Dive Brief:
- The Securities and Exchange Commission announced settled charges against footwear company Skechers for failure to disclose payments “for the benefit of its executives and their immediate family members,” according to a recent press release.
- Skechers agreed to a cease and desist order and will pay a $1.25 million civil penalty to settle the SEC’s charges without admitting or denying the commission’s findings, according to the release. The SEC did not name the executives associated with the settlement.
- “We are pleased that the Securities and Exchange Commission recognized our cooperation and remedial efforts, and we were able to come to an amicable resolution,” Skechers said in a statement provided via email. “This outcome is consistent with the results of our previously announced internal review and the corrective disclosures made over the course of last year.”
Dive Insight:
The Manhattan Beach, California-based footwear retailer failed to disclose the employment of two relatives of Skechers’ executives, a consulting relationship between an executive and an individual living in the same household, and assorted compensation received by these individuals in its definitive proxy statements and filings for the years between 2019 and 2020, according to the SEC’s order.
The company did not disclose that a sibling-in-law of an executive officer had received $213,645 while serving as a non-executive employee for its fiscal 2020, according to the order. The next fiscal year, a sibling-in-law of an executive officer received $155,419 in compensation, while the sibling of a different executive officer and director received $486,790 in compensation while both served as non-executive employees, which Skechers also failed to disclose.
Additionally, an individual sharing a household with a company director and executive officer had received $210,000 in compensation when working as an independent contractor of the company for both its fiscal 2018 and fiscal 2019, which was not disclosed.
The footwear company also failed to disclose that for multiple years, two of its executives owed more than $120,000 to Skechers for personal expenses, which had been paid for but not yet reimbursed by the executives, according to the SEC order.
The disclosure of related persons transactions provides crucial information for investors when it comes to evaluating the relationship between the company and its officers, Scott A. Thompson, associate director of enforcement in the SEC’s Philadelphia Regional Office said in a statement included in the release.
“Today’s action is a reminder that companies should take appropriate measures to ensure proper disclosure of such transactions,” he said.
The $1.25 million civil penalty on the part of the popular shoe brand comes as the SEC widens its spotlight on executive compensation and benefits; in 2022, the SEC adopted “pay versus performance” rules requiring U.S. public companies to include a table covering executive pay and financial performance indicators for a five-year period in their filings, CFO Dive previously reported.
That same year, the SEC also adopted new “clawback” policies requiring companies to recover “erroneously awarded incentive-based compensation,” according to an SEC filing at the time. In the past 10 years, the SEC has brought 20 cases against businesses for failing to disclose the perks provided to their executives, including two in 2023, according to a report by Bloomberg.
Skechers’ executive compensation policies and perks have also fallen under the scrutiny of its shareholders; the SEC civil penalty comes approximately a month after a Delaware Chancery Court dismissed a shareholder derivative lawsuit against Skechers which concerned the use of private jets by company executives, according to a February press release.
The suit alleged that Skechers made no effort to put reasonable limits on the use of private jets by executives, who made “excessive” use of the planes and racked up millions in expenses, an attorney for the plaintiff said during a court hearing according to a report by Bloomberg.
The suit named executives including members of the company’s board as well as Skecher CEO Robert Greenberg, his two adult sons, Michael Greenberg and Jeffrey Greenberg — who serve as president and co-founder and VP of electronic media, respectively — and Chief Operating Officer David Weinberg, according to the court’s opinion.
“We are sincerely pleased with the Court’s ruling, but it certainly comes as no surprise,” CEO Robert Greenberg said in a statement included in the company release regarding the case’s dismissal. “We have always believed that this lawsuit should not have been permitted to proceed. We feel vindicated that the Court agreed.”
An SEC spokesperson declined to comment beyond the details included in the Commission’s public filings and press release.
FAQs
Skechers agreed to a cease and desist order and will pay a $1.25 million civil penalty to settle the SEC's charges without admitting or denying the commission's findings, according to the release. The SEC did not name the executives associated with the settlement.
Can I return Skechers to any store in Australia? ›
You can attend any store location convenient to you, where you can choose between a refund, or an exchange, pending stock availability. Any initial or return shipping fees are non-refundable in the event you choose to return all or part of your order.
What is Skechers return policy? ›
Returns. If you're not 100% satisfied with your purchase, you can return your item(s) in-store or online within 30 days of purchase and we will be happy to provide you with an in-store exchange, store credit or refund depending on your payment method.
How long do you have to return Skechers shoes? ›
If you're not happy with your SKECHERS purchase for any reason, you may return unworn item(s) within 45 days of shipment for a refund via a FREE printable UPS return label. At this time we only accept returns for purchases on the SKECHERS website.
Is there a class action lawsuit against Skechers? ›
CONSUMER LAW GROUP has launched a national class action lawsuit against Skechers on behalf of individuals who have purchased the product Shape-Ups Shoes (“Toning Shoes”).
How do I file a complaint with Skechers? ›
For any other product related issues, please write your concerns to customercare.india@skechers.com or get in touch with us on our toll-free 1800 200 8555 (Mon-Sat at: 10am to 7pm).
How do I send back Skechers? ›
To initiate a return and print your free return shipping label please go to "Orders and Returns" which is located at the top right hand side of the homepage on the SKECHERS website. Enter your order number and the email address associated with your order and confirm.
Can we return used shoes? ›
Many chain shoe stores and online vendors have return policies that specify the shoes must be unworn and in the original packaging. That means that you should only wear them indoors on clean surfaces for a few days before deciding to return them. If they appear to be worn, you may not get a refund or exchange.
What is the return on assets for Skechers? ›
Skechers's return on assets for fiscal years ending December 2019 to 2023 averaged 8.4%. Skechers's operated at median return on assets of 9.0% from fiscal years ending December 2019 to 2023. Looking back at the last 5 years, Skechers's return on assets peaked in December 2021 at 13.3%.
Can you exchange Skechers without a receipt? ›
You can visit any of our SKECHERS shop to exchange your Merchandise & to be eligible for an exchange at SKECHERS shops: 1-Merchandise must be presented with original Online receipt. 2-Merchandise must be in a salable condition, in original state, in original packaging.
You have 45 days from the date of purchase to decide if your new Skechers are the perfect fit for you. If for any reason you're not completely satisfied with your purchase, you're entitled to return your unworn items within this time frame for a refund or exchange.
How do you clean stinky Skechers? ›
If your shoes start to smell, try sprinkling a little bit of baking soda inside them. This will help absorb any bad odors. You can also look into odor eliminator spray. Buy waterproof spray to keep them clean.
Who owns Skechers? ›
The ownership structure of Skechers USA (SKX) stock is a mix of institutional, retail and individual investors. Approximately 73.58% of the company's stock is owned by Institutional Investors, 1.80% is owned by Insiders and 24.62% is owned by Public Companies and Individual Investors.
Can I exchange Skechers bought online to a store? ›
Currently, we do not accept any exchanges through our website. Customers can only exchange size by visiting any of Skechers exclusive store along with invoice and product in unused condition in the original packaging within 10 days from product delivery.
Where is Skechers headquarters? ›
At our Corporate Headquarters in Manhattan Beach, California, we design our footwear, develop marketing campaigns and oversee our global operations.
Where is Skechers headquarters located? ›
At our Corporate Headquarters in Manhattan Beach, California, we design our footwear, develop marketing campaigns and oversee our global operations.
Are Skechers approved by podiatrist? ›
The Ultimate Comfort Solution
Experience effortless style and comfort with podiatrist-certified arch support developed using over 20 years of data. Footwear in our Arch Fit® collection features a removable, supportive cushioning insole system for a more enjoyable walking experience.
Who is the owner of Skechers? ›
History. Skechers was founded in 1992 by Robert Greenberg, who had previously founded LA Gear in 1983 (he stepped down as CEO of that company the same year he founded Skechers).
What country are Skechers made in? ›
Crafted with precision in China, Mexico, Brazil, and Romania, Skechers now dazzles the world with over 900 styles of shoes. From the popular Go Walk, Skechers Sport, Skechers USA, Cali, Tone Ups, Skechers Work, to Skechers Kids, they have become a colossus, appealing to every kind of shoe lover out there!
