Shelly Ibach, Sleep Number president and CEO.

Total compensation: $11,415,068 for the year ended Dec. 31

Salary: $746,200

Nonequity incentive pay: $3,439,043

Other compensation: $54,939

Exercised stock option: $3,838,263

Value realized on vesting shares: $3,336,623

New stock options: 67,325

CEO pay ratio: 169-1

Median employee pay: $50,496

Total 2020 shareholder return: 71.1%

Note: In a move to preserve cash when Sleep Number stores were closed during the pandemic and uncertainty surrounding the economy was at its peak, Ibach and other executives delayed merit salary increases until the end of the year and elected to exchange some salary for an equal value of time-vested restricted stock units that would vest at the end of the year.

The pandemic increased people's interest in their wellness, including their sleep health, and stay-at-home orders focused people on home improvements. So even before the 80% of its stores that had closed reopened, people purchased more of Sleep Number's 360 smart beds through its e-commerce channels.

The company did not adjust its goals for the annual incentive plan to account for the impact of the pandemic. By the end of the year, the company exceeded its annual incentive targets and executives and other employees, including Ibach, earned maximum annual incentive plan bonuses for the year.

The company furloughed or reduced hours of nearly 40% of its employees and suspended certain employee benefits. The company brought back 90% of furloughed employees, but as business improved, total employment at the end of 2020 had increased by more than 200 to 4,679.

Furloughed employees in the annual incentive plan program still got the maximum payment.

Sleep Number also made a special contribution for 401(k) matches that were missed. And the company spent more than $11 million (retail value) to make a gift of a new 360 smart bed to each employee.

Ibach's compensation in 2020 was 65% more than in 2019. She earned a maximum bonus of $3.4 million but also benefited from the salary for restricted shares swap.

She ended up swapping approximately $330,723 of her annual salary for 14,405 shares of restricted stock. Those shares were granted on April 15 and between then and Dec. 26, the vested Select Comfort shares had rebounded with a total return of more than 270%. The value of those restricted shares ended up being worth approximately $1.2 million.

Most of the remaining compensation was from previously issued long-term equity awards that either vested in 2020 or were exercised by Ibach.

Patrick Kennedy