Fossil Group, Inc.

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(3)

Mr. Kartsotis refused all forms of compensation for fiscal year 2022.

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(4)

This amount represents financial advisory services, the Company’s contributions to Mr. Boyer’s account under its 401(k) plan and Company-paid life insurance premiums.

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(5)

This amount represents annual wellness benefits, financial advisory services, the Company’s contributions to Mr. Hart’s account under its 401(k) plan and Company-paid life insurance premiums.

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(6)

This amount represents the Company’s contributions to Mr. McKelvey’s account under its 401(k) plan, Company-paid life insurance premiums and $346,361 of severance payments made to Mr. McKelvey.

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NARRATIVE DISCLOSURE TO SUMMARY COMPENSATION TABLE

During fiscal year 2023, our NEO compensation program included four components: base salary, annual cash incentive plan, long-term incentive equity grants and other compensation, including employee benefits generally available to all of our employees. Each component is described in detail below.

Base Salary

Annually, the CEO reviews and recommends to the Compensation and Talent Management Committee individual salaries for the NEOs, except the CEO salary. To determine individual salaries, the Compensation and Talent Management Committee may consider the scope of job responsibilities, individual performance and contributions, as well as our overall performance and annual budget guidelines for merit increases. The Compensation and Talent Management Committee’s objective is to award base compensation levels for each NEO around the median for the comparable position within our industry peer group based upon market data. However, salaries may be set higher when considered necessary to attract or retain key executives. Base salaries are reviewed annually and any adjustments to salaries are made in the first quarter of each fiscal year during our performance review process.

For fiscal year 2023, our NEOs did not receive an increase. The following table shows the base salary for each NEO.

Annual Cash Incentive Plan

The Cash Incentive Plan is a performance-based annual cash incentive plan that links cash incentive awards to achieving pre-established performance goals. For fiscal year 2023, the Compensation and Talent Management Committee set the performance metrics used to determine cash incentive awards to a combination of financial metrics and Company strategic goals. The Compensation and Talent Management Committee believes that using these performance metrics aligns the NEOs’ bonus opportunities with the priorities of the Company and ultimately long-term value creation for the Company’s stockholders.

For fiscal year 2023, each NEO was eligible for a target bonus opportunity under the Cash Incentive Plan as follows: 130% of his annual salary for Mr. Kartsotis, 100% of their annual salary for Messrs. Boyer and McKelvey and 75% of his annual salary for Mr. Hart. The actual cash incentive amounts are paid out based on the extent to which our financial goals and strategic priorities

are achieved. For fiscal year 2023, the financial goals were weighted 85% and the strategic priorities goals were weighted 15%. The measurement period for evaluating performance under the metrics was our 2023 fiscal year (the “Measurement Period”).

The metrics for 2023 were as follows:

• Performance measured individually with weighting of 5% each.

Performance goals were approved by the Compensation and Talent Management Committee in February 2023 and included targets for threshold, target, and stretch payouts for the financial metrics. For the strategic goals, the revitalize FOSSIL brand, digital transformation and jewelry expansion goals were measured individually with an achievement range of 0% to 200%. Each performance metric was measured independently of the other metrics. In setting these targets, key considerations of the Compensation and Talent Management Committee included:

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Net sales: Determined using constant currency.

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Adjusted operating income: Determined using constant currency, excludes restructuring costs and intangible asset impairment and includes actual bonus payment total under the Cash Incentive Plan.

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Revitalize the FOSSIL brand: Determined using sales, customer file size, marketing investment and brand health index performance indicators.

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Digital transformation: Determined by revenue growth.

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Jewelry expansion: Determined by sale growth, direct-to-consumer comp sales and sales penetration

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Target payouts for each performance metric are listed below:

• As a percentage of target

The Compensation and Talent Management Committee approves the specific payments to the NEOs under the Cash Incentive Plan. The Compensation and Talent Management Committee also retains discretion to reduce bonus compensation or recommend additional cash bonuses during the year based on factors such as promotions and business segment, department, individual or overall Company performance.

During the Measurement Period, the Company achieved net sales of $1.414 million (using constant currency), which paid out at 0% of target, adjusted operating income of $(90) million, which paid out at 0% of target, and TAG Opex Run Rate Savings of $86 million, which paid out at 65.1% of target. For fiscal year 2023, the Company achieved the strategic goals of revitalizing the FOSSIL brand at 100%, digital transformation at 100% and jewelry expansion at 25%, resulting in an overall payout of 27.5%. The calculation for the Company payout percentage was the sum of weighting times achievement for each metric (as defined), and for fiscal year 2023 was:

Based on the foregoing, the Compensation and Talent Management Committee approved the following cash bonus payments under the Cash Incentive Plan for fiscal year 2023 performance:

• Prorated for Mr. McKelvey’s August 11, 2023 termination of service date with the Company and paid in accordance with the terms of Mr. McKelvey’s Executive Severance Agreement.

Long-Term Incentive Plan

We believe that substantial equity ownership and equity awards encourage management to take actions favorable to the medium and long-term interests of the Company and its stockholders and align their interests with the interests of the Company and its stockholders. We believe that including equity awards in the compensation program serves our longer-term goals, including management retention, because the value of equity is realized over several years. Accordingly, equity-based compensation constitutes a significant portion of the overall compensation of the NEOs.

For fiscal year 2023, the Compensation and Talent Management Committee approved a target of a percentage of annual salary (in effect at the end of the prior calendar year) for long-term incentive grants for each NEO as follows: 150% for Messrs. Boyer and McKelvey and 113% for Mr. Hart. As part of the Company’s efforts to limit the number of shares granted annually from the 2016 Plan, the foregoing percentages were reduced by 25% from the intended equity targets of 200% and 150%, respectively. The approved mix of awards consisted of 50% in RSUs, which vest ratably over three years, and 50% in PSUs, which vest ratably over three years based on the achievement of the performance measures; and continued employment with the Company. In addition, for retention purposes, Messrs. Hart and McKelvey each received an equity grant on the date of the annual grant of 40,000 RSUs

with the same three-year vesting schedule as their annual grants. The Compensation and Talent Management Committee makes the ultimate determination regarding these grants and can increase or decrease the recommended awards. In order to manage the Company’s burn rate, the target long-term incentive grants were (i) reduced by 25% and (ii) calculated on the date of grant using a $13.25 per share value instead of the fair market value of $3.225 per share on the date of grant. Based on the foregoing, the Compensation and Talent Management Committee approved the following annual equity awards which were granted on April 15, 2023:

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(1)

As part of the Company’s efforts to limit the number of shares granted annually from the 2016 Plan, the value of the annual equity award, and subsequently the number of RSU and PSU shares granted, has been reduced by 25% from the intended equity targets for each of the NEOs in the table.

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(2)

Messrs. Hart and McKelvey each received a retention grant of 40,000 RSUs on the date of the annual grant.

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PSUs PSU grants are designed to reward executives for improving operating margin and managing controllable costs. In addition, these grants ensure management is focused on long-term strategic performance goals and maximizes retention. The PSUs vest ratably each year over three years based on the Company’s performance.

2021 — 2023 PSU Results

For the 2021 and 2023 PSU grants, PSUs are to be earned based on adjusted operating margin (calculated based on constant currency and excluding restructuring costs and intangible asset impairment). For the 2022 PSU grants the PSUs are to be earned based on adjusted operating income (calculated based on constant currency and excluding restructuring costs and intangible asset impairment). The payout range enables executives to receive a variable award based on performance. Final distribution of the PSU awards could range from 0% to 200% of the PSUs granted at target depending on Company performance during the measurement period.

The performance metrics for the outstanding tranche of the 2021 PSU grant for fiscal year 2023 is shown in the following table:

The performance metric for the outstanding tranche of the 2022 PSUs for fiscal year 2022 is shown in the following table:

The performance metric for the outstanding tranche of the 2023 PSUs for fiscal year 2023 is shown in the following table:

For fiscal year 2023, the Company achieved an adjusted operating margin of (6.5)% and adjusted operating income of $(92) million. As a result, the Compensation and Talent Management Committee approved a 0% payout for the following outstanding awards: the third tranche of the 2021 PSU grant, the second tranche of the 2022 PSU grant and the first tranche of the 2023 PSU grant.

Executive Compensation Practices

Our executive compensation programs are designed to attract, motivate and retain executive officers, while aligning the interests of our executives with the interests of our stockholders. Below is a summary of compensation practices we have adopted to drive performance and to align with stockholder interests, as well as a summary of those practices we do not employ.

Other Compensation and Benefit Elements

Our benefit programs are generally egalitarian. Our NEOs are eligible for the same health and welfare benefit programs as our other U.S. employees, including our qualified defined contribution 401(k) plan. In addition, our NEOs received the following perquisites:

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Financial advisory services of up to $15,000

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An annual wellness benefit

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Employer-paid guaranteed universal life insurance

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Employer-paid supplemental long-term disability insurance

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Retirement benefits upon reaching 55 years of age and 10 years of service with the Company to include continuation of health care coverage for 18 months and continuation of Company product discounts

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