Chief Executive Officer Succession Plan

12 Months Ended

Jun. 30, 2018

Compensation Related Costs [Abstract]

Chief Executive Officer Succession Plan

CHIEF EXECUTIVE OFFICER SUCCESSION PLAN

On June 25, 2018, Hain announced a Chief Executive Officer (“CEO”) succession plan, whereby the current CEO, Irwin D. Simon, will terminate employment with the Company upon the hiring of a new CEO. Following the hiring of a new CEO, Mr. Simon will become Non-Executive Chairman of the Board of Directors for a transition period. Under the terms of the Succession Agreement (the “Agreement”), Mr. Simon’s employment with the Company will terminate on the date immediately prior to the first date of employment of a new CEO of the Company to be appointed by the Company’s Board of Directors (the “Succession Date”). Prior to the Succession Date, Mr. Simon will continue his position as President and CEO and will assist the Board of Directors in the identification and hiring of a successor to his position during this period.

Cash Separation Payments

The Agreement provides for a cash separation payment of $34,294 payable in a single lump sum and cash benefits continuation costs of $209. These costs are being recognized over the term of the Company’s best estimate of the Succession Date, currently estimated to occur no later than December 31, 2018. Expense recognized in connection with these payments was $1,453 in the twelve months ended June 30, 2018.

Long Term Incentive Award

Mr. Simon was granted 164 total shareholder return (“TSR”) performance based awards on September 26, 2017. The performance period will end on June 30, 2019. Under the Agreement, he will be entitled to compensation if the TSR components are met. The Agreement modifies Mr. Simon’s award such that his award went from improbable of being earned to probable since the Agreement allows him to be eligible for the award while he is no longer an employee. Accordingly, the Company determined that a Type III modification pursuant to ASC 718 has occurred. Therefore, in accordance with ASC 718, the Company determined the fair value of the replacement award as of the modification date, utilizing the Monte Carlo valuation model. As a result, the fair value of the TSR performance based awards granted on September 26, 2017 was reduced from $31.60 per share to $3.19 per share based on the lower likelihood of attainment, resulting in revised expense of $524, which will be amortized on a straight-line basis from June 24, 2018 through the estimated Succession Date. In the fiscal year ended June 30, 2018, the Company reversed the previously recognized stock-based compensation expense of $2,244 and recognized $22 of stock-based compensation expense associated with the modified grant, resulting in a net reduction to stock-based compensation expense of $2,222 in the twelve months ended June 30, 2018 associated with the modification of this grant.

Accelerated Stock Compensation

The Agreement allows for acceleration of vesting of all service-based awards outstanding at the Succession Date. In connection with these accelerations, the Company expects to recognize additional stock-based compensation expense of $445 ratably through the Succession Date, of which $19 was recognized in the twelve months ended June 30, 2018.