The board of directors has a rigorous process to ensure that the composition of directors is diverse, balanced and aligned with the evolving needs of the company. Currently the board
consists of nine members. The holders of Class A common stock will elect six directors and holders of common stock will elect three directors. Each elected director will hold office until the next annual meeting. The election of our directors requires
a plurality of votes cast at the meeting by the holders of the respective classes of common stock.
The nominees for election at the 2023 annual meeting were recommended by the Nominating, Compensation and Governance Committee (the “NCG Committee”) of the board. All of the nominees
are currently directors of Havertys. We expect that each of the nominees will be available for election, but if any of them is unable to serve at the time the election occurs, it is intended that the proxies will vote for the election of another
nominee to be designated by the NCG Committee and the board.
Our board is a diverse, highly engaged group of individuals that provides strong, effective oversight of Havertys. Both individually and collectively, our directors
have the qualifications, skills and experience needed to inform and oversee the company’s long-term strategic growth priorities. The board believes that a variety and balance of perspectives on the board results in more thoughtful and robust
deliberations, and ultimately, better decisions. Each director was nominated on the basis of the unique experience, background, qualifications, attributes and skills that he or she brings to the board, as well as how those factors blend with those of
the others on the board.
The biography of each of the nominees contains information regarding such nominee’s experience and his or her director positions held currently or at any time during the last five
years. The fact that an icon is not shown does not mean the individual does not possess the experience, qualification, or skill.
|
Proposal 1: Nominees for Election by Holders of Class A Common Stock
|
|
|
|
Derek G. Schiller
Age 52
|
Independent Director since 2020 |
|
Principal Occupation: President and Chief Executive
Officer of the Atlanta Braves, a Major League Baseball Club, since March 2018. President of Business for the Braves from March 2016 to March 2018; Executive Vice President of Sales and Marketing from August 2007 to March 2016 for the Braves.
Directorships: Board Member of the Metro Atlanta
Chamber of Commerce, the Atlanta Convention and Visitors Bureau, the Atlanta Sports Council, and the Jack and Jill Late-Stage Cancer Foundation.
|
|
|
|
Clarence H. Smith
Age 72
|
Management Director since 1989
Chairman of the board since 2012
|
|
Principal Occupation: Chief Executive Officer of
Havertys since 2003. President and Chief Executive Officer from 2003 until March 2021. Over 47 years with Havertys in various positions.
Directorships: Oxford Industries, Inc. and member of
the Board of Trustees of Marist School.
|
|
|
|
Al Trujillo
Age 63
|
Independent Director since 2003 |
|
Principal Occupation: President and Chief Operating
Officer of the Georgia Tech Foundation since 2013. Investment Funds Advisor from 2007 to 2013. Former President and Chief Executive Officer of Recall Corporation, a global information management company until 2007.
Directorships: Member of the Board of Trustees of
Marist School. Former director of SCANA Corporation, which was acquired by Dominion Energy in 2018.
|
|
Clarence H. Smith and Rawson Haverty, Jr. are first cousins.
|
|
Proposal 1: Nominees for Election by Holders of Common Stock
|
|
|
|
Michael R. Cote
Age 61
|
Independent Director since 2022 |
|
Principal Occupation: Retired, former CEO of
Secureworks from 2002 to 2022 and chairman of the board from 2002 to 2011.
Directorships: Executive Chairman of the Board of
Directors of Nitel, Inc., Member of the Board of Trustees of Children’s Healthcare of Atlanta, Palmetto Technology Group, the board of regents at Boston College, the advisory board of the Georgia Tech School of Cybersecurity and Privacy, and
the board of trustees at Marist School.
|
|
|
|
L. Allison Dukes
Age 48
|
Independent Director since 2016 |
|
Principal Occupation: Senior Managing Director and
Chief Financial Officer, Invesco Ltd. since August 2020. Deputy Chief Financial Officer, Invesco Ltd. from March 2020 to August 2020. Former Chief Financial Officer for SunTrust Banks, Inc., from March 2018 until December 2019. Head of Commercial Banking for SunTrust Banks, Inc. from 2017 until 2018. President, Chairman and CEO of the Atlanta Division of SunTrust Banks, Inc. from 2015 until
2017.
Directorships: Member of the Board of Trustees of
Children’s Healthcare of Atlanta, Emory University; past chair of the board of Junior Achievement of Georgia.
|
|
|
|
G. Thomas Hough
Age 68
|
Independent Director since 2018
Lead Director since 2021
|
|
Principal Occupation: Retired, Americas Vice Chair of
Ernst & Young LLP (“EY”). Vice Chair of Assurance Services of EY from 2009 to 2014.
Directorships: Equifax Inc. and a director/trustee
of the Federated Hermes Fund Family. Member of the President’s Cabinet of the University of Alabama. Former director of Publix Super Markets, Inc. from 2015 until 2020.
|
The following sections provide an overview of our corporate governance structure and processes as they relate specifically to our board of directors.
Our company is led by Clarence Smith, who has served as chief executive officer since 2003 and chairman of the board since August 2012. Our board
nominees are composed of seven independent directors, one non-independent director, and one management director. Our independent directors meet in executive session at each board meeting. These sessions are presided over by the lead director.
Chairman/CEO: We believe that having a combined chairman/CEO, independent chairs for each of our board committees, and an independent lead director helps provide strong, unified leadership for our management team and board of directors
and is currently the right structure for our company. We have one individual who we believe is seen by employees, business partners, and stockholders as providing leadership for Havertys and we have experienced independent directors providing oversight
of company operations. The board believes that it should have the flexibility to make these determinations at any given point based on what it considers is the appropriate leadership structure for Havertys at the time.
Lead Director: Consistent with industry best practices, our lead director helps Havertys maintain a corporate governance structure with appropriate independence
and balance. The lead director chairs the executive sessions of independent directors and facilitates communications between the chairman/CEO and other directors. The lead director, currently Tom Hough, is elected by the independent directors
annually.
Our board has three standing committees: Audit Committee, NCG Committee and Executive Committee. The table below shows the current membership, the principal functions and the number of
meetings held in 2022:
|
Name, Meetings and Members
|
|
Principal Functions
|
|
Audit Committee
Meetings: 4
Al Trujillo – Chair
Mike Cote
Tom Hough
Vicki Palmer
Each member has been designated as “an audit committee financial expert” as defined by the Securities and Exchange Commission (“SEC”) and meets the independence requirements of
the New York Stock Exchange (“NYSE”), SEC, and our Governance Guidelines as well as the enhanced standards for Audit Committee members in Section 10A-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
|
|
• Provides oversight of the systems and procedures relating to the financial statements, financial reporting process, systems of internal accounting and financial controls.
• Reviews and discusses with management the company’s risk assessment framework and management policies, including cybersecurity and the framework with respect to significant financial risk exposures.
• Monitors the qualifications, independence and performance of the company’s internal audit function and independent auditor and meets periodically with management, internal audit team, and the independent auditor in separate
executive sessions.
• Performs other functions as the board deems appropriate.
|
|
Name, Meetings and Members
|
|
Principal Functions
|
|
NCG Committee
Meetings: 2
Actions by Unanimous Consent: 1
Mylle Mangum – Chair
Allison Dukes
Tom Hough
Derek Schiller
Al Trujillo
Each member meets the independence requirements of the NYSE, SEC and our Governance Guidelines as well as the enhanced standards for Compensation Committee
members in Rule 16b-3 promulgated under the Exchange Act.
|
|
• Translates our compensation objectives into a compensation strategy that reinforces alignment of the interests of our executives with that of our stockholders.
• Approves and evaluates the company’s director and executive officer compensation plans, policies and programs.
• Conducts an annual review and evaluation of the CEO’s performance in light of the company’s goals and objectives.
• Reviews and makes recommendations for composition and structure of the board and policies relating to the recruitment of new board members and nomination and reelection of existing board members.
• Oversees the compliance structure and programs with annual reviews of Havertys’ corporate governance documents.
• Oversees the company’s ESG-related initiatives.
• Reviews and approves related person transactions in accordance with board practices.
|
|
Executive Committee
Meetings: 0
Actions by Unanimous Consent: 1
Independent Members:
Tom Hough - Chair
Mylle Mangum
Al Trujillo
Management Member:
Clarence Smith
|
|
• In accordance with our bylaws, acts with the power and authority of the board in the management of our business and affairs in the interim period between meetings of the board.
• Generally, holds meetings to approve specific terms of financings or other transactions after these items have previously been presented to the board.
|
Attendance. During 2022, the board met four times and the committees met as indicated in the above
table. Each director attended at least 87% of the meetings of the board and committees on which he or she served during 2022.
We do not have a policy regarding director attendance at the annual meeting of stockholders. We have historically received proxies representing approximately 90%
of eligible shares and had no stockholders in attendance at our annual meetings. No directors attended the 2022 annual meeting, and none are expected to attend the 2023 annual meeting.
|
Board of Directors Oversight Roles
|
Stockholders elect our board to serve their long-term interests and to oversee management. Our board and its committees work closely with management to provide feedback from
stockholders and oversight, review, and counsel related to long-term strategy, risks, and opportunities. Our board works with management to determine our mission and long-term strategy. It also oversees business affairs and integrity, risk
management, CEO succession planning, and the annual CEO evaluation. Our board looks to the expertise of its committees to provide strategic oversight in their areas of focus. Examples of oversight areas are provided below.
Risk Oversight. Inherent in the board’s responsibilities are the understanding and oversight of the various risks facing the company. Effective risk oversight is an important priority of the board. The board exercises its
oversight responsibility for risk both directly and through its committees which have specific areas of focus for risk management. The board as a whole examines specific business risks, such as those associated with our business model and innovation,
supply chain, and cybersecurity, in its regular meetings in addition to the reports from its committees.
Long-Term Business Strategy. The board reviews management’s long-term business strategy including capital allocation priorities and business development opportunities each year and approves Havertys’ strategic plan. Updates on the
key elements of the plan are reviewed by the board at each board meeting throughout the year.
Stockholder Engagement. We value stockholder views and insights and believe
management has the primary responsibility for stockholder communications and engagement. The chairman and other members of Havertys' senior management team communicate regularly with stockholders on a variety of topics throughout the year to address
stockholders’ questions and to seek input concerning company policies and practices. The board receives regular updates concerning stockholder feedback which cover topics including our strategy and performance, capital allocations and corporate
governance matters.
Oversight of ESG. Havertys’ board of directors believes the company’s business
strategy and ESG strategy should be in alignment and focus on material risks and business drivers. The board has delegated oversight of certain ESG matters to its committees.
Audit Committee: Consistent with its oversight of financial and
other metrics, the Audit Committee is tasked with reviewing our ESG disclosures.
NCG Committee: ESG oversight related to compensation and human
capital management is delegated to the NCG Committee. This includes reviewing Havertys’ culture and organization and the execution of ESG-related initiatives. The NCG Committee is also tasked with evaluating whether there is sufficient diversity on the
board, including gender, racial and ethnic diversity, and overseeing our diversity and inclusion initiatives.
Management: The ESG Working Group is comprised of cross-functional leaders that are responsible for strategy and executional buildout of all ESG activities and reports to the ESG Steering Committee. The ESG Steering Committee is
responsible for providing oversight and approving the recommendations set forth by the Working Group and informing the board.
We began issuing a report in December 2021 containing disclosures on environmental, social, and governance factors that we consider relevant to our business. We update and share this
important information and metrics related to our journey to reduce our environmental impact, strengthen our team and communities, and enhance our long-term, value-creating focus on sustainability.
|
Governance Guidelines and Policies
|
Our board and management team are committed to achieving and maintaining high standards of corporate governance, as well as a culture of and
reputation for the highest levels of ethics, integrity and reliability. We annually review our governance policies and practices against evolving standards. In considering possible modifications, our board and management focus on those changes that
are appropriate for our company and our industry, rather than adopting a one-size-fits-all approach.
Our board recognizes that excellence in corporate governance is essential in carrying out its responsibilities to our stockholders, employees, customers, suppliers and
communities. The board has adopted guidelines and a number of policies to support our values and good corporate governance and practices. These governance practices and policies include:
Director Independence. Our Corporate Governance Guidelines state
that a majority of the directors must be non-management directors who meet the “independence” requirements of the NYSE. The NCG Committee conducts an annual review to determine the independence of each director based on the standards contained in our
Governance Guidelines and NYSE corporate governance requirements. The board, based on the recommendation of the NCG Committee and its review, has affirmed that each of the following non-employee directors is independent and has no material relationship
with the company that could impair their independence: Mike Cote, Allison Dukes, Tom Hough, Mylle Mangum, Vicki Palmer, Derek Schiller, and Al Trujillo.
For more information regarding our policy on Transactions with Related Persons, please see page 11 of this proxy statement.
Annual Evaluations. The board is committed to continuous improvement with respect to its ability to carry out its responsibilities. Each year the board and its independent committees, supervised by the NCG Committee, conduct self-assessments related to
their performance.
These annual assessments are an important tool to ensure the board is well-positioned to provide effective oversight.
Board Tenure, Mandatory Retirement and Resignation
from Board. As of the start of the 2023 board year, the average tenure of our independent directors is 11 years. Our independent directors are subject to a
mandatory retirement age and cannot stand for re-election in the calendar year following their 75th birthday. On the recommendation of the NCG Committee, the board may waive this requirement on an annual basis. A director is also required to
submit his or her resignation from the board to the NCG Committee in the event that a director retires from or otherwise leaves his or her principal occupation or employment. The NCG Committee can choose to accept or reject the resignation.
Director Nominations. The NCG Committee is
primarily responsible for identifying and evaluating director candidates and for recommending re-nomination of incumbent directors. The NCG Committee, which consists entirely of independent directors, regularly reviews the appropriate size and
composition of the board and anticipates vacancies and required expertise. The NCG Committee reviews potential nominees from several sources, including directors, management, stockholders or others. The NCG Committee is also authorized to retain search
firms to identify potential director candidates, as well as other external advisors, including for purposes of performing background reviews of potential candidates.
In evaluating potential nominees, the NCG Committee will review and consider, among other things, the nominee’s relevant career and business operations experience,
judgment, industry knowledge, independence, character, gender, race, ethnicity, age, demonstrated leadership skills, financial literacy, and experience in the context of the needs of the board at the time and the then-current mix of director
attributes. The NCG Committee does not have a formal policy with respect to diversity, however, the board and the NCG Committee believe that it is essential that the board members represent diverse viewpoints. In considering candidates for the board,
the NCG Committee considers the entirety of each candidate’s credentials.
The NCG Committee will consider recommendations for directors submitted by stockholders. Stockholders should submit their recommendations in writing to the NCG
Committee (See “Communications with Directors”). The proponent should submit evidence that he or she is a stockholder of Havertys, together with a statement of the proposed nominee’s qualifications to be a director. There is no difference in the manner
in which the NCG Committee evaluates proposed nominees that are recommended by a stockholder.
Communications with Directors. The board welcomes questions or comments about the
company and its operations. Interested persons wishing to write any director, committee or the board should send correspondence to the Corporate Secretary, Haverty Furniture Companies, Inc., 780 Johnson Ferry Road, Suite 800, Atlanta, Georgia 30342.
Please specify to whom your correspondence should be directed.
2023 Proxy Statement | 10
Code of Conduct. All of our directors and employees, including our chief executive
officer and other executive officers, are required to comply with our Code of Conduct to help ensure that our business is conducted in accordance with the highest standards of ethical behavior.
Hedging and Pledging Policies. We prohibit our directors, officers and employees from
hedging their ownership of Havertys stock, including purchasing or selling derivative securities relating to Havertys stock and from purchasing financial instruments that are designed to hedge or offset any decrease in the market value of Havertys
securities. Our directors and executive officers are prohibited from pledging Havertys securities as collateral for a loan and from holding any Havertys securities in margin accounts. There are no outstanding pledges or margin accounts involving
Havertys securities by any of our directors or executive officers.
Related Party Transaction Policy. Our board has adopted a written policy for the
review, approval or ratification of certain related party transactions. The term “related party transaction” is defined as any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which (1)
the aggregate amount involved will exceed $120,000 in any calendar year; (2) we are a participant; and (3) any related party of Havertys (such as an executive officer, director, nominee for election as a director or beneficial owners of greater than 5%
of our stock, or their immediate family members) has or will have a direct or indirect interest.
The board has determined that the NCG Committee is best suited to review and approve related party transactions. When reviewing the material facts of related party transactions the NCG
Committee must take into account whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related party’s interest in the
transaction. Certain categories of transactions have standing pre-approval under the policy including: (1) certain transactions with another company in which the related party’s only relationship is as an employee (other than an executive officer),
director or beneficial owner of less than 10% of that company’s stock; (2) certain transactions where the related person’s interest arises solely from the ownership of our common stock and all holders of our common stock receive the same benefit on a
pro rata basis (e.g. dividends, stock repurchases, rights of offerings); (3) certain banking-related services in which the terms of such transactions are generally the same or similar to accounts offered to others in the ordinary course of business;
and (4) transactions made on the same or similar terms available to all of our employees.
During 2022, there were no related party transactions requiring approval under the policy or disclosure in this proxy statement.
Compensation Committee Interlocks and Insider Participation. All NCG Committee members are independent and none of the NCG Committee members has served as an officer or employee of Havertys. None of our executive officers has served as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on our board or NCG Committee. Therefore, there is no relationship
that requires disclosure as a Compensation Committee interlock.
Delinquent Section 16(a) Reports. Based solely on our review of the copies of such
reports furnished to or prepared by Havertys and written representations that no other reports were required, we believe that all Section 16(a) filing requirements applicable to reporting persons were complied with during the year ended December 31,
2022.
2023 Proxy Statement | 11