accounting requirements;

our systems and policies to monitor and manage business risk;

the independent registered public accounting firm’s appointment, qualifications, independence and compensation; and

the performance of our internal audit function.
The Audit Committee also reviews the performance of our independent registered public accounting firm, KPMG, including the selection and performance of the lead audit engagement partner, in the annual audit of our consolidated financial statements and in assignments unrelated to the audit, and reviews the independent registered public accounting firm’s fees. In selecting and evaluating an independent registered public accounting firm, the Audit Committee considers such factors as the quality and efficiency of the services provided by the auditor, the auditor’s capabilities and the auditor’s technical expertise and knowledge of the Company’s operations and industry. Each year, the Audit Committee will evaluate the qualifications, performance, tenure and independence of the Company’s independent auditor and determine, after also considering the impact of a change in auditor, whether to re-engage the current independent auditor. KPMG has audited our financial statements since 2014.
The Audit Committee is currently composed of three independent directors, Messrs. Bird, Kennedy and Huff and Ms. Lefko, each of which qualifies as an “audit committee financial expert” under the SEC rules.
The Audit Committee provides our Board such information and materials as it may deem necessary to make our Board aware of financial matters requiring the attention of our Board. The Audit Committee reviews our financial disclosures and meets privately, outside the presence of our management, with our independent registered public accounting firm. In fulfilling its oversight responsibilities, the
Audit Committee reviewed and discussed the audited consolidated financial statements in our 2020 Annual Report with management, including a discussion of accounting principles, the reasonableness of significant judgments made in connection with the audited consolidated financial statements, and disclosures in the consolidated financial statements. The Audit Committee reports on these meetings to our Board.
Our management has primary responsibility for preparing our consolidated financial statements and for our financial reporting processes. In addition, our management is responsible for establishing and maintaining adequate internal control over financial reporting.
The Audit Committee reports as follows:
(1)
The Audit Committee has reviewed and discussed the audited consolidated financial statements for fiscal year 2020 with our management.
(2)
The Audit Committee has discussed with KPMG, our independent registered public accounting firm for fiscal year 2020, the matters required to be discussed under the Public Company Accounting Oversight Board standards.
(3)
The Audit Committee has received the written disclosures and the letter from KPMG pursuant to Rule 3526 of the Public Company Accounting Oversight Board, and has discussed with KPMG its independence, including whether the provision of non-audit services to us is compatible with its independence.
The Audit Committee has adopted a policy that requires pre-approval of all audit, audit-related, tax services, and other services performed by the independent registered public accounting firm. The policy provides for pre-approval by the Audit Committee (or by one or more members of the Audit Committee pursuant to any delegated authority) of specifically defined audit and non-audit services. Unless the specific service has been previously pre-approved with respect to that fiscal year, the Audit Committee (or any member or members of the Audit Committee with such delegated authority) must approve the specific service before the independent registered public accounting firm is engaged to perform such services for us.
Based on the reviews and discussions described above, the Audit Committee recommended to the Board that the audited consolidated financial statements be included in PetIQ’s Annual Report on Form 10-K, for the fiscal year ended December 31, 2020, for filing with the SEC.
22   PetIQ, Inc.

Audit Committee Report​
The foregoing report was submitted by the Audit Committee of the Board and shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A promulgated by the SEC or Section 18
of the Exchange Act, and shall not be deemed incorporated by reference into any prior or subsequent filing by us under the Securities Act or the Exchange Act.
Respectfully submitted on April 30, 2021, by the following members of the Audit Committee of the Board:
Larry Bird (Chair)
Ronald Kennedy
Scott Huff
2021 Proxy Statement   23

Proposal 2: Ratification of the Appointment of the Company’s Independent Auditors
PROPOSAL TWO:
RATIFICATION OF THE APPOINTMENT OF THE COMPANY’S INDEPENDENT AUDITORS
The Audit Committee has selected KPMG as the Company’s independent accountants for fiscal year 2021, and the Board is asking stockholders to ratify that selection. Although current law, rules, and regulations, as well as the charter of the Audit Committee, require the Audit Committee to engage, retain, and supervise the independent accountants, the Board considers the selection of the independent accountants to be an
important matter of stockholder concern and is submitting the selection of KPMG for ratification by stockholders as a matter of good corporate practice.
The affirmative vote of holders of a majority of the shares of Common Stock represented at the meeting and entitled to vote on the proposal is required to ratify the selection of KPMG as the Company’s independent accountant for the current fiscal year.
Fees Paid to Independent Accountants
The following table sets forth the aggregate fees billed for various professional services rendered by KPMG:
2020
2019
Audit Fees(1) $ 2,927,983 $ 1,761,838
Audit-Related Fees(2) $ 113,429 $ 1,097,777
Tax Fees(3) $ 10,178 $ 13,000
Total Fees $ 3,051,590 $ 2,872,615
(1)
Audit fees include fees associated with the annual audit of our consolidated financial statements and reviews of the Company’s quarterly reports on Form 10-Q and other services that are normally provided by the independent accountants in connection with our regulatory filings.
(2)
Audit-related fees relate to acquisition related due diligence services, comfort letters, and reimbursement for litigation related costs.
(3)
Tax fees include services related to tax compliance, and tax advice.
All services listed in the above table were approved by the Audit Committee.
We expect representatives of KPMG to be available at the Annual Meeting. They will have the opportunity to make a statement at the Annual Meeting if they desire to do so and will be available to respond to appropriate questions.
Recommendation of the Board
The Board recommends that stockholders vote “FOR” the ratification of the Company’s independent auditors.
24   PetIQ, Inc.

Compensation Discussion and Analysis​
COMPENSATION DISCUSSION AND ANALYSIS
Overview of Compensation Program
The Compensation Committee of our Board of Directors, which we refer to herein as the “Committee,” is responsible for establishing, implementing and continually monitoring adherence with our compensation philosophy and executive compensation programs. The Committee strives to ensure that the total compensation paid to our
executive officers is fair, reasonable and competitive. Generally, the types of compensation and benefits provided to our executive officers, including the named executive officers, are similar to those provided to executive officers at comparable companies in similarly situated positions.
Named Executive Officers
For 2020, our named executive officers and their respective titles are as follows:

McCord Christensen, Chief Executive Officer

John Newland, Chief Financial Officer

Susan Sholtis, President

Michael Smith, Executive Vice President, Product Division

R. Michael Herrman, Executive Vice President, General Counsel & Corporate Secretary
Messrs. Christensen and Newland are named executive officers for 2020 based on their positions with us as principal executive officer and principal financial officer during 2020. Ms. Sholtis and Messrs. Smith and Herrman are named executive officers based on being the three highest paid executive officers of the Company, other than the principal executive officer and principal financial officer, during 2020.
Compensation Philosophy and Objectives
The Committee believes that the most effective executive compensation program is one that is designed to reward the achievement of our specific annual, long-term and strategic goals, and which aligns executives’ interests with those of our stockholders by rewarding performance above established goals, with the ultimate objective of improving stockholder value. The Committee evaluates both performance and compensation to ensure that we maintain our ability to attract and retain superior employees in key positions and that compensation provided to key
employees remains competitive relative to the compensation paid to similarly situated executives at companies with, among other things as discussed in greater detail below, similarly sized revenues. To that end, the Committee believes that executive compensation packages provided by us to our executives, including to our named executive officers, should include both cash and equity-based compensation that rewards performance as measured against established goals.
Role of Executive Officers in Compensation Decisions
Our Chief Executive Officer annually reviews the performance of each of our named executive officers (other than the Chief Executive Officer, whose performance is reviewed by the Committee). The conclusions reached and recommendations based on these reviews, including with respect to salary adjustments and annual incentive award target and actual payout amounts, are presented to
the Committee, which has the discretion to modify any recommended adjustments or awards to executives.
The Committee has final approval over all compensation decisions for our named executive officers and approves recommendations regarding cash and equity awards to all of our officers.
2021 Proxy Statement   25

Compensation Discussion and Analysis
Setting Executive Compensation
Based on the foregoing objectives, the Committee has structured our executive compensation programs to motivate our executives to achieve the business goals set by us and to reward the executives for achieving these goals. In evaluating executive compensation, the Committee considers a variety of factors including market demands,
internal equity and external surveys which provide insight into and guidance on the pay practices of similar companies. While survey data provides us with a helpful guideline, we do not make compensation decisions based on any single factor.
Executive Compensation Components
The principal components of compensation for our named executive officers are:

base salary;

annual incentives; and

long-term incentive awards.
Base Salary
We provide our named executive officers and other employees with base salary to compensate them for services rendered during the fiscal year. Base salaries established for our named executive officers are intended to reflect each individual’s responsibilities, experience, historical performance and other discretionary factors deemed relevant by the Committee and have generally been set at levels deemed necessary to attract and retain individuals with superior talent. Base salaries are also designed to provide our named executive officers with steady cash flow during the course of the fiscal year that is not contingent on short-term variations in the Company’s operating performance. The initial base salary for our named executive officers is established in their employment agreements.
Salary levels are reviewed annually as part of our performance review process as well as upon a promotion
or other material change in job responsibility. Merit-based increases to salaries of the executives, including our named executive officers, are based on the Committee’s assessment of the individual’s performance.
In reviewing base salaries of our executives, the Committee primarily considers:

scope and/or changes in individual responsibility;

internal analysis of the executive’s compensation, both individually and relative to other officers; and

individual performance of the executive.
The Committee reviews these criteria collectively but does not assign a weight to any criterion when setting base salaries. Each base salary adjustment is made by the Committee subjectively based upon the foregoing.
Our named executive officers are entitled to the following annual base salaries:
Name
2020 Base Salary Rate ($)
(Effective January 1, 2020)
2021 Base Salary Rate ($)
(Effective January 1, 2021)
McCord Christensen 800,000 950,000
John Newland 425,000 500,000
Susan Sholtis 450,000 550,000
Michael Smith 415,000 500,000
R. Michael Herrman 315,000 400,000
In 2019, FW Cook, the Committee’s independent compensation consultant, engaged in a review of Mr. Christensen’s compensation package as Chief Executive Officer and based on that review, recommended an increase to Mr. Christensen’s base salary rate for 2020 in order to better align his pay with competitive practices. In
October 2020, the Board approved base salary increases for each named executive officer, effective January 1, 2021 to reflect individual performance and to recognize the contributions of such named executive officers within their respective roles.
26   PetIQ, Inc.

Compensation Discussion and Analysis​
Annual Incentives
Our named executive officers are eligible for annual bonuses based on Company and individual performance, with payment amounts determined by the Committee based on the Committee’s assessment of performance for the applicable year. The annual incentive plan is intended to focus the entire organization on meeting or exceeding the annual performance goals that are set during the early part of each year and approved by the Committee, while also providing significant opportunity to reward individual contributions.
Each named executive officer is assigned an annual target opportunity for an annual bonus expressed as a percentage of such executive’s base salary. An executive’s target annual incentive percentage generally increases as his or her ability to affect the Company’s performance increases. Consequently, as an executive’s responsibilities increase, his or her variable compensation in the form of a discretionary annual bonus, which is dependent on Company performance, generally makes up a larger portion of the executive’s total compensation.
The 2020 annual bonus target opportunities for our named executive officers are set forth in the following table:
Name
Target Bonus as % of
Base Salary
Target Bonus ($)
McCord Christensen 100% 800,000
John Newland 100% 425,000
Susan Sholtis 100% 450,000
Michael Smith 75% 311,250
R. Michael Herrman 75% 236,250
For 2020, the Committee determined to use Adjusted EBITDA as the sole annual incentive performance measure (for more information regarding Adjusted EBITDA and a reconciliation to net income, the most directly comparable GAAP measure, see Appendix A, “Reconciliation of Non-GAAP Financial Measure”). The Board set an Adjusted EBITDA target for 2020 of $77.0 (as adjusted to exclude bonus expenses), and the Committee determined that no bonuses would be earned if actual Adjusted EBITDA was achieved at 85% or less of target, bonuses would be earned at 100% if actual Adjusted EBITDA was achieved at 100%
of target, and bonuses would be earned at 150% if actual Adjusted EBITDA was achieved at 115% of target, with linear interpolation for performance between the specified goals. The actual Adjusted EBITDA achieved by the Company for 2020 was $67.8 million, which, as adjusted to exclude bonus expenses and the impact of COVID-19, resulted in approximately 108% of target. Despite the above-target performance on an as adjusted basis, the Committee determined to exercise negative discretion to cap payouts for 2020 at 100% of target.
The annual bonuses earned by our named executive officers for 2020 are set forth in the following table:
Name
2020 Annual Incentive
Payout Percentage
(% of Target)
2020 Annual Bonus ($)
McCord Christensen 100% 800,000
John Newland 100% 425,000
Susan Sholtis 100% 450,000
Michael Smith 100% 311,250
R. Michael Herrman 100% 236,250
Long-Term Incentive Awards
We established the Omnibus Plan in connection with our initial public offering in 2017, pursuant to which cash and equity-based incentives (including through an annual incentive program) may be granted to participating employees, directors and consultants. An amendment and
restatement of our Omnibus Plan was approved by our shareholders at the 2019 annual meeting. The principal purposes of the Omnibus Plan are to encourage profitability and growth through short-term and long-term incentives that are consistent with our objectives; to give participants
2021 Proxy Statement   27

Compensation Discussion and Analysis
an incentive for excellence in individual performance; to promote teamwork among participants; and to give us a significant advantage in attracting and retaining key employees, directors and consultants. Our Omnibus Plan provides for the grant of incentive stock options within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended, nonqualified stock options, stock appreciation rights, restricted shares, restricted stock units, performance-based awards (including performance-based restricted shares and performance units), and other stock or cash-based awards.
In August 2018, the Committee adopted a long-term incentive award program (the “LTI Program”) under the Omnibus Plan, pursuant to which equity awards are made
on an annual basis to certain employees of the Company, including our named executive officers. At the beginning of each fiscal year, 50% of a participant’s target grant date dollar value under the LTI Program will be awarded to the extent that the participant remains employed by the Company on the grant date, and 50% of a participant’s target grant date dollar value under the LTI Program will be awarded based on the level of Adjusted EBITDA achieved by the Company in the year prior to the year of grant, as compared to the Adjusted EBITDA budget set for each year by the Board (for more information regarding Adjusted EBITDA and a reconciliation to net income, the most directly comparable GAAP measure, see Appendix A, “Reconciliation of Non-GAAP Financial Measure”).
The LTI Program target opportunities for our named executive officers are set forth in the following table:
Name
Target LTI Award
(% of Base Salary)
Target LTI Award ($)
McCord Christensen 150% 1,200,000
John Newland 100% 425,000
Susan Sholtis 100% 450,000
Michael Smith 100% 415,000
R. Michael Herrman 100% 315,000
The mix of equity awards granted to the Company’s named executive officers under the LTI Program on March 12, 2020 consisted of nonqualified stock options (weighted 50%) and restricted stock units (weighted 50%), which will vest ratably in annual installments over four years from the date of grant, generally based on a participant’s continued employment with the Company through each vesting date.
The actual Adjusted EBITDA achieved by the Company for 2019 was $60.7 million, which was in excess of the Adjusted EBITDA budget set by the Board. As a result of the foregoing, our named executive officers received the grants of nonqualified stock options and restricted stock units for pursuant to the LTI Program in 2020 as set forth in the following table:
Name
Nonqualified Stock
Options (#)
Restricted Stock
Units (#)
McCord Christensen 45,435 27,717
John Newland 22,717 11,359
Susan Sholtis 23,555 11,777
Michael Smith 12,643 6,321
R. Michael Herrman 14,675 7,337
Retirement Plan
Effective February 1, 2019, we adopted a qualified defined contribution 401(k) plan in which all of our eligible employees, including our named executive officers, may
participate. The Company will match 100% of up to the first 3% of a participant’s deferral per year under the 401(k) plan.
28   PetIQ, Inc.

Compensation Discussion and Analysis​
Limited Perquisites
We provide named executive officers with limited perquisites that we and the Committee believe are reasonable and consistent with our overall compensation
program to better enable us to attract and retain superior employees for key positions.
Employment Agreements and Severance Benefits
We provide our named executive officers with certain severance protections in their employment agreements in order to attract and retain an appropriate caliber of talent for such positions. Our employment agreements with the named executive officers and the severance
provisions set forth therein are summarized below under “— Executive Employment Arrangements” and “— Potential Payments upon Termination or Change in Control.” We intend to periodically review the level of the benefits in these agreements.
Hedging and Pledging Disclosure
The Company’s Insider Trading Policy (the “Policy”) prohibits directors and officers designated as “officers” for purposes of Section 16 under the Securities Exchange Act of 1934, as amended (together, the “Section 16 Reporting Persons”) from (i) entering into hedging or monetization transactions involving our Company stock and (ii) holding our Company stock in a margin account or pledging our Company stock as collateral for a loan. An excerpt from the Policy is set forth below:
Margin Accounts and Pledges. Section 16 Reporting Persons may not pledge any Company securities as collateral for a loan and such person may not hold Company securities as collateral in a margin account. Such persons may not have control over these transactions as the securities may be sold at certain times without such person’s consent. A margin or foreclosure sale that occurs when a person subject to this policy is aware of material, nonpublic information may, under some circumstances,
result in unlawful insider trading. This provision shall not apply with respect to members of the Company’s Board of Directors who may indirectly engage in such transactions in a professional capacity.
Hedges and Monetization Transactions. Section 16 Reporting Persons may not engage in hedging or monetization transactions, through transactions in Company securities or through the use of financial instruments designed for such purpose. Such hedging and monetization transactions may permit a person to own Company securities, but without the full risks and rewards of ownership. When that occurs, the person may no longer have the same objectives as the Company’s stockholders generally. This provision shall not apply with respect to members of the Company’s Board of Directors who may indirectly engage in such transactions in a professional capacity.
Clawback Policy
The Company maintains a formal clawback policy (the “Clawback Policy”) that applies to all “Incentive-Based Compensation” granted to any “Executive Officer”, in each case as such term is defined in rules or regulations issued by the U.S. Securities and Exchange Commission or any national securities exchange or national securities association on which shares of the common stock of the Company may be traded, in connection with Section 10D of the Exchange Act, as added by Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended.
In the event that the Company is required by applicable U.S. federal securities laws to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under such securities laws, the Company will recover from such
Executive Officer who received Incentive-Based Compensation during the three-year period preceding the date on which the Company is required to prepare an accounting restatement, based on the erroneous data, the amount, if any, in excess of what would have been paid to the Executive Officer under the accounting restatement. If the Committee cannot determine the amount of excess Incentive-Based Compensation received by an Executive Officer directly from the information in the accounting restatement, then it will make its determination based on a reasonable estimate of the effect of the accounting restatement and will determine, in its sole discretion, the method for recouping Incentive-Based Compensation. In determining what actions to take, the Committee shall take into account all relevant factors, including whether the Executive Officer engaged in fraud, misconduct or other bad-faith action that caused or partially caused the need for
2021 Proxy Statement   29

Compensation Discussion and Analysis
the restatement. In addition, the Committee may dismiss the Executive Officer, authorize legal action, or take such other action to enforce the Executive Officer’s obligations to the Company as it may deem appropriate in view of all the facts surrounding the particular case.
The Clawback Policy is administered by the Committee, which has the sole discretion in making all determinations under the Clawback Policy, which shall be binding on all
individuals. The Clawback Policy will be interpreted and administered (and, as necessary, amended to be) consistent with the applicable requirements of Section 10D of the Exchange Act and any applicable rules or regulations issued by the U.S. Securities and Exchange Commission or any national securities exchange or national securities association on which shares of the common stock of the Company may be traded.
2021 Pay Actions
In October 2020, the Board approved increases to Messrs. Smith and Herrman’s annual target opportunity for each officer’s annual bonus from 75% of base salary to 100% of
base salary. In addition, in October 2020, the Board approved an increase to Mr. Christensen’s LTI target from 150% to 200%.
Tax and Accounting Implications
One of the factors the Committee considers when determining executive compensation is the anticipated tax treatment to the Company and to the executives of the various payments and benefits. Section 162(m) of the Internal Revenue Code (“Section 162(m)”) generally provides that a publicly held company may not deduct compensation paid to certain covered executive officers to the extent that such compensation exceeds $1,000,000 per executive officer in any year. While the Committee
generally considers this limit when determining compensation, there are instances in which the Committee has concluded, and reserves the discretion to conclude in the future, that it is appropriate to exceed the limitation on deductibility under Section 162(m) to ensure that executive officers are compensated in a manner that it believes to be consistent with the Company’s best interests and those of its stockholders.
30   PetIQ, Inc.

Compensation Committee Report​
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement and the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.
THE COMPENSATION COMMITTEE
Mark First, Chairman
Ronald Kennedy
2021 Proxy Statement   31

Summary Compensation Table
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table discloses the compensation information for fiscal years 2018 through 2020 for our principal executive officer (“PEO”), principal financial officer (“PFO”) and the three most highly compensated executive officers other than the PEO and PFO who were serving as executive officers at the end of the last completed fiscal year (collectively, the “named executive officers”).
Name and
Principal Position
Year
Salary
($)
Bonus
($)(1)
Stock
Awards
($)(2)
Option
Awards
($)(3)
Non-Equity
Incentive Plan
Compensation
($)(4)
All Other
Compensation
($)(5)
Total
($)
McCord Christensen
Chief Executive Officer
2020 817,808 442,754 314,220 800,000 23,328 2,398,110
2019 516,026 747,337 225,001 409,649 1,898,013
2018 491,440 500,000 1,476,000 2,467,440
John Newland
Chief Financial Officer
2020 439,855 221,387 152,106 425,000 7,886 1,246,234
2019 387,019 560,502 112,501 204,830 8,400 1,273,252
2018 371,434 375,000 738,862 1,485,296
Susan Sholtis
President
2020 465,385 229,534 157,717 450,000 8,206 1,310,842
2019 400,000 581,158 6,423 987,581
2018 83,333 749,000 1,504,168 97,815 2,435,116
Michael Smith
Executive Vice President, Product Division
2020 430,385 123,196 84,654 311,250 28,958 838,952
2019 216,154 733,949 409,566 996,714 20,852 2,376,312
R. Michael Herrman(6)
Executive Vice President, General Counsel and Corporate Secretary
2020 326,346 142,998 98,260 236,250 803,854
(1)
The amounts reported in the “Bonus” column for 2019 represent (i) for Messrs. Christensen and Newland, discretionary bonuses paid to the executives in 2020 with respect to services provided in 2019, and (ii) for Mr. Smith, a sign-on bonus of $500,000 paid in connection with the commencement of his employment with the Company, and a discretionary bonus of $233,949 paid in 2020 with respect to services provided in 2019.
(2)
The amounts reported in the “Stock Awards” column for 2020 represent the grant date fair value of the restricted stock unit awards granted to the named executive officers, calculated in accordance with FASB ASC Topic 718. For a discussion of the assumptions and methodologies used in calculating the grant date fair value of the restricted stock unit awards, please see Note 9 to the Company’s consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
(3)
The amounts reported in the “Option Awards” column for 2020 represent the grant date fair value of the stock option awards granted to the named executive officers, calculated in accordance with FASB ASC Topic 718. For a discussion of the assumptions and methodologies used in calculating the grant date fair value of the stock option awards, please see Note 9 to the Company’s consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
(4)
The amounts reported in the “Non-Equity Incentive Plan Compensation” column for 2020 represent the amounts earned under the Company’s 2020 annual incentive program based on achievement of the applicable Adjusted EBITDA target, as described above in the Compensation Discussion and Analysis under the heading, “Annual Incentives.”
(5)
The amounts reported in the “All Other Compensation” column for 2020 represent employer matching contributions under the Company’s 401(k) plan, except for amounts reported for (i) Mr. Christensen, who received reimbursements of $14,440 and $8,928 related to club dues and personal or family travel expenses, respectively, and (ii) Mr. Smith, who received reimbursements of $20,354 related to the closing costs associated with the sale of his prior residence.
(6)
Because Mr. Herrman was not a named executive officer prior to 2020, only his 2020 compensation is reported in this table.
Executive Employment Arrangements
A summary of our current at-will employment agreements with our named executive officers is set forth below. For
a description of the severance provisions of the employment agreements, see “— Potential Payments upon Termination or Change in Control” below.
32   PetIQ, Inc.

Summary Compensation Table​
McCord Christensen. Effective May 31, 2012, Mr. Christensen entered into an employment agreement with the Company, which was amended and restated effective May 9, 2019. Under the amended agreement, Mr. Christensen will continue to serve as Chief Executive Officer for a term of three years, plus automatic one-year renewals thereafter unless any party provides notice of intent not to renew the agreement. The amended agreement provides for an initial base salary of $515,000 per year and eligibility to receive annual cash bonuses in the discretion of the Board with a target bonus equal to 100% of his annual base salary. Mr. Christensen is also eligible to participate in and receive awards under the PetIQ, Inc. Amended and Restated 2017 Omnibus Incentive Plan (the “Omnibus Plan”), as determined by the Committee in its discretion.
Mr. Christensen is subject to certain restrictive covenants, including provisions regarding non-competition and non-solicitation of employees, independent contractors, clients, customers or suppliers, while employed by the Company and for a period following the termination of employment of either four years (in the event that Mr. Christensen’s employment terminates for any reason prior to December 31, 2020) or three years (in the event that Mr. Christensen’s employment terminates for any reason after December 31, 2020).
John Newland. Effective May 9, 2019, Mr. Newland entered into an employment and non-competition agreement with the Company, which supersedes the terms of Mr. Newland’s offer letter, dated March 6, 2014. Pursuant to the agreement, Mr. Newland will continue to serve as Chief Financial Officer for a term of one year, plus automatic one-year renewals thereafter unless any party provides notice of intent not to renew the agreement. The agreement provides for an initial base salary of $386,250 per year and eligibility to receive annual cash bonuses in the discretion of the Board with a target bonus of 100% of his annual base salary. Mr. Newland is also eligible to participate in and receive awards under the Omnibus Plan, as determined by the Committee in its discretion. Mr. Newland is subject to certain restrictive covenants, including provisions regarding non-competition and non-solicitation of employees, independent contractors, clients, customers or suppliers, while employed by the Company and for a period following the termination of employment of one year.
Susan Sholtis. On September 17, 2018, Ms. Sholtis entered into an employment agreement with the Company, effective October 1, 2018, to serve as President of the Company. The agreement provides for an initial term of one year, plus automatic one-year renewals thereafter. unless any party provides notice of intent not to renew the agreement, and an initial base salary of $400,000 per
year. In addition, Ms. Sholtis is eligible to receive annual cash bonuses in the discretion of the Board with a target bonus of 100% of her annual base salary. Ms. Sholtis is subject to certain restrictive covenants, including provisions regarding non-competition and non-solicitation of employees, independent contractors, clients, customers or suppliers, while employed by the Company and for a period of one year following the termination of her employment for any reason.
In connection with Ms. Sholtis’s commencement of employment, Ms. Sholtis received an option to purchase 100,000 shares of Class A Common Stock, vesting in equal installments on each of the first four anniversaries of the grant date, and 20,000 restricted stock units, vesting 50% on the first anniversary of the grant date and in equal installments on each of the second, third, and fourth anniversaries thereafter.
Michael Smith. Effective May 28, 2019, Mr. Smith entered into an employment and non-competition agreement with the Company. Under the agreement, Mr. Smith will serve as the Executive Vice President, Product Division of the Company for an initial term of one year, plus automatic one-year renewals thereafter unless any party provides notice of intent not to renew the agreement. The agreement provides for an initial base salary of $400,000 per year and a $500,000 sign-on bonus. In addition, Mr. Smith is eligible to receive annual cash bonuses in the discretion of the Board with a target bonus of 75% of his annual base salary (prorated for the 2019 fiscal year) and to participate in and receive awards under the Omnibus Plan, as determined by the Committee in its discretion, with a target opportunity equal to 100% of his annual base salary (prorated for the 2019 fiscal year). Mr. Smith is subject to certain restrictive covenants, including provisions regarding non-competition and non-solicitation of employees, independent contractors, clients, customers or suppliers, while employed by the Company and for a period following the termination of employment of one year.
In connection with the commencement of Mr. Smith’s employment, Mr. Smith received an option to purchase 100,000 shares of Class A Common Stock and an award of 15,508 restricted stock units, in each case, vesting in substantially equal installments on each of the first four anniversaries of the grant date.
R. Michael Herrman. Effective May 9, 2019, Mr. Herrman entered into an employment and non-competition agreement with the Company. Pursuant to the agreement, Mr. Herrman will serve as General Counsel and Secretary of the Company for a term of one year, plus automatic one-year renewals thereafter unless any party provides notice of intent not to renew the agreement. The agreement
2021 Proxy Statement   33

Summary Compensation Table
provides for an initial base salary of $295,000 per year and eligibility to receive annual cash bonuses in the discretion of the Board with a target bonus of 50% of his annual base salary. Mr. Herrman is also eligible to participate in and receive awards under the Omnibus Plan, as determined by the Committee in its discretion. Mr. Herrman is subject
to certain restrictive covenants, including provisions regarding non-competition and non-solicitation of employees, independent contractors, clients, customers or suppliers, while employed by the Company and for a period following the termination of employment of one year.
34   PetIQ, Inc.

Grants of Plan-Based Awards​
GRANTS OF PLAN-BASED AWARDS
The following table discloses the grants of plan-based awards made to our named executive officers in 2020.
Name
Type of Award
Grant Date
Estimated Future Payouts Under Non-
Equity Incentive Plan Awards(1)
All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#)
All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
Exercise or
Base
Price of
Option
Awards
($/Sh)
Grant
Date Fair
Value of
Stock and
Option
Awards
($)(2)
Threshold
($)
Target
($)
Maximum
($)
McCord Christensen
Annual Incentive
800,000 1,200,000
RSU(3) 3/12/2020 22,717 442,754
Stock Option(4) 3/12/2020 45,435 19.49 304,220
John Newland
Annual Incentive
425,000 637,500
RSU(3) 3/12/2020 11,359 221,382
Stock Option(4) 3/12/2020 22,717 19.49 152,106
Susan Sholtis
Annual Incentive
450,000 675,000
RSU(3) 3/12/2020 11,777 229,534
Stock Option(4) 3/12/2020 23,555 19.49 157,717
Michael Smith
Annual Incentive
311,250 466,875
RSU(3) 3/12/2020 6,321 123,196
Stock Option(4) 3/12/2020 12,643 19.49 84,654
R. Michael Herrman
Annual Incentive
236,250 354,375
RSU(3) 3/12/2020 7,337 142,998
Stock Option(4) 3/12/2020 14,675 19.49 98,260
(1)
The threshold, target, and maximum annual incentive amounts represent 0%, 100%, and 150%, respectively, of the total bonus opportunity for each named executive officer. If actual performance falls between threshold and target or between target and maximum, the award would be calculated using linear interpolation. The annual incentive awards are also based on a percentage of base salary, which is 100% for each of Messrs. Christensen and Newland and Ms. Sholtis, and 75% for each of Messrs. Smith and Herrman. The target amount is generally the named executive officer’s base salary multiplied by his or her respective target opportunity.
(2)
Please see Note 9 to the Company’s consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 for the assumptions made in determining values.
(3)
The restricted stock unit awards vest in approximately equal installments on each of the first four anniversaries of the applicable grant dates, subject to continued service with the Company through each such vesting date.
(4)
The stock option awards vest in approximately equal installments on each of the first four anniversaries of the applicable grant dates, subject to continued service with the Company through each such vesting date.
Annual Incentives
A summary of the Company’s annual incentive program is set forth above under the heading, “Compensation Discussion and Analysis — Executive Compensation Components — Annual Incentives.”
Long-Term Incentives
The stock options and restricted stock unit awards were all granted pursuant to the Omnibus Plan, a summary of which is set forth above under the heading, “Compensation Discussion and Analysis — Executive Compensation Components —  Long-Term Incentive Awards.” In general, the stock options and restricted stock units vest in ratable annual installments on each of the first four anniversaries of the grant date, generally subject to continued service with the Company through each applicable vesting date. For a description of the effect of a termination of employment or change in control on the vesting of stock options and restricted stock units, please see “Executive Compensation — Potential Payments Upon Termination or Change in Control.”
2021 Proxy Statement   35

Outstanding Awards and Fiscal Year End
OUTSTANDING AWARDS AND FISCAL YEAR END
The following table shows outstanding equity awards as of December 31, 2020 for each named executive officer.
Option Awards
Stock Awards
Name
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable(1)
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable(1)
Option
Exercise
Price
($)
Option
Expiration
Date
Number of
Shares or
Units of
Stock That
Have Not
Vested (#)(2)
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(3)
McCord Christensen 45,435(4) 19.49 3/12/2030 22,717(4) 873,469
9,466 28,399(5) 27.73 3/13/2029 6,086(5) 234,007
75,000 75,000(6) 24.97 3/15/2028
154,053 51,351(7) 16.00 7/20/2027
John Newland 22,717(4) 19.49 3/12/2030 11,359(4) 436,754
4,733 14,200(5) 27.73 3/13/2029 3,043(5) 117,003
37,500 37,500(6) 24.97 3/15/2028
107,666 35,888(7) 16.00 7/20/2027
Susan Sholtis 23,555(4) 19.49 3/12/2030 11,777(4) 452,826
50,000 50,000(8) 37.49 10/1/2028 6,660(10) 256,077
668(11) 25,685
Michael Smith 12,643(4) 19.49 3/12/2030 6,321(4) 243,042
25,000 75,000(9) 26.76 5/28/2029 11,631(9) 447,212
R. Michael Herrman 14,675(4) 19.49 3/12/2030 7,337(4) 282,108
3,155 9,467(5) 27.73 3/13/2029 2,029(5) 78,015
12,500 37,500(5) 27.73 3/13/2029
(1)
These option awards vest and become exercisable in approximately equal installments on each of the first four anniversaries of the applicable grant date, subject to continued service with the Company through each such vesting date. The regular term of each option expires on the tenth anniversary of the applicable grant date.
(2)
Unless otherwise noted in the following footnotes, the restricted stock unit awards reported in this column vest in approximately equal installments on each of the first four anniversaries of the applicable grant dates, subject to continued service with the Company through each such vesting date.
(3)
The value of the unvested restricted stock units is shown assuming a market value of $38.45 per share, the closing market price of a share of Class A Common Stock on December 31, 2020.
(4)
Granted on March 12, 2020.
(5)
Granted on March 13, 2019.
(6)
Granted on March 15, 2018.
(7)
Granted on July 20, 2017.
(8)
Granted on October 1, 2018.
(9)
Granted on May 28, 2019.
(10)
This restricted stock unit award was granted on October 1, 2018. The award vested 50% on the first anniversary of the grant date, with the remainder vesting in approximately equal annual installments on each of the second, third, and fourth anniversaries thereafter, subject to continued service with the Company through each such vesting date.
(11)
This restricted stock unit award was granted on March 15, 2018 in connection with Ms. Sholtis’s commencement of service as a non-employee director. The award vested or vests in approximately equal installments on each of the first three anniversaries of the applicable grant date, subject to continued service with the Company through each such vesting date.
36   PetIQ, Inc.

Nonqualified Deferred Compensation​
OPTION EXERCISES AND STOCK VESTED
The following table summarizes the vesting of restricted stock units held by our named executive officers during 2020. No stock options were exercised in 2020 by our named executive officers.
Stock Awards
Name
Number of Shares Acquired on
Vesting (#)(1)
Value Realized on
Vesting ($)(2)
McCord Christensen 2,028 44,256
John Newland 1,014 22,125
Susan Sholtis 4,007 119,962
Michael Smith 3,877 117,900
R. Michael Herrman 676 14,750
(1)
Represents the vesting of restricted stock unit awards granted in 2018 and 2019.
(2)
The value realized on vesting is equal to the number of shares, multiplied by the fair market value of the shares at the time of vesting.
PENSION BENEFITS
We do not maintain any defined benefit pension plans.
NONQUALIFIED DEFERRED COMPENSATION
We do not maintain any nonqualified deferred compensation arrangements.
2021 Proxy Statement   37

Potential Payments Upon Termination or Change in Control
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
The tables below show estimates of the compensation payable to each of our named executive officers upon their termination of employment with the Company, calculated as if the executive had terminated employment effective December 31, 2020. The actual amounts due to any one of the named executive officers upon termination of
employment can only be determined at the time of the termination. There can be no assurance that a termination or change in control would produce the same or similar results as those described below if it occurs on any other date or at any other stock price, or if any assumption is not, in fact, correct.
Named Executive Officer and Triggering Event
Cash
Severance
($)(1)
Accelerated
Vesting of Stock
Options and
Restricted Stock
Units
($)(2)
Total
Payments
($)
McCord Christensen
Termination without Cause/Resignation for Good Reason