DBI DEF 14A Report ended July 14, 2020

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(1)	Each Class B Common Share of Designer Brands Inc. is exchangeable into one Class A Common Share.

(2)

Mr. Schottenstein beneficially owns 11,461,295 Class A Common Shares of Designer Brands Inc. in the aggregate. This includes (i) 71,905 Class A Common Shares held by Mr. Schottenstein directly; (ii) 26,100 Class A Common Shares held by the Jerome Schottenstein Fund A Revocable Trust, of which Mr. Schottenstein acts as co-trustee and has shared power to vote and dispose of such shares; (iii) 493,961 shares held by the Jay Schottenstein Revocable Trust 2009, of which Mr. Schottenstein is trustee and has sole power to vote and dispose of such shares; (iv) 63,754 shares held by the Lori Schottenstein 1984 Subchapter S Trust, of which Mr. Schottenstein is co-trustee and has shared power to vote and dispose of such shares; (v) 56,814 shares held by the Saul Schottenstein Subchapter Trust #4, of which Mr. Schottenstein is trustee and has sole power to vote and dispose of such shares; (vi) 236,528 Class A Common Shares held by Schottenstein SEI, LLC (SSEI); (vii) 1,000,000 shares held by Schottenstein Realty, LLC, of which Mr. Schottenstein is a member by virtue of various family trusts, a director, Chairman and Chief Executive Officer and has shared power to vote and dispose of such shares; (viii) 531,643 Class A Common Shares that Mr. Schottenstein has a right to purchase within 60 days of May 1, 2020; and (ix) 1,260,436 Class A Common Shares held by Ann S. Deshe, Susan S. Diamond, their spouses, and certain of their lineal descendants and affiliates (the Deshe/Diamond Affiliates), of which Mr. Schottenstein has sole voting power with respect to such shares, pursuant to a share exchange agreement with the Deshe/Diamond Affiliates and other parties thereto (the Deshe/Diamond Share Exchange).

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(3)	Based solely upon information contained in the Schedule 13G filed with the SEC on February 4, 2020, as of December 31, 2019, BlackRock Inc. has sole voting power over 8,880,014 shares and sole dispositive power over 9,058,937 shares.

(4)

Based solely upon information contained in Amendment No. 9 to Schedule 13G filed with the SEC on February 10, 2020, as of January 31, 2020, The Vanguard Group, an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, has sole voting power over 82,502 shares, shared voting power over 9,099 shares, sole dispositive power over 6,434,974 shares, and shared dispositive power over 83,874 shares.

(5)	Based solely upon information contained in the Schedule 13G filed with the SEC on February 14, 2020, as of December 31, 2019, Fuller & Thaler Asset Management, Inc. has sole voting power over 4,885,257 shares, shared voting power over 0 shares, sole dispositive power over 4,980,347 shares, and shared dispositive power over 0 shares.

(6)

Based solely upon information contained in Amendment No. 2 to Schedule 13G filed with the SEC on February 12, 2020, as of December 31, 2019, Dimensional Fund Advisors LP has sole voting power over 4,648,958 shares and sole dispositive power over 4,780,052 shares. According to the filing, Dimensional Fund Advisors LP, an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, furnishes investment advice to four investment companies and serves as investment manager or sub-adviser to certain other commingled funds, group trusts and separate accounts (collectively, the “Funds”). In certain cases, subsidiaries of Dimensional Fund Advisors LP may act as an adviser or sub-adviser to certain Funds. In its role as investment adviser, sub-adviser and/or manager, Dimensional Fund Advisors LP or its subsidiaries (collectively, “Dimensional”) may possess voting and/or investment power over the shares reported, and may be deemed to be the beneficial owner of the shares held by the Funds. However, the shares reported are owned by the Funds. Dimensional disclaims beneficial ownership of such shares.

*	Represents less than 1% of outstanding Common Shares.

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•

Promoting Stability and Continuity . Our classified board structure enhances stability and continuity of leadership because our Board will always include directors with prior experience with our operating and regulatory environment, business, strategic goals, competition, trends and risks. We believe that these experienced directors help our Board maintain a long-term perspective, leading to decisions that are both in the long-term interests of our company and our shareholders and responsive to short-term needs and objectives.

•	Maximizing Shareholder Value . We believe that a classified board enhances our ability to achieve value for our shareholders in the event of an unsolicited takeover. Without a classified board, a potential acquirer could gain control of our Board at a single annual meeting by replacing a majority of directors with its own nominees without paying a premium to our shareholders.

•	Enhancing Director Independence . We believe that a classified board with three-year terms enhances non-management directors’ independence from special interest groups or other parties whose goals may not be in the best interests of all of our shareholders.

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*	Independent Directors under the rules of the NYSE and our Corporate Governance Principles.

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•	has no material relationship with us or our subsidiaries;

•	satisfies the other criteria specified by NYSE listing standards;

•	has no business conflict with us or our subsidiaries; and

•	otherwise meets applicable independence criteria specified by law, regulation, exchange requirement, or the Board.

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•	independence;

•	judgment;

•	skill;

•	diversity;

•	strength of character;

•	age;

•	experience with businesses and organizations of comparable size and scope;

•	experience as an executive of, or advisor to, a publicly traded or private company;

•	experience and skill relative to other Board members;

•	specialized knowledge or experience;

•	service on other boards; and

•	desirability of the candidate’s membership on the Board or any committees of the Board.

•	name, age, business address, and residence address;

•	principal occupation or employment;

•	the class and number of Designer Brands Inc. shares beneficially owned; and

•	any other information relating to the nominee that is required to be disclosed in solicitations for proxies for election of directors pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

•	name and record address;

•	the class and number of Designer Brands Inc. shares beneficially owned;

•	a representation that the shareholder is a holder of record of shares of Designer Brands Inc. entitled to vote at such meeting;

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•	a representation that the shareholder intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; and

•	a description of all arrangements or understandings between the shareholder and such nominee, and any other persons, pursuant to which the nomination or nominations are to be made by the shareholder.

•	the integrity of our financial statements;

•	compliance with legal and regulatory requirements;

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•	the independent auditor’s qualifications and independence;

•	performance of our internal audit function and independent auditor;

•	efficiency of our internal controls;

•	the review and approval of related party transactions; and

•	the review and response to complaints made to us regarding accounting, internal accounting controls, and auditing or other compliance matters.

•	aligns with our business strategy;

•	enables the business to maximize benefits technology can provide;

•	ensures resources are used responsibly; and

•	ensures risks are managed appropriately.

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•

Delegation — The Audit Committee may delegate pre-approval authority to one or more of its independent members, provided that the member(s) to whom such authority is delegated promptly reports any pre-approval decisions to the other Audit Committee members. The Audit Committee has not delegated to management its responsibilities to pre-approve services performed by the independent registered public accounting firm.

•	Audit Services — Annual audit, review, and attestation engagement terms and fees are subject to the specific pre-approval of the Audit Committee. Any changes in the terms, conditions, or fees resulting from changes in the audit scope require the Audit Committee’s approval.

•	Audit-Related Services — Confirmation that the provision of any audit-related services, including assurance and related services reasonably related to the performance of the audit or review of financial statements, does not impair the independence of the independent registered public accounting firm.

•	Other Services — Unless a type of service to be provided by the independent registered public accounting firm has received general pre-approval, it will require specific pre-approval by the Audit Committee.

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Tax Services — The Audit Committee believes that our independent registered public accounting firm can provide tax services to us such as tax compliance and certain tax advice without impairing its independence. In no event, however, will the independent registered public accounting firm be retained in connection with a transaction initially recommended by the independent registered public accounting firm, the purpose of which may be tax avoidance and the tax treatment of which may not be supported in the Internal Revenue Code and related regulations or similar regulations of other applicable jurisdictions.

(1)	Audit-related fees for fiscal 2019 and 2018 relate to implementation of new accounting standards and significant non-routine transactions.

(2)	Tax fees for fiscal 2019 and 2018 relate to general tax advice and significant non-routine transactions.

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•	Review of our annual financial statements to be included in our Annual Report on Form 10-K and recommendation to the Board whether the audited financial statements should be included in our Annual Report on Form 10-K;

•	Review of our quarterly financial statements to be included in our Quarterly Reports on Form 10-Q;

•	Oversight of our relationship with our independent auditors, including:

•	Appointment, compensation, termination, and oversight of our independent auditors; and

•	Pre-approval of all auditing services and permitted non-audit services by our independent auditors;

•	Oversight of our internal controls;

•	Oversight of the review and response to complaints made to us regarding accounting, internal accounting controls, and auditing matters or other compliance matters;

•	Oversight of our internal audit function; and

•	Review and approval of related party transactions.

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•	Jay L. Schottenstein - Executive Chairman of the Board;

•	Roger L. Rawlins - Chief Executive Officer;

•	Jared A. Poff - Executive Vice President and Chief Financial Officer;

•	Deborah L. Ferrée - Vice Chair and President; and

•	William L. Jordan - Executive Vice President and Chief Growth Officer.

•	Mr. Schottenstein, our Executive Chairman of the Board, provides strategic guidance and insight to our business.

•	Mr. Rawlins has served as our Chief Executive Officer since 2016. Prior to his appointment as CEO, Mr. Rawlins held positions of increasing responsibility in Finance, E-commerce, Innovation, and Strategy with the Company over more than 10 years.

•	Mr. Poff, our Executive Vice President and Chief Financial Officer, provides financial leadership to drive profitability, enhance financial returns, maintain financial integrity, and ensure the availability of the investment capital necessary to deliver on our growth strategy.

•	Ms. Ferrée, our Vice Chair and President, spearheads the development of strong vendor relationships and product initiatives.

•

Mr. Jordan, our Executive Vice President and Chief Growth Officer since February 2020, supports our quest to deliver differentiated products, differentiated experiences and grow market share through new markets, categories and customers. Mr. Jordan previously served as Executive Vice President of the Company and President of DSW Shoe Warehouse, Inc., a wholly-owned subsidiary of the Company, since February 2019.

•	Total revenue increased $314.8 million to nearly $3.5 billion, a 9.9% increase from 2018;

•	Despite difficult industry dynamics and operating challenges, comparable sales increased by 0.8%;

•	Digital demand in our U.S. retail grew 28.2%;

•	Our customer loyalty program remains unparalleled. We now have 32 million members, and we continue to look for new and innovative ways to drive engagement, average spend, and ticket size;

•	In Canada, we saw great momentum with our 2018 acquisition, Town Shoes Limited. We are successfully leveraging our DSW U.S. expertise, applying infrastructure, enhancing digital capabilities and implementing inventory discipline, all of which are yielding tremendous results for our Canadian operations;

•	Continued the integration of Camuto Group and moved a significant amount of sourcing to Camuto from our previous third party producer;

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•	Remained disciplined in our tariff mitigation efforts by working with our vendors, accelerating private brand rollout, taking positions on raw material, creating alternate components in footwear production and testing innovative in-store services, all of which have provided the ability to mitigate approximately 80% to 90% of our exposure;

•	Executed on our initiative of introducing both differentiated products and services into our DSW stores. This included the expansion of our nail bar services, which is yielding increased frequency, attachment rates, and annual footwear spend when a rewards member becomes a nail bar customer;

•	Charitable donations included $2.2 million; and

•	Remained efficient in our capital allocation priorities. In recognition of our strong cash flow generation, we maintained a shareholder friendly approach with approximately $214.2 million invested, comprised of $72.6 million in dividends and $141.6 million in share repurchases.

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•	Annual revenue between one-half and two times that of Designer Brands Inc.;

•	Companies we compete against for business and talent;

•	Companies with a fashion orientation and/or that operate as specialty retail;

•	Retailers that operate larger square footage stores;

•	Companies that have a track record of delivering results; and

•	Similar business complexity (multiple brands, mix of retail and wholesale, designer and manufacturer of own brand, private label, etc.).

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•	CEO Severance Agreement - Mr. Rawlins entered into a revised Executive Severance Agreement in December 2019 to bring the length of severance for a termination without cause to a more typical market practice for similarly situated CEOs. For more detail on provisions of the revised agreement, please see the section regarding Employment Agreements with Named Executive Officers.

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•	Base salaries - Our NEOs received an average base salary increase of 8.9%, with four NEOs receiving a merit increase plus an adjustment or promotion increase due to expanded responsibilities following the Town Shoes Limited and Camuto LLC acquisitions that occurred during fiscal 2018.

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Short-term incentives - The Company did not achieve the Adjusted Operating Income threshold in the financial component of the Performance-Based Annual Cash Incentive Compensation Plan. The Company did achieve three out of the five strategic objectives, as discussed below. As a result, each of our NEOs receive an incentive payout at 15% of target in accordance with the pay for performance objective of the Annual Cash Incentive Compensation Plan.

•	Long-term incentives - All NEOs have 50% of their annual long-term incentive award directly linked to Designer Brands Inc.’s financial performance. Performance shares previously granted to the NEOs were earned at 56% of target based on fiscal 2019 Adjusted Operating Income of $153.8 million.

•	Say on pay - At the 2019 annual meeting, our shareholders overwhelmingly voted in favor of our executive compensation practices, with 96.8% of votes cast in support.

•	Peer group review - The Committee conducted a review of the Proxy Peer Group utilized for purposes of benchmarking executive compensation, and no changes were made to the Proxy Peer Group.

I.	Base salary: Reflects scope of the role and individual performance through cash compensation.

II.	Performance-based annual cash incentive compensation: Motivates and rewards contributions to annual operating performance and long-term business strategy with cash payouts that vary based on the level of achievement.

III.	Long-term equity incentive compensation: Promotes alignment of executive decisions with Company goals and shareholder interests through equity where value is pegged to Company stock performance.

IV.	Retirement savings contributions through the 401(k) plan: Provides broad-based retirement benefits that contribute to financial security.

•	Overall Designer Brands Inc. financial performance during the prior year;

•	The individual performance of the NEO during the prior year;

•	Base salary data drawn from the market data;

•	The target total cash compensation level of the appropriate benchmark position(s) from the market data; and

•	If relevant, compensation paid by a previous employer.

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1.	One component was based upon Designer Brands Inc.’s financial performance in the form of Adjusted Operating Income*, worth 75% of the total award, up to a maximum of 150%.

2.	The second component was based on five pre-established strategic objectives, worth 25% of the total award, that could be modified in the Committee’s discretion up to 50%, but only if, and in proportion to, financial performance above the plan target.

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•	Performance shares (“PSs”); and

•	Service-based restricted stock units (“RSUs”).

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(1)	These columns represent possible payouts for fiscal 2019 under our ICP. See the CD&A for a discussion of the performance-based criteria applicable for these awards and the Summary Compensation table for the actual amounts paid for fiscal 2019.

(2)

These columns represent Performance Share grants and reflect the range of shares that may be potentially earned based on the Company’s achievement of the performance goals established for fiscal 2019. The threshold represents the minimum number of shares that could be awarded if the performance goal is achieved at the threshold level. The target represents the number of shares that could be awarded upon 100% achievement of the performance goal and the maximum represents the maximum number of shares that could be awarded if the performance goal is achieved at the maximum level. Fiscal 2019 performance was attained at 56%. Performance Shares generally vest 100% on the third anniversary of the Grant Date, subject to the Company’s achievement of the performance goal. Detailed in this column is the number of shares underlying the performance shares granted on the dates indicated in the “Grant

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(3)

Detailed in this column is the number of shares underlying the time-based restricted stock units granted on the dates indicated in the “Grant Date” column. Units will be “credited” with the same dividend that would be issued if the unit was a Designer Brands Inc. Class A Common Share. The amounts associated with the dividend equivalent units will not be distributed unless and until the stock unit award is settled. Time-based stock units generally vest 100% on the third anniversary of the Grant Date.

(4)	Designer Brands Inc. did not award Stock Options in fiscal 2019.

(5)	Amounts reported in the “Grant Date Fair Value of Stock Options and Awards” column represent the aggregate grant date fair value of equity awards granted during fiscal 2019. For additional information on the valuation assumptions, refer to Note 6 of Designer Brands Inc.’s financial statements in the Form 10-K.

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(1)	Represents the closing share price of Designer Brands Inc. Class A Common Shares on the last day of the fiscal year ($14.24) multiplied by the number of shares not yet vested or earned.

(2)	The remaining options vested on March 24, 2020.

(3)	The remaining options vest on December 15, 2020.

(4)	The remaining options vested or will vest ratably on March 22, 2020 and 2021.

(5)	The remaining options vest ratably on January 31, 2021 and 2022.

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(6)	The remaining options vested or will vest ratably on March 21, 2020, 2021 and 2022.

(7)	Performance-based restricted stock units vested March 21, 2020 (41,558), Performance Shares vest on March 20, 2021 (52,830), March 26, 2022 (26,942) and Restricted Stock Units vest on March 20, 2021 (35,219) and March 26, 2022 (48,111).

(8)	Performance shares vest on March 20, 2021 (150,934) and March 26, 2022 (80,823) and Restricted Stock Units vest on March 20, 2021 (100,623) and March 26, 2022 (144,328).

(9)	Restricted stock units vested on March 21, 2020 (8,904) and will further vest on March 20, 2021 (8,803) and March 26, 2020 (18,039). Performance shares vest on March 20, 2021 (13,205) and March 26, 2022 (10,102).

(10)	Performance-based restricted stock units vested March 21, 2020 (76,337). Performance shares vest on March 20, 2021 (105,654), March 26, 2022 (37,717) and Restricted Stock Units vest on March 20, 2021 (70,437) and March 26, 2022 (67,353).

(11)	Performance-based stock units vested on March 21, 2020 (23,006). Performance shares vest on March 20, 2021 (30,188) and March 26, 2022 (13,472). Restricted Stock Units vest on March 20, 2021 (20,125), March 22, 2021 (41,023) and March 26, 2022 (24,056).

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(1)

Amounts eligible to be deferred into the Nonqualified Deferred Compensation Plan are described in more detail in the CD&A on page 32. Mr. Rawlins did not participate in the Nonqualified Deferred Compensation Plan in fiscal 2019, but does have an account balance from previous participation. The balance listed is attributable to contributions and earnings made in 2010 when Mr. Rawlins was not a Named Executive Officer. Mr. Poff was an active participant in the plan for fiscal 2019. Contributions reflected in these columns were reported as compensation in the Summary Compensation Table for each year in which the respective executive was a named executive officer.

(2)	Aggregate earnings in the last fiscal year are not reflected in the fiscal 2019 Summary Compensation Table because the earnings were neither preferential nor above-market.

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•	The Compensation Committee reviews the quality of our earnings prior to approving incentive payments;

•	We provide a significant percentage of compensation based on performance, which is in turn based on annual and long-term incentives that require sustained value creation over several years to earn target incentives;

•	For cash incentive payments made under our ICP, the Compensation Committee provides a maximum payout of 200% of target;

•	We use the same financial metric, historically adjusted net income, to determine annual incentive payouts for all bonus eligible associates; and

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•	Certain payments to our Named Executive Officers are subject to recovery if we restate a financial statement due to material noncompliance with any financial reporting requirement under the securities laws and such noncompliance is a result of misconduct .

•	An annual cash retainer of $75,000;

•	An annual equity retainer of $140,000; and

•	An additional annual retainer for committee service for each committee on which such director serves (provided that the committee chairs do not receive such additional retainer) as follows:

◦	Audit Committee - $20,000

◦	Compensation Committee - $15,000

◦	Nominating and Corporate Governance Committee - $15,000

◦	Technology Committee - $15,000

•	The annual cash retainer and the additional annual retainer for committee service are payable in quarterly installments on the last day of each fiscal quarter; and

•	The annual equity retainer is payable on the date of each annual meeting of the shareholders for the purpose of electing directors, determined by dividing the amount of the retainer by the per-share market value of our Class A Common Shares on the grant date.

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(1)

Each director who is not an employee of Designer Brands Inc. and who does not otherwise receive compensation (including severance) from Designer Brands Inc. was granted stock units on May 23, 2019. The amounts reported in the “Stock Awards” column represent the full grant date fair value for financial statement reporting purposes, as provided by ASC 718 (determined by the closing price of Designer Brands Inc. Class A common stock on the date of grant). Messrs. Joseph Schottenstein and Sonnenberg, and Mmes. Lau and Zaiac elected to have the shares distributable within 30 days of the grant date. The remaining directors have elected to settle the units upon leaving the Board of Directors.

(2)

For calendar year 2019, Ms. Singh-Bushell and Mr. Cobb elected to defer their retainer into the Designer Brands Inc. Nonqualified Deferred Compensation Plan. The aggregate deferred compensation earnings in the fiscal year are not reflected in the above table because the earnings were neither preferential nor above-market. The amount is reflected in the “Fees Earned or Paid in Cash” column. The provisions of the Nonqualified Deferred Compensation Plan are described above in the section entitled Nonqualified Deferred Compensation Plan.

(3)	Ms. Lau received one-time fee of $25,000 for her work on cross-brand collaboration efforts.

(4)

Beginning in the first quarter of fiscal 2013, Mr. Joseph Schottenstein elected to receive payment of all fees in the form of stock awards and continued this election in fiscal 2019. The value of the awards is reflected in the “Fees Earned or Paid in Cash” column. The total number of shares granted were 4,544. The quarterly number of shares granted was based on the closing stock price on the day of grant rounded to the nearest whole share.

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(1)	Amounts listed include accumulated dividend equivalent units.

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•	Attract and retain highly talented, experienced retail executives who can make significant contributions to our long-term business success;

•	Reward executives for achieving business goals and delivering strong performance; and

•	Align executive incentives with shareholder value creation.

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(1)	any person who is, or at any time since the beginning of the Company’s last fiscal year was, a director, director nominee or executive officer of the Company;

(2)	a shareholder of the Company who owns more than five percent (5%) of any class of the Company’s voting securities;

(3)	a member of the immediate family of any person described in (1) or (2) above; and

(4)	an entity in which any person described in (1), (2) or (3) above has a greater than ten percent (10%) equity interest.

•	Is the transaction in the normal course of the Company’s business?

•	Are the terms of the transaction fair to the Company?

•	Are the terms of the transaction commercially reasonable? Are the terms of the transaction substantially the same as the terms that the Company would be able to obtain in an arm’s-length transaction with an unrelated third party?

•	Has the Company obtained an independent appraisal or completed a financial analysis of the transaction? If so, what are the results of such appraisal or analysis?

•	Is the transaction in the best interests of the Company and the Company’s shareholders?

•	Would the transaction impair a director’s independence in the event that the related person is an independent director?

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•	If SSC learns about a corporate opportunity, it does not have to tell us about it and it is not a breach of any fiduciary duty for it to pursue such corporate opportunity for itself or to direct it elsewhere.

•	If one of our directors or officers who is also a director or officer of SSC learns about a corporate opportunity, he or she shall not be liable to us or to our shareholders if SSC pursues the corporate opportunity for itself, directs it elsewhere or does not communicate information about the opportunity to us, if such director or officer acts in a manner consistent with the following policy:

•	If the corporate opportunity is offered to one of our officers who is also a director but not an officer of SSC, the corporate opportunity belongs to us unless it was expressly offered to the officer in writing solely in his or her capacity as a director of SSC, in which case it belongs to SSC.

•	If the corporate opportunity is offered to one of our directors who is not an officer of Designer Brands Inc., and who is also a director or officer of SSC, the corporate opportunity belongs to us only if it was expressly offered to the director in writing solely in his or her capacity as our director.

•	If the corporate opportunity is offered to one of our officers, whether or not such person is also a director, who is also an officer of SSC, it belongs to us only if it is expressly offered to the officer in writing solely in his or her capacity as our officer or director.

•	the relationship or interest is disclosed or is known to the Board of Directors or the committee approving the contract or transaction, and the Board of Directors or committee, in good faith reasonably justified by the facts, authorizes the contract or transaction by the affirmative vote of a majority of the directors who are not interested in the contract or transaction;

•	the relationship or interest is disclosed or is known to the shareholders, and the shareholders approve the contract or transaction by the affirmative vote of the holders of a majority of the voting power of the Company held by persons not interested in the contract or transaction; or

•	the contract or transaction is fair at the time it is authorized or approved by the Board of Directors, a committee of the board of directors, or the shareholders.

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