e.l.f. Beauty (ELF) DEF 14ADefinitive proxy

e.l.f. Beauty, Inc. (NYSE: ELF) (“e.l.f. Beauty” or “we”) is a multi-brand beauty company that offers inclusive, accessible, cruelty-free cosmetics and skincare products. Our mission is to make the best of beauty accessible to every eye, lip and face.

We believe our ability to deliver 100% cruelty-free, premium-quality products at accessible prices with broad appeal differentiates us in the beauty industry. We believe the combination of our fundamental value equation, digitally-led strategy, as well as our world-class team’s ability to execute with speed, has positioned us well to navigate a rapidly changing landscape in beauty.

Our brands are:

Our brands are available online and in leading beauty, mass-market, and clean beauty specialty retailers. Our brands are positioned to touch diverse consumer cohorts at different price points. All three of our brands have accessible pricing relative to their competitive set and further our mission of making the best of beauty accessible to every eye, lip and face.

Below is a chart of our brands and how we view them based on distribution and price point:

Our Board of Directors (our “Board”), management, and employees are highly experienced, with proven track records managing and growing brand portfolios. At e.l.f. Beauty, we are committed to diversity, equity, and inclusion. We believe it is important that our team reflects the diverse consumers we serve. Our commitment to diversity, equity, and inclusion starts at the top with a highly skilled and diverse Board.

We are proud to be, as of March 31, 2021, one of only five public companies listed in the United States with a board of directors that has over 55% women and over 20% Black or African American representation (out of nearly 4,000 public companies). We’re also proud that our employee base is representative of the diverse consumers we serve.

Our Board is actively engaged in overseeing the strategic direction of e.l.f. Beauty and is committed to acting in the best interests of e.l.f. Beauty and our stockholders. Our Board recognizes the importance of having the right mix of skills, expertise, and experience, and is committed to continuously reviewing its capabilities, structure, and ongoing member refreshment on behalf of our stockholders. To that end, seven of our independent directors have joined our Board within the last six years.

Our results for the fiscal year ended March 31, 2021 (“FY 2021”) demonstrate that our business model and competitive advantages are robust, as we strengthened our position in a challenging environment. We delivered 12% year-over-year net sales growth in FY 2021, greatly outpacing the U.S. color cosmetics category, which declined approximately 14% according to Nielsen. e.l.f. Cosmetics was the only top five U.S. color cosmetics brand to post growth and the only brand to gain share, with 5.7% of the category, up 100 basis points year-over-year.

In FY 2021, we continued our focus on executing our five strategic imperatives to create long-term value for our stockholders, highlights of which are discussed below:

FY 2021 marked our first full year operating W3LL PEOPLE, our plant-powered clean beauty brand. The key focus in FY 2021 was “recharging” W3LL PEOPLE, as we fundamentally transformed many aspects of the brand, including price points, imagery, website, social channels, media strategy, and the in-store experience. We expanded distribution for the brand, launching six of W3LL PEOPLE’s best-selling stock-keeping units (“SKUs”) in all ULTA Beauty stores as part of ULTA’s Conscious Beauty program, an initiative to provide consumers greater choices and transparency in clean beauty.

We also took an important step in our transformation to a multi-brand company with the launch of Keys Soulcare, our groundbreaking new lifestyle beauty brand with Alicia Keys. Keys Soulcare carves out a new category in beauty, called “soulcare”, which goes beyond skincare to care for the body, mind and spirit. The brand’s initial skincare collection included nine product offerings with dermatologist-developed clean formulas, skin-nourishing ingredients, and soul-nurturing rituals. Keys Soulcare is also accelerating our global retail strategy, launching in the United States with ULTA Beauty, in the United Kingdom with Cult Beauty, and in eight countries across Western Europe with Douglas.

e.l.f. Beauty is led by its purpose—we stand with every eye, lip, face and paw—and we are committed to operating in a sustainable manner and being a responsible corporate citizen for the benefit of our consumers, our investors, our team, the environment, and the communities in which we live and work.

Consistent with our values and commitments, we took a number of steps in FY 2021 to further our environmental, social and governance (“ESG”) journey, including:

Stockholders are being asked to elect four Class II directors, each for a three-year term—however, in order to evenly distribute our directors across all classes, Mr. Mitchell (if elected as a Class II director) will be reclassified by our Board as a Class I director immediately after election and serve a two-year term (rather than a three-year term).

The election of Class II directors will be determined by a plurality of the votes cast, meaning that the four nominees receiving the most “For” votes will be elected as Class II directors. “Withhold” votes and broker non-votes are not considered votes cast for this proposal and will have no effect on the election of Class II directors.

Our Board has nominated the following four individuals for election as Class II directors at the 2021 annual meeting. All of our nominees are current members of our Board.

Each of the nominees has consented to being named as a nominee in this proxy statement and to serving as a Class II director (and with respect to Mr. Mitchell, to serving as a Class I director upon reclassification) if elected.

Ms. Cooks Levitan, Ms. Parham, and Mr. Wolford were previously elected to our Board by our stockholders in 2018. Mr. Mitchell was appointed to our Board in November 2020 to fill a vacancy on our Board created by an increase in the size of our Board; he is standing for election as a director by stockholders for the first time. Mr. Mitchell was recommended to our Board by Boardspan Inc., an independent director search firm engaged by the Nominating and Corporate Governance Committee.

If elected:

If for any reason any nominee is unable or declines to serve at the time of the 2021 annual meeting, the persons named as proxies in the proxy card will have the authority to vote for substitute nominees, or vote to allow the vacancy created thereby to remain open until filled by our Board. Our Board has no reason to believe that any of the nominees will be unable or decline to serve as a director if elected.

The following pages contain a brief biography of each nominee and description of the relevant experiences, qualifications, attributes, and skills of each nominee that led the Nominating and Corporate Governance Committee and our Board to recommend that person as a nominee for director. 

We have carefully evaluated the other forms of service of our nominees and determined that all of our nominees can commit the requisite time and attention to serve our stockholders’ interests. Additionally, none of our nominees are “over-boarded” according to thresholds of certain major institutional investors and proxy advisory firms, according to their respective voting policies.

Our commitment to diversity, equity, and inclusion starts at the top with a highly skilled and diverse Board. We believe diversity on our Board is important because a variety of points of view improves the quality of dialogue, contributes to a more effective decision-making process, enhances overall culture, and ultimately increases our capacity for long-term growth. We are proud to be, as of March 31, 2021, one of only five public companies listed in the United States with a board of directors that has over 55% women and over 20% Black or African American representation (out of nearly 4,000 public companies).

All of our directors, except Mr. Amin, are independent under NYSE listing standards, making our Board 89% independent.

Our Board has determined that Ms. Keith, Ms. Cooks Levitan, Mr. Mitchell, Ms. Parham, Mr. Perry, Ms. Pritchard, Ms. Watson, and Mr. Wolford each qualifies as an independent director under NYSE listing standards. Mr. Amin is not considered independent because he is the Chief Executive Officer of e.l.f. Beauty.

NYSE’s independent director definition includes a series of objective tests, including that the director is not, and has not been within the last three years, one of our employees and that neither the director nor any of his or her family members has engaged in various types of business dealings with us. In addition, as required by NYSE listing standards, our Board has made an affirmative determination as to each independent director that he or she has no material relationship with e.l.f. Beauty (either directly or as a partner, stockholder, or officer of an organization that has a relationship with us). In making these determinations, our Board considered ownership of our common stock by each director and reviewed and discussed information provided by each director with regard to that director’s business and personal activities and relationships as they may relate to e.l.f. Beauty and our management.

There are no family relationships among any of our directors or executive officers.

Our Board represents our stockholders’ interests and is responsible for furthering the long-term success and value of e.l.f. Beauty, consistent with our Board’s fiduciary duties to our stockholders. Our Board has responsibility for establishing broad corporate policies, setting strategic direction, and overseeing management, which is responsible for the day-to-day operations of e.l.f. Beauty.

In fulfilling this role, each director must exercise his or her good faith business judgment in the best interests of e.l.f. Beauty and our stockholders. We are committed to conducting our business in accordance with ethical business principles.

Our Board oversees the risk management process, while management oversees and manages risk on a daily basis. Our executive team provides regular reports to our Board on areas of material risk to e.l.f. Beauty, including operational, financial, legal, regulatory, and strategic risks. In addition, as part of its review of operational risk, our Board reviews cybersecurity risks facing e.l.f. Beauty, including the potential for breaches of our key information technology systems and the potential for breaches of our systems and processes relating to the protection of consumer and employee confidential information.

While our Board is ultimately responsible for risk oversight, each of our Board committees assists in fulfilling these oversight responsibilities. Their specific areas of responsibility are:

To facilitate our Board’s oversight of our risk management process, the chair of each committee reports (or delegates to another committee member or to our General Counsel to report) on its activities to our full Board, which enables our Board and its committees to coordinate the risk oversight role and keep informed of any developments impacting our risk profile.

Our governance framework provides our Board with the discretion and flexibility to make determinations as needed to provide appropriate leadership for our Board. In making these determinations, our Board considers many factors, including the specific needs of the business and what is in the best interests of e.l.f. Beauty and our stockholders.

Our Board believes that our current Board leadership structure provides an effective balance between strong management leadership and appropriate safeguards and oversight by our independent directors.

Our Board encourages all directors to play an active role in overseeing our business. The non-management directors meet in executive session without management directors or management present on a regularly scheduled basis. These meetings allow non-management directors to discuss issues of importance to e.l.f. Beauty, including the business and affairs of e.l.f. Beauty as well as matters concerning management, without any member of management present.

As the director closest to our business, Mr. Amin is best able to identify many of the business issues that require the attention of our Board and, as Chairman, can best focus our directors’ attention on the most critical business matters. Further, in our Board’s experience, having Mr. Amin serve as both Chairman and Chief Executive Officer allows for timely and unfiltered communication with our Board on these critical business issues.

Our Board currently has three standing committees: the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee. The primary responsibilities (and other details) of each committee are

The Nominating and Corporate Governance Committee is responsible for reviewing with our full Board, on an annual basis, the appropriate characteristics, skills, and experience required for our Board as a whole and the individual directors. In evaluating the suitability of individual candidates for our Board (both new candidates and current directors), the Nominating and Corporate Governance Committee and our Board consider many factors, including the following:

In addition to candidates identified through its own internal processes, the Nominating and Corporate Governance Committee will evaluate candidates for director that are suggested by any stockholder.

In order for the Nominating and Corporate Governance Committee to consider a stockholder suggestion, the stockholder must submit proof of e.l.f. Beauty stock ownership and submit an explanation of the reasons why the stockholder believes the candidate is qualified for service on our Board. To fully evaluate the candidate, the Nominating and Corporate Governance Committee may request the stockholder provide additional information regarding the suggested candidate.

The Nominating and Corporate Governance Committee evaluates candidates suggested by stockholders using the same principles and methodologies as it uses to evaluate other candidates (including candidates identified by our Board or our executive team).

There is no set deadline or timing for a stockholder to suggest a candidate for our Board. Stockholder suggestions for nominees for director should be submitted in writing to:

The procedures described above are meant to establish an additional means by which stockholders can contribute to our process for identifying and evaluating candidates for our Board and are not meant to replace or limit stockholders’ general nomination rights, as discussed below, in any way.

Any stockholder may nominate a candidate or candidates for election to our Board at an annual meeting of stockholders if the stockholder complies with the advance notice, information, and consent provisions contained in our bylaws, which are briefly described below.

To nominate a candidate, a stockholder must submit a detailed resume of the candidate and an explanation of the reasons why the stockholder believes the candidate is qualified to serve on our Board. The stockholder must also provide other information about the candidate that would be required by the SEC rules to be included in a proxy statement.

In addition, the stockholder must include the consent of the candidate with respect to the candidate’s nomination and commitment to serve if elected, and describe any relationships, arrangements or undertakings between the stockholder and

If a stockholder wishes to nominate one or more persons for election to our Board at the 2022 annual meeting of stockholders, we must receive notice of the nomination between April 28, 2022 and May 28, 2022 according to our bylaws. However, if the date of the 2022 annual meeting of stockholders is more than 30 days before or more than 60 days after August 26, 2022, notice must be received not later than the 90th day prior to the date of the 2022 annual meeting of stockholders or, if later, the 10th day following the day on which public disclosure of the date of the 2022 annual meeting of stockholders is first made.

Stockholder director nominations must be submitted in writing to:

We did not receive notice of any director nominations from our stockholders for the 2021 annual meeting.

Our Board is committed to continual corporate governance improvement. Our Board, and each committee, conducts an annual self-evaluation to review and assess its overall effectiveness, including with respect to strategic oversight, board structure and operation, interaction with and evaluation of management, governance policies, and committee structure and composition. As appropriate, these assessments may result in updates or changes to our practices as well as commitments to continue existing practices that our directors believe contribute positively to the effective functioning of our Board and committees.

Our Board meets at least quarterly each year and special meetings may be held as permitted by our bylaws. Committee meetings are held at such times as the committee may determine, with the goal of meeting at least quarterly each year. Directors are expected to attend and participate in Board meetings and applicable committee meetings, and spend the time needed and meet as frequently as necessary to properly discharge their responsibilities.

During FY 2021 our Board held 10 meetings. Each director, for the portion of FY 2021 that the director was a member of our Board or a particular committee, as applicable, attended at least 75% of the aggregate of the total number of meetings of our Board held during FY 2021 and the total number of meetings held during FY 2021 by all committees of our Board on which that director served.

Although we do not have a policy with regard to directors’ attendance at the annual meetings of stockholders, all directors are encouraged to attend the annual meeting of stockholders. Each director that was on our Board on the date of the 2020 annual meeting of stockholders attended the 2020 annual meeting of stockholders.

We compensate our non-employee directors for their service on our Board in accordance with our Non-Employee Director Compensation Program. We also reimburse all directors for their reasonable business expenses incurred in connection with their activities as directors.

e.l.f. Beauty and our Board welcome open communication with stockholders and appreciate input that advances our goal of enhancing stockholder value. We engage regularly with our stockholders and encourage anyone, including our stockholders, to contact our Board or individual directors about corporate governance or matters related to our Board or e.l.f. Beauty. Individuals may send written communications to our Board, committees of our Board, or individual directors by mailing those communications to our Corporate Secretary at:

Depending on the subject matter, our Corporate Secretary will:

At each Board meeting, a member of management presents a summary of all communications received since the last meeting that were not forwarded to our Board or the director or directors to whom they were addressed. A member of management also makes those communications available to our Board upon request.

The following is a list of our executive officers and their respective ages, positions, and brief biographies as of the date of this proxy statement.