Designer Brands (DBI) DEF 14ADefinitive proxy

April 28, 2023

Dear Designer Brands Shareholder:

Certain statements in this Proxy Statement may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations and assumptions that involve risks and uncertainties and on information available to the Company as of the date hereof. The Company’s actual results could differ materially from those stated or implied, due to risks and uncertainties associated with its business, which include the risk factors disclosed in its latest Annual Report on Form 10-K and other filings with the Securities and Exchange Commission (“SEC”), including, without limitation, the section entitled “Risk Factors” contained therein. Forward-looking statements include statements regarding the Company’s expectations, beliefs, intentions, or strategies regarding the future, and can be identified by forward-looking words such as “plans,” “anticipate,” “believe,” “could,” “continue,” “estimate,” “expect,” “intend,” “may,” “should,” “will,” and “would” or similar words. Except as may be required by applicable law, the Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions, or circumstances on which any such statement is based.

Your vote is very important! Please cast your vote immediately on all the proposals to ensure that your shares are represented.

Our investment in our people fosters a culture of belonging, empowering individual development and potential. We are passionate about our associates and continue our ongoing focus on creating a more diverse, equitable, and inclusive workplace and industry.

The Human Capital and Compensation Committee of our Board is fully engaged to respond to the dynamic business environment in which we operate. As discussed in the Compensation Discussion and Analysis (“CD&A”) section of this Proxy Statement, the Human Capital and Compensation Committee:

Pursuant to rules adopted by the U.S. Securities and Exchange Commission (the “SEC”), we have elected to provide access to our proxy materials via the internet. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials (the “Notice”) to our shareholders of record and beneficial owners. If your shares are registered directly in your name with our transfer agent, Computershare Limited (“Computershare”), then you are considered a registered shareholder with respect to those shares. If you hold your shares through an intermediary, such as a bank or broker, then you are considered the beneficial holder of those shares. All shareholders will have the ability to access the proxy materials on a website referred to in the Notice or to request to receive a printed set of the proxy materials, at no charge. Instructions on how to access the proxy materials via the internet or to request a printed copy may be found on the Notice. In addition, shareholders may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis by following the instructions on the website referred to in the Notice.

We have two classes of securities outstanding and entitled to vote at the 2023 Annual Meeting: our Class A Common Shares, no par value, and our Class B Common Shares, no par value (together, the “Common Shares”). Only shareholders of record at the close of business on April 21, 2023, our record date for the 2023 Annual Meeting, are entitled to notice of and to vote at the 2023 Annual Meeting or any adjournments, continuations, or postponements thereof. As of the record date, the total number of outstanding Class A Common Shares entitled to vote at the 2023 Annual Meeting was 57,630,592 and the total number of Class B Common Shares entitled to vote at the meeting was 7,732,743. Each outstanding Class A Common Share is entitled to one vote with respect to each matter to be voted on at the meeting and each outstanding Class B Common Share is entitled to eight votes with respect to each matter to be voted on at the meeting. Class A Common Shares and Class B Common Shares vote together as a single class with respect to all matters submitted to a vote of shareholders.

Without affecting any vote previously taken, a proxy may be revoked by a shareholder by giving a written notice of revocation to us in writing (Designer Brands Inc., 810 DSW Drive, Columbus, Ohio 43219, Attention: Corporate Secretary). A holder of record may also revoke or change his, her, or its vote by executing and returning to us a later-dated proxy or by virtually attending the 2023 Annual Meeting and voting online during the meeting. If your Common Shares are held in street name, you must follow the instructions of your broker, bank, or other nominee to revoke your voting instructions.

The presence, by virtual participation or by proxy, of the holders of a majority of the outstanding Common Shares entitled to vote is necessary to constitute a quorum for the transaction of business at the 2023 Annual Meeting. Abstentions, votes to withhold, and broker non-votes are counted for purposes of determining the presence or absence of a quorum. Broker non-votes occur when brokers holding shares on behalf of beneficial owners do not receive voting instructions from the beneficial holders and are not permitted to vote on the matter without voting instructions. If a broker does not receive voting instructions, the broker may vote those shares only on matters deemed “routine” by the New York Stock Exchange (“NYSE”). We believe that Proposal 2 – Ratification of the Appointment of Independent Registered Public Accounting Firm is a “routine” matter. We believe that Proposal 1 – Election of Directors, Proposal 3 – Advisory Vote on the Compensation of Named Executive Officers, and Proposal 4 – Advisory Vote on the Frequency of Shareholder Votes on the Compensation of Named Executive Officers are “non-routine” matters and therefore, brokers cannot vote on such proposals unless they receive voting instructions from beneficial holders.

Solicitation of proxies may be made in person, in writing, by telephone, text message, email, or facsimile, or otherwise by our directors and employees, including executive officers. We will bear the cost of the solicitation of proxies, including the charges and expenses of brokerage firms and others for forwarding solicitation material to beneficial owners of shares.

Our Board currently consists of eleven members and is divided into three classes, designated as Class I, Class II, and Class III. The members of the three classes are elected to serve for staggered terms of three years. Pursuant to Article II, Section 2.02 of our Code of Regulations, the number of directors constituting each class will, as nearly as practicable, be equal. As such, we currently have four Class I directors, four Class II directors, and three Class III directors.

At the 2023 Annual Meeting, four Class I director nominees are standing for election to the Board, each to serve a three-year term expiring at the 2026 annual meeting of shareholders. Each of the Class I director nominees currently serves as a director of the Company.

We are committed to strong corporate governance, and our Board regularly reviews our governance structure, including our classified board structure. Our Articles of Incorporation, as amended (the “Articles”), divides our Board into three classes, with each class elected to serve a three-year term. As a result, at each annual meeting of shareholders, approximately one-third of our directors are elected to serve for a three-year term. Our Board periodically considers the continued appropriateness of this classified board structure and believes that our classified board structure provides important benefits, including:

The names and ages of the “Class I Director Nominees” and the “Class II and Class III Continuing Directors,” their principal occupations during the past five years, and certain other information regarding our directors are provided below.

Under Ohio law and our Code of Regulations, directors are elected by a plurality of the votes cast. This means that the director nominees receiving the greatest number of votes voted “FOR” their election will be elected as directors. Withheld and broker non-votes will not be treated as votes cast for this purpose and, therefore, will not affect the outcome of the election.

Our executive officers are appointed annually by our Board and serve at the pleasure of the Board. In addition to Jay Schottenstein and Douglas Howe, whose information is provided above under “Proposal 1 – Election of Directors,” the following individuals are our executive officers.

Pursuant to our Corporate Governance Principles, the Company does not have a policy with respect to the separation of the offices of Executive Chairman and CEO. The Board believes that the determination of whether these roles should be separated should be part of the succession planning process and that the Board should have the flexibility to determine the best leadership structure for the Company and its shareholders when it elects a new CEO or at any other given point in time.

Since 2009, the Company has had separate CEO and Executive Chairman roles. Our Board periodically assesses these roles and the Board leadership structure to ensure the interests of the Company and its shareholders are best served. The Board believes that the current leadership structure, with a separated Executive Chairman and CEO structure, allows the Executive Chairman to focus on Board responsibilities and the CEO to concentrate on the Company’s administrative and operating functions. Furthermore, this structure supports the efficient allocation of oversight responsibilities between the Board and management.

Mr. Jay Schottenstein has served as our Executive Chairman since 2005. As discussed below, Mr. Schottenstein is not an independent director. While the Board does not have a lead independent director, the independent members of the Board meet in regularly scheduled executive sessions (without management or the Executive Chairman present). Additionally, the Board does not have a designated director who leads executive sessions; instead, the independent directors alternate as the chair of such executive sessions in alphabetical order by last name. The Board believes that the current structure ensures that the independent directors provide sufficient independent oversight of management.

The Executive Chairman and CEO set the agenda for Board meetings with an understanding of their responsibility to ensure that certain items pertinent to the advisory and monitoring functions of the Board be brought to it for review and/or decision. The Executive Chairman is responsible for presiding at regular sessions of the Board. Materials, information, and data that is important to the Board’s understanding of the Company’s businesses and meeting agenda items is distributed to the Board before meetings to ensure directors are adequately informed and prepared for discussion of the items at the meeting. It is the general policy of the Company that all major decisions be considered by the Board as a whole.

The chairs of our Board committees play an active role in leading our committees by working with management to ensure each committee discusses crucial risks and opportunities of the Company. Agenda items that fall within the scope of responsibilities of a Board committee are set by the chair of that committee. Any member of the Board may request that an item be included on the agenda and is free to raise subjects that are not on the agenda for a particular meeting at any Board or committee meeting. The Board and each committee have the power to hire independent legal, financial, or other advisors as they may deem necessary, without consulting or obtaining the advanced approval of any officer of the Company, and the Company shall be responsible for paying the fees and other costs associated with any such services rendered to the Board or any committee thereof.

The Board has adopted Corporate Governance Principles that address Board structure, membership (including director nominee qualifications), performance, operations, and management oversight. A current copy of our Corporate Governance Principles can be found at our corporate and investor website at investors.designerbrands.com/governance-documents and is available in print (without charge) to any shareholder upon written request to 810 DSW Drive, Columbus, Ohio 43219, Attn: Corporate Secretary.

Our director independence standards are set forth in our Corporate Governance Principles. Pursuant to our Corporate Governance Principles, a majority of our directors must be independent. For a director to be considered an “independent director,” the Board must annually determine that he or she satisfies the independence requirements under the NYSE listing standards and any other applicable laws, rules, and regulations. During its annual review of director independence, the Board considered whether there were any transactions or relationships between the Company and any director or any member of his or her immediate family (or any entity of which a director or an immediate family member is an executive officer, general partner, or significant equity holder) that would impact a director’s independence.

As a result of its annual review, the Board affirmatively determined that the following directors are independent under our independence standards:

As Messrs. Howe and Jay Schottenstein are executives of the Company, the Board determined that they are not independent. Additionally, Mr. Joseph Schottenstein is not independent, as he is an immediate family member of an executive officer of the Company. Accordingly, the Board is currently approximately 73% independent.

Each of the Nominating and Corporate Governance Committee, Human Capital and Compensation Committee, and Audit Committee are composed entirely of independent directors as defined under applicable SEC rules and the NYSE listing standards. Our Board also has a Technology Committee composed entirely of independent directors.

Other than Messrs. Jay and Joseph Schottenstein, who are father and son, there are no family relationships among our directors and executive officers.

A total of seven meetings of the Board were held during fiscal 2022. With the exception of Mr. Joseph Schottenstein, each director attended 75% or more of the aggregate of (i) the total number of meetings of the Board held during the time in which such director was a member of the Board and (ii) the total number of committee meetings on which such director served. Overall average attendance at such meetings was over 92%.

Our Corporate Governance Principles provide that all incumbent directors and director nominees are encouraged to attend our Annual Meeting of Shareholders. All of the Company’s then-serving directors virtually attended our 2022 Annual Meeting of Shareholders.

We have four standing committees of the Board: (1) Nominating and Corporate Governance Committee; (2) Human Capital and Compensation Committee, formerly known as the Compensation Committee; (3) Audit Committee; and (4) Technology Committee. Each standing committee is governed by a committee charter. A current copy of each committee’s charter can be found on our corporate and investor website at investors.designerbrands.com/governance-documents and is available in print (without charge) to any shareholder upon written request to 810 DSW Drive, Columbus, Ohio 43219, Attn: Corporate Secretary.

The following chart sets forth the responsibilities and duties and current members of each committee, as well as the number of meetings held by each committee in fiscal 2022.

Our Board and its committees play an important role in overseeing the identification, assessment, and mitigation of material risks. In fulfilling this responsibility, the Board and its committees regularly consult with management to evaluate and, when appropriate, modify our risk management strategies.

The Company implemented an enterprise risk management program (“ERM Program”) in fiscal 2010. Our CEO, who reports to our Board, is the sponsor of the ERM Program. As part of the ERM Program, management provides an annual report to the Board regarding our significant risks and what management is doing to mitigate such risks. Management also updates the Board on significant new risks that are identified on a quarterly basis and reports on actions the Company is taking to mitigate such risks. Additionally, the ERM Program’s annual report provides an update on calls received to our Ethics Hotline, an anonymous reporting hotline available to our United States (“U.S.”) and international subsidiaries. The Company believes that its leadership structure supports the risk oversight function of the Board.

The Nominating and Corporate Governance Committee is responsible for identifying and evaluating potential candidates for nomination as a director. Candidates may come to the attention of the Nominating and Corporate Governance Committee from a variety of sources, including current Board members, shareholders, and management. All candidates (including shareholder nominees) are reviewed in the same manner, regardless of the source of the recommendation. The Nominating and Corporate Governance Committee will consider the recommendations of shareholders regarding potential director candidates. For additional information regarding how to submit a director nominee for the Company’s 2024 Annual Meeting of Shareholders, see “Shareholder Director Nominees.”

Although there are no specific minimum qualifications that a director candidate must possess, potential candidates are identified and evaluated according to the qualification criteria set forth in the Nominating and Corporate Governance Committee charter, including:

* Based on self-identification information that was provided by the directors and to which each such director consented to the public disclosure of.

As set forth in our Corporate Governance Principles, the Board does not believe that it should establish arbitrary director term or age limits. While we are committed to Board refreshment, we believe that term or age limits hold the disadvantage of losing the contribution of directors with institutional knowledge, who have been able to develop, over a period of time, increasing insight into the Company and its operations, and who have an understanding of the Company’s long-term strategy and direction. As part of its responsibilities, the Nominating and Corporate Governance Committee evaluates each incumbent director’s qualifications, performance, and ability to continue to contribute productively before recommending the nomination of that director for an additional term.

The Board and its committees conduct annual self-evaluations to determine whether they are functioning effectively. As part of the Board’s annual self-evaluation, the Nominating and Corporate Governance Committee receives and reviews comments from each director and then reports to the Board with a summary of the Board’s performance. The annual assessment focuses on the Board’s effectiveness and contributions to the Company, with the primary goal of identifying any areas in which the Board could improve. To the extent improvements are warranted, the Nominating and Corporate Governance Committee establishes a plan to ensure that the improvements are made in a timely and meaningful manner. The annual assessment is also used as a means to identify, and foster robust discussion on, the need for specific director skill sets that would support the Company’s strategic and long-term plans and provide opportunities for growth. For example, in connection with the Board’s self-evaluation in fiscal 2021, the Board identified the need for director experience to support its athleisure strategy, as well as additional financial expertise. Accordingly, in fiscal 2022, the Board appointed Mr. Paul, the CEO and founder of KLUTCH Sports Group, and Ms. Fersko, the current Chief Operations and Supply Chain Officer for Centric Brands and the former Executive Vice President of Finance and Operations of The Jones Group, to the Board.

We have adopted a Global Code of Conduct that applies to all our employees and executive officers, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, and an additional Code of Ethics for Senior Financial Officers that applies to senior financial officers. Additionally, the Board adopted a Director Code of Conduct applicable to our Board members. Our Global Code of Conduct, Code of Ethics for Senior Financial Officers, and Director Code of Conduct are each available on our corporate and investor website at investors.designerbrands.com/governance-documents and are available in print (without charge) to any shareholder upon written request to 810 DSW Drive, Columbus, Ohio 43219, Attn: Corporate Secretary. We intend to disclose any amendment to, or waiver from, any provision of the Global Code of Conduct, Code of Ethics for Senior Financial Officers, or Director Code of Conduct applicable to executive officers and directors by posting such information on our corporate and investor website at investors.designerbrands.com.

Our Insider Trading Policy prohibits all directors, executive officers (including our NEOs), associates, advisors and consultants of Designer Brands and its subsidiaries from engaging in transactions in financial instruments (including, for example, prepaid variable forward contracts, equity swaps, collars, or exchange funds) or otherwise engaging in transactions that are designed to hedge or offset any decrease in the market value of Designer Brands stock. Our Insider Trading Policy also prohibits covered persons from holding our stock in a margin account or pledging our stock as collateral for a loan; provided, that individuals who had pledged Designer Brands stock prior to the adoption of this provision are exempt from this requirement. As disclosed in the “Security Ownership of Certain Beneficial Owners and Management” section of this Proxy Statement, Mr. Tanenbaum pledged 27,746 shares of Designer Brands stock as security for a line of credit in fiscal 2016. Our Insider Trading Policy is posted on our internal website or available upon request for all directors, executive officers (including our NEOs), associates, advisors, and consultants of Designer Brands and its wholly owned subsidiaries.

Additionally, through the travel program, associates and customers have the opportunity to join Soles4Souls Global Experience trips to serve the communities in one of our partner countries. In 2022, 27 Designer Brands associates and 20 customers participated in Soles4Souls Global Experience trips.

We believe that the strength of our workforce is critical to our success. Our associates strive every day to create a welcoming and inclusive environment for our customers. One of our core strategies is to invest in and support our associates who are key to differentiating our products and experiences in the competitive footwear market. We monitor and adapt as necessary to maintain our competitive position, including the following areas of focus:

We are on a journey to promote greater levels of DE&I in everything we do and recognize that there is still a long way to go. We will continue to challenge our own biases, engage in difficult conversations in meaningful ways, foster diverse perspectives to drive innovation, and intentionally evolve our operating strategies to advance this important work, including through our BRGs, CIGs, and councils.

Our Board has adopted a written policy for approval of related person transactions by the Audit Committee (the “Policy”), which provides that our Audit Committee will review and approve potential related person transactions, arrangements, or relationships involving us and a related person, as described below. A copy of the Policy can be found at our corporate and investor website at investors.designerbrands.com/governance-documents and is available in print (without charge) to any shareholder upon request. The Policy provides for the review, approval, ratification, or rejection of any “related person transaction” that we are required to report under SEC rules and regulations.

For purposes of the Policy, a “related person transaction” is any transaction, or a series of similar transactions, which is currently proposed or has been in effect at any time since the beginning of the last fiscal year, in which (i) the Company or any of its subsidiaries, was, or is proposed to be, a participant, (ii) the amount of the transaction(s) exceeds $120,000, and (iii) any of the following persons (each, a “related person”) has or will have a direct or indirect material interest:

In determining whether to approve a related person transaction, the Audit Committee considers any facts and circumstances that the Audit Committee may deem relevant. Based on an analysis of such facts and circumstances, the Audit Committee takes formal action to either approve, ratify, or reject the related person transaction.

As of March 31, 2023, Jay L. Schottenstein, the Executive Chairman of Designer Brands, beneficially owned approximately 14,552,709 Class A Common Shares in the aggregate. Included in the aggregate number of Class A Common Shares that Mr. Schottenstein beneficially owned as of that date are approximately 7,720,154 Class B Common Shares that may be converted into Class A Common Shares on a one-for-one basis at any time. Mr. Schottenstein serves as chairman of Schottenstein Stores Corporation (“SSC”) and other affiliated entities of SSC. For fiscal 2022, we paid approximately $12,087 million in total fees, rents, and expenses to SSC and its affiliates.

In the ordinary course of business, we have entered into a number of agreements with SSC and its affiliates relating to our business and our relationship with these companies, the material terms of which are described below. We believe that each of the agreements entered into with these entities is on terms at least as favorable to us as could be obtained in an arm’s-length transaction with an unaffiliated third party. In the event that we desire to enter into any agreements with SSC or any of our directors, officers, or other affiliates in the future, in accordance with Ohio law, any contract, action, or other transaction between or affecting us and one of our directors or officers or between or affecting us and any entity in which one or more of our directors or officers is a director, trustee, or officer or has a financial or personal interest, will either (i) be approved by the shareholders, a majority of the disinterested members of our Board, or a committee of our Board that authorizes such contracts, action, or other transactions or (ii) be fair to us as of the time our directors, a committee of our directors, or our shareholders approve the contract, action, or transaction. In addition, any transactions with directors, officers, or other affiliates will be subject to requirements of the Sarbanes-Oxley Act and other SEC rules and regulations, as well as to our written related person transactions policy described above.

We receive media services for our stores from Retail Entertainment Design (“RED”), an affiliate of SSC. The agreement provides for media services such as digital music, video services, and other related services. For fiscal 2022, we paid approximately $0.4 million to RED.

We receive consulting/professional services from Charles Spicer, Inc., an affiliate of SSC. The consulting/professional services include, among other things, strategic planning, financial matters, risk analysis and management, mergers, acquisitions, business development, and general corporate, operational, and organizational matters. For fiscal 2022, we paid approximately $0.3 million to Charles Spicer, Inc.

We receive services from SSC pursuant to a Corporate Services Agreement between us and SSC. The agreement sets forth the costs of shared services, including specified legal, travel expense, and administrative services. For fiscal 2022, our allocated portion of the amount we paid to SSC was approximately $0.3 million.

Our current director compensation policy provides that each non-employee director will receive:

The annual retainers are paid as follows:

Directors do not receive any additional compensation for attending Board meetings or Board committee meetings. All members of our Board are reimbursed for reasonable costs and expenses incurred in attending meetings of our Board and its committees. Non-employee directors may elect to have any of the cash portion of their compensation paid in the form of stock units in lieu of cash. Employee directors do not receive any additional consideration for their service on the Board.

The Company sponsors a nonqualified retirement plan, amended and restated effective as of September 29, 2022 (the “Nonqualified Plan”), in which a select group of management and other highly-compensated associates, including NEOs, and Board members may participate. Board members may contribute up to 100% of the annual cash retainer paid by Designer Brands (as described in more detail in the fiscal 2022 Director Compensation table). Deferral elections are made annually related to future compensation, in compliance with §409A of the Code. In order to maintain the Nonqualified Plan’s tax-deferred status, Nonqualified Plan assets are subject to the claims of creditors of Designer Brands. Participants choose to invest their account in an array of investment alternatives that generally mirror the investment alternatives under the 401(k) Plan. The Nonqualified Plan allows for in-service distributions in a

lump sum. The Nonqualified Plan also allows for retirement distributions which are permitted as a lump sum or in three (3), five (5), or ten (10) annual installments. Distribution elections are made when deferral elections are made in compliance with Code §409A.

Stock units issued to a director are fully vested on the date of grant. Directors may elect to have the stock units settled (i) 30 days following the grant date, (ii) on a specified future date more than 30 days following the grant date, (iii) when the director leaves the Board (for any reason), or (iv) in annual installments following the end of service to the Board. Stock units are settled in Designer Brands Inc. Class A Common Shares.

Directors have no voting rights in respect to the stock units, but they will have the power to vote the Designer Brands Class A Common Shares received upon settlement of the award. In general, directors have equivalent rights to receive dividends paid on Designer Brands Class A Common Shares. Each director is “credited” with the same dividend that would be issued if the stock unit was a Designer Brands Class A Common Share. The amounts associated with the dividend equivalent rights will not be distributed until the director’s stock unit award is settled.

Board members have an ownership guideline of five times their annual cash retainer (excluding committee fees) to be achieved within five years of joining the Board. The following forms of equity interests count towards the stock ownership requirement: (i) shares purchased on the open market; (ii) shares obtained through stock option exercise; (iii) shares held as deferred stock units; (iv) shares held in benefit plans; (v) shares held in trust for the economic benefit of the director, his or her spouse, or his or her dependent children; (vi) shares owned jointly or separately by the director’s spouse or dependent children; and (vii) unvested restricted stock units. Unexercised stock options do not count. As of the last day of fiscal 2022, all Board members have either met the ownership guidelines or are still within the five-year compliance time frame.

The following table sets forth certain information regarding the compensation earned by or paid to each non-employee director who served on the Board in fiscal 2022.

Our Audit Committee has adopted a policy under which audit and non-audit services to be rendered by our independent registered public accounting firm are pre-approved. The pre-approval policy, which is available on our corporate and investor website at investors.designerbrands.com/governance-documents, is designed to, among other things, assure that the provision of such services does not impair the independence of our independent registered public accounting firm and is summarized below.

No services were provided by the independent public accountants during fiscal 2022 or fiscal 2021 that were not approved by the Audit Committee.

The following table sets forth the aggregate fees for professional services rendered by Deloitte & Touche LLP, our independent registered public accounting firm, for each of the last two fiscal years.

The Audit Committee appointed Deloitte & Touche LLP (“Deloitte”) as our independent registered public accounting firm for fiscal 2023. Although we are not required to seek shareholder ratification of the appointment of Deloitte as our independent registered public accounting firm, we are doing so as a matter of good corporate governance. In the event that shareholders do not ratify the appointment of Deloitte, the Audit Committee will reconsider its appointment, but shall have no obligation to retain a new or different independent registered public accounting firm. In addition, even if the shareholders ratify the appointment of Deloitte, the Audit Committee may, in its discretion, appoint a different independent registered public accounting firm at any time during the fiscal year if the Audit Committee determines that a change is in the best interest of the Company and our shareholders.

Representatives of Deloitte are expected to be present by virtual participation at the 2023 Annual Meeting to respond to appropriate questions and to make a statement if such representatives so desire.

Under our Code of Regulations, approval of this proposal requires the affirmative vote of the holders of the greater of (i) a majority of the shares required to constitute a quorum for such meeting, in which case abstentions and broker non-votes have the effect of votes “Against” the proposal, and (ii) a majority of the shares voted on such proposal, in which case abstentions and broker non-votes are disregarded and have no effect on the outcome of the vote.

Our management is responsible for our internal controls and preparing our consolidated financial statements. Our independent registered public accounting firm, Deloitte, is responsible for performing an independent audit of the consolidated financial statements and issuing a report thereon. Their audit is performed in accordance with the standards of the Public Company Accounting Oversight Board (the “PCAOB”). The Audit Committee is responsible for overseeing the conduct of these activities. In performing its oversight function, the Audit Committee relies, without independent verification, on the information provided to it and on representations made by our management and our independent registered public accounting firm.

The Audit Committee met with the internal auditors and independent registered public accounting firm, with and without management present, to discuss the results of their audits, the evaluations of our internal controls, and the overall quality of our financial reporting. The Audit Committee reviewed and discussed with each of management and Deloitte the audited financial statements for the fiscal year ended January 28, 2023. The Audit Committee reviewed and discussed with the independent registered public accounting firm its judgments as to the quality, not just acceptability, of our accounting principles and such other matters as are required to be discussed under the applicable requirements of the PCAOB and the SEC. In addition, the Audit Committee has received the written disclosures and the letter from the independent accountant required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence and has discussed with the independent accountant the independent accountant’s independence.

Based on its review of the audited consolidated financial statements and discussions with management and Deloitte referred to above, the Audit Committee recommended to the Board the inclusion of the audited financial statements for the fiscal year ended January 28, 2023, in our Annual Report on Form 10-K for filing with the SEC.

This Compensation Discussion and Analysis (“CD&A”) describes the goals and objectives of our executive compensation program, including our compensation philosophy, objectives, policies, and practices with respect to our named executive officers (“NEOs”).

Our NEOs for fiscal 2022 were:

* Mr. Rawlins served as the Company’s Chief Executive Officer for the entirety of fiscal 2022 and until April 1, 2023.

** Mr. Poff served as Executive Vice President and Chief Financial Officer in fiscal 2022, and was appointed Chief Administrative Officer in addition to Chief Financial Officer of the Company effective March 12, 2023.

*** Mr. Howe joined the Company in May 2022 as President, DSW. Effective April 1, 2023, Mr. Howe was appointed Chief Executive Officer of the Company.

**** Ms. Ferrée served as the Company’s Vice Chair and as President, Camuto LLC in fiscal 2022. Effective February 1, 2023, Ms. Ferrée was appointed Chief Product Officer in addition to Vice Chair of the Company, and transitioned out of the role of President, Camuto LLC.

Our fiscal 2022 executive compensation program continued to focus on attracting and retaining the best executives for our business. A summary of the key elements of our executive compensation program, as well as fiscal 2022 actions and changes approved by the Human Capital and Compensation Committee of the Board (for purposes of this CD&A, the “Committee”), is summarized in the chart below:

Our compensation philosophy for the executive team, including our NEOs, is to attract and retain highly qualified leaders, drive performance by incentivizing our NEOs to attain short- and long-term goals, align the interests of our NEOs with those of our shareholders, and create long-term shareholder value. We continually review leading practices in corporate governance and executive compensation. As appropriate, we consider changes to our program in order to reflect and embrace best practices and remain competitive in our industry.

Management also engaged Korn Ferry for additional compensation services to the Company in fiscal 2022. The amount of these services was not material. The survey information was used by management for compensation recommendations and market practice assessment for management at all levels. In connection with the engagement of Korn Ferry, the Committee reviewed the services provided by Korn Ferry to management and determined that Korn Ferry was independent.

The Committee has developed the following key executive compensation objectives in order to support our business strategy and compensation philosophy:

The criteria used to select companies for the fiscal 2022 proxy peer group (the “Proxy Peer Group”) included:

For fiscal 2022, Michaels Cos., Inc. was removed from the Proxy Peer Group because it is no longer a public company after being acquired in 2021. Crocs, Inc. was added to the Proxy Peer Group for fiscal 2022 because it met the aforementioned criteria used by the Committee. Other than these changes, the Proxy Peer Group remained unchanged from the 2021 proxy peer group.

For fiscal 2022, the compensation paid to the NEOs was reviewed relative to compensation paid by the Proxy Peer Group to executive officers of similar title and responsibility. By reviewing this publicly available information, as summarized for the Committee by Korn Ferry, the Committee was able to analyze and assess the market competitive pay for each NEO position. The Committee reviews each individual NEO’s compensation relative to the other NEOs’ compensation, taking into account each NEO’s scope of responsibility, performance, and impact on our business results. In addition to the Proxy Peer Group, the Committee reviewed data from the Korn Ferry 2022 Retail Industry Total Remuneration Report, which provides data on the compensation practices of key competitors, including fashion and specialty retailers. This survey provides information on all key executive positions at major retailers and is used to supplement the Proxy Peer Group data. This survey also provides the Committee with an understanding of the broader retail market and pay practices for jobs of similar scope and complexity, with the goal of allowing the Company to remain competitive in both attracting talented senior executives and retaining high performing executives.

For fiscal 2022, the total compensation of our NEOs generally consisted of the following principal components:

Base salaries are determined based on position, responsibilities, and individual contributions with reference to the market data provided by Korn Ferry. As we use base salary as a means to attract and retain our NEOs, our executive compensation program aims to pay base salaries that are competitive with those of the Proxy Peer Group, supplemented with survey data from key competitors from the Korn Ferry 2022 Retail Industry Total Remuneration Report.

In the first quarter of each year, the Committee reviews and determines each NEO’s base salary. During its review, the Committee primarily considers:

The following table sets forth the changes to the NEOs’ base salaries during fiscal 2022:

In early fiscal 2022, the Executive Chairman of the Board met with the Committee and reviewed the accomplishments and contributions made by the Company’s CEO, Mr. Rawlins. The Committee also reviewed benchmarking information provided by Korn Ferry. In recognition of Mr. Rawlins’ leadership of the Company during fiscal 2021, the Committee approved an 8.3% increase to Mr. Rawlins’ base salary.

The CEO reviewed with the Committee the accomplishments and contributions made by each of the other NEOs under his supervision and recommended increasing Mr. Poff's base salary. After discussing the Company’s financial performance, and the recommendations of the Executive Chairman and the CEO, the Committee approved an 9.1% increase to Mr. Poff's base salary.

The Committee met with Korn Ferry and reviewed market information related to the pay of the Executive Chairman of the Board. After discussing the market information, the Executive Chairman’s role in the Company’s business, and other relevant factors, the Board approved a merit-based increase of 7.5% to the Executive Chairman’s base salary in light of the Company’s performance in fiscal 2021.

In reviewing Ms. Ferrée’s base salary, the Committee determined that her fiscal 2021 base salary remained competitive as compared to the Proxy Peer Group, and therefore, determined no changes were appropriate.

As previously noted, Mr. Howe joined the Company in May 2022. In setting his compensation, the Committee considered analysis and relevant market information provided by Korn Ferry.

For fiscal 2022, the Committee determined that it was appropriate to return to an annual bonus plan, rather than adopt six-month incentive plans such as those implemented in fiscal 2021 and fiscal 2020 in response to the unpredictability of the COVID-19 pandemic. The Designer Brands Inc. 2005 Cash Incentive Compensation Plan (as amended and restated, the “ICP”) is designed to promote the achievement of annual performance goals and to focus the NEOs on the short-term objectives that the Committee believes will ultimately drive the attainment of long-term business objectives and increases in shareholder value. The NEOs are generally treated the same as all other eligible associates that participate in the ICP. Under the ICP, NEOs are eligible for annual cash incentive awards, the achievement of which is based upon well-defined, pre-established business objectives.

Early in fiscal 2022, the Committee established each NEO’s incentive bonus opportunity as a percentage of earnings during the annual performance period.

Threshold, target, and maximum payouts are based on the Company’s achievement of the performance goals at the applicable level. We do not make payouts below the threshold level.

In February 2022, the Committee approved using Adjusted Operating Income, a non-GAAP financial measure, as the performance metric for the 2022 ICP. The Committee selected this performance metric as it believes that Adjusted Operating Income provides a meaningful representation of our core financial operating performance and is a key financial metric used by management and other stakeholders.

As discussed above, Ms. Ferrée, as President of Camuto LLC, participated in the Camuto Bonus Plan. The following provides a summary of the Camuto Bonus Plan, as approved by the Committee:

The table below sets forth the performance ranges, corresponding payout goals, and actual performance achievement for the Camuto Bonus Plan:

Generally, achievement of performance goals is obtained by using actual performance to determine the corresponding level of payment, and with respect to determining Ms. Ferrée’s and Mr. Howe’s payouts, then taking into account the weighting allocated to each performance metric under the Camuto Bonus Plan and the DSW Bonus Plan, respectively. Payout levels between the threshold, target, and maximum amounts are determined based on linear interpolation.

As calculated above, the Company achieved $205.3 million in Adjusted Operating Income for fiscal 2022, resulting in a 64% payout for Messrs. Schottenstein, Rawlins, and Poff. For Ms. Ferrée, Company Adjusted Operating Income (weighted 50%) of $205.3, DSW Merchandise Margin on Camuto Produced Product (weighted 25%) of $240.3 million, and Camuto Gross Profit before Royalty expenses, excluding DSW sales (weighted 25%) of $75.9 million, resulted in a 95% payout under the Camuto Bonus Plan. For Mr. Howe, Company Adjusted Operating Income (weighted 75%) of $205.3 and DSW Merchandise Margin on Camuto Produced Product (weighted 25%) of $240.3 million, resulted in a 91% payout under the DSW Bonus Plan.

We believe that our executive officers are in a position to make substantial contributions to the long-term success of the Company and should have a significant portion of compensation tied to that success. Long-term compensation creates a pay-for-performance culture that provides an incentive to contribute to the continued growth and development of our business and aligns the interests of executive officers with those of our shareholders. Ultimately, this promotes the retention of our executive officers and creates the potential to maximize shareholder value. Our long-term incentive compensation utilized the following types of award grants to achieve these goals, with each award weighted equally (i.e., 50%):

In determining the value of annual long-term equity incentive grants, the Committee’s overall objective is consistent with our executive compensation philosophy to provide competitive long-term incentive awards. Accordingly, in determining the grant date value for the fiscal 2022 long-term incentive awards, the Committee considered market data from Proxy Peer Group companies provided by Korn Ferry, as well as performance for each NEO. The Committee believes that the fiscal 2022 long-term incentive awards provide an appropriate incentive to the leadership team to focus on long-term shareholder value creation and, at the same time, sufficiently promote retention, which the Company believes is necessary in a competitive labor market. Except with respect to Mr. Howe’s annual long-term equity incentive award, which was granted upon his hire, the fiscal 2022 performance-based RSUs and time-based RSUs were granted in March 2022 as part of the annual performance review process. All of the NEOs’ long-term equity incentive awards granted in fiscal 2022 were made under the Designer Brands Inc. 2014 Long-Term Incentive Plan (as amended and restated, the “LTI Plan”), which was first approved by shareholders in 2014 and amended and restated in 2020.

In addition to the annual long-term equity incentive grants above, Mr. Howe received a one-time grant of 405,665 time-based RSUs in connection with his hiring in May 2022 (the “Howe Hire Award”). The Howe Hire Award was intended to incentivize Mr. Howe to join the Company and offset the value of forfeited stock from his previous employer. The Howe Hire Award was granted on May 30, 2022 under the LTI Plan, based on a grant date fair value of $15.53 that will vest one-third per year over three years, subject to his continued employment with the Company.

Additionally, at the end of fiscal 2022, Mr. Poff received a one-time grant of 62,630 time-based RSUs in recognition of the additional support he would be providing in connection with the CEO transition (the “Poff Recognition Award”). The Poff Recognition Award was granted on January 17, 2023 under the LTI Plan, based on a grant date fair value of $9.58 and will vest 100% on the one-year anniversary of the grant date.

Performance-based RSUs reward NEOs in proportion to the Company’s financial performance based on the predetermined performance measure selected by the Committee during the one-year performance period. Following the conclusion of the one-year performance period, the performance-based RSUs are also subject to a subsequent two-year time-based vesting feature, such that performance-based RSUs cliff vest on the third anniversary of the grant date. Accordingly, the performance-based RSUs vest 100% on the third anniversary of the grant date subject to and based upon the achievement of the performance goal during the one-year performance period. If threshold performance is not achieved during the performance period, the performance-based RSUs are forfeited in their entirety.

For fiscal 2022, the Committee selected Adjusted Operating Income as the performance metric, as it believes that this metric provides a meaningful representation of our core financial operating performance and is a key financial metric used by management and other stakeholders.

In the first 90 days of the fiscal year, the Committee establishes the minimum, target, and maximum levels of performance used to determine the potential number of RSUs earned, as shown in the table below. In setting the threshold, target, and maximum Company financial performance goals, the Committee considered specific circumstances facing the Company, historical performance, and investor expectations, as well as input from Korn Ferry. The fiscal 2022 performance-based RSUs were granted on March 24, 2022 based on a grant date fair value of $13.55 per share.

Time-based RSUs provide retention value because they generally vest 100% at the end of three years from the grant date. Since the stock unit value is tied directly to the market value of the Company’s common stock, and not exclusively to an increase in the market value of the Company’s common stock, they provide retention value even when the stock price is stable or declining.

In fiscal 2019, the Committee granted long-term equity incentive awards to Messrs. Schottenstein, Rawlins, Poff, and Ms. Ferrée that consisted of performance-based RSUs and time-based RSUs. As disclosed in the Company’s definitive proxy statement for the 2020 Annual Meeting of Shareholders, Messrs. Schottenstein, Rawlins, Poff, and Ms. Ferrée earned 56% of the target grant for fiscal 2019 performance-based RSUs based on the Company’s Adjusted Operating Income during the one-year performance period that ended on February 1, 2020, which awards remained subject to time-based vesting requirements that lapsed in early fiscal 2022. See the Fiscal 2022 Option Exercises and Stock Vested table for more information about the vesting of the performance-based RSUs and time-based RSUs during fiscal 2022.

The Company sponsors a tax-qualified 401(k) plan (the “401(k) Plan”), in which all eligible associates, including the NEOs, can elect to participate. Under the 401(k) Plan, participants are able to contribute up to 50% of their total eligible cash compensation (including base salary and annual cash incentive compensation) on a pre-tax or after-tax basis up to the limits imposed by the Code. The maximum allowable per participant deferral in 2022 under the Code was $20,500 ($27,000 if at least age 50). The Company provides a 100% match on the first 3% contributed by a participant and an additional 50% match on the next 2% contributed by a participant. All matching contributions are 100% vested. Matching contributions are not made by the Company until participants have completed at least six months of service with the Company. In light of the matching contribution for participants, and under § 401(a)(17) of the Code, the maximum allowable annual company matching contribution per participant in 2022 was $12,200. Participants can choose to

invest their account balances in an array of investment alternatives (some of which are target date funds) as selected by plan fiduciaries. The Company’s stock fund is not among the investment alternatives available to plan participants. The 401(k) Plan allows multiple distribution options of all vested balances after termination of service. However, loans and in-service distributions under certain circumstances, such as a hardship, attainment of age 59-1/2, or a disability, are permitted for participants who are still active with the Company.

The Company sponsors the Nonqualified Plan, in which a select group of management and other highly-compensated associates, including NEOs, may participate. The Company does not provide a company matching contribution in the Nonqualified Plan. In fiscal 2022, none of the NEOs participated in the Nonqualified Plan.

Under the pre-amended Nonqualified Plan, eligible associates may contribute up to 80% of their base salary and 90% of their monthly and/or annual bonus on a pre-tax basis. Under the amended Nonqualified Plan, eligible associates may contribute up to 70% of their base salary and 80% of their monthly and/or annual bonus on a pre-tax basis. Deferral elections are made annually related to future compensation, in compliance with §409A of the Code. Participating associates who also participate in the 401(k) Plan may earn a 401(k) make-up contribution if their contributions to the Nonqualified Plan reduce the matching contributions they receive in the 401(k) Plan. In order to maintain the Nonqualified Plan’s tax-deferred status, Nonqualified Plan assets are subject to the claims of the Company’s creditors. Participants choose to invest their account in an array of investment alternatives that generally mirror the investment alternatives under the 401(k) Plan. The Nonqualified Plan allows for in-service distributions in a lump sum. The Nonqualified Plan also allows for retirement distributions which are permitted as a lump sum or in three (3), five (5), or ten (10) annual installments. Distribution elections are made when deferral elections are made in compliance with § 409A of the Code.

The currently employed NEOs (other than Mr. Schottenstein and, as discussed below, Mr. Rawlins) have standard executive agreements that entitle them to receive certain benefits and payments if their employment terminates in specified separation scenarios. All of the currently employed NEOs (and all participants in the LTI Plan) are entitled to certain payments or benefits upon a change in control, including potential acceleration of the vesting of outstanding equity awards pursuant to the LTI Plan. These arrangements are described under the Potential Payments upon Termination and Change in Control section. The executive severance agreements do not include specific amounts of salary, bonus opportunities, or equity-based compensation for future years.

On January 5, 2023, the Company announced a planned succession process, whereby Mr. Rawlins stepped down from his role as CEO and as a member of the Board effective April 1, 2023, at which time Mr. Howe assumed the CEO role and joined the Board. To assist in facilitating a smooth transition, Mr. Rawlins will serve as a strategic advisor to the Company and the Board until April 1, 2024, pursuant to a Transition and Consulting Agreement, as described under the Potential Payments upon Termination and Change in Control section.

Our NEOs receive limited perquisites and other benefits as part of a competitive compensation package. These benefits include a Company matching contribution under our 401(k) Plan (as discussed above), which is available to all employee participants. We provide our Executive Chairman with certain security services through the Company. Additionally, from time to time, we have paid for relocation costs. In fiscal 2022, Mr. Howe relocated to join Designer Brands and the Company provided certain relocation benefits in accordance with our relocation policy. The amount of Mr. Howe’s relocation benefit can be found in footnote (5) of the Summary Compensation Table. In the aggregate, these other benefits constitute only a small percentage of each NEO’s total compensation.

Under the LTI Plan, the Committee approves all equity awards and has not delegated to management the authority to approve equity awards. The Chair of the Committee has authority to approve equity awards in situations where it is not practical to bring the Committee together for such a purpose.

The Company has implemented a stock ownership guideline for the CEO. Under this guideline, the CEO is encouraged to hold shares of the Company’s stock with a value at least equal to one (1) times the CEO’s annual base salary, to be achieved within three years of becoming CEO. Counting only directly-owned, fully-vested shares, Mr. Rawlins owned shares representing more than five times the ownership guideline as of January 28, 2023. Mr. Howe, who succeeded Mr. Rawlins as the Company’s CEO effective as of April 1, 2023, does not yet own shares in excess of the ownership guidelines, but has three years from the date of his promotion to CEO to satisfy the stock ownership guidelines.

The LTI Plan includes a compensation recoupment, or “clawback,” provision that allows the Company to recover payment relating to awards granted under the LTI Plan in certain circumstances, including if a participant engages in fraudulent conduct or activities relating to the Company or a participant knew or should have known of such conduct or activities. Additionally, the LTI Plan gives the Committee the authority to recoup certain compensation in the event that the Company restates its financial statements and, as a result of such restatement, the amount of compensation that would have been paid or payable pursuant to an award granted under the LTI Plan would have been lower had the financial results been properly reported. This policy is in addition to any requirements that might be imposed pursuant to applicable law. In October 2022, the SEC adopted new Rule 10D-1 under the Exchange Act, which requires national securities exchanges, including the NYSE, to establish listing standards relating to executive officer incentive compensation clawback and disclosure rules. The Company intends to monitor the development of NYSE’s final listing standards and plans to amend its existing compensation recoupment policy, as appropriate, in accordance with requirements of NYSE’s final listing standards.

Section 162(m) of the Code generally limits deductibility of compensation that a publicly traded company pays to certain “covered employees,” up to $1 million per year. Covered employees for this purpose include the Company’s Chief Executive Officer, Chief Financial Officer, the next three most highly compensated executive officers, and any such “covered employee” for a year after 2016. While the Committee considers tax consequences to the Company as a factor when it makes compensation determinations, the Committee reserves discretion to award compensation that is not fully deductible under Code § 162(m) if the Committee believes that such compensation will best attract, retain, and reward executives and contribute to our business objectives.

The Human Capital and Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis with management. Based on the Human Capital and Compensation Committee’s review and discussion with management, the Human Capital and Compensation Committee has recommended to the Board of Directors, and the Board of Directors has approved, that the Compensation Discussion and Analysis be included in this Proxy Statement.