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Notice of
Annual Meeting
of  Stockholders

PROXY
STATEMENT

Meeting Date:
June 20, 2019​

Our Business

PVH is one of the largest branded apparel companies in the world, with a history going back over 135 years. We have over 38,000 associates operating in over 40 countries and generated $9.7 billion in revenues in 2018. Our brand portfolio consists of nationally and internationally recognized trademarks, including the global designer lifestyle brands, Tommy Hilfiger  and CALVIN KLEIN, as well as Van Heusen, IZOD, ARROW, Warner’s, Olga, True&Co., and Geoffrey Beene. We also license brands from third parties, including Speedo, Kenneth Cole New York, Kenneth Cole Reaction, Unlisted, a Kenneth Cole Production, MICHAEL Michael Kors, Michael Kors Collection, DKNY and Chaps. Our brand portfolio also includes various other owned, licensed, and private label brands.

We design and market branded dress shirts, neckwear, sportswear, jeanswear, performance apparel, intimate apparel, underwear, swimwear, swim products, handbags, accessories, footwear and other related products. Our brands are positioned to sell globally at various price points and in multiple channels of distribution. This enables us to offer products to a broad range of consumers, while minimizing competition among our brands and reducing our reliance on any one demographic group, product category, price point, distribution channel, or region. We also license the use of our trademarks to third parties and joint ventures for product categories and in regions where we believe our licensees’ expertise can better serve our brands.

Our directly operated businesses in North America in 2018 consisted principally of wholesale sales under our TOMMY HILFIGER, CALVIN KLEIN, Van Heusen, IZOD, ARROW, Speedo, Warner’s, Olga and Geoffrey Beene trademarks; the operation of digital commerce sites under the TOMMY HILFIGER, CALVIN KLEIN, Speedo, True&Co., Van Heusen and IZOD trademarks, and the styleBureau.com digital commerce site; and the operation of retail stores, principally in premium outlet centers, primarily under our TOMMY HILFIGER, CALVIN KLEIN, and certain of our heritage brand trademarks. Our directly operated businesses outside of North America consisted principally of our wholesale and retail sales in Europe and Asia under our TOMMY HILFIGER trademarks; our wholesale and retail sales in Europe, Asia and Latin America under our CALVIN KLEIN trademarks; and the operation of digital commerce sites under the TOMMY HILFIGER and CALVIN KLEIN trademarks. Our licensing activities principally related to the licensing worldwide of our TOMMY HILFIGER and CALVIN KLEIN trademarks for a broad array of product categories and for use in numerous discrete jurisdictions.

Notice of 2019
Annual Meeting of Stockholders

How to vote

​	​	Important notice regarding the availability of proxy materials for the annual meeting of stockholders to be held on June 20, 2019	​	​
​	​	Our Annual Report to Stockholders for our fiscal year ended February 3, 2019, the Proxy Statement and all other proxy materials are available at www.pvhannualmeetingmaterials.com	​	​

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Dear Fellow Stockholders

We live by the belief that success is not defined only by our bottom line but also by our commitment to doing the right thing, including responsible

governance

MAY 7, 2019

The Power of PVH – the incredible makeup of our organization, encompassing our iconic brands, our talented teams and our wide range of global growth opportunities – was fully on display in 2018. We leveraged our diversified business model to grow revenues by 8% to a record $9.7 billion and to achieve GAAP earnings per share of  $9.65, representing 41% growth year-over-year (EPS on a non-GAAP basis of  $9.60*, representing 21% growth year-over-year). Our results significantly exceeded our initial expectations.

We live by the belief that success is not defined only by our bottom line. We are proud of our efforts to protect the environment and the rights of the over one million workers in our supply chain, and to enrich the lives of the people and communities where we live and work. We believe our commitment to inclusion and diversity strengthens our organization. We have pledged to promote inclusion and diversity both in our company and outside, among our suppliers and other business partners and in our industry generally. Lastly, we believe our dedication to associate engagement and development, and our promotion of our values of individuality, partnership, passion, integrity and accountability, define our culture and make PVH a truly unique organization.

Our commitment to doing the right thing has, with little fanfare, also historically extended to governance. We moved to annual election of directors from a classified structure in the mid-1990s, well before it became a standard practice. Our Audit & Risk Management Committee has a long record of independence and rigorous oversight that pre-dates the Sarbanes-Oxley Act requirements by decades. Our proxy statements have been cited from time to time for robust and transparent disclosures.

2018 is no exception to this history. The most obvious change is the document you are reading now. We made the commitment to – and have now executed – a major re-write of our Proxy Statement. We hope you find it easier to read and understand, not to mention more attractive and consistent with the PVH brand. More importantly, we hope you find the expanded disclosure and increased use of graphics more informative. We are pleased with the results and hope you are as well.

When you read the Proxy Statement, you will see some new concrete measures we took to enhance our governance in 2018. We adopted proxy access – without ever having received any inquiry or request to do so – and we are putting forward, on our own, two amendments to our certificate of incorporation to eliminate supermajority voting provisions. We believe it is not good governance to have supermajority voting requirements. Approval of each of the proposed amendments requires an affirmative vote of at least 80% of our outstanding shares – not just 80% of the shares voted. Therefore, I urge you to be certain to vote.

Finally, I would be remiss if I did not take this opportunity to thank you for your confidence in and support of PVH. I hope to see you at our 2019 Annual Meeting.

Sincerely,

EMANUEL CHIRICO
Chairman and Chief Executive Officer

* Reconciliations to GAAP amounts appear on Exhibit A.

Table of
Contents

​	Notice of 2019 Annual Meeting of Stockholders	​	​	i	​
​	Proxy Summary	​	​	1	​
​	Proposal 1: Election of Directors	​	​	7	​
​	Corporate Governance	​	​	14	​
​	Independence	​	​	14	​
​	Leadership Structure of the Board	​	​	14	​
​	Risk Oversight	​	​	15	​
​	Board, Committee and Director Evaluations	​	​	16	​
​	Board Refreshment	​	​	17	​
​	Stockholder Engagement	​	​	19	​
​	Director Resignation Policy	​	​	19	​
​	Director On-Boarding	​	​	20	​
​	Ongoing Director Education	​	​	20	​
​	Management Succession Planning	​	​	20	​
​	Political and Lobbying Activities	​	​	21	​
​	Values and Corporate Responsibility	​	​	21	​
​	Meetings	​	​	22	​
​	Transactions with Related Persons	​	​	23	​
​	Governing Documents	​	​	23	​
​	How to Contact the Board	​	​	24	​
​	Committees	​	​	24	​
​	Director Compensation	​	​	26	​
​	Annual Retainers	​	​	26	​
​	Stock Ownership Guidelines	​	​	26	​
​	Proposal 2: Advisory Vote on Executive Compensation	​	​	29	​
​	Compensation Discussion & Analysis	​	​	30	​
​	Compensation Committee Report	​	​	50	​

​	Executive Compensation Tables	​	​	51	​
​	Summary Compensation Table	​	​	51	​
​	Grants of Plan-Based Awards	​	​	54	​
​	Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table	​	​	55	​
​	Outstanding Equity at Fiscal Year-End	​	​	61	​
​	Option Exercises and Stock Vested	​	​	63	​
​	Pension Benefits	​	​	63	​
​	Defined Benefit Plans	​	​	64	​
​	Non-Qualified Deferred Compensation	​	​	67	​
​	Potential Payments Upon Termination and Change in Control Provisions	​	​	70	​
​	CEO Pay Ratio	​	​	71	​
​	Proposal 3: Amendment to Our Certificate of Incorporation to Eliminate the Supermajority Voting Requirement for Certain Transactions	​	​	72	​
​	Proposal 4: Amendment to Our Certificate of Incorporation to Eliminate the Supermajority Voting Requirement for By-Law Amendments	​	​	73	​
​	Proposal 5: Ratification of the Appointment of Auditor	​	​	74	​
​	Audit Committee Report	​	​	75	​
​	Equity Compensation Plan Information	​	​	76	​
​	Security Ownership of Certain Beneficial Owners and Management	​	​	77	​
​	5% Stockholders	​	​	77	​
​	Directors, Nominees for Director, and Executive Officers	​	​	78	​
​	Delinquent Section 16(a) Reports	​	​	79	​
​	General Information About the Annual Meeting	​	​	80	​
​	Exhibit A — GAAP to Non-GAAP Reconciliations	​	​	A-1	​
​	Exhibit B — NEO Employment Agreements	​	​	B-1	​
​	Exhibit C — Amended and Restated Certificate of Incorporation of PVH Corp.	​	​	C-1	​

Proxy Summary

This summary highlights information contained elsewhere in this Proxy Statement and does not contain all of the information you should consider. Please read the entire Proxy Statement carefully before voting. Disclosures in this Proxy Statement generally pertain to matters related to our most recently completed fiscal year, which began on February 5, 2018, and ended on February 3, 2019. References to “2018” and other years refer to fiscal years, which are designated by the calendar year in which they begin.

​	Record Date	​	​	April 23, 2019	​
​	Voting	​	​	■ Stockholders as of the record date are entitled to vote. ​ ■ Each share of our common stock is entitled to one vote. ​	​
​	Admission	​	​	■ Attendance at the meeting will be limited to holders of record as of the record date of our common stock or their proxies, beneficial owners with evidence of ownership and guests of PVH. ​ ■ If you hold stock through a bank or broker, you can bring an account statement as of the record date as evidence of ownership. ​ ■ Attendees must present a picture ID. ​	​

Proxy Summary Director Election

Director Election (page 7)

The following table introduces our director nominees, all of whom currently serve on our Board. All directors are elected annually by a majority of votes cast.

All of our directors are independent except Mr. Chirico.

■ Committee Chair​

Proxy Summary Director Diversity​

Director Diversity

Director Skills

Our Board embodies a broad and diverse set of experiences, qualifications, attributes and skills that are vital to the success of our business.

Proxy Summary 2018 Business Highlights

2018 Business Highlights

PVH demonstrated the power of its diversified business model throughout 2018. We leveraged our portfolio of iconic brands, our strong global platforms and our multi-channel distribution model to grow revenue and earnings. Through the passion and dedication of our associates and our collective focus on continual evolution, our results exceeded our initial expectations despite weaker than expected results at Calvin Klein, the challenging retail landscape (including several retail bankruptcies), geopolitical pressures and a weakening macro-economic picture. That we were able to exceed our financial plans against this backdrop demonstrates the “Power of PVH” — the incredible makeup of our organization that encompasses our iconic brands, our talented teams and the wide range of our global growth opportunities.

We have outperformed our peer group for the one-, two- and three-year periods ended 2018 based on revenue growth and earnings per share (on a non-GAAP basis as reported by us), and, other than the one-year period, based on total stockholder return (“TSR”).

1

Earnings per share amounts used are on a non-GAAP basis, as reported by us.

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2

Total stockholder return vs. S&P 500 is based on the S&P 500 companies as of March 12, 2019, which differs from the S&P 500 companies used to determine the performance share units payout for the performance period ended April 25, 2019 (see discussion on page 41).

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3

Overall percentile ranking excludes TSR vs. S&P 500.

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1

Earnings per share amounts used are on a non-GAAP basis, as reported by us.

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2

Total stockholder return vs. S&P 500 is based on the S&P 500 companies as of March 12, 2019, which differs from the S&P 500 companies used to determine the performance share units payout for the performance period ended April 25, 2019 (see discussion on page 41).

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*

Reconciliations to GAAP amounts appear in Exhibit A.

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Proxy Summary Executive Compensation Highlights​

Executive Compensation Highlights (page 30)

Our compensation program is a pay-for-performance model based upon the philosophy that we should incentivize our executive officers to improve our financial performance, profitably grow our businesses and increase stockholder value, and reward them only if they attain these objectives.

Compensation Mix

Compensation Changes From 2017 to 2018

The following table shows how compensation for the NEOs was adjusted for 2018.

1

Restricted stock unit (“RSU”) awards made prior to 2018 to Messrs. Chirico, Shaffer, Duane and Shiffman, who are based in the U.S., were subject to a condition intended to satisfy the requirement for deductibility under Section 162(m) of the U.S. Internal Revenue Code (the “Code”). No similar condition was included on the 2018 awards, as the changes to the Code under the Tax Cuts and Jobs Act of 2017 eliminated the deduction.

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2

We entered into a new employment agreement with Mr. Duane in March 2018 under which his salary and the terms of his bonus and equity awards are fixed. The agreement sets forth the equity awards to be granted to Mr. Duane during the three-year term, including a one-time award of RSUs in lieu of the annual grant of RSUs and stock options. The grant date target value ($3.3 million) was equal to three times the aggregate target grant date value of his annual award of RSUs ($550,000) and stock options ($550,000) in 2017. See discussion on page 41.

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3

Mr. Grieder’s base salary is tied to Swiss francs because he is a resident of Switzerland. See discussion on page 34.

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4

Mr. Grieder had received an incremental increase to his annual award of RSUs in 2017 to reflect outperformance in 2016. The incremental award was not repeated in 2018.

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Proxy Summary Governance Highlights

Governance Highlights (page 14)

PVH is committed to excellence in corporate governance, as evidenced by the policies and practices summarized below.

Election of Directors

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​	The Board of Directors recommends a vote FOR the election of the twelve nominees named below.	​

Nominees for Election

Proposal 1: Election of Directors Nominees for Election

Proposal 1: Election of Directors Nominees for Election​

 

1

On September 15, 2014, NII Holdings, Inc. filed for bankruptcy protection in New York, New York.

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2

On January 11, 2013, Deloitte Consulting LLP acquired all of the business of Monitor Company pursuant to an agreement entered into on November 7, 2012. To help facilitate the acquisition, Monitor Company filed for bankruptcy protection on November 7, 2012, in Wilmington, Delaware. The sale was accomplished by means of a bankruptcy court-approved sale under the U.S. Bankruptcy Code.

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Proposal 1: Election of Directors Nominees for Election

Proposal 1: Election of Directors Nominees for Election​

Proposal 1: Election of Directors Nominees for Election

Proposal 1: Election of Directors Nominees for Election​

Corporate Governance

Independence

The Board of Directors has evaluated the independence of each of the directors and nominees for director in relation to the rules of the New York Stock Exchange (“NYSE”). The independence inquiry included the additional criteria for service on the Audit & Risk Management Committee and the Compensation Committee for the directors who are members of those committees. The Board determined that Mr. Chirico, as our only management director, is not independent, and that each of our other current directors is independent.

In making these independence determinations, the Board of Directors considers whether a director has or had a relationship with PVH that would disqualify the individual under applicable regulation from being considered independent, that would be disclosable under applicable regulation, or that might otherwise be deemed material to the director, the director’s family or PVH. None of the directors, other than Mr. Chirico, has a material relationship with PVH, either directly or as a partner, stockholder, or officer of an organization that has a relationship with PVH, nor does any other director have a direct or indirect material interest in any transaction involving PVH.

The Board of Directors did consider that PVH employs Ms. Baglivo’s daughter when making its independence decision with respect to her. In concluding that Ms. Baglivo is independent, the Board noted that her daughter’s annual compensation is well below the threshold of  $120,000 that would require disclosure under applicable SEC rules.

No family relationship exists between any director or executive officer of PVH with any other director or executive officer.

Leadership Structure of the Board

Our Chief Executive Officer currently serves as Chairman of the Board of Directors. The Board believes that no single leadership model is necessarily best for PVH and that the decision to combine or separate the offices of Chief Executive Officer and Chairman should depend on the circumstances. Right now, the Board believes that combining these two roles is the most effective leadership structure for us. Mr. Chirico’s combined role has promoted unified leadership and direction for the Board and executive management, and has allowed for a single, clear focus for the chain of command to execute our strategic initiatives and business plans. Mr. Chirico’s extensive knowledge of and tenure at PVH makes him uniquely qualified for this leadership role.

Our Corporate Governance Guidelines provide that, if the Chief Executive Officer serves as Chairman, the independent directors must elect an independent director to serve as presiding director. The Nominating, Governance & Management Development Committee is responsible for nominating the director to serve in such role.

Mr. Nasella has been our presiding director since 2007. The duties of the presiding director include:

In addition to creating a strong, independent, clearly defined presiding director role, the Board has adopted a number of governance practices to ensure effective independent oversight. The members of all key Board committees must meet the independence requirements prescribed by the NYSE. The Board holds executive sessions of the independent directors at the end of every Board meeting, as well as at other times the independent directors choose.

Corporate Governance Risk Oversight​

Risk Oversight

Corporate Governance Board, Committee and Director Evaluations

Board, Committee and Director Evaluations

The Board believes it is important to address its role, the presentation topics at its meetings, and its capabilities and effectiveness on a regular basis. Conducting Board, director and committee evaluations — and discussing the results of those evaluations — are an important part of this process. The Nominating, Governance & Management Development Committee oversees the annual Board evaluation process.

Corporate Governance Board Refreshment​

Board Refreshment

Evaluating current Board composition

The Nominating, Governance & Management Development Committee initiated a formal, ongoing process for director succession in 2016. The process had several goals:

The Nominating, Governance & Management Development Committee uses a skills matrix to assess the strengths and needs of the Board in relation to our current business strategy, expected future strategic needs, and the current state of our industry. The matrix incorporates areas of operating and industry experience that Committee members have determined should be represented on our Board. Using directors’ self-assessments and assessments from the other directors and management, including our Executive Vice President, Global Talent Management, the Committee populates the matrix, showing the extent to which each current director has the desired qualities and skills.

The Nominating, Governance & Management Development Committee reviews the skills matrix, along with individual director demographics, tenure and committee memberships, and considers our total Board composition and demographics compared to our peers, to determine whether we need to add a director with specific qualities or skills. The Committee believes our Board of Directors is most effective when its members represent a mix of the attributes, skills and experience shown below.

Director Nominee Skills

C-suite experience managing a business with an ecommerce component to the business vs. direct experience managing an e-commerce business

C-Suite experience managing a business with international operations vs. actually operating within an internationally based business

Corporate Governance Board Refreshment

Identifying potential new directors

In evaluating potential new directors, the Nominating, Governance & Management Development Committee will consider the needs identified by our formal review process and the resulting skills matrix, and also may consider factors such as each candidate’s professional experience; business, charitable or educational background; performance in current position; reputation; age; and service on other boards of directors. Potential candidates have been identified at various times by members of the Board, by a third-party search and recruiting firm retained for that purpose, and by senior executives.

The Nominating, Governance & Management Development Committee will consider a nominee recommended by a stockholder if the recommendation is made in writing and includes (i) the qualifications of the proposed nominee to serve on the Board, (ii) the principal occupations and employment of the proposed nominee during the past five years, (iii) each directorship currently held by the proposed nominee, and (iv) a statement that the proposed nominee has consented to the nomination. The recommendation should be addressed to our Secretary. The expectation is that candidates recommended by stockholders would be evaluated in a similar manner as candidates identified by the Committee.

Proxy access

We amended our By-Laws in April 2019 to adopt a proxy access provision. This provision allows stockholders to nominate director candidates for election to our Board, and for those director candidates to be included in our proxy materials. Under our proxy access by-law, a group of up to 20 stockholders that collectively has owned at least 3% of our common stock for at least three years may nominate director candidates constituting up to the lesser of two directors and 20% of our Board, subject to certain informational and procedural requirements.

The Nominating, Governance & Management Development Committee evaluated a number of different factors and potential formulations in adopting our proxy access by-law before recommending it to the Board for approval. We believe the version we adopted provides stockholders with meaningful participation in the director nomination process, while also imposing reasonable thresholds to avoid unnecessary administrative costs and to ensure the nominating stockholders have an appropriate and genuine interest in PVH and its governance.

Diversity

The Nominating, Governance & Management Development Committee considers the diversity of the Board and potential candidates in selecting new directors but does not have a specific policy in that regard. In practice, the Committee reviews whether a candidate would contribute to the diversity of skills, abilities, and experiences represented in our skills matrix, as well as the candidate’s race, ethnicity and gender. We are proud of the diversity of backgrounds that characterize our current Board of Directors, including that one-third of our directors are women, and believe that our diversity provides significant benefits to PVH.

Mandatory retirement

Directors cannot be nominated for re-election if they will be 72 on the date of the applicable annual meeting, absent a waiver by the Nominating, Governance & Management Development Committee and the full Board. The Board has granted a waiver to Mr. Nasella due to his continued strong leadership, performance, and contributions to the Board and the committees on which he sits. The Board believes that imposing a mandatory retirement age is an effective way to ensure director refreshment. To that end, two of the directors who have joined the Board in recent years were nominated in anticipation of then upcoming retirements, which have now occurred.

Corporate Governance Stockholder Engagement​

Stockholder Engagement

Our discussions with stockholders cover a wide range of topics, but generally our conversations involve the following issues:

We also engage with stockholders on our compensation practices, most notably on CEO compensation, and periodically seek input from them regarding our compensation program and the compensation paid to Mr. Chirico and the other senior executives. The Compensation Committee has discussed and considered communications received from stockholders relating to our compensation program, and the Committee Chairman has responded to inquiries, where appropriate. In addition, the members of the Compensation Committee typically attend our Annual Meeting and are available to answer questions regarding our compensation program.

In general, feedback from our stockholders is positive and we have not generally received any requests to undertake changes to our compensation practices, adopt corporate governance measures, undertake additional (or enhance existing) corporate responsibility initiatives, or expand our engagement practices.

Director Resignation Policy

The election of directors in an uncontested election requires the affirmative vote of a majority of the votes cast at an annual meeting. Our Corporate Governance Guidelines provide that a director seeking re-election who does not obtain a majority vote of stockholders must offer a letter of resignation. The Nominating, Governance & Management Development Committee will make a recommendation to the full Board on whether to accept or reject any such resignation, or whether other action should be taken. The Board must act on the Committee’s recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date election results are certified. Our Corporate Governance Guidelines provide that the Nominating, Governance & Management Development Committee and the Board may consider any factors and information that they consider appropriate and relevant in making their respective decisions. The director who has tendered a resignation cannot participate in the Committee or Board discussions regarding that resignation.

Corporate Governance Director On-Boarding

Director On-Boarding

We conduct a comprehensive on-boarding process for new directors. We believe a wide-ranging orientation is important in positioning new directors for success. The process includes pairing a new director with a seasoned member of the Board who serves as a peer mentor for the first three to six months. In addition, new directors participate in a corporate, business and financial orientation program that involves substantive individual meetings with senior executives. For example, the Chief Executive Officer will brief new directors on current business and strategy; the Chief Operating & Financial Officer will speak about our financial performance; the Treasurer and Senior Vice President, Business Development and Investor Relations will discuss our capital structure, the stockholder base and investor relations; the General Counsel will discuss corporate governance, periodic reporting and stock-related matters; and the Chief Human Resources Officer will report on human resources strategies, key talent and succession planning. In addition, senior executives in our Tommy Hilfiger, Calvin Klein and Heritage Brands businesses provide an overview of their respective businesses. The orientation also includes an introductory session with the Chair or members of the Board committee on which the new director will sit and may also include executives and outside advisors who work with that committee. SEC filings and other information are provided as a background resource. We endeavor to have all new directors visit our European headquarters in Amsterdam within their first year of service.

Ongoing Director Education

We have created a website for directors that is part of our PVH University learning management system. The site provides directors with access to information on director educational conferences and programs, our PVH Complies compliance training courses, and the extensive library of courses we offer to our associates. The site identifies programs, conferences and classes recommended by other directors and our Talent Development Team.

We encourage directors to pursue educational opportunities to enable them to better perform their duties and to learn about emerging issues. In addition, we provide access to educational materials and resources, including subscriptions to outside publications relevant to governance and our industry, and membership in governance organizations. We do not limit the amount of time or money that can be spent on director education, although we do evaluate the courses and conferences to make certain that the subject matter is appropriate for the director and their role. Directors are allowed to determine the amount of education they deem appropriate. However, our Corporate Governance Guidelines strongly encourage directors to attend at least one external director education program per year.

The Nominating, Governance & Management Development Committee may request that directors seek out particular education programs or that the Board receive presentations based on results from the Board questionnaires and individual director self-assessments.

We often incorporate travel to PVH facilities and facilities operated by business partners to educate directors on our global operations, as well as matters related to the committees on which they serve. For example, the entire Board traveled in 2018 to Hong Kong, Shanghai and Tokyo to visit our offices and retail operations there, and members of the Corporate Responsibility Committee have traveled to see factories where our goods are produced.

Management Succession Planning

The Nominating, Governance & Management Development Committee has implemented a detailed plan regarding succession planning. Succession plans for the Chief Executive Officer and the senior management team are updated at least annually, and the Committee presents a status report on succession plans annually to the full Board. The succession-planning process includes both identifying and developing plans for promising internal candidates and identifying external candidates. The plan includes mid-term and long-term solutions and arrangements in the event an emergency arises.

Corporate Governance Political and Lobbying Activities​

Political and Lobbying Activities

PVH does not contribute to political candidates, parties or causes. We do occasionally participate in lobbying activities, principally through our membership in industry associations. For example, we are involved in ongoing efforts not to have apparel and footwear imported into the U.S. from China subjected to additional tariffs. We believe additional tariffs would be damaging to retail sales, cause price increases and job losses, and would be excessive given the already elevated level of tariffs on these imports as compared to other product categories.

We were involved in 2017 in industry efforts on proposed U.S. tax reform and, in particular, lobbying against the suggestion that a border adjustment tax on imports be included in the broader reform plan. We were actively involved in 2014 and 2015 in seeking an extension of the African Growth and Opportunity Act (“AGOA”), which offers incentives for African countries to continue their efforts to open their economies and build free markets. We believe East Africa provides a potential opportunity for us to be involved in the vertically integrated production of apparel in an environment where our corporate responsibility standards can be implemented from the outset, including adherence to best practices in working conditions, workers’ rights, building and fire safety, and use of green energy sources. We continue to monitor the eligibility of the countries in sub-Saharan Africa where we produce in order to participate in AGOA benefits, which, for producers like PVH, allows us to import goods into the U.S. on a duty-free basis.

Values and Corporate Responsibility

We believe that PVH is truly a unique organization, from our associates’ embodiment of our values — individuality, partnership, passion, integrity and accountability — to our ongoing commitment to Corporate Responsibility (“CR”), to our efforts to invest in the long-term success of our associates. We recognize our responsibility as an industry leader to consider CR throughout our strategic business decisions to positively affect human rights, protect the environment, foster inclusion and diversity, and sponsor community engagement. We believe that our success is not only measured by our business results, but how we achieve them.

As the conscience of our industry shifts toward more responsible, sustainable practices, we are positioning our business to be at the forefront of what’s next. We recently unveiled the next evolution of our CR strategy — Forward Fashion. The heart of this ambitious vision for the future is to reduce negative impact to zero, increase positive impacts to 100% and improve the over one million lives across our value chain. We believe that this strategy truly represents our purpose and the way we should all do business.

PVH would not be where it is today without our industry-leading talent. We believe our associates are a reflection of our organization and that it is our responsibility to encourage an inclusive environment, which ultimately inspires change from within. We believe we are developing a strong foundation for continued success by creating a workplace that appreciates our associates and acknowledges that our people are our greatest asset. We are proud to note that our efforts regularly are recognized publicly in a variety of ways, including appearing on Forbes’ list of Best Employers for Diversity, Fortune magazine’s list of the World’s Most Admired Companies, Forbes’ inaugural list of Best Employers for Women, and Top Five Lead Awards from HR.com in five categories, including Best Corporate University.

We invite you to read our annual CR Report and learn more about how we drive fashion forward — for good — by visiting the Corporate Responsibility section of our website at PVH.com/responsibility.

You can learn more about our recognitions — which highlight the Power of PVH — by visiting the Recognitions section of our website at PVH.com/company/recognitions.

Corporate Governance Meetings

Meetings

Board meetings typically cover four categories of business, as described below.

To ensure that the Board is fully informed about issues under discussion, meetings often include presentations by our corporate officers, senior executives or internal subject matter experts, and outside advisors and consultants. One meeting each year is convened offsite for several days to give directors an opportunity to consider and discuss at length matters such as strategy, opportunities, business strengths and weaknesses, and competitive threats. The offsite meeting also provides the directors with exposure to and the opportunity to interact with a large contingent of executives from the global management team. These interactions help the Board assess the talent pool globally.

Executive Sessions

Each Board meeting begins in an executive session of all of the directors (along with the corporate Secretary). This session includes an overview of the agenda by the Chairman and Chief Executive Officer and a preview of some of the key issues confronting management. In addition, the executive session gives directors an opportunity to prepare possible lines of questioning for management and outside advisors and enables the Board to discuss issues that they do not want to raise with the rest of management present. On occasion, other members of management other than the CEO will be invited to participate with respect to discrete items.

Our independent directors also meet at the end of each regular meeting (and other times) in executive session to discuss Board presentations, management performance and the performance of our Chief Executive Officer. Mr. Nasella, our presiding director, leads these executive sessions.

CEO Evaluation

Mr. Nasella meets with our Chief Executive Officer at least annually to discuss the Board’s feedback on the CEO’s performance and areas for improvement. The feedback is elicited through a written performance evaluation completed by each director that solicits both quantitative and qualitative responses regarding five key areas of performance: Leadership and People; Strategic Planning; Financial Results; External Relations; and Board Relations.

Corporate Governance Transactions with Related Persons​

Transactions with Related Persons

SEC rules require us to disclose certain transactions with “related persons.” These are transactions, subject to certain exceptions, involving amounts in excess of  $120,000 between PVH on one side and one of the following categories of people on the other side:

The only transaction that meets these criteria is that Dominic Chirico, a son of Emanuel Chirico, has worked in our Calvin Klein business since September 2010. In 2018, Dominic Chirico received compensation of  $295,611 consisting of salary and bonus.

The Audit & Risk Management Committee is required to review and approve any transaction between PVH and any director or executive officer that will, or is reasonably likely to, require disclosure under SEC rules. In determining whether to approve any such transaction, the Committee will consider the following factors, among others, to the extent relevant to the transaction:

Additionally, under our Code of Business Conduct & Ethics and our Conflict of Interest Policy, our directors and associates, including executive officers, have a duty to report all potential conflicts of interest, including transactions with related persons. We have established procedures for reviewing and approving disclosures under the Conflict of Interest Policy and all disclosures are discussed annually with the Audit & Risk Management Committee.

Governing Documents

Corporate Governance Guidelines. Our Corporate Governance Guidelines address matters such as director qualifications and responsibilities, Board committees and their charters, the responsibilities of the presiding director, director independence, director access to management, director compensation, director orientation and education, evaluation of management, management development and succession planning, and annual performance evaluations for the Board. The Nominating, Governance & Management Development Committee reviews the Corporate Governance Guidelines annually and determines whether to recommend changes to the Board.

Code of Ethics for Chief Executive Officer and Senior Financial Officers. Our Code of Ethics is designed to ensure full, fair, accurate, timely and understandable disclosure in the periodic reports we file with the SEC. We intend to disclose on our website any amendments to, or waivers of, the Code of Ethics that would otherwise be reportable on a Current Report on Form 8-K. Any such disclosure will be posted within four business days following the date of the amendment or waiver.

Code of Business Conduct and Ethics. The Code of Conduct, which applies to all PVH directors, officers and associates, addresses matters such as conflicts of interest, insider trading, confidentiality of PVH’s proprietary information, and discrimination and harassment.

All of these documents are posted on our website at PVH.com/investor-relations/governance.

Corporate Governance How to Contact the Board

How to Contact the Board

Stockholders and other interested parties may send communications to the Board of Directors (or specified group of individual directors, such as the non-management directors and the presiding director). Any such communication should be addressed to the Board (or individual director) in care of the Secretary of PVH Corp., 200 Madison Avenue, New York, New York, 10016-3903.

Committees

The Board of Directors has four standing committees: Audit & Risk Management; Compensation; Nominating, Governance & Management Development; and Corporate Responsibility. Each committee has a written charter adopted by the Board of Directors that is available on our website at PVH.com/investor-relations/governance.

Corporate Governance Committees​

Director Compensation

Annual Retainers

Non-employee directors are paid annually in a combination of cash and restricted stock units, as shown below.

1

Each of our non-employee directors who was elected on June 21, 2018 received a grant of 940 RSUs.

​

In addition to these annual retainers, non-employee directors are reimbursed for their meeting-related expenses.

Directors who join the Board after our annual meeting are paid a pro rata portion of the applicable fees for the year but do not receive an award of RSUs. We do not pay fees or make equity grants to non-employee directors who are designated for election by a stockholder having director nomination rights. We currently have no such directors.

Our non-employee directors receive very limited benefits and perquisites. They are entitled to the same discounts at our retail stores as are available to all associates. In addition, we provide business accident travel insurance for directors and their spouses, which is at no additional cost to us because we maintain coverage for our associates globally. Finally, non-employee directors are eligible to participate at their own cost in our group umbrella insurance program, which may offer more favorable rates than they can obtain on their own.

Stock Ownership Guidelines

Our non-employee directors are required under our stock ownership guidelines to own shares of our common stock with an aggregate value equal to five times the annual cash retainer payable to directors. New directors have five years from the date they are elected to attain this ownership level. All of our non-employee directors who have served on the Board for five years or more are currently in compliance with this requirement. Our stock ownership guidelines require directors to hold 50% of the shares received upon the vesting of their equity awards (after payment of taxes) until they satisfy the guideline. There are no stock ownership guidelines for directors designated for election by a stockholder having director nomination rights, of which we currently have none.

Director Compensation Stock Ownership Guidelines​

The following table provides information concerning the compensation of all individuals who served as directors during any portion of 2018, other than Mr. Chirico, whose compensation as an executive is set forth on the Summary Compensation Table on page 51.

1

The fees earned or paid in cash to the directors consist of the following:

​

2

The amounts are the aggregate grant date fair value of RSUs granted in 2018, which were the only equity awards granted to our directors in 2018. The fair value is equal to $154.40, the closing price of our common stock on the date of grant, multiplied by the number of RSUs granted.

​

Director Compensation Stock Ownership Guidelines

3

The number of unexercised stock options and aggregate number of unvested RSUs for each of our directors as of February 3, 2019, were as follows:

​

a

Stock awards consist of unvested restricted stock units, which vest on the first anniversary of the date of grant.

​

b

Settlement of 5,189 of these outstanding awards has been deferred pursuant to the director’s election, as permitted under our 2006 Stock Incentive Plan.

​

c

Settlement of 21,140 of these outstanding awards has been deferred pursuant to the director’s election, as permitted under our 2006 Stock Incentive Plan.

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d

Settlement of 4,066 of these outstanding awards has been deferred pursuant to the director’s election, as permitted under our 2006 Stock Incentive Plan.

​

e

Settlement of 5,230 of these outstanding awards has been deferred pursuant to the director’s election, as permitted under our 2006 Stock Incentive Plan.

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f

Settlement of 11,088 of these outstanding awards has been deferred pursuant to the director’s election, as permitted under our 2006 Stock Incentive Plan.

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Advisory Vote on Executive Compensation

​		​
​	The Board of Directors recommends a vote FOR approval of the compensation paid to our Named Executive Officers.	​

Our performance targets are meaningful and are designed to encourage our executives to perform at high levels. We must achieve earnings per share that falls within the earnings per share guidance range that management provides to the financial market at the beginning of each fiscal year to pay out bonuses at the target level, and business unit executives must achieve earnings goals for their respective business units. In both cases, the goals are based on the annual budget reviewed and approved by the Board of Directors, and the target levels typically are established above the prior year’s performance.

Our compensation program reflects sound pay practices.

■

We generally do not provide our NEOs with any guarantees as to salary increases, bonuses, incentive plan awards or equity compensation.

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■

Our perquisites are very modest and do not include tax reimbursements or “gross-ups” for severance payments.

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■

We have adopted stock ownership guidelines (including holding requirements until ownership levels are achieved) for our NEOs that are intended to align their long-term interests with those of our stockholders and to encourage a long-term focus.

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Our total compensation packages are comparable to our peers. When we establish compensation packages each year, we compare the total compensation that each NEO can earn to compensation for the most comparable executives at the companies in our peer group. We confirm the accuracy of such comparisons by reviewing actual amounts paid or expected to be paid at the end of each year. The compensation package for our Chief Executive Officer, consistent with our emphasis on pay for performance, is heavily weighted on long-term and performance-based elements. Compensation packages for our other NEOs are also heavily weighted on these elements, although not to the same degree as the CEO’s compensation package. In all cases, the weighting is consistent with those of their counterparts at our peers.

Our compensation program works as intended. We believe the information disclosed in this Proxy Statement, in particular the Compensation Discussion & Analysis and Executive Compensation Tables sections, demonstrates that our executive compensation program is well-designed, is working as intended, emphasizes pay for performance without encouraging undue risk, incorporates sound corporate governance practices, and foregoes elements that are considered poor pay practices.

The Board submits the following resolution to stockholders to indicate their non-binding advisory approval:

Compensation
Discussion & Analysis

Contents				​
Compensation Discussion & Analysis	​	​	​	​
Executive Summary	​	​	30	​
2018 Executive Compensation Program	​	​	34	​
Executive Compensation Overview	​	​	35	​
Compensation Decisions for 2018	​	​	37	​
Other Benefits	​	​	46	​
Administration of our Compensation Programs	​	​	47	​
Risk Considerations in Compensation Programs	​	​	49	​

NEO	​	​	Age	​	​	Years of Service	​	​	Title	​
EMANUEL CHIRICO	​	​	61	​	​	25	​	​	Chairman and Chief Executive Officer, PVH Corp.	​
MICHAEL A. SHAFFER	​	​	56	​	​	28	​	​	Executive Vice President and Chief Operating & Financial Officer, PVH Corp.	​
FRANCIS K. DUANE	​	​	62	​	​	20	​	​	Vice Chairman, PVH Corp. and Chief Executive Officer, Heritage Brands	​
DANIEL GRIEDER	​	​	57	​	​	221	​	​	Chief Executive Officer, Tommy Hilfiger Global and PVH Europe	​
STEVEN B. SHIFFMAN	​	​	61	​	​	26	​	​	Chief Executive Officer, Calvin Klein	​

Executive Summary

2018 Performance Highlights

Our 2018 results exceeded our plans and our long-term growth targets despite weaker than expected results in our Calvin Klein business, several department store bankruptcies and continued store closings, geopolitical pressures and a weakening macro-economic picture. We believe the ability of our teams to over-deliver against our Board-approved financial plans against this backdrop demonstrates the “Power of PVH” — the combination of our iconic brands, our talented teams and the wide range of global growth opportunities in front of us.

We believe that significant opportunities for growth remain, as we continue to execute on our strategic priorities with an emphasis on driving long-term stockholder value creation. We expect these priorities, which include global expansion, a focus on driving consumer experience, investing in our operating platforms, and using our balance sheet to drive returns, will enable us to attain top line and bottom line growth over the next several years.

CD&A EXECUTIVE SUMMARY  2018 Performance Highlights​

Our earnings per share, EBIT, and revenue performance over the past three years was as follows:

CD&A EXECUTIVE SUMMARY  2018 Compensation Highlights

2018 Compensation Highlights

The following table shows the principal elements of the compensation program for our Named Executive Officers and the value attributable to each element for 2018, with the following conditions:

■

Base salaries are shown at the highest level for the year for NEOs who received mid-year salary increases.

​

■

Annual bonuses are shown at the target level payouts.

​

■

RSUs, stock options and performance share units (“PSUs”) are shown at the grant date value.

​

Some of the compensation figures discussed in this section will not be the same as the figures provided in the Executive Compensation Tables section that begins on page 51 because of the foregoing conditions or for reasons otherwise explained.

1

Mr. Duane’s restricted stock unit grant was subject to a three-year ratable vesting period, vesting on each of the first three anniversaries of the grant date pursuant to the terms of his employment agreement. Please see discussion on page 41.

​

2

Awards granted to US-based NEOs prior to 2018 were subject to achievement of a financial goal intended to satisfy the condition for deductibility under Section 162(m) of the Code. The measure was not included on awards made in 2018 and is not expected to be used in the future, as the U.S. Tax Cuts and Jobs Act of 2017 eliminated the deduction for performance-based compensation under Section 162(m).

​

3

Mr. Grieder’s salary and bonus are paid in euros and have been converted from Swiss francs at a franc-to-euro exchange rate of 0.8775, which was the closing rate on February 1, 2019, the last business day of 2018. See “Special note about compensation for Mr. Grieder” on page 34.

​

CD&A EXECUTIVE SUMMARY  Compensation Best Practices​

Compensation Best Practices

We follow the practices described below because we believe they align our compensation program, and the interests of our NEOs, with the interests of our stockholders and avoid excessive risk.

 

3

This policy was adopted in 2018. Previously, all of our incentive compensation plans included clawback provisions. See “Clawback Policy” on page 48.

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CD&A  2018 EXECUTIVE COMPENSATION PROGRAM

2018 EXECUTIVE
COMPENSATION PROGRAM

Philosophy and Approach

Our compensation program is a pay-for-performance model. We believe we should incentivize our executive officers to improve our financial performance, profitably grow our businesses and increase stockholder value, and reward them only if they attain these objectives. To that end, the bulk of each Named Executive Officer’s compensation package consists of short-term and long-term incentive awards that pay out only if we achieve specific financial and strategic targets, and equity awards that are linked to increases in stock value over time. Our strategic targets include advancing our corporate responsibility commitments to our associates, the workers in our value chain, and the communities where we live and work, as we firmly believe these efforts help strengthen our organization and improve our performance by managing risk, maximizing efficiencies and driving value.

We also believe our compensation program should be competitive. An organization of our size and breadth can only operate effectively and profitably if it is managed by a team of talented executives, and executives with the right background and skill sets are in demand. To ensure that we can recruit and retain the right people for PVH, when we establish compensation packages each year, we compare the total potential compensation that each Named Executive Officer can earn to the compensation awarded to the most comparable executives at the companies in our peer group. (For more information on the peer group, see “Peer Group,” which begins on page 43.)

Our compensation program and plans have flexibility that permits the use of a variety of compensation elements and varying terms. The Compensation Committee reviews the program annually, keeping abreast of regulatory changes, following marketplace developments and analyzing practices within our peer group. This effort is intended to ensure that our practices are consistent with stockholder interests and enable us to recruit, retain and motivate qualified associates. In administering the program each year, the Compensation Committee determines what elements to use, the terms of all awards and, with respect to performance cycles concluded, the achievement of financial goals and any payouts to be made.

CD&A  Executive Compensation Overview​

Executive Compensation Overview

Elements of Compensation

Our executive compensation program currently consists of six components with the following purposes:

Individual NEOs may not receive all six forms of compensation every year. Awards under the Long-Term Incentive Plan, in particular, are only made from time to time; no GRIP awards were made in 2018. Messrs. Duane, Grieder and Shiffman are the only NEOs who currently have outstanding GRIP awards. Payouts under those awards require their respective business units to achieve predetermined levels of earnings over a three-year period ending at the end of 2019.

Compensation Committee Process

Considerations when setting compensation

The Compensation Committee reviews annually the compensation packages for each of our Named Executive Officers. This includes their base salaries, annual and long-term bonus opportunities, the value of their unvested stock options and RSU awards, and the allocation among these elements. We do not prescribe a specific formula for the mix of pay elements other than to favor variable performance-based pay over fixed pay and long-term pay over short-term.

When setting the compensation packages for the NEOs, the Compensation Committee starts by looking at the median compensation for comparable executives within our peer group. (For more information, see “Peer Group,” which begins on page 43.) Then we consider both objective and subjective factors, such as:

The Compensation Committee also receives input from management, particularly Mr. Chirico and the Chief Human Resources Officer, about compensation for the other NEOs.

Mr. Chirico’s compensation package is determined based upon the Board’s assessment of his performance. Input from each director on several performance metrics leads to the cumulative assessment of his performance (see discussion on page 22), which guides the Compensation Committee’s recommendation and the Board’s approval of his compensation package for the upcoming year. Generally speaking, we adjust Mr. Chirico’s compensation package less frequently than we adjust compensation for the other NEOs because the CEO’s compensation is more heavily weighted toward long-term elements than the compensation packages for the other NEOs, and the Committee prefers to look at several years of compensation results to determine whether preceding compensation adjustments worked as intended.

CD&A  Executive Compensation Overview

Authority to grant equity awards

The Compensation Committee has sole authority to grant equity awards to the NEOs. The Committee has annually delegated limited authority to our Chief Executive Officer to make equity awards to other PVH associates—principally in connection with promotions and new hires. Pursuant to this authority, the Chief Executive Officer may grant, on an annual basis, restricted stock units with an aggregate grant date value of  $5 million and a maximum value in a year to any one associate of  $300,000. In addition, in 2017 and 2018, the Committee delegated limited authority to our Chief Executive Officer to make discretionary equity awards to high-potential and high-performing executives below the senior executive level. Any awards made are in addition to an individual’s standard annual grant and subject to the parameters established by the Committee. For 2018, these awards were not permitted to exceed $5 million in the aggregate and generally did not exceed 50% of the individual’s standard annual award. The Committee receives a report annually on the awards granted pursuant to these delegations of authority.

Schedule for Compensation Committee meetings

The Compensation Committee generally makes decisions during the first quarter of each year about payouts of incentive plan awards for the recently completed fiscal year, and about base salaries, performance-based awards and equity grants for the current fiscal year. (See “Timing of Equity Awards” on page 47.) In addition, the Committee uses these first quarter meetings to consider and approve any new incentive compensation plans or arrangements that require Board or stockholder approval. The Compensation Committee’s other meetings typically are focused on reviewing our compensation programs generally and discussing potential changes to the program, including to address corporate governance and regulatory developments. The Committee also uses these other meetings to address compensation issues relating to changes in executives and promotions among the executive ranks. In addition, the Committee regularly reviews the types and mix of incentive awards included in our compensation program, the financial measures used in incentive awards, and alternative plans and financial measures.

Use of tally sheets

The Compensation Committee reviews tally sheets annually. Each NEO’s tally sheet covers prior year compensation and proposed compensation for the then-current year, including all elements of cash compensation, incentive compensation, perquisites, and benefits. Tally sheets also illustrate compensation opportunities and benefits and quantify payments and other value an executive would receive in various termination of employment scenarios, meaning they show full “walk away” values. As such, they enable the Compensation Committee to see and evaluate the full range of executive compensation; understand the magnitude of potential payouts as a result of retirement, change in control, and other events resulting in termination of employment; and consider changes to our compensation program, arrangements and plans in light of  “best practices” and emerging trends.

Independent Compensation Consultant

The Compensation Committee has retained ClearBridge Compensation Group (“ClearBridge”) as its independent compensation consultant since 2009. The Compensation Committee directs the compensation consultant, approves the scope of the compensation consultant’s work each year, and approves the associated fees.

ClearBridge meets and works with the Committee, our Chief Executive Officer, our Chief Human Resources Officer and our Senior Vice President, Global Compensation, Benefits and HR Systems, to develop each year’s compensation packages and overall compensation program. The Committee reviews the compensation program and related matters annually, and instructs the compensation consultant to provide information, analysis and recommendations to facilitate that review. Areas of focus in 2018 included performance measures, the relative allocation of target pay among the compensation elements, and whether to change the compensation program or the approach to constructing the NEO compensation packages in light of the change to the deductibility of performance-based compensation under U.S. tax law. The compensation consultant also assists the Committee in regard to its assessment of risks in our compensation program and consideration of tally sheets.

ClearBridge is engaged by, and reports directly to, the Compensation Committee, and has been determined by the Committee to be independent under SEC rules and NYSE listing standards. ClearBridge also advises, and reports to, the Nominating, Governance & Management Development Committee on matters relating to non-employee director compensation. Management is prohibited from retaining the compensation consultant without the prior approval of the Compensation Committee. No such approval has been sought.

Role of Management

The Chief Human Resources Officer, Senior Vice President, Global Compensation, Benefits and HR Systems, and the General Counsel review drafts of the materials the compensation consultant prepares for the Committee to ensure the accuracy of our internal data. These executives also provide guidance to the Committee regarding applicable matters such as associate perceptions and reactions, and legal and disclosure developments.

CD&A  Compensation Decisions for 2018​

Compensation Decisions for 2018

Base Salaries

Objective

Base salaries provide our Named Executive Officers with a stable and secure source of income at a market-competitive level, and also serve to retain and motivate these individuals.

Considerations

Base salaries are established for each NEO primarily based upon market considerations, peer data, PVH’s overall performance, our expected performance, individual performance, and (for Messrs. Duane, Grieder and Shiffman) the performance of the business units for which an NEO has responsibility. For any particular NEO, the Compensation Committee also may consider time between salary increases, whether the NEO was recently promoted or assumed additional responsibilities, the NEO’s advancement potential and whether the NEO executed special or difficult assignments during the year. Finally, the Compensation Committee takes into account the relative salaries of our Named Executive Officers. Ultimately, base salary decisions are subjective; no specific weight is assigned to any deciding factor.

2018 decisions

Base salaries for our NEOs are shown below. The salary increases shown were effective on June 1, 2018.

Mr. Chirico’s base salary had last been increased in 2012.

Short-Term Incentives—Performance Incentive Bonus Plan

Considerations

We believe annual bonuses are appropriate to motivate the Named Executive Officers to execute against the budget and business plans approved by our Board each year. These budgets are the basis of our earnings and other guidance, assessments of our performance in earnings releases, and discussions with and presentations to investors.

At the beginning of each year, the Compensation Committee makes three sets of decisions respecting annual bonuses:

CD&A  Compensation Decisions for 2018

2018 decisions

Potential bonus payouts

The Compensation Committee sets threshold, target and maximum payouts for each NEO, expressed as a percentage of the NEO’s base salary. For 2018, award opportunities were as follows:

Mr. Chirico’s potential payouts were increased at each of threshold (from 75% to 100%), target (from 150% to 200%), and maximum (from 300% to 400%). There were no changes to the potential payouts for our other NEOs.

Financial metrics

Annual bonuses for Mr. Chirico and Mr. Shaffer were based entirely upon earnings per share of our common stock for the year. Bonuses for NEOs with divisional responsibilities were based on both corporate earnings per share and operating income for their respective business units, in the proportions shown below. We selected these two metrics because they are important to our investors.

Oversight of The Underwear Group was moved from Mr. Duane to Mr. Shiffman due to the importance of our Calvin Klein Underwear business to that group. Mr. Grieder’s responsibility for our Heritage Brands business activities in Europe was expanded beyond our Michael Kors dress furnishings business (his sole responsibility in 2017) to include an Izod sportswear business that was launched in Europe during 2018.

Non-financial criteria

Payouts for the NEOs also are based upon individual performance against pre-established non-financial strategic and performance criteria, which gives the Compensation Committee some flexibility to modify payouts (up or down) by up to 25% of an NEO’s base salary, so long as an adjusted award does not exceed the NEO’s maximum opportunity. We added this additional component to the bonus awards in 2017 to encourage and reward NEOs’ efforts to improve performance, develop and advance associates under their leadership, and lead progress against our corporate responsibility commitments. These items either do not get captured by the financial goals or are expected to yield benefits only in the future.

2018 results

Earnings per share

Payouts of bonuses for all the NEOs were contingent principally upon achievement of their respective earnings goals (earnings per share for all NEOs and business unit operating income for certain NEOs). The earnings per share and business unit earnings goals at target were based on the budget approved by the Board at the beginning of 2018 and included a planned level of share repurchases.

CD&A  Compensation Decisions for 2018​

The earnings per share goal at target also is typically at or near the midpoint of the earnings per share guidance range we give to investors at the beginning of each year. The earnings per share goal at target for 2018 was at the midpoint of our guidance, and was inclusive of an expected $0.35 per share positive impact related to foreign currency exchange rates. The actual positive impact was only $0.05 per share.

Once the target was established, we set the threshold performance goal at approximately 90% of target and the maximum performance goal at approximately 110% of target, as was the case in 2018. The threshold-to-maximum range can vary from year to year based on the Compensation Committee’s evaluation of business but has been approximately 90% to 110% for each of the past three years.

1

This number is on a non-GAAP basis. Earnings per share on a GAAP basis for 2017 was $6.84.

​

2

This number is on a non-GAAP basis. Earnings per share on a GAAP basis for 2018 was $9.65.

​

Our earnings per share results were between the target and maximum goals. As a result, our NEOs received payouts on the EPS portion of their bonus awards calculated using straight-line interpolation between their respective target and maximum potential payouts.

Individual business units

Annual bonuses for Messrs. Duane, Grieder and Shiffman are based heavily on the operating income of the business units each leads. The threshold, target and maximum operating income goals applicable to each of these NEOs are set forth below, as well as the actual results and payout percentage for 2018. Threshold performance goals typically are set at approximately 90% of target, and maximum performance goals typically are set at approximately 110% of target, consistent with the awards based on earnings per share. The threshold-to-maximum range can vary from year to year based on the Compensation Committee’s evaluation of business conditions, but has been approximately 90% to 110% for each of the past three years.

Operating Income Goals

Each of Messrs. Duane, Grieder and Shiffman qualified for a payout of the portion of their annual bonus awards attributable to the earnings performance of their business units. These payouts, subject to the adjustments described below, were calculated on a straight-line interpolation basis from the potential payouts shown above. Payouts on the business unit portion of the annual awards were between target and maximum for Mr. Duane, at maximum for Mr. Grieder, and between threshold and target for Mr. Shiffman.

CD&A  Compensation Decisions for 2018

Discretionary adjustments for non-financial criteria

In addition to the financial goals discussed above, each NEO’s bonus award potentially was subject to adjustment based on the NEO’s performance against prescribed non-financial strategic and performance criteria. The Compensation Committee adjusted Mr. Duane’s bonus upward based upon certain efforts he made in 2018 to grow the Heritage Brands business. Mr. Shiffman’s bonus was adjusted downward due to issues in the Calvin Klein business related to a strategy he had developed. See the discussion below.

2018 annual bonus amounts

Annual bonuses for the NEOs were calculated using the following formulas and were then subject to adjustment for non-financial criteria, as described immediately above:

For Messrs. Chirico and Shaffer:

For Messrs. Duane, Grieder and Shiffman:

The calculation of the actual bonus payout amounts is shown below.