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The Home Depot 2025 Proxy Statement | 39 |
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Fiscal 2024 Performance Measures and Actual Performance | | Executive Compensation Results |
Performance-Based Restricted Stock: | | | | |
Restricted stock is forfeited if Fiscal 2024 operating profit is not at least 90% of the MIP target. | | Shares of restricted stock were not forfeited and will vest 50% after 30 months and 50% after 60 months from grant date.
|
($ in billions) Metric | Threshold
(90% of Target) | Target | Actual* | |
| Operating Profit | $19.62 | | $21.80 | | $21.42 | | | |
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| Stock Options: |
Based on stock price performance – annual grant with an exercise price of $384.41 made on March 20, 2024. | | At the end of Fiscal 2024, options were in-the-money by $27.57 per share. Options vest 25% on each of the second, third, fourth and fifth anniversaries of the grant date. |
*See “—Elements of Our Compensation Programs—Annual Cash Incentive—Potential Adjustments” beginning on page 46 below, “—Elements of Our Compensation Programs—Annual Cash Incentive—Fiscal 2024 MIP Results” starting on page 47 below, and “—Elements of Our Compensation Programs—Long-Term Incentives—Performance-Based Restricted Stock” starting on page 50 below. |
Performance-Based Features of Fiscal 2024 Compensation and Compensation Best Practices
The following features of our executive compensation program illustrate our performance-based compensation philosophy and our practice of following compensation best practices:
ü 100% of the annual incentive compensation under our Fiscal 2024 MIP was tied to performance against pre-established, specific, measurable performance goals.
ü One half of the annual Fiscal 2024 equity grant was in the form of a three-year performance share award, with payout contingent on achieving pre-established average ROIC and average operating profit targets over the three-year performance period.
ü Our performance-based restricted stock awards, which comprised 30% of the annual Fiscal 2024 equity grant, were forfeitable if Fiscal 2024 operating profit was less than 90% of the Fiscal 2024 MIP operating profit target. Dividends on performance-based restricted stock grants are accrued and not paid out to executive officers unless and until the performance goal is met.
ü Our equity awards have longer vesting periods than those of many of our peers, with the performance-based restricted stock awards and stock options vesting over five years and the performance shares cliff-vesting in full after three years (subject to achievement of performance goals), which aligns executive officers’ interests with the interests of our shareholders in the long-term performance of the Company.
ü Approximately 90.8% of our CEO’s total target compensation was tied to the achievement of corporate performance objectives and/or share price performance.
ü We do not provide tax reimbursements, also known as “gross-ups,” to NEOs; we have limited perquisites; and we do not have any change in control agreements, supplemental executive retirement plans, defined benefit pension plans, guaranteed salary increases or guaranteed bonuses for executive officers.
ü We prohibit all associates, including executive officers, and directors from entering into hedging or monetization transactions designed to limit the financial risk of owning Company stock.
ü We prohibit all Section 16 officers, including executive officers, and directors from pledging shares of our common stock as collateral, including to secure any indebtedness, and from opening margin accounts using our common stock.
ü We maintain robust stock ownership and retention guidelines for executive officers.
ü Our executive compensation clawback policy, applicable to all executive officers, extends beyond mandated requirements and allows the LDC Committee, in its discretion, to recoup any bonus, incentive payment, equity award or other compensation if, among other things, the executive officer engaged in intentional misconduct that caused the Company material financial or reputational harm.
ü We conduct a compensation risk assessment on at least an annual basis.
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40 | The Home Depot 2025 Proxy Statement |
Impact of Fiscal 2024 Business Results on Executive Compensation
The amount of incentive compensation paid to our executive officers, if any, is determined by our performance against our Fiscal 2024 business plan created at the beginning of the year and intended to be challenging in light of the prevailing economic conditions, yet attainable through disciplined execution of our strategic initiatives. Consistent with our business plan, and due to the continuing uncertainty regarding macroeconomic conditions and the persistently high interest rate environment, after adjusting for the 53rd week in Fiscal 2024, our executive compensation program targets reflected a modest decrease in the sales and operating profit goals from the actual results for the prior year and a modest increase in the inventory turns goals from prior year actual results. The compensation earned by our NEOs reflects our Company performance against those metrics.
•The LDC Committee approved salary increases for the NEOs (other than Mr. Decker) based on its assessment of individual performance and other factors, as discussed in more detail below.
•Our MIP paid out slightly below the target level due to results slightly below target for the sales and operating profit metrics and above target for the inventory turns metric. The Pro strategic goal, which was first introduced for Fiscal 2024, was achieved.
•The performance condition on the performance-based restricted stock granted in Fiscal 2024 was satisfied, although the shares still remain subject to time-based vesting requirements.
•The NEOs earned 25.6% of their Fiscal 2022-2024 performance share award due to average ROIC and average operating profit over the three-year performance period of 39.4% and $22.24 billion, respectively, reflecting results below the threshold level for average ROIC and above the threshold level for average operating profit.
Fiscal 2024 Management Transitions
As announced in May 2024, Matthew A. Carey served as our Executive Vice President – Customer Experience until June 3, 2024, at which time he served as Executive Vice President until his retirement on December 31, 2024. In connection with Mr. Carey’s retirement, Jordan Broggi was promoted from Senior Vice President and President – Online to Executive Vice President – Customer Experience and President – Online. Mr. Carey’s salary and other terms of employment were not adjusted in connection with his transition to Executive Vice President in June 2024, as he remained employed to facilitate this transition through the date of his retirement.
Opportunity for Shareholder Feedback
The LDC Committee carefully considers feedback from our shareholders regarding executive compensation matters. Shareholders are invited to express their views or concerns directly to the LDC Committee or the Board in the manner described under “Communicating with the Board” on page 14.
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The Home Depot 2025 Proxy Statement | 41 |
EXECUTIVE COMPENSATION DETERMINATION PROCESS
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| Participant | | Role in the Executive Compensation Determination Process |
Independent Members of the Board | • | The independent members of the Board, consisting of all directors in Fiscal 2024 other than Mr. Decker, evaluated the performance and determined the compensation of the CEO. |
LDC Committee | • | The LDC Committee evaluated the CEO’s performance and made recommendations to the independent members of the Board regarding his compensation. |
| • | The LDC Committee evaluated the performance and determined the compensation of our executive officers other than the CEO. |
| • | The LDC Committee may delegate its responsibilities to subcommittees but did not delegate any of its authority with respect to the compensation of any executive officer for Fiscal 2024. |
Executive Officers | • | The CEO and our EVP-HR made recommendations to the LDC Committee as to the amount and form of executive compensation for executive officers (other than the CEO’s compensation). |
| • | At the request of the LDC Committee, the EVP-HR and the CEO regularly attended LDC Committee meetings, excluding executive sessions. The CEO did not participate in or attend any LDC Committee or Board discussions pursuant to which his compensation was established. |
Independent Compensation Consultant | • | In November 2023, the LDC Committee engaged Pay Governance as its independent compensation consultant for Fiscal 2024 to provide research, market data, survey information and design expertise in developing executive and director compensation programs. Pay Governance provides consulting services solely to compensation committees. |
| • | A representative of Pay Governance attended LDC Committee meetings in Fiscal 2024 and advised the LDC Committee on all principal aspects of executive compensation, including the competitiveness of program design and award values and specific analyses with respect to the Company’s executive officers, including Mr. Decker. The compensation consultant reports directly to the LDC Committee, and the LDC Committee is free to replace the consultant or hire additional consultants or advisers at any time. |
| • | Pursuant to the independent compensation consultant policy adopted by the LDC Committee, its compensation consultant provides services solely to the LDC Committee and is prohibited from providing services or products of any kind to the Company. Further, affiliates of the compensation consultant may not receive payments from the Company that would exceed 2% of the consolidated gross revenues of the compensation consultant and its affiliates during any year. |
| • | Pay Governance provided services solely to the LDC Committee in Fiscal 2024, and none of its affiliates provided any services to the Company. In addition, under the Company’s independent compensation consultant policy, the LDC Committee assessed Pay Governance’s independence and whether its work raised any conflicts of interest, taking into consideration the independence factors set forth in applicable SEC and NYSE rules. Based on that assessment, including review of a letter from Pay Governance addressing those factors, the LDC Committee determined that Pay Governance was independent and that its work did not raise any conflicts of interest. |
Benchmarking
We do not target any specific peer group percentile ranking for total compensation or for any particular component of compensation for our NEOs. The LDC Committee considers each executive’s compensation history and peer group market position as reference points in setting compensation on an annual basis. For Fiscal 2024 for our CEO, the LDC Committee considered data provided by Pay Governance from two peer
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42 | The Home Depot 2025 Proxy Statement |
groups. The first consisted of the Fortune 50 companies, excluding certain financial services and other companies due to their unique compensation structure (as noted below). This group reflects companies of similar size and complexity to us. The second group, listed below, consisted of the top ten retail companies by market capitalization, with which we compete for executive talent.
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| Retail Peer Group |
| Amazon.com | Ross Stores, Inc. |
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| AutoZone, Inc. | Target Corporation |
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| Costco Wholesale Corporation | The Kroger Co. |
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| Lowe’s Companies, Inc. | The TJX Companies, Inc. |
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| O’Reilly Automotive, Inc. | Walmart Inc. |
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The retail peer group remained largely unchanged from Fiscal 2023. The Kroger Co. replaced Dollar General Corporation in the retail peer group due to changes in their respective market capitalizations.
In reviewing the benchmarking data from 2023 in connection with setting Mr. Decker’s Fiscal 2024 compensation in early 2024, the LDC Committee and the independent directors also reviewed the percentile ranking of our revenues and Mr. Decker’s target total compensation compared to each of these peer groups, as reflected below:
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| Percentile Rank |
| Category | Fortune 50(3) | | Retail Peers |
Market Cap(1) | 80% | | 82% |
Company Revenue(2) | 53% | | 68% |
| CEO Target Total Compensation | 8% | | 30% |
(1) Based on one-month average in December 2023.
(2) Based on fiscal 2023 revenue as reported in SEC filings.
(3) Excludes Bank of America Corporation, Berkshire Hathaway Inc., Citigroup Inc., Fannie Mae, Freddie Mac, JPMorgan Chase & Co., and Wells Fargo & Company. Dell Technologies, Inc., Meta Platforms, Inc. and Tesla, Inc. were also excluded due to the atypical compensation structures of their founder/CEOs. State Farm Mutual Automobile Insurance was excluded because it is a private company and did not disclose executive compensation data.
For our other NEOs, the LDC Committee considered data from the Aon Radford McLagan Compensation Database (the “Aon Radford Database”), which provides information and comparisons on compensation for executive and industry-specific positions. For Ms. Campbell, Mr. McPhail, Ms. Roseborough and Mr. Carey, the LDC Committee also considered the compensation paid to NEOs in the retail peer group with the same pay rank within their respective companies as each of these NEOs. Data from the Aon Radford Database for Fortune 50 companies and retail peer group was utilized to the extent it was available for each NEO role. In some cases, proxy data was used where survey data was not available. This survey data helps the LDC Committee understand compensation for the market in which the Company principally competes for retail-specific talent and for customers.
Mitigating Compensation Risk
The LDC Committee performs a broad-based review and risk assessment of the proposed compensation policies and practices for the Company’s associates, including but not limited to our executive officers, on at least an annual basis. Based on the collective assessment, management and the LDC Committee determined that our compensation policies and practices did not create risks that are reasonably likely to have a material adverse effect on the Company. In reaching that conclusion, management and the LDC Committee considered the following qualitative and quantitative factors:
Qualitative Factors:
•Management and the LDC Committee, with the advice of the independent compensation consultant, regularly review our executive compensation programs, with a focus on both their efficacy in driving
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The Home Depot 2025 Proxy Statement | 43 |
quality performance and potential responses to such programs by the investment community and other external constituencies.
•The LDC Committee and, for the CEO, the independent members of the Board, provide effective oversight in setting goals and monitoring attainment of those goals.
•Robust internal controls are in place to ensure compensation plans operate as designed and approved.
•Compensation programs and pay amounts at various leadership levels are routinely analyzed against market data by the LDC Committee and management to ensure compensation is appropriate to the market.
•Bonus, incentive and equity awards to executive officers are subject to an executive compensation clawback policy, as described below on page 51, to discourage manipulation of incentive program elements. •Robust stock ownership guidelines are in place to further align the interests of shareholders and executive officers, as described below beginning on page 51. Quantitative Factors:
•Performance and payment time horizons are appropriate, and they are not overweight in short-term incentives.
•The relationship between the incremental achievement levels and corresponding payouts in our incentive plans is appropriate. Each of our MIP performance metrics have payout caps, and our performance shares are subject to a maximum payout of 200%. The number of shares of our performance-based restricted stock and stock options is fixed at the time of grant.
•Programs employ a reasonable mix of performance metrics and are not overly concentrated on a single metric. Although the operating profit metric is used in more than one incentive, it is a key corporate goal that takes into account both revenue and expense, and the risk of overweighting it is mitigated by using it across different time horizons.
•Criteria for payments are closely aligned with our strategic initiatives, our business plan and shareholder interests.
•Payout curves are reasonable and do not contain steep “cliffs” that might encourage unreasonable short-term business decisions to achieve payment thresholds.
•Equity for senior officers is paid in a mix of performance shares, performance-based restricted stock, and stock options.
Consideration of Last Year’s Say-on-Pay Vote
At our 2024 annual meeting on May 16, 2024, approximately 93% of the shares voted were voted in support of the compensation of our NEOs. Since then, as part of our shareholder engagement program, we have continued to solicit feedback on our compensation practices. In considering the results of the 2024 advisory vote on executive compensation and feedback from these shareholders, the LDC Committee concluded that the compensation paid to our executive officers and the Company’s overall executive pay practices have strong shareholder support and therefore determined to maintain the current overall compensation structure for Fiscal 2024.
ELEMENTS OF OUR COMPENSATION PROGRAMS
The principal elements of our compensation programs for our NEOs are discussed below.
Base Salaries
We provide competitive base salaries that allow us to attract and retain a high-performing leadership team. Base salaries for our NEOs are reviewed and generally adjusted annually based on a comprehensive management assessment process. For Fiscal 2024, following discussion with the LDC Committee and based upon a review of competitive market data, and assessments of the Company’s business plan and then-anticipated economic conditions in Fiscal 2024, we established a Company-wide merit increase budget for hourly and salaried associates of 3.0%.
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44 | The Home Depot 2025 Proxy Statement |
In late February 2024, the LDC Committee, and in the case of our CEO, the independent directors, performed their annual review of base salaries for the NEOs. In establishing the base salaries for the NEOs for Fiscal 2024, the LDC Committee considered total compensation, scope of responsibilities, performance over the previous year, experience, internal pay equity, potential to assume additional responsibilities, and the competitive marketplace. At Mr. Decker’s request, and following discussions with the LDC Committee and its independent compensation consultant, the independent members of the Board maintained Mr. Decker’s base salary at $1,400,000. His salary has therefore remained unchanged since his appointment to the position of President and CEO in March 2022. The other NEOs received annual salary increases as set forth in the table below. Mr. Bastek’s increase was primarily driven by consideration of market data after his promotion to Executive Vice President – Merchandising during Fiscal 2023. The changes from this salary review were effective in April 2024.
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Fiscal 2024 Base Salary Changes as of April 2024 |
| Name | 2024 Base Salary | 2023 Base Salary | Percent Change |
| Edward P. Decker | $1,400,000 | $1,400,000 | — | % |
Richard V. McPhail | $950,000 | $910,800 | 4.3 | % |
Ann-Marie Campbell | $1,030,000 | $1,000,000 | 3.0 | % |
William D. Bastek | $750,000 | $650,000 | 15.4 | % |
Teresa Wynn Roseborough | $788,877 | $765,900 | 3.0 | % |
Matthew A. Carey | $927,515 | $900,500 | 3.0 | % |
Annual Cash Incentive
All NEOs participate in the MIP, our cash-based annual incentive plan. The Fiscal 2024 MIP payout was contingent upon the achievement of financial and strategic performance goals set by the LDC Committee at the beginning of the Fiscal 2024 performance period. As in prior years, the Fiscal 2024 MIP financial goals included sales, operating profit and inventory turns. Excluding the impact of the 53rd week of Fiscal 2024, the MIP targets set at the beginning of Fiscal 2024 reflected a modest decrease in each of the sales and operating profit goals from the prior year results due to continued pressure on home improvement demand and the continuing uncertainty regarding macroeconomic conditions and the persistently high interest rate environment; and an increase in the inventory turns performance metric from the prior year results largely due to improved inventory productivity. To better align the MIP structure with the Company’s strategic initiatives in Fiscal 2024, the LDC Committee determined to include a new Pro strategic goal weighted at 10%, with a corresponding decrease in the weighting assigned to each of the sales and operating profit goals to 40%. The pro strategic goal measures the year-over-year increase in total sales in the U.S. to Pros whose accounts are managed by our outside sales team, which we refer to as managed account sales. The Pro strategic goal is intended to drive focus on the Company’s strategic initiative of growing market share with Pros. The LDC Committee bases the payout of the MIP on achievement of these financial and strategic metrics to ensure alignment with shareholder value creation and the Company’s business plan.
Performance Goals. Set forth below are the MIP performance measures and weightings used for Fiscal 2024 and the threshold, target and maximum Company achievement levels for the sales, operating profit and inventory turns performance measures established by the LDC Committee for Fiscal 2024 (dollars in billions). The operating profit threshold must be met for any MIP payout to occur. There is no threshold or maximum performance level for the Pro strategic goal; achievement of this goal results in 100% payout with respect to this goal (subject to the operating profit threshold, referenced above), with no payout on the Pro strategic goal if this goal is not achieved.
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The Home Depot 2025 Proxy Statement | 45 |
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| Fiscal 2024 Performance Measures |
| Measure | Weighting | Threshold | % of Target
Goal | % of Target
Payout | Target | Maximum | % of Target
Goal | % of Target
Payout |
| Sales | 40 | % | $139.39 | | 90 | % | 50 | % | $154.88 | | $170.37 | | 110 | % | 200 | % |
| Operating Profit | 40 | % | $19.62 | | 90 | % | 50 | % | $21.80 | | $23.98 | | 110 | % | 200 | % |
| Inventory Turns | 10 | % | 4.10 | | 90 | % | 50 | % | 4.55 | | 5.01 | | 110 | % | 200 | % |
Pro Strategic Goal | 10 | % | n/a | n/a | n/a | Increase in managed account sales from Fiscal 2023(1) | n/a | n/a | n/a |
(1)The amount of managed account sales is competitively sensitive information that we do not publicly disclose, and disclosure would cause competitive harm to the Company. In light of ongoing uncertainty regarding macroeconomic conditions and the persistently high interest rate environment, the Pro strategic goal was expected to be challenging but achievable with focused effort to enhance organizational alignment on our Pro strategic initiatives.
The relative weighting among the measures was determined by the LDC Committee, with input from the CEO and the EVP-HR, to reflect the Company’s priorities for Fiscal 2024. The weighting of the Pro strategic goal was set at 10% to drive organizational alignment on and attention to the Company’s Pro strategic initiatives. The weighting of each of the sales and operating profit measures was correspondingly reduced to 40%, maintaining the emphasis on both sales growth and profitability. The weighting of the inventory turns measure at 10% maintained visibility and focus on inventory management.
Potential Adjustments. The pre-established definitions of all performance metrics under the MIP provided for adjustments for the impact of acquisitions or dispositions of any business(es) with annualized sales of greater than $1 billion in the aggregate, provided that if the acquired or disposed business has an operating loss, the operating profit metric is not subject to this adjustment. The definitions of sales and operating profit under the MIP also provided for adjustments in connection with specified types of nonrecurring charges and write-offs related to strategic restructuring transactions, the discontinuation of a significant product line, or changes in tax laws or other laws or provisions, or accounting principles, in each case that impact results in excess of $50 million in the aggregate during the fiscal year. The LDC Committee included the adjustment for restructuring transactions because it believes these types of strategic decisions support the long-term interests of the Company and should not adversely affect incentive opportunities. The adjustment for changes in laws or accounting principles reflects the fact that these changes are outside of the control of the executive officers, and the LDC Committee similarly believes that they should not affect incentive opportunities.
As in prior years, the LDC Committee also included in the pre-established definitions of sales and operating profit an adjustment to neutralize the impact of any change (positive or negative) in currency exchange rates during the fiscal year for our Canada and Mexico business units or another country where the Company has annual sales in excess of $1 billion. This adjustment reflected the volatility in exchange rates and in the value of the U.S. dollar against other currencies, in particular the Canadian dollar and the Mexican peso, that has occurred over the last several years. The LDC Committee noted that adjustments for currency fluctuations are not uncommon for large multinational corporations. These fluctuations represent external, macroeconomic influences outside of the control of the executive officers, and the LDC Committee believes that they should not affect incentive opportunities.
In addition, taking into account the impact of the COVID-19 pandemic as well as the potential for future pandemics, the LDC Committee included in the definitions of sales and operating profit an adjustment for the impact of any store closures required due to a pandemic with an aggregate impact to sales in excess of $1 billion, and in the operating profit definition, an adjustment for specific expenses in excess of $50 million in the aggregate that were not already included in the targets set for Fiscal 2024 and that would not otherwise have been incurred but for combating the impact of a pandemic on business operations. By neutralizing the impact of these expenses on MIP results, the LDC Committee desired to incentivize management to make appropriate expenditures for the safety of our customers and associates, without penalizing their incentive opportunity. At the same time, the LDC Committee retained the ability to use negative discretion to reduce the amount of any MIP payout if the impact of this adjustment, or any of the adjustments discussed above, were to result in a payment to an executive inconsistent with our pay for performance philosophy.
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46 | The Home Depot 2025 Proxy Statement |
In accordance with their pre-established definitions, the Fiscal 2024 sales, operating profit and inventory turns financial metrics are all determined on a 53-week basis, and the Pro strategic goal is determined on a 52-week basis, excluding the 53rd week.
Payout Calculations. The payouts for achievement of the performance goals for the Fiscal 2024 MIP were based on overall Company performance for all of our NEOs. For achievement of the target level of performance, executive officers receive 100% payout. The target performance level was set consistent with the Fiscal 2024 business plan we established in early 2024.
There was no change in Fiscal 2024 to the performance payout curve for the sales, operating profit, or inventory turns metrics. In Fiscal 2024, the threshold and maximum performance levels remained at 90% and 110% of the performance targets for each of the sales, operating profit, and inventory turns measures, respectively, and the minimum and maximum payout for achievement for each of those measures remained at 50% and 200% of target payout, respectively. The Company used interpolation to determine the specific amount of payout for each NEO with respect to the achievement of financial goals between the various levels. There is no threshold or maximum performance level for the Pro strategic goal; achievement of this goal results in a 100% payout with respect to this goal (subject to achievement of the operating profit threshold discussed above), with no payout on the Pro strategic goal if this goal is not achieved. The LDC Committee does not have discretion to increase the MIP payout earned by an NEO, but it may decrease the payout even if the performance goals are achieved.
The annual target payout levels were determined as a percentage of base salary: 200% for the CEO, 125% for the Senior Executive Vice President, and 100% for all other Executive Vice Presidents.
Fiscal 2024 MIP Results. For Fiscal 2024, for purposes of determining the achievement of MIP awards, sales were $153.37 billion, operating profit was $21.42 billion and inventory turns were 4.71 times, slightly below the target level for the sales and operating profit metrics, and above target for the inventory turns metric. The Pro strategic goal was achieved, with Fiscal 2024 managed account sales exceeding Fiscal 2023 managed account sales due to focus throughout the year on advancing Pro initiatives. Pursuant to the pre-established definition of sales under the MIP, sales were adjusted up by $258.8 million for the impact of changes in currency exchange rates in Fiscal 2024 and adjusted down by $6.41 billion due to acquisitions. Pursuant to the pre-established definition of operating profit under the MIP, operating profit was adjusted up by $37.1 million due to the impact of changes in currency exchange rates in Fiscal 2024 and down by $146.0 million due to acquisitions. Pursuant to the pre-established definition of inventory turns under the MIP, inventory turns were adjusted up by 0.04 due to acquisitions. Actual sales, operating profit and inventory turns without any adjustments were $159.51 billion, $21.53 billion, and 4.67 respectively, which was above the target performance level for the sales and inventory turns goals and below the target level for the operating profit goal. No adjustments were required to the Pro strategic metric pursuant to its pre-established definition.
Based on performance in Fiscal 2024 against the performance goals, the following were the target and actual MIP awards for Fiscal 2024 for each NEO:
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| At Target Performance | | At Actual Performance |
| Name | % of Base Salary | Dollar Amount | | % of Target | Dollar Amount |
| Edward P. Decker | 200 | % | $2,800,000 | | | 98 | % | $2,743,532 | |
| Richard V. McPhail | 100 | % | $950,000 | | | 98 | % | $930,841 | |
| Ann-Marie Campbell | 125 | % | $1,287,500 | | | 98 | % | $1,261,535 | |
| William D. Bastek | 100 | % | $750,000 | | | 98 | % | $734,875 | |
| Teresa Wynn Roseborough | 100 | % | $788,877 | | | 98 | % | $772,968 | |
Matthew A. Carey(1) | 100 | % | $927,515 | | | 98 | % | $908,810 | |
(1)Mr. Carey retired from the Company effective December 31, 2024. Our MIP provides that retirement eligible associates who retire prior to the MIP payment date receive a payout prorated based on the time in their roles during the fiscal year, with employment for any portion of a fiscal month receiving MIP credit for the full fiscal month. Because Mr. Carey was retirement eligible and employed during the last fiscal month of Fiscal 2024, he received the full Fiscal 2024 MIP payout based on actual performance.
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The Home Depot 2025 Proxy Statement | 47 |
MIP Program Change for Fiscal 2025. To better align the MIP structure with drivers of the Company’s shareholder value creation during the past several fiscal years, the LDC Committee has determined to increase the weighting assigned to the sales goal to 50% for the Fiscal 2025 MIP; the operating profit goal in the Fiscal 2025 MIP will be weighted at 30%, demonstrating a continued focus on profitability.
Long-Term Incentives
For Fiscal 2024, consistent with prior years, we awarded the NEOs annual long-term incentives consisting of 50% performance shares, 30% performance-based restricted stock, and 20% stock options. The LDC Committee selected this mix to highlight the focus on pay for performance and alignment with shareholder interests. The LDC Committee also believed that this mix of equity components provided an appropriate mix of mid- and long-term performance measures and retention incentive, without promoting excessive risk-taking.
The total target value of the annual equity awards granted in March 2024 to the NEOs was determined by the LDC Committee after considering the value of equity grants of officers with similar responsibilities at peer group companies described under “Executive Compensation Determination Process—Benchmarking” above and individual performance relating to financial management, leadership, talent management and operational effectiveness, as well as retention risk. For Fiscal 2024, the annual equity award for Mr. Decker at the target level was 786% of his Fiscal 2024 base salary approved in February 2024. For the other NEOs, the target equity value for the annual equity grant ranged from 248% to 388% of their Fiscal 2024 base salary approved in February 2024.
Performance Shares. The Fiscal 2024-2026 performance share awards granted in March 2024 provide for the issuance of shares of our common stock at the end of a three-year period based on the achievement of average ROIC and operating profit goals over that period, as follows (dollars in billions):
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| Fiscal 2024-2026 Performance Shares | Threshold | Target | Maximum |
| Three-Year Average ROIC | 30.98 | % | 36.45 | % | 41.91 | % |
| Three-Year Average Operating Profit | $18.45 | $21.71 | $24.96 |
| Percent of Target Payout | 50 | % | 100 | % | 200 | % |
To better align with the market and drive consistency with the MIP payout at threshold, for the Fiscal 2024-2026 performance share awards, the LDC Committee increased the payout at the threshold performance level to 50% of target payout (from the prior 25% for the Fiscal 2023-2025 and Fiscal 2022-2024 awards). For the Fiscal 2024-2026 performance share awards, the threshold performance level was set at 85% of target performance for each metric, and the maximum level was set at 115% of target performance. For results between the threshold, target and maximum levels, the number of shares is determined by interpolation. There is no payout for results below the threshold level. Each performance measure is separately determined and equally weighted. ROIC for each year in the performance period is defined as operating profit, net of tax, divided by the average of beginning and ending equity and long-term debt for the relevant fiscal year. The pre-established definitions of operating profit and ROIC for the Fiscal 2024-2026 awards are determined on each fiscal year’s respective total week basis and include adjustments for acquisitions and dispositions of any business(es) during any single fiscal year with annualized sales exceeding $1 billion in the aggregate; certain nonrecurring write-offs or charges related to strategic restructuring transactions, the discontinuation of a significant product line, changes in tax laws or other laws or provisions, or accounting principles which, in each case, have an impact on reported results that exceed $50 million in the aggregate during any fiscal year; and changes in foreign exchange rates, similar to the Fiscal 2024 MIP. Also similar to the Fiscal 2024 MIP, the LDC Committee included in the pre-established definitions of operating profit and ROIC an adjustment for the impact of any store closures as a result of a pandemic in excess of $1 billion, and for operating profit, an adjustment for expenses in excess of $50 million that were not already included in the pre-established metrics for the performance period and that would not otherwise have been incurred but for a pandemic.
In Fiscal 2023 and Fiscal 2022, the LDC Committee granted performance share awards that were structured similarly to the Fiscal 2024-2026 awards, although the Fiscal 2022-2024 awards have a different payout curve (90% threshold and 110% maximum), the Fiscal 2023-2025 and Fiscal 2022-2024 awards have a different
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48 | The Home Depot 2025 Proxy Statement |
payout at threshold performance as noted above, and the pre-established definitions of operating profit for the Fiscal 2023-2025 and Fiscal 2022-2024 awards are determined on a 52-week basis. The Fiscal 2023-2025 and Fiscal 2022-2024 awards each provide for the grant of shares of our common stock at the end of the respective three-year period based on the achievement of average ROIC and average operating profit goals over that period, as follows (dollars in billions):
| | | | | | | | | | | |
Fiscal 2023-2025 Performance Shares | Threshold | Target | Maximum |
| Three-Year Average ROIC | 33.3 | % | 39.2 | % | 45.1 | % |
| Three-Year Average Operating Profit | $19.41 | $22.84 | $26.26 |
| Percent of Target Payout | 25 | % | 100 | % | 200 | % |
| | | | | | | | | | | |
Fiscal 2022-2024 Performance Shares | Threshold | Target | Maximum |
| Three-Year Average ROIC | 42.1 | % | 46.7 | % | 51.4 | % |
| Three-Year Average Operating Profit | $21.41 | $23.79 | $26.17 |
| Percent of Target Payout | 25 | % | 100 | % | 200 | % |
The pre-established definitions of operating profit and ROIC for the Fiscal 2023-2025 and Fiscal 2022-2024 performance share awards are essentially the same as those used for the Fiscal 2024-2026 awards, except that the pre-established definitions of operating profit and ROIC for the Fiscal 2023-2025 and Fiscal 2022-2024 awards contain an adjustment for the impact of any individual acquisition or disposition of a business with annualized sales of at least $1 billion (as opposed to acquisitions and dispositions with annualized sales exceeding $1 billion in the aggregate per the pre-established definitions for the Fiscal 2024-2026 awards). Dividend equivalents accrue on each of the performance share awards (as reinvested shares) and will be paid upon payout of the award based on the actual number of shares earned.
Performance Share Results. The performance period for the Fiscal 2022-2024 performance share awards ended on February 2, 2025. Over the three-year period, the Company achieved an average operating profit of $22.24 billion and an average ROIC of 39.4%, as calculated pursuant to the terms of the awards. As a result, the NEOs earned 25.6% of their Fiscal 2022-2024 awards, reflecting results slightly above the threshold level for average operating profit and below the threshold level for average ROIC. Pursuant to the pre-established definition of operating profit for the Fiscal 2022-2024 awards, operating profit was adjusted up by $73.0 million due to changes in currency exchange rates in Fiscal 2022, Fiscal 2023 and Fiscal 2024 and down by $146.0 million due to acquisitions. Pursuant to the pre-established definition of ROIC for the Fiscal 2022-2024 awards, ROIC was calculated as operating profit, net of tax, including the same adjustments to operating profit reflected above, divided by the average of the beginning and ending equity and long-term debt, which was adjusted down by $18.1 billion due to acquisitions. Average operating profit and average ROIC over the three-year period without any adjustments were $22.42 billion and 37.5%, respectively, which was below the target level but above the threshold level for average operating profit and below the threshold level for average ROIC. The NEOs earned the following shares under the award, which include reinvested accrued dividends:
| | | | | | | | | | | |
| Name | Value at Date of Grant(1)
(3/23/2022) | Shares Earned Upon Certification of Performance Following
End of Performance
Period (2/2/2025) | Value of Earned Shares at
End of Performance
Period(2) (2/2/2025) |
| Edward P. Decker | $5,099,749 | | 4,414 | | $1,818,865 | |
| Richard V. McPhail | $1,374,729 | | 1,190 | | $490,308 | |
| Ann-Marie Campbell | $1,399,776 | | 1,211 | | $499,241 | |
William D. Bastek | $349,706 | | 302 | | $124,725 |
| Teresa Wynn Roseborough | $949,882 | | 822 | | $338,783 | |
Matthew A. Carey | $1,149,940 | | 995 | | $410,135 | |
(1) Reflects the grant date fair value.
(2) Reflects the value based upon the closing stock price of $411.98 on January 31, 2025, the last trading day of Fiscal 2024.
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The Home Depot 2025 Proxy Statement | 49 |
Performance Share Program Change for Fiscal 2025. For the Fiscal 2025-2027 performance shares granted in March 2025, the Company shifted the target setting approach to address business volatility. In prior years, the Company has utilized a three-year average annual target for ROIC and operating profit. For Fiscal 2025-2027 performance shares, the Company will establish annual targets for ROIC and operating profit at the outset of the three-year performance period, with each year’s target based on a pre-established rate of change applied to the prior year’s actual results. The payout will be calculated by determining the average three-year performance, ensuring a continued focus on a three-year performance cycle.
Performance-Based Restricted Stock. In March 2024, we granted performance-based restricted stock awards that were forfeitable if operating profit was less than 90% of the MIP operating profit target for Fiscal 2024. Dividends on the restricted stock awards are accrued and not paid out unless the performance goal is met. Once the performance goal is met, cash dividends are paid on the shares of restricted stock. The performance goal was met for Fiscal 2024. As a result, the restricted stock will vest 50% on each of the 30- and 60-month anniversaries of the grant date.
Stock Options. In March 2024, we granted stock options with an exercise price equal to the fair market value of our stock, which is defined as the market closing price on the date of grant. The options vest 25% on each of the second, third, fourth and fifth anniversaries of the grant date. Option re-pricing is expressly prohibited by our Omnibus Plan without shareholder approval.
Deferred Compensation Plans
In addition to the FutureBuilder 401(k) Plan (a broad-based tax-qualified plan), our executive officers can participate in two nonqualified deferred compensation plans for our management and highly-compensated associates:
•The Deferred Compensation Plan For Officers (solely funded by the individuals who participate in the plan); and
•The THD Restoration Plan, which provides a Company matching contribution equal to 3.5% of the amount of salary and annual cash incentive earned by a management-level associate in excess of the Internal Revenue Service annual compensation limit for tax-qualified plans, payable in shares of common stock of the Company upon retirement or other employment termination.
The plans are designed to permit participants to accumulate income for retirement and other personal financial goals. The Deferred Compensation Plan For Officers and the THD Restoration Plan are described in the notes to the Nonqualified Deferred Compensation table on page 61. Deferred compensation arrangements are common executive programs, and we believe that these arrangements help us in the recruitment and retention of executive talent; however, we do not view nonqualified deferred compensation as a significant element of our compensation programs. None of these plans provides above-market or preferential returns. Perquisites
We provide very limited perquisites to our NEOs and do not view them as a significant element of our compensation program. We do not provide tax reimbursements, or gross-ups, on perquisites to our NEOs.
Our NEOs who joined the Company prior to Fiscal 2009 participate in a death-benefit-only program, under which they are entitled to a $400,000 cash payment upon death if they are employed by the Company at that time. For executive officers with ten years of service with the Company, the benefit is paid upon death even if they are no longer employed by the Company. In Fiscal 2009, we discontinued the death-benefit-only program for any new executive officers. Currently, all of our NEOs except for Ms. Roseborough (who joined the Company in November 2011) and Mr. Bastek (who became an executive officer of the Company in March 2023) participate in the program and have met the service requirement and are therefore entitled to death benefit coverage.
For security reasons, the Company requests that Mr. Decker travel by Company aircraft, including travel for personal reasons. We also permit non-business use of Company aircraft by other active NEOs on a more limited basis.
Other Benefits
Our NEOs have the option to participate in various employee benefit programs, including medical, dental, disability and life insurance benefit programs. These benefit programs are generally available to all full-time
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50 | The Home Depot 2025 Proxy Statement |
associates. We also provide all associates, including our NEOs, with the opportunity to purchase our common stock through payroll deductions at a 15% discount through our ESPP, a nondiscriminatory, tax-qualified plan. All associates, including our NEOs, are also eligible to participate in our charitable matching gift program through The Home Depot Foundation.
MANAGEMENT OF COMPENSATION-RELATED RISK
We employ a number of mechanisms to mitigate the chance of our compensation programs encouraging excessive risk-taking, including those described below.
| | |
Regular Risk Assessment |
As discussed above under “Mitigating Compensation Risk” beginning on page 43, the LDC Committee undertakes a review and risk assessment of our compensation policies and practices on at least an annual basis. |
|
Anti-Hedging Policy |
The Company has adopted a policy that prohibits all associates, officers and directors from entering into hedging or monetization transactions designed to limit the financial risk of owning Company stock. These include prepaid variable forward contracts, equity swaps, collars, exchange funds and other similar transactions, as well as speculative transactions in derivatives of the Company’s securities, such as puts, calls, options (other than those granted under a Company compensation plan) or other derivatives. |
|
| Anti-Pledging Policy |
The Company prohibits all Section 16 officers, including any executive officers and directors from pledging shares of our common stock as collateral, including to secure any indebtedness, and from opening margin accounts using our common stock. |
|
Executive Compensation Clawback Policy |
As discussed above under “Governance Best Practices—Corporate Governance Guidelines,” we have an Executive Compensation Clawback Policy, which applies to all of our executive officers and is set forth in our Corporate Governance Guidelines. The policy includes both a requirement for (i) the recoupment of erroneously awarded incentive compensation in the event of a financial restatement, without regard to the fault of the executive officer, and (ii) the recoupment, at the discretion of the Board or LDC Committee, of any bonus, incentive payment, equity award or other compensation (in whole or in part) awarded to or received by an executive officer if the compensation was based on any financial results or operating metrics that were achieved as a result of that executive officer’s knowing or intentional fraudulent or illegal conduct or if the executive officer engaged in any intentional misconduct that caused the Company material financial or reputational harm. |
| | |
Stock Ownership and Retention Guidelines |
Our Executive Stock Ownership and Retention Guidelines require our NEOs to hold shares of common stock with a value equal to the specified multiples of base salary indicated below. This program assists in focusing executives on long-term success and shareholder value. Shares owned outright, whether directly or indirectly, restricted stock, and shares acquired pursuant to the ESPP, the FutureBuilder 401(k) Plan, and the THD Restoration Plan are counted towards this requirement. Unearned performance shares and unexercised stock options are not counted toward this requirement. Newly hired and promoted executives have four years to satisfy the requirements and must hold all shares received upon vesting of equity awards (net of shares withheld to pay taxes) until the requirements are met. As of March 7, 2025, all NEOs employed by the Company complied with the stock ownership and retention guidelines and held the following multiples of base salary (rounded to the nearest whole multiple): |
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The Home Depot 2025 Proxy Statement | 51 |
| | | | | | | | |
| Multiple of Base Salary |
| Name | Current Ownership | Guideline |
| Edward P. Decker | 34x | 6x |
Richard V. McPhail | 19x | 4x |
Ann-Marie Campbell | 32x | 4x |
William D. Bastek | 11x | 4x |
Teresa Wynn Roseborough | 11x | 4x |
Although we have not adopted a formal policy regarding the timing of equity award grants, including stock option grants, the Company-wide annual equity grants are made on a predetermined schedule. Company-wide annual equity grants, including the annual equity grants to the NEOs, are approved at the LDC Committee meeting (or Board meeting, in the case of the CEO) typically held in late February but are awarded effective as of the date of the March meeting of the LDC Committee, which is generally scheduled at least a year in advance and is several weeks after the approval. Throughout the year, equity awards are made to new hires, promoted associates, and, in some circumstances, for retention purposes or as a reward for exceptional performance. In each of these cases, the effective grant date for these mid-year awards is the date of the next regularly-scheduled quarterly LDC Committee meeting. The exercise price of each of our stock option grants is the market closing price on the effective grant date. In Fiscal 2024, the LDC Committee (or our Board, in the case of the CEO) did not take into account material nonpublic information when determining the timing and terms of equity award grants, and the Company did not time the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation.
SEVERANCE AND CHANGE IN CONTROL ARRANGEMENTS
The employment arrangements for our NEOs do not entitle them to severance payments upon employment termination. We also do not have any change in control agreements with our executives. Since Fiscal 2013, our standard form of equity award agreement has provided for accelerated vesting if the executive is terminated without cause within 12 months following a change in control, and our Omnibus Plan incorporates this “double-trigger” change in control provision into the plan for awards issued after May 2022. Prior to Fiscal 2013, our equity awards provided for accelerated vesting solely upon a change in control regardless of any termination of employment. As of February 2, 2025, two outstanding restricted stock awards held by Mr. Decker contained such provisions. Those awards have since vested in accordance with their terms, and there are no remaining equity awards outstanding that vest solely upon a change in control. In the event the value of any accelerated vesting constitutes an “excess parachute payment,” the executive would be subject to a 20% excise tax on such amount, and the amount would not be tax-deductible by the Company.
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52 | The Home Depot 2025 Proxy Statement |
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation during the last three fiscal years paid to or earned by (1) our CEO; (2) our CFO; (3) the three other most highly compensated executive officers who were serving as executive officers as of the end of Fiscal 2024; and (4) an individual who would have been among the Company’s three most highly compensated executive officers, other than the CEO and CFO, but for the fact that such individual was no longer serving as an executive officer at the end of Fiscal 2024 (collectively referred to as NEOs).
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| SUMMARY COMPENSATION TABLE |
Name, Principal Position and Year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(2) (3) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($)(4) (5) | Total ($) |
Edward P. Decker Chair, President and Chief Executive Officer | | | |
| 2024 | 1,426,923 | | — | | 9,043,035 | | 2,199,952 | | 2,743,532 | | — | | 161,237 | | 15,574,678 | |
| 2023 | 1,400,000 | | — | | 8,543,529 | | 2,109,958 | | 2,290,880 | | — | | 74,885 | | 14,419,252 | |
| 2022 | 1,369,712 | | — | | 8,263,788 | | 2,039,958 | | 2,848,936 | | — | | 97,395 | | 14,619,789 | |
Richard V. McPhail
Executive Vice President and Chief Financial Officer | | | |
| 2024 | 959,223 | — | | 2,675,709 | | 639,993 | | 930,841 | | — | | 27,763 | | 5,233,530 | |
| 2023 | 903,692 | — | | 2,415,890 | | 584,955 | | 745,190 | | — | | 25,628 | | 4,675,355 | |
| 2022 | 872,154 | — | | 2,276,663 | | 549,966 | | 934,310 | | — | | 28,064 | | 4,661,157 | |
Ann-Marie Campbell Senior Executive Vice President | | |
| 2024 | 1,042,885 | | — | | 3,324,193 | | 799,991 | | 1,261,535 | | — | | 22,985 | | 6,451,589 | |
| 2023 | 940,829 | | — | | 2,543,245 | | 709,939 | | 852,262 | | — | | 23,165 | | 5,069,440 | |
| 2022 | 893,308 | | — | | 2,319,245 | | 559,982 | | 955,544 | | — | | 23,613 | | 4,751,692 | |
William D. Bastek Executive Vice President – Merchandising | | | |
| 2024 | 741,346 | | — | | 2,254,515 | | 549,988 | | 734,875 | | — | | 45,808 | | 4,326,533 | |
Teresa Wynn Roseborough Executive Vice President, General Counsel and Secretary | | | |
| 2024 | 798,746 | | — | | 1,657,163 | | 390,947 | | 772,968 | | — | | 22,151 | | 3,641,977 | |
| 2023 | 759,923 | | — | | 1,582,510 | | 379,955 | | 626,637 | | — | | 31,363 | | 3,380,388 | |
Matthew A. Carey Former Executive Vice President(6) | | | |
| 2024 | 892,742 | | — | | 1,963,890 | | 473,963 | | 908,810 | | — | | 19,642 | | 4,259,048 | |
| 2023 | 893,462 | | — | | 1,915,699 | | 459,987 | | 736,763 | | — | | 31,228 | | 4,037,139 | |
| 2022 | 863,192 | | — | | 2,041,162 | | 584,925 | | 923,692 | | — | | 22,663 | | 4,435,634 | |
(1)Fiscal 2024 contained 53 weeks, compared to 52 weeks in each of Fiscal 2023 and Fiscal 2022, so Fiscal 2024 salary amounts reflect one additional week of pay. In addition, the amount of salary actually received in any year may differ from the annual base salary amount due to the timing of payroll periods and the timing of changes in base salary, which typically occur in April or following a mid-year promotion.
(2)The amounts in the “Stock Awards” and “Option Awards” columns do not represent amounts the NEOs received or are entitled to receive. Rather, amounts set forth in the “Stock Awards” and “Option Awards” columns represent the aggregate grant date fair value of awards granted in Fiscal 2024, Fiscal 2023 and Fiscal 2022 computed in accordance with FASB ASC Topic 718. The assumptions made in the valuation of the option awards are set forth in Note 9 to the Company’s consolidated financial statements included in the 2024 Form 10-K. The valuation of performance-based restricted stock, performance share awards, and share equivalents granted under the THD Restoration Plan is based on the closing stock price on the grant date.
(3)Amounts for Fiscal 2024 reflect the grant date fair value of performance share and performance-based restricted stock awards granted to the NEOs during Fiscal 2024, plus the value of share equivalents under the THD Restoration Plan in Fiscal 2024, as set forth in the table below. For NEOs employed at the end of Fiscal 2024, Fiscal 2024 Restoration Plan contributions reflect contributions for two plan years since the January 31, 2024 and January 31, 2025 allocation dates both fell within Fiscal 2024.
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The Home Depot 2025 Proxy Statement | 53 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name | Grant Date Fair Value for Performance Shares ($) | | Grant Date Fair Value for Performance-Based Restricted Stock ($) | | Value of Share Equivalents Under THD Restoration Plan ($) |
| Edward P. Decker | 5,499,754 | | 3,299,775 | | 243,506 |
| Richard V. McPhail | 1,599,914 | | 959,872 | | 115,923 |
| Ann-Marie Campbell | 1,999,701 | | 1,199,744 | | 124,749 |
William D. Bastek | 1,374,650 | | 824,944 | | 54,921 |
Teresa Wynn Roseborough | 977,170 | | 586,225 | | 93,768 |
Matthew A. Carey | 1,184,752 | | 710,774 | | 68,364 |
The grant date fair value of the performance shares reflected in the table above is computed based upon the probable outcome of the performance goals as of the grant date, in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. For the performance-based restricted stock, this value is the same as the value calculated assuming the maximum level of performance under the awards.
The value of the performance share awards granted in Fiscal 2024 as of the grant date, assuming that the maximum level of the performance goals will be achieved, is as follows for each of the NEOs:
| | | | | | | | | | | |
| Name | Grant Date Value of Performance Shares Assuming Maximum Performance ($) |
| Edward P. Decker | 10,999,508 |
| Richard V. McPhail | 3,199,829 |
| Ann-Marie Campbell | 3,999,402 |
William D. Bastek | 2,749,300 |
Teresa Wynn Roseborough | 1,954,340 |
Matthew A. Carey | 2,369,503 |
(4)Incremental cost of perquisites is based on actual cost to the Company. The incremental cost of personal use of Company aircraft is based on the average direct cost of use per hour, which includes fuel, maintenance, crew travel and lodging expense, landing and parking fees, and engine restoration cost. Any applicable deadhead flights are allocated to the NEOs. No incremental cost for personal use of the Company aircraft was attributed to an NEO where the plane was already traveling to the destination for business reasons. Since our aircraft are used primarily for business travel, we do not include the fixed costs that do not change based on usage, such as crew salaries, depreciation, hangar rent and insurance. In addition to the incremental cost of personal aircraft use reported in the “All Other Compensation” column and in footnote 5 below, we impute taxable income to the NEOs for any personal aircraft use in accordance with Internal Revenue Service regulations. We do not provide tax reimbursements, or “gross-ups,” on these amounts to executive officers.
(5)The following table identifies perquisites and personal benefits for Fiscal 2024 that are required to be quantified under SEC rules. These consist of personal aircraft use, certain matching contributions to charitable organizations on behalf of the NEOs, and certain matching contributions made by the Company under the FutureBuilder 401(k) Plan.
| | | | | | | | | | | |
| Name | Personal Use of Airplane ($) | Matching Charitable Contributions ($) | FutureBuilder 401(k) Plan Company Match ($) |
| Edward P. Decker | 93,202 | | 40,000 | | 10,062 | |
| Richard V. McPhail | — | | 5,000 | | 12,181 | |
| Ann-Marie Campbell | — | | — | | 12,156 | |
William D. Bastek | — | | 25,000 | | 7,587 | |
Teresa Wynn Roseborough | — | | 3,900 | | 7,380 | |
Matthew A. Carey | — | | — | | 9,761 | |
Other perquisites and personal benefits for the NEOs for Fiscal 2024 were long-term disability insurance premiums; the annual cost of premiums for the insurance policies underlying the death-benefit-only program for Mr. Decker, Mr. McPhail, Ms. Campbell and Mr. Carey (prior to his retirement); small gifts associated with certain corporate events for Mr. Bastek, Mr. Decker and Ms. Roseborough; transportation costs to a corporate event for Mr. Bastek, Mr. McPhail, Ms. Roseborough and Mr. Carey; for Mr. Decker, amounts related to personal security; and for Mr. Bastek, tickets to certain entertainment events. We do not provide tax gross-ups on any of these perquisites or personal benefits.
(6)Effective June 3, 2024, Mr. Carey stepped down from his role as Executive Vice President – Customer Experience, remaining as Executive Vice President until he retired from the Company on December 31, 2024. Mr. Carey’s salary and other terms of employment were not adjusted in connection with his transition to Executive Vice President in June 2024, as he remained employed through the date of his retirement to facilitate the transition process.
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54 | The Home Depot 2025 Proxy Statement |
MATERIAL TERMS OF NEO EMPLOYMENT ARRANGEMENTS
This section describes employment arrangements in effect for the NEOs during Fiscal 2024, all of which are “at-will” employment arrangements set forth in the offer letters provided to the NEOs at the time of hire, promotion or change in role, as applicable. Because the offer letters reflect at-will employment, they have no set duration and consequently no renewal or extension provisions. The letters are all filed as exhibits to the 2024 Form 10-K.
The offer letters state each NEO’s initial base salary and annual MIP target as a percentage of base salary, payout of which is subject to the achievement of pre-established goals. Both the base salary and MIP target are subject to adjustment upon review by the LDC Committee, or independent members of the Board in the case of our CEO. The Fiscal 2024 base salary and MIP target as a percentage of base salary for each NEO are set forth above in the Compensation Discussion and Analysis.
In addition, the offer letters provide that the NEOs are eligible to participate in other benefit programs available to salaried associates and/or officers. These benefits include the ESPP, the Deferred Compensation Plan for Officers, the THD Restoration Plan, and, for certain NEOs, the death-benefit-only insurance program. Any provisions in the letters regarding termination of employment are discussed below in the section entitled “Potential Payments Upon Termination or Change in Control” beginning on page 62. For security reasons, Mr. Decker’s offer letter states that the Company has requested that he travel, whenever practicable, by Company aircraft, including when traveling for personal purposes. The Company does not provide a tax gross-up for any imputed compensation resulting from personal use of Company aircraft.
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The Home Depot 2025 Proxy Statement | 55 |
FISCAL 2024 GRANTS OF PLAN-BASED AWARDS
The following table sets forth the plan-based awards granted to the NEOs pursuant to Company plans during Fiscal 2024.
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FISCAL 2024 GRANTS OF PLAN-BASED AWARDS |
| | | | | | | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Under-lying Options (#) | Exer-cise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards(4) ($) |
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | Estimated Future Payouts Under Equity Incentive Plan Awards |
| Name | Grant Date(1)(3) | Approval Date(3) | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) |
| Edward P. Decker | | | | | | | | | | | |
| Performance Shares | 3/20/2024 | 2/22/2024 | — | | — | | — | | 3,576 | | 14,307 | | 28,614 | | — | | — | | — | | 5,499,754 | |
| Annual Stock Grant | 3/20/2024 | 2/22/2024 | — | | — | | — | | — | | 8,584 | | — | | — | | — | | — | | 3,299,775 | |
| Annual Option Grant | 3/20/2024 | 2/22/2024 | — | | — | | — | | — | | — | | — | | — | | 22,976 | | 384.41 | | 2,199,952 | |
MIP(2) | 2/22/2024 | 2/22/2024 | 560,000 | | 2,800,000 | | 5,600,000 | | — | | — | | — | | — | | — | | — | | — | |
| Richard V. McPhail | | | | | | | | | | | | |
| Performance Shares | 3/20/2024 | 2/22/2024 | — | | — | | — | | 1,040 | | 4,162 | | 8,324 | | — | | — | | — | | 1,599,914 | |
| Annual Stock Grant | 3/20/2024 | 2/22/2024 | — | | — | | — | | — | | 2,497 | | — | | — | | — | | — | | 959,872 | |
| Annual Option Grant | 3/20/2024 | 2/22/2024 | — | | — | | — | | — | | — | | — | | — | | 6,684 | | 384.41 | | 639,993 | |
MIP(2) | 2/22/2024 | 2/22/2024 | 190,000 | | 950,000 | | 1,900,000 | | — | | — | | — | | — | | — | | — | | — | |
| Ann-Marie Campbell | | | | | | | | | | | |
| Performance Shares | 3/20/2024 | 2/22/2024 | — | | — | | — | | 1,300 | | 5,202 | | 10,404 | | — | | — | | — | | 1,999,701 | |
| Annual Stock Grant | 3/20/2024 | 2/22/2024 | — | | — | | — | | — | | 3,121 | | — | | — | | — | | — | | 1,199,744 | |
| Annual Option Grant | 3/20/2024 | 2/22/2024 | — | | — | | — | | — | | — | | — | | — | | 8,355 | | 384.41 | | 799,991 | |
MIP(2) | 2/22/2024 | 2/22/2024 | 257,500 | | 1,287,500 | | 2,575,000 | | — | | — | | — | | — | | — | | — | | — | |
William D. Bastek | | | | | | | | | | | |
| Performance Shares | 3/20/2024 | 2/22/2024 | — | | — | | — | | 894 | | 3,576 | | 7,152 | | — | | — | | — | | 1,374,650 | |
| Annual Stock Grant | 3/20/2024 | 2/22/2024 | — | | — | | — | | — | | 2,146 | | — | | — | | — | | — | | 824,944 | |
| Annual Option Grant | 3/20/2024 | 2/22/2024 | — | | — | | — | | — | | — | | — | | — | | 5,744 | | 384.41 | | 549,988 | |
MIP(2) | 2/22/2024 | 2/22/2024 | 150,000 | | 750,000 | | 1,500,000 | | — | | — | | — | | — | | — | | — | | — | |
Teresa Wynn Roseborough | | | | | | | | | | | |
Performance Shares | 3/20/2024 | 2/22/2024 | — | | — | | — | | 635 | | 2,542 | | 5,084 | | — | | — | | — | | 977,170 | |
Annual Stock Grant | 3/20/2024 | 2/22/2024 | — | | — | | — | | — | | 1,525 | | — | | — | | — | | — | | 586,225 | |
Annual Option Grant | 3/20/2024 | 2/22/2024 | — | | — | | — | | — | | — | | — | | — | | 4,083 | | 384.41 | | 390,947 | |
MIP(2) | 2/22/2024 | 2/22/2024 | 157,775 | | 788,877 | | 1,577,754 | | — | | — | | — | | — | | — | | — | | — | |
Matthew A. Carey | | | | | | | | | | | |
| Performance Shares | 3/20/2024 | 2/22/2024 | — | | — | | — | | 770 | | 3,082 | | 6,164 | — | | — | | — | | 1,184,752 | |
| Annual Stock Grant | 3/20/2024 | 2/22/2024 | — | | — | | — | | — | | 1,849 | — | | — | | — | | — | | 710,774 | |
| Annual Option Grant | 3/20/2024 | 2/22/2024 | — | | — | | — | | — | | — | | — | | — | | 4,950 | | 384.41 | | 473,963 | |
MIP(2) | 2/22/2024 | 2/22/2024 | 185,503 | 927,515 | 1,855,030 | — | | — | | — | | — | | — | | — | | — | |
(1)All awards were granted under the Omnibus Plan other than MIP awards.
(2)Ultimate payouts under the Fiscal 2024 MIP are based on achievement of pre-established performance goals, as described in the Compensation Discussion and Analysis. The amount in the “Threshold” column for the Fiscal 2024 MIP reflects the minimum possible payout based upon assumed achievement of the threshold performance levels, as discussed below under “Terms of Plan-Based Awards Granted to NEOs for Fiscal 2024—Fiscal 2024 MIP.” For discussion of the threshold, target and maximum performance levels, see discussion under “Annual Cash Incentive—Performance Goals” starting on page 45 in the Compensation Discussion and Analysis above. (3)Annual equity awards under the Omnibus Plan were approved at the February 22, 2024 meeting of the LDC Committee (and on February 22, 2024, by the independent Board members for Mr. Decker) but were granted effective as of March 20, 2024. See discussion under “—Management of Compensation-Related Risk—Equity Grant Procedures” on page 52 in the Compensation Discussion and Analysis above. (4)The amounts do not represent amounts the NEOs received or are entitled to receive. Rather, amounts represent the grant date fair value of awards granted in Fiscal 2024 computed in accordance with FASB ASC Topic 718. The assumptions made in the valuation of the option awards are set forth in Note 9 to the Company’s consolidated financial statements as filed with the SEC in the 2024 Form 10-K. The valuation of restricted stock and performance share awards is based on the closing stock price on the grant date.
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56 | The Home Depot 2025 Proxy Statement |
TERMS OF PLAN-BASED AWARDS GRANTED TO NEOS FOR FISCAL 2024
The LDC Committee approved the Fiscal 2024 annual grants of performance shares, performance-based restricted stock and stock options under the Omnibus Plan for the NEOs other than Mr. Decker. Mr Decker’s awards were approved by the independent members of the Board.
| | | | | |
Award Type | Award Terms |
Performance Shares | For Fiscal 2024, 50% of the annual equity grant provided to the NEOs was in the form of performance shares. The terms and conditions of the awards are described under “—Elements of our Compensation Programs—Long-Term Incentives” in the Compensation Discussion and Analysis above. Upon termination of employment without cause within 12 months following a change in control, the executive would be entitled to a pro rata portion of performance shares based on actual performance for the portion of the performance period before a change in control, plus a pro rata portion of the target performance shares for the portion of the performance period after a change in control. In the event of death, disability or termination of employment at or after age 60 with at least five years of continuous service (“retirement”) other than for cause, the executive or his or her estate will be entitled to receive any performance shares ultimately earned, and in the event of death or disability before retirement, a pro rata portion of any shares ultimately earned. Because Mr. Decker, Ms. Roseborough and Mr. Carey had each reached age 60 with more than five years of service at the time of the grant of the awards or during Fiscal 2024, they are each “retirement eligible” and their performance share awards are non-forfeitable, although payout, if any, is based on achievement of the performance goals. Dividend equivalents accrue on performance share awards (as reinvested shares) and are paid upon the payout of the award based on the actual number of shares earned. |
Annual Stock Grants | For Fiscal 2024, 30% of the annual equity grant provided to the NEOs was in the form of performance-based restricted stock, which was forfeitable if Fiscal 2024 operating profit was less than 90% of the MIP target for Fiscal 2024. If the performance target is met, as it was for Fiscal 2024, the awards are then subject to time-based vesting. The annual restricted stock grants vest 50% on each of the 30-month and 60-month anniversaries of the grant date, subject to continued employment through the vesting date, or upon termination due to death, disability or termination without cause within 12 months following a change in control. In addition, once the executive becomes retirement eligible, the restricted stock becomes non-forfeitable, provided the performance target is met, but it is not transferable before the time-based vesting dates. Because Mr. Decker and Ms. Roseborough were retirement eligible at the time of the grant and Mr. Carey became retirement eligible during Fiscal 2024, their awards became non-forfeitable when the performance condition was met but remain non-transferable until the time-based vesting dates. Dividends on the restricted stock are accrued (as cash dividends) and not paid out to executive officers unless the performance target is met. Once the performance target is met, cash dividends are paid on the shares of restricted stock. |
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The Home Depot 2025 Proxy Statement | 57 |
| | | | | |
Award Type | Award Terms |
| Annual Stock Option Grants | For Fiscal 2024, 20% of the annual equity grant provided to the NEOs was in the form of nonqualified stock options. The stock option awards vest 25% per year on the second, third, fourth and fifth anniversaries of the grant date, subject to continued employment through the vesting date, or upon termination due to death, disability or termination without cause within 12 months following a change in control. In addition, the stock option awards become non-forfeitable once the executive becomes retirement eligible but are not exercisable before the time-based vesting dates. Generally, stock options may be exercised, once vested, over the remainder of the ten-year option term, subject to continued employment or meeting the retirement eligibility requirements. Because Mr. Decker, Ms. Roseborough and Mr. Carey were each retirement eligible at the time of the grant or became retirement eligible during Fiscal 2024, their option awards are non-forfeitable but are not exercisable until the time-based vesting dates. |
Fiscal 2024 MIP | Each of the NEOs participated in the Fiscal 2024 MIP, the Company’s annual cash-based incentive plan. The Fiscal 2024 MIP payout was based upon achievement of pre-established performance goals, as described under “—Elements of Our Compensation Programs—Annual Cash Incentive” in the Compensation Discussion and Analysis starting on page 45 above. The LDC Committee established the following threshold, target and maximum payout levels for Fiscal 2024 for the NEOs under the MIP. The threshold, target and maximum potential payouts under the MIP for these NEOs reflect the following percentages of base salary at the end of Fiscal 2024: |
| | | | | | | | | | | |
| Percentage of Base Salary |
| Name | Threshold | Target | Maximum |
| Edward P. Decker | 40 | % | 200 | % | 400 | % |
| Richard V. McPhail | 20 | % | 100 | % | 200 | % |
| Ann-Marie Campbell | 25 | % | 125 | % | 250 | % |
William D. Bastek | 20 | % | 100 | % | 200 | % |
Teresa Wynn Roseborough | 20 | % | 100 | % | 200 | % |
Matthew A. Carey | 20 | % | 100 | % | 200 | % |
| | | | | |
| Because the operating profit threshold must be met for any payout to occur, the threshold percentage above reflects the minimum possible payout based upon assumed achievement of that threshold. In addition, once an executive becomes retirement eligible, if the executive retires prior to the MIP payment date, the executive receives a payout that is prorated based on the time the executive served in his or her role during the fiscal year. Retirement eligible executives employed on or after the first day of a fiscal month receive MIP credit for that full fiscal month. Since Mr. Carey was retirement eligible and employed with the Company during the last fiscal month of Fiscal 2024, he was eligible for a full Fiscal 2024 MIP payout based on actual performance upon his retirement. The actual amounts earned by the NEOs based on achievement of Fiscal 2024 MIP performance goals are reported in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. |
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58 | The Home Depot 2025 Proxy Statement |
OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END
The following table sets forth information regarding outstanding equity awards as of the end of Fiscal 2024 granted to the NEOs.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END |
| | Option Awards | | Stock Awards |
| Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Option Exercise Price ($) | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | Equity Incentive Plan Awards: Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) |
| Edward P. Decker | 8/6/2004 | — | | — | | — | | — | | | 2,500 | | 1,029,950 | | — | | — | |
| 8/18/2005 | — | | — | | — | | — | | | 4,000 | | 1,647,920 | | — | | — | |
| 3/23/2016 | 32,897 | | — | | 130.22 | 3/22/2026 | | — | | — | | — | | — | |
| 3/22/2017 | 19,350 | | — | | 147.36 | 3/21/2027 | | — | | — | | — | | — | |
| 3/21/2018 | 13,660 | | — | | 178.02 | 3/20/2028 | | — | | — | | — | | — | |
| 3/27/2019 | 16,308 | | — | | 189.25 | 3/26/2029 | | — | | — | | — | | — | |
| 3/25/2020 | 9,253 | | 3,085 | | 181.76 | 3/24/2030 | | 996 | | 410,332 | | — | | — | |
| 11/19/2020 | 3,720 | | 1,240 | | 270.93 | 11/18/2030 | | 253 | | 104,231 | | — | | — | |
| 3/24/2021 | 7,894 | | 7,895 | | 292.75 | 3/23/2031 | | 1,266 | | 521,567 | | — | | — | |
| 3/23/2022 | 7,434 | | 22,303 | | 317.05 | 3/22/2032 | | 2,649 | | 1,091,335 | | 4,414 | | 1,818,865 | |
| 3/22/2023 | — | | 32,164 | | 282.61 | 3/21/2033 | | 6,148 | | 2,532,853 | | 19,479 | | 8,024,820 | |
| 3/20/2024 | — | | 22,976 | | 384.41 | 3/19/2034 | | 8,584 | | 3,536,436 | | 29,129 | | 12,000,740 | |
| Richard V. McPhail | 3/23/2016 | 3,369 | | — | | 130.22 | 3/22/2026 | | — | | — | | — | | — | |
| 3/22/2017 | 5,989 | | — | | 147.36 | 3/21/2027 | | — | | — | | — | | — | |
| 3/21/2018 | 4,036 | | — | | 178.02 | 3/20/2028 | | — | | — | | — | | — | |
| 3/27/2019 | 4,818 | | — | | 189.25 | 3/26/2029 | | — | | — | | — | | — | |
| 11/21/2019 | 7,282 | | — | | 218.54 | 11/20/2029 | | — | | — | | — | | — | |
| 3/25/2020 | 8,412 | | 2,805 | | 181.76 | 3/24/2030 | | 1,651 | | 680,179 | | — | | — | |
| 11/19/2020 | 3,720 | | 1,240 | | 270.93 | 11/18/2030 | | 461 | | 189,923 | | — | | — | |
| 3/24/2021 | 3,947 | | 3,947 | | 292.75 | 3/23/2031 | | 1,153 | | 475,013 | | — | | — | |
| 3/23/2022 | 2,004 | | 6,013 | | 317.05 | 3/22/2032 | | 1,301 | | 535,986 | | 1,190 | | 490,308 | |
| 3/22/2023 | — | | 8,917 | | 282.61 | 3/21/2033 | | 3,104 | | 1,278,786 | | 5,400 | | 2,224,507 | |
| 3/20/2024 | — | | 6,684 | | 384.41 | 3/19/2034 | | 2,497 | | 1,028,714 | | 8,474 | | 3,491,094 | |
| Ann-Marie Campbell | 3/25/2020 | 9,253 | | 3,085 | | 181.76 | 3/24/2030 | | 1,816 | | 748,156 | | — | | — | |
| 11/19/2020 | 3,720 | | 1,240 | | 270.93 | 11/18/2030 | | 461 | | 189,923 | | — | | — | |
| 3/24/2021 | 4,824 | | 4,825 | | 292.75 | 3/23/2031 | | 1,409 | | 580,480 | | — | | — | |
| 3/23/2022 | 2,040 | | 6,123 | | 317.05 | 3/22/2032 | | 1,325 | | 545,874 | | 1,211 | | 499,241 | |
| 3/22/2023 | — | | 8,917 | | 282.61 | 3/21/2033 | | 3,104 | | 1,278,786 | | 5,400 | | 2,224,507 | |
| 11/16/2023 | — | | 1,666 | | 306.44 | 11/15/2033 | | 407 | | 167,676 | | — | | — | |
| 3/20/2024 | — | | 8,355 | | 384.41 | 3/19/2034 | | 3,121 | | 1,285,790 | | 10,591 | | 4,363,448 | |
| William D. Bastek | 3/23/2016 | 3,783 | | — | | 130.22 | 3/22/2026 | | — | | — | | — | | — | |
| 3/22/2017 | 2,303 | | — | | 147.36 | 3/21/2027 | | — | | — | | — | | — | |
| 3/21/2018 | 1,645 | | — | | 178.02 | 3/20/2028 | | — | | — | | — | | — | |
| 2/27/2019 | 4,716 | | — | | 183.67 | 2/26/2029 | | — | | — | | — | | — | |
| 3/27/2019 | 4,077 | | — | | 189.25 | 3/26/2029 | | — | | — | | — | | — | |
| 3/25/2020 | 2,733 | | 912 | | 181.76 | 3/24/2030 | | 536 | | 220,821 | | — | | — | |
| 3/24/2021 | 1,228 | | 1,228 | | 292.75 | 3/23/2031 | | 359 | | 147,901 | | — | | — | |
| 3/23/2022 | 510 | | 1,530 | | 317.05 | 3/22/2032 | | 331 | | 136,365 | | 302 | | 124,725 | |
| 8/18/2022 | 402 | | 1,209 | | 325.21 | 8/17/2032 | | 384 | | 158,200 | | — | | — | |
| 3/22/2023 | — | | 6,402 | | 282.61 | 3/21/2033 | | 1,786 | | 735,796 | | 1,569 | | 646,199 | |
| 3/20/2024 | — | | 5,744 | | 384.41 | 3/19/2034 | | 2,146 | | 884,109 | | 7,281 | | 2,999,556 | |
| Teresa Wynn Roseborough | 3/25/2020 | — | | 2,524 | | 181.76 | 3/24/2030 | | 1,035 | | 426,399 | | — | | — | |
| 3/24/2021 | — | | 3,158 | | 292.75 | 3/23/2031 | | 506 | | 208,462 | | — | | — | |
| 3/23/2022 | — | | 4,155 | | 317.05 | 3/22/2032 | | 624 | | 257,076 | | 822 | | 338,783 | |
| 3/22/2023 | — | | 5,792 | | 282.61 | 3/21/2033 | | 1,106 | | 455,650 | | 3,508 | | 1,445,027 | |
| 3/20/2024 | — | | 4,083 | | 384.41 | 3/19/2034 | | 1,525 | | 628,270 | | 5,176 | | 2,132,235 | |
| | | | | |
The Home Depot 2025 Proxy Statement | 59 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| OUTSTANDING EQUITY AWARDS AT 2024 FISCAL YEAR-END |
| | Option Awards | | Stock Awards |
| Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Option Exercise Price ($) | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | Equity Incentive Plan Awards: Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) |
| Matthew A. Carey | 3/25/2020 | 9,253 | | 3,085 | | 181.76 | | 3/24/2030 | | 1,001 | | 412,392 | | — | | — | |
| 3/24/2021 | 3,859 | | 3,860 | | 292.75 | | 3/23/2031 | | 621 | | 255,840 | | — | | — | |
| 3/23/2022 | 1,676 | | 5,029 | | 317.05 | | 3/22/2032 | | 600 | | 247,188 | | 995 | | 410,135 | |
| 5/19/2022 | 462 | | 1,386 | | 287.76 | | 5/18/2032 | | 119 | | 49,026 | | — | | — | |
| 3/22/2023 | — | | 7,012 | | 282.61 | | 3/21/2033 | | 1,346 | | 554,525 | | 4,246 | | 1,749,424 | |
| 3/20/2024 | — | | 4,950 | | 384.41 | | 3/19/2034 | | 1,849 | | 761,751 | | 6,275 | | 2,585,188 | |
(1)Unless indicated otherwise, stock options for each NEO vest on the 25% on the second, third, fourth and fifth anniversaries of the grant date.
(2)Unless indicated otherwise, restricted stock awards vest 50% on each of the 30-month and 60-month anniversaries of the grant date.
(3)The final installment of the 2004 and 2005 restricted stock grants to Mr. Decker vested on March 13, 2025.
The reported value of the restricted stock awards is based on the $411.98 closing stock price on January 31, 2025, the last trading day of Fiscal 2024.
(3)The NEOs’ performance share awards are earned upon the completion of the three-year performance periods ending February 2, 2025, February 1, 2026, and January 31, 2027, based on achievement of pre-established average ROIC and operating profit goals, as described above in the Compensation Discussion and Analysis under “—Elements of Our Compensation Programs—Long-Term Incentives—Performance Shares” starting on page 48 and under “Terms of Plan-Based Awards Granted to NEOs for Fiscal 2024—Performance Shares” on page 57. The awards are paid out, if at all, following certification by the LDC Committee of the achievement of the goals after completion of the applicable performance period. For the Fiscal 2022-2024 award, the shares reported are the actual amounts earned based on the performance level met over the performance period, as certified by the LDC Committee on February 27, 2025, and include dividend equivalents accrued on the award. For the Fiscal 2023-2025 award and the Fiscal 2024-2026 award, the reported number of shares includes dividend equivalents accrued through February 2, 2025, assumes achievement of the target level of performance for the Fiscal 2023-2025 award, and assumes achievement of the maximum level of performance for the Fiscal 2024-2026 award, each in accordance with SEC requirements. The reported value of the performance share awards is based on the closing stock price on January 31, 2025, the last trading day of Fiscal 2024. OPTIONS EXERCISED AND STOCK VESTED IN FISCAL 2024
The following table sets forth the options exercised and the shares of restricted stock and performance shares that vested for the NEOs during Fiscal 2024.
| | | | | | | | | | | | | | | | | | | | |
| OPTIONS EXERCISED AND STOCK VESTED IN FISCAL 2024 |
| Option Awards | | Stock Awards |
| Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | | Number of Shares Acquired on Vesting (#) | | Value Realized on Vesting ($)(1) |
Edward P. Decker | 35,987 | | 9,085,401 | | | 25,085 | | (2) | 9,383,771 | |
| Richard V. McPhail | 15,296 | | 3,986,473 | | | 10,601 | | | 3,993,321 | |
| Ann-Marie Campbell | 57,542 | | 12,964,917 | | | 13,106 | | | 4,919,742 | |
William D. Bastek | 2,969 | | 892,060 | | | 3,661 | |
| 1,374,296 | |
Teresa Wynn Roseborough | 39,982 | | 7,807,039 | | | 9,075 | | (2) | 3,397,029 | |
Matthew A. Carey | 50,239 | | 8,850,473 | | | 14,082 | | (2) | 5,430,955 | |
(1)The value realized on vesting is based on the Company’s closing price on the applicable vesting date. These amounts represent the vesting of stock awards granted in 2019 to 2022 and the vesting of certain stock awards withheld to pay taxes for NEOs who are retirement-eligible, as described in footnote 2 below.
(2)For Mr. Decker, includes 5,051 shares withheld to pay taxes on restricted stock grants that became non-forfeitable on February 22, 2024. For Ms. Roseborough, includes 910 shares withheld to pay taxes on restricted stock grants that became non-forfeitable on February 22, 2024. For Mr. Carey, includes 3,002 shares withheld to pay taxes on restricted stock grants that became non-forfeitable on November 23, 2024. The remaining shares under each of these grants continue to be restricted until the time-based vesting dates are reached.
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60 | The Home Depot 2025 Proxy Statement |
NONQUALIFIED DEFERRED COMPENSATION FOR FISCAL 2024
The following table sets forth information regarding the participation of the NEOs in the Company’s nonqualified deferred compensation plans for Fiscal 2024.
| | | | | | | | | | | | | | | | | | | | |
| NONQUALIFIED DEFERRED COMPENSATION FOR FISCAL 2024 |
| Executive Contributions in Last FY ($)(3) | Registrant Contributions in Last FY ($)(4) | Aggregate Earnings in Last FY ($)(5) | Aggregate Withdrawals/ Distributions ($) | | Aggregate Balance at Last FYE ($)(6) |
| Name | |
| Edward P. Decker | | | | | | |
THD Restoration Plan(1) | N/A | 243,506 | | 590,387 | | — | | | 3,857,219 | |
Deferred Compensation Plan For Officers(2) | — | | — | | 204,809 | | — | | | 1,280,612 | |
| Richard V. McPhail | | | | | | |
THD Restoration Plan(1) | N/A | 115,923 | | 246,170 | | — | | | 1,605,685 | |
| Ann-Marie Campbell | | | | | | |
THD Restoration Plan(1) | N/A | 124,749 | | 386,629 | | — | | | 2,503,221 | |
William D. Bastek | | | | | | |
THD Restoration Plan(1) | N/A | 54,921 | | 58,189 | | — | | | 400,288 | |
Teresa Wynn Roseborough | | | | | | |
THD Restoration Plan(1) | N/A | 93,768 | | 193,321 | | — | | | 1,261,359 | |
Matthew A. Carey | | | | | | |
THD Restoration Plan(1) | N/A | 68,364 | | 438,854 | | — | | | 2,781,108 | |
(1)The THD Restoration Plan, an unfunded, nonqualified deferred compensation plan, provides management-level associates with a benefit equal to the matching contributions that they would have received under the Company’s FutureBuilder 401(k) Plan if certain Internal Revenue Code limitations were not in place. On January 31 of each year, the plan makes an allocation to participant accounts in an amount equal to the participant’s eligible earnings (generally, salary plus annual cash incentive award) during the prior calendar year minus the Internal Revenue Code limit for tax-qualified plans ($345,000 for 2024) multiplied by the current Company match level of 3.5%. This amount is then converted to units representing shares of the Company’s common stock. Stock units credited to a participant’s account are also credited with dividend equivalents at the same time, and in the same amount, as dividends are paid to shareholders. Participant account balances vest at the same time their account in the Company’s tax-qualified FutureBuilder 401(k) Plan vests, which provides for 100% cliff vesting after three years of service. A participant’s vested account balance is payable in shares of common stock on retirement or other employment termination. In-service withdrawals are not permitted.
(2)The Deferred Compensation Plan For Officers is an unfunded, nonqualified deferred compensation plan that allows officers to defer payment of up to 50% of base salary and up to 100% of annual cash incentive compensation until retirement or other employment termination. The Company makes no contributions to the Deferred Compensation Plan For Officers. Participants may also elect an in-service distribution during a designated calendar year or over a period of not more than ten years, or upon a change in control of the Company. Commencing at retirement after age 60 or one year thereafter, payment is made, at the participant’s election, in a single sum or equal annual installment payments over a period of not more than ten years, provided that distribution in a single sum is automatically made on termination for reasons other than retirement or disability. Participants direct the manner in which their account balances are deemed invested among an array of investment funds, and notional earnings are credited to participant accounts based on fund returns. Accounts are 100% vested at all times. The amount presented in the “Aggregate Earnings in Last FY” in the table above does not precisely equal the difference in the amount reported in the “Aggregate Balance at Last FYE” in the table above and the amount previously reported in the “Aggregate Balance at Last FYE” due to timing of market price variances.
(3)Executive contributions represent deferral of base salary and incentive awards under the MIP during Fiscal 2024, which amounts are also disclosed in the Fiscal 2024 Salary column and the Fiscal 2023 Non-Equity Incentive Plan Compensation column of the Summary Compensation Table. The THD Restoration Plan is non-elective, and participants cannot make contributions to it.
(4)All Company contributions to the THD Restoration Plan are included as compensation in the “Stock Awards” column of the Summary Compensation Table. The Company does not make contributions to the Deferred Compensation Plan For Officers.
(5)THD Restoration Plan earnings represent the change in the value of the underlying Company stock during Fiscal 2024 plus dividend equivalents that are credited at the same rate, and at the same time, that dividends are paid to all shareholders. Deferred Compensation Plan For Officers earnings represent notional returns on participant-selected investments.
(6)For the THD Restoration Plan, amounts in the aggregate balance for Mr. Decker, Mr. McPhail, Ms. Campbell, Ms. Roseborough, and Mr. Carey of $444,235, $211,674, $243,087, $62,916, and $532,233, respectively, were previously reported in the Summary Compensation Table.
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The Home Depot 2025 Proxy Statement | 61 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
Termination Without Cause or For Good Reason
The employment arrangements with our NEOs do not entitle them to severance payments upon employment termination. They would, however, be entitled to any vested benefits under Company plans in which they participate. Each of the NEOs is subject to non-competition and non-solicitation restrictions for periods ranging from 24 to 36 months post-termination. Each NEO is also subject to post-termination confidentiality restrictions.
Change in Control
The Company does not maintain change in control agreements for its executives. Since Fiscal 2013, our standard form of equity award agreement adopted by the LDC Committee has provided for accelerated vesting if the executive is terminated without cause within 12 months following a change in control, and our Omnibus Plan incorporates this “double-trigger” provision into the plan for all awards issued after May 2022. Prior to Fiscal 2013, our equity awards provided for accelerated vesting solely upon a change in control regardless of any termination of employment. As of February 2, 2025, two outstanding restricted stock awards held by Mr. Decker contained such provisions. Those awards have since vested in accordance with their terms, and there are no remaining equity awards outstanding that vest solely upon a change in control.
The following table sets forth the estimated value that the NEOs employed at the end of Fiscal 2024 would have been entitled to receive due to accelerated vesting of outstanding awards assuming a change in control of the Company occurred as of February 2, 2025, both with and without a termination of employment. In addition, in the event of a termination of employment, these NEOs would be entitled to receive vested benefits under Company plans in which they participate, including amounts under the THD Restoration Plan and, if applicable, the Deferred Compensation Plan For Officers, as set forth in the Nonqualified Deferred Compensation table on page 61 of this Proxy Statement. | | | | | | | | | | | | | | | | | | | | |
| CHANGE IN CONTROL |
| Change in Control Only | | Change in Control Followed by Termination Without Cause | | Total |
| Name | Value of Restricted Stock Awards ($)(1) | | Value of Additional Restricted Stock and Option Awards Vesting on Termination ($)(2) | Value of Performance Shares Vesting on Termination ($)(3) | | Assuming Change in Control AND Termination of Employment ($) |
| Edward P. Decker | 2,677,870 | | | 16,934,934 | | 12,441,384 | | | 32,054,188 | |
| Richard V. McPhail | — | | | 7,388,555 | | 3,533,140 | | | 10,921,695 | |
| Ann-Marie Campbell | — | | | 8,398,124 | | 3,982,611 | | | 12,380,735 | |
William D. Bastek | — | | | 3,876,305 | | 2,049,189 | | | 5,925,493 | |
Teresa Wynn Roseborough | — | | | 4,189,773 | | 2,225,104 | | | 6,414,877 | |
(1)Value reflects outstanding shares of restricted stock granted prior to Fiscal 2013, multiplied by a closing stock price of $411.98 on January 31, 2025. This restricted stock vested on March 13, 2025 and, accordingly, is no longer subject to acceleration upon a change in control.
(2)Value reflects outstanding shares of all restricted stock awards other than the grant described above in footnote 1, in each case multiplied by a closing stock price of $411.98 on January 31, 2025, and the intrinsic value as of January 31, 2025 of all outstanding unvested stock options, using the closing stock price of $411.98 on January 31, 2025.
(3)Value reflects the following: (a) for the Fiscal 2023-2025 performance share award, (i) shares that would have been earned based on 67.1% actual performance at the end of Fiscal 2024 multiplied by a ratio of 735 days in the performance period through February 2, 2025 to 1,099 total days in the performance period, plus (ii) target performance shares multiplied by the ratio of 364 days remaining in the performance period after February 2, 2025 to 1,099 total days in the performance period; and (b) for the Fiscal 2024-2026 performance share award, (i) shares that would have been earned based on 109.0% actual performance at the end of Fiscal 2024 multiplied by a ratio of 371 days in the performance period through February 2, 2025 to 1099 total days in the performance period, plus (ii) target performance shares multiplied by the ratio of 728 days remaining in the performance period after February 2, 2025 to 1099 total days in the performance period. In each case, the number of performance shares obtained is multiplied by a closing stock price of $411.98 on January 31, 2025 to determine the value as of the end of Fiscal 2024. Amounts include dividend equivalents accrued through the end of Fiscal 2024 converted into additional performance shares. Amounts do not include the value of the Fiscal 2022-2024 award because it was earned as of February 2, 2025, the last day of the performance period, and would be received regardless of whether there was a change in control and associated termination of employment.
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62 | The Home Depot 2025 Proxy Statement |
Termination Due to Death or Disability
Equity awards made to salaried associates, including the NEOs, generally provide for accelerated vesting of the award upon employment termination due to death or disability. The following table sets forth the estimated value of benefits that the NEOs employed at the end of Fiscal 2024 would have been entitled to receive assuming death or disability as of February 2, 2025. In addition, these NEOs would be entitled to receive vested benefits under Company plans in which they participate, including amounts under the THD Restoration Plan and, if applicable, the Deferred Compensation Plan For Officers, as set forth in the Nonqualified Deferred Compensation table on page 61 of this Proxy Statement. | | | | | | | | | | | | | | | | | |
| DEATH OR DISABILITY |
| Name | Value of Restricted Stock and Option Awards ($)(1) | Value of Performance Shares ($)(2) | | Death Benefit ($)(3) | Total
($) |
| Edward P. Decker | 19,612,804 | | 11,924,761 | | | 400,000 | | 31,937,566 | |
| Richard V. McPhail | 7,388,555 | | 1,640,504 | | | 400,000 | | 9,429,059 | |
| Ann-Marie Campbell | 8,398,124 | | 1,800,765 | | | 400,000 | | 10,598,889 | |
William D. Bastek | 3,876,305 | | 841,263 | | | N/A | 4,717,568 | |
Teresa Wynn Roseborough | 4,189,773 | | 2,131,173 | | | N/A | 6,320,946 | |
(1)Value reflects outstanding restricted stock at the end of Fiscal 2024, multiplied by a closing stock price of $411.98 on January 31, 2025, and outstanding unvested stock options based on the intrinsic value as of January 31, 2025, using the closing stock price of $411.98 on January 31, 2025.
(2)Value reflects the following: (a) for the Fiscal 2023-2025 performance share award, the prorated portion of shares that would have been earned based on 67.1% actual performance at the end of Fiscal 2024 multiplied by a ratio of 735 days in the performance period through February 2, 2025 to 1,099 total days in the performance period; and (b) for the Fiscal 2024-2026 performance share award, the prorated portion of shares that would have been earned based on 109.0% actual performance at the end of Fiscal 2024 multiplied by a ratio of 371 days in the performance period through February 2, 2025 to 1099 total days in the performance period. The number of performance shares obtained is multiplied by a closing stock price of $411.98 on January 31, 2025 to determine the value as of the end of Fiscal 2024. Amounts include dividend equivalents accrued through the end of Fiscal 2024 converted into additional performance shares. Amounts do not include the value of the Fiscal 2022-2024 award because it was earned as of February 2, 2025, the last day of the performance period, and would be received regardless of the individual’s death or disability and associated termination of employment.
(3)Value reflects a death benefit under the death-benefit-only program, which is only paid out upon death, not disability.
Retirement Eligibility of Continuing NEOs
With very few exceptions, equity awards made to salaried associates, including the NEOs, provide that the awards are no longer forfeitable upon retirement on or after age 60 with at least five years of continuous service with the Company. Mr. Decker and Ms. Roseborough are the only NEOs employed as of February 2, 2025 that had met this condition. The following table sets forth the estimated value of benefits that Mr. Decker and Ms. Roseborough would be entitled to receive as a result of their retirement eligibility as of February 2, 2025. Mr. Decker and Ms. Roseborough would also be entitled to the Fiscal 2024 MIP award, as disclosed in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table, on page 53 of the Proxy Statement, as well as amounts under the THD Restoration Plan and, if applicable, the Deferred Compensation Plan For Officers, as set forth in the Nonqualified Deferred Compensation table on page 61 of this Proxy Statement. | | | | | | | | | | | |
RETIREMENT ELIGIBILITY |
| Name | Value of Restricted Stock and Option Awards ($)(1) | Value of Performance Shares ($)(2) | Total
($) |
| Edward P. Decker | 16,934,934 | | 11,924,761 | | 28,859,696 | |
| Teresa Wynn Roseborough | 4,189,773 | | 2,131,173 | | 6,320,946 | |
(1)Value reflects restricted stock grants that have the retirement eligibility provision described above and that are outstanding at the end of Fiscal 2024, multiplied by a closing stock price of $411.98 on January 31, 2025, and unvested stock options that have the retirement eligibility provision, based on the intrinsic value as of January 31, 2025, using the closing stock price of $411.98 on January 31, 2025. The restricted stock grants would remain non-transferable, and the stock options would remain non-exercisable, until the time-based vesting dates.
(2)Value reflects the following: (a) for the Fiscal 2023-2025 performance share award, the shares that would have been earned based on
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The Home Depot 2025 Proxy Statement | 63 |
67.1% actual performance at the end of Fiscal 2024; and (b) for the Fiscal 2024-2026 performance share award, the shares that would have been earned based on 109.0% actual performance at the end of Fiscal 2024. The number of performance shares obtained is multiplied by a closing stock price of $411.98 on January 31, 2025 to determine the value as of the end of Fiscal 2024. Amounts include dividend equivalents accrued through the end of Fiscal 2024 converted into additional performance shares. Amounts do not include the value of the Fiscal 2022-2024 performance award because it was earned as of February 2, 2025, the last day of the performance period, and would be received regardless of the individual’s retirement.
Retirement of Former Executive in Fiscal 2024
Upon his retirement on December 31, 2024, Mr. Carey did not receive any severance benefits. As noted above, equity awards held by Mr. Carey provide that the awards are no longer forfeitable upon retirement on or after age 60 with five years of continuous service, which conditions Mr. Carey had met at the time of his retirement. The following table sets forth the estimated value of benefits that Mr. Carey was entitled to receive as a result of his retirement eligibility.
| | | | | | | | | | | |
RETIREMENT ELIGIBILITY |
| Name | Value of Restricted Stock and Option Awards ($)(1) | Value of Performance Shares ($)(2) | Total
($) |
Matthew A. Carey | 4,434,938 | | 2,582,291 | | 7,017,229 | |
(1) Value reflects restricted stock grants that have the retirement eligibility provision described above and are outstanding as of December 31, 2024, his retirement date from the Company, multiplied by a closing stock price of $388.99 on December 31, 2024, and unvested stock options that also have the retirement eligibility provision described above, based on the intrinsic value as of December 31, 2024, using the closing stock price of $388.99 on December 31, 2024. The restricted stock grants remain non-transferable, and the stock options remain non-exercisable, until the time-based vesting dates.
(2) Value reflects the following: (a) for the Fiscal 2022-2024 performance share award, the actual number of shares earned at the end of Fiscal 2024 based on 25.6% actual performance at the end of the three-year performance period; (b) for the Fiscal 2023-2025 performance share award, the shares that would have been earned based on 67.1% actual performance at the end of Fiscal 2024; and (c) for the Fiscal 2024-2026 performance share award, the shares that would have been earned based on 109.0% actual performance at the end of Fiscal 2024. The number of performance shares obtained is multiplied by a closing stock price of $411.98 on January 31, 2025 to determine the value as of the end of Fiscal 2024. Amounts include dividend equivalents accrued through the end of Fiscal 2024 converted into additional performance shares.
Upon his retirement, Mr. Carey was also entitled to vested benefits under Company plans in which he participated. These benefits included his Fiscal 2024 MIP award, as disclosed in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table on page 53 of the Proxy Statement, and amounts under the THD Restoration Plan as set forth in the Nonqualified Deferred Compensation table on page 61 of this Proxy Statement. | | | | | |
64 | The Home Depot 2025 Proxy Statement |
PAY VERSUS PERFORMANCE
As required by Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive “compensation actually paid,” or “CAP,” and certain financial performance of the Company. CAP does not reflect the actual amount of compensation earned by or paid to our NEOs during the applicable years and does not necessarily reflect how the LDC Committee evaluated compensation decisions in light of Company performance. For further information concerning the Company’s pay-for-performance philosophy and how the Company aligns executive compensation with the Company’s performance, refer to the Compensation Discussion and Analysis beginning on page 37.
