Executive Compensation

Message from Beth Newlands Campbell, Board Chair 

 

Members, 

As owners of REI, you can expect a high degree of transparency from management about the co-op’s business practices. One way we do that is by disclosing the compensation of our most highly-paid leaders. We have a “pay for performance” philosophy and REI’s executive compensation programs are structured accordingly, with the majority of compensation directly dependent on the performance of the co-op relative to our annual and long-term plans. 

As in years’ past, REI continues to compare our compensation program elements (base pay, annual and long-term incentive pay, and retirement contributions) to those offered both by peer companies in the industry and to regular executive pay surveys. At REI, we set executive compensation at the median of the market. Each year, the board also considers other factors when determining pay: co-op performance, individual performance, internal equity, and co-op values. Generally, this results in our executive total target compensation falling between the 25th and 50th percentile of the market—as is the case this year. At REI, we set our targets for hourly pay between the 50th and 75th percentile of the market. 

Having a competitive and compelling compensation program is essential to attracting and retaining the leaders we need to continue to guide the co-op through a complex and challenging environment. Over the past several years, the team at REI has made tough decisions in service of the long-term viability of the co-op, and that work continues.  

Coming into 2022, based on strength of performance and positive momentum across our business, the co-op set an ambitious plan and aggressive growth targets for the year. Significant changes to both broader economic and business conditions challenged those original goals and impacted REI, along with companies across retail and beyond. Slower revenue and membership growth, along with higher operating costs and critical investments in our hourly workforce meant the co-op was unprofitable for 2022.   

As a result of the changing conditions in 2022, the co-op made intentional updates to financial and membership forecasts at mid-year.  The co-op also reset the 2022 incentive plans to align to the new forecasts. The revised plan was structured as a single, all co-op plan for 2022, creating a new set of goals that prioritized shared success across the co-op.  This change ensured that every eligible employee, including our leadership team, would still receive a partial incentive payout for 2022 at a reduced level. Looking ahead to 2023, we will continue to balance the need to recognize and reward our employees with the needs of the business in a volatile environment.  

We encourage our members to read the 2022 compensation discussion and analysis (CD&A) for additional detail on our pay programs. 

Best, 

Beth Newlands Campbell 
REI Board Chair 

About Executive Compensation at REI 

REI's executive compensation is overseen by the board of directors through the oversight of the Compensation Committee, guided by their charter and REI’s executive compensation philosophy. The Compensation Committee engages an independent compensation consultant to challenge, confirm and advise the board on executive compensation issues. 

REI’s board of directors has annually published information on the total compensation of REI's President and CEO, Executive Vice Presidents, and other Named Executive Officers. In fiscal year 2022, the disclosure includes the following Named Executive Officers (NEOs): President & CEO, CFO, and the three most highly compensated executive officers. In addition, a compensation discussion and analysis (CD&A) is included to provide a better understanding of the philosophy and programs governing executive compensation at REI. The summary compensation table and narrative provides compensation data for the years 2020, 2021 and 2022. This information is updated annually. 

Board of Directors Compensation at REI 

The Compensation Committee of the board is charged with developing the recommendation for director compensation bi-annually. The Compensation Committee’s independent consultant provides market information on pay levels and prevailing practices among companies of similar size, scope and complexity, including companies in the retail industry and the outdoor industry. 

Director compensation should be adequate to attract highly-qualified individuals who are co-op members and who possess the business acumen, leadership experience and character attributes to successfully guide the co-op for the long term. At the same time, director compensation needs to reflect the special nature of the co-op and REI’s enduring values, which include service to members and the co-op. In that context, the board's compensation is set below the median for comparable companies. Currently, REI’s total board compensation is below the 25th percentile for comparable companies. 

The chair of the board, the vice chair of the board, and the chairs of our three standing committees (Audit & Finance, Compensation, and Nominating & Governance) receive additional compensation in recognition of the additional work and responsibilities associated with those leadership roles. Below is a chart showing current board compensation. 

  

Effective as of January 1, 2022 

Directors 

$125,000 per year 

Board Chair 

Additional $50,000 per year 

Board Vice Chair 

Additional $25,000 per year 

Committee Chair 

Additional $25,000 per year 

Travel Expenses 

Reimbursed for reasonable expenses