CEO Pay Watch: Shelly Ibach, CEO of Sleep Number Corp., made 66% more in 2021 than the year before, with her compensation topping $19 million. Earnings rose 34% and revenue 20% during the year as people spent more money on their homes during the pandemic. The performance over the past three years boosted the value of Ibach's restricted stock. The Minneapolis-based company makes smart beds that not only control the firmness and position of the mattress but also can offer feedback on the customer's sleeping habits.
- Total compensation for the year ended Dec. 31: $19,025,416
- Salary: $1,142,308
- Non-equity incentive pay: $1,921,280
- Other compensation: $95,640
- Exercised stock options: $2,903,222
- Shares realized on vesting: $12,962,966
- New stock options: 21,880
- CEO pay ratio: 170 to 1
- Median employee pay: $50,496
- Total 2021 return to shareholders: -6.4%
Note: Ibach will soon assume the board chair role in addition to her president and CEO titles. On May 12, she will succeed Jean-Michel Valette, chairman since 2010. Valette will remain on the board and current director Michael Harrison will be named lead independent director.
The Minneapolis-based company had a strong year in 2021 as demand remained robust for its signature adjustable smart beds. Earnings rose 34% to $6.16 a share on revenue that grew 20% to $2.18 billion even as the company battled supply chain issues.
Ibach's new role did not affect her compensation for 2021, which increased 66% from the $11.4 million she made in 2020. The increase was a result of achieving annual goals in 2021 and also from compensation tied to performance over the last three years.
Restricted stock units that were awarded in 2019 and meant to reward performance from 2019 to 2021 paid out at 167% of the targeted award as the company exceeded revenue, operating profit and return on invested capital goals over that time. That resulted in a payout of Ibach's restricted stock awards of $12.96 million.
Ibach also realized $2.9 million from exercising 32,575 stock options that were granted in previous years.
Sleep Number's annual incentive plan is based on the company's adjusted earnings and applies not just to Ibach but to other executives and 1,900 of its 5,525 employees. The adjusted earnings of $276.7 million earned employees a payout of 122% of the target for 2021.
Ibach's annual cash incentive was $1.9 million, down from the previous year's $3.5 million.
In 2020, Ibach gave up some of her base salary in exchange for equity awards. In 2021, the full salary resumed and the board increased her annual salary by 5% to $1,155,000 a year.
