Company: CULP
Filing Date: 2025-08-15
Form Type: DEF 14A
Source: 0000950170-25-109242
Chunk: 36

Company: CULP INC
Filing Date: 2025-08-15
Form: DEF 14A
Chunk 36
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 of our Board (the “Committee”), which is made up solely of independent directors, leads and directs our executive compensation program. Additional details about the individual compensation of each NEO and the annual review of compensation for our NEOs is contained in the sections that follow, and this Compensation Discussion and Analysis should be read in connection with that information. Executive Summary The primary purpose of the Company’s executive compensation program is to support growth in earnings, return on capital, free cash flow, balance sheet management, and shareholder value. The compensation structure adopted by the Committee for NEOs during the fiscal 2025 year sought to accomplish these goals by relying heavily on incentive-based compensation linked to the Company’s financial results, as opposed to fixed compensation, while also seeking to enhance the Company’s ability to align the long-term interests of senior management with those of our shareholders. The Committee previously approved an executive compensation philosophy in fiscal 2021 to begin positioning base salaries and target short-term and long-term incentive award opportunities for NEOs at or near market 50 th percentile (or median) levels, as compared to the Company’s peer group, through gradual salary and incentive compensation increases over time, while continuing to place significant emphasis on variable pay to help align executive pay with performance and long-term shareholder value creation. However, this program was paused in fiscal 2023 in response to macroeconomic and industry headwinds affecting the Company’s business, when the Company implemented a freeze on base salaries for most employees with base salaries over $150,000, including all of our NEOs at the time. In fiscal 2024, the Company again delayed any further implementation of adjustments to executive pay to move toward peer-median targets. Instead, executives other than the chief executive officer received modest (four percent) base salary merit increases based on individual performance, in line with salary increase percentages for other salaried employees. The chief executive officer requested to continue the salary-freeze already in place for him in fiscal 2024 in light of recent financial results for the Company that were below expectations. For fiscal 2025, due to the Company's continuing focus on controlling costs in what remained an extremely challenging market and industry environment, as well as recent financial results for the Company that were below expectations, the Company again delayed any further implementation of its plan to adjust executive pay to move towards peer-median targets. Neither the chief executive officer nor any other NEO received an increase in base salary in fiscal 2025. Beyond base salaries, NEOs also had the opportunity to earn additional compensation under