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The Home Depot 2025 Proxy Statement | i |
COMMONLY USED OR DEFINED TERMS
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| TERM | | DEFINITION |
| 1997 Plan | | 1997 Omnibus Stock Incentive Plan |
2024 annual meeting | | Annual meeting of shareholders held on May 16, 2024 |
2024 Form 10-K | | Annual Report on Form 10-K for Fiscal 2024 |
| Board | | Board of Directors of the Company |
| By-Laws | | By-Laws of the Company (amended and restated effective February 23, 2023) |
| CDP | | The not-for-profit organization formerly known as the Carbon Disclosure Project |
| CEO | | Chief Executive Officer |
| CFO | | Chief Financial Officer |
| Company | | The Home Depot, Inc. and its consolidated subsidiaries |
| COO | | Chief Operating Officer |
| Directors Plan | | Nonemployee Directors’ Deferred Stock Compensation Plan |
| ESPP | | Amended and Restated Employee Stock Purchase Plan |
| EVP-HR | | Executive Vice President – Human Resources |
| Exchange Act | | The Securities Exchange Act of 1934, as amended |
| FASB ASC Topic 718 | | Financial Accounting Standards Board Accounting Standards Codification Topic 718 |
| FCPA | | U.S. Foreign Corrupt Practices Act |
Fiscal 2025 | | Fiscal year ending February 1, 2026 (includes 52 weeks) |
Fiscal 2024 | | Fiscal year ended February 2, 2025 (includes 53 weeks) |
| Fiscal 2023 | | Fiscal year ended January 28, 2024 (includes 52 weeks) |
| Fiscal 2022 | | Fiscal year ended January 29, 2023 (includes 52 weeks) |
| Fiscal 2021 | | Fiscal year ended January 30, 2022 (includes 52 weeks) |
| Fiscal 2020 | | Fiscal year ended January 31, 2021 (includes 52 weeks) |
| Fiscal 2013 | | Fiscal year ended February 2, 2014 (includes 52 weeks) |
| IT | | Information technology |
| KPMG | | KPMG LLP, the Company’s independent registered public accounting firm |
| LDC Committee | | Leadership Development and Compensation Committee |
| Meeting | | 2025 Annual Meeting of Shareholders of the Company |
| MIP | | Management Incentive Plan |
| MRO | | Maintenance, repair and operations |
| NACD | | National Association of Corporate Directors |
| NCG Committee | | Nominating and Corporate Governance Committee |
| NEO | | Named executive officer |
| Non-U.S. ESPP | | Non-U.S. Employee Stock Purchase Plan |
| Notice | | Notice of Internet Availability of Proxy Materials |
| NYSE | | New York Stock Exchange |
| Omnibus Plan | | Omnibus Stock Incentive Plan, as Amended and Restated May 19, 2022 |
| Pay Governance | | Pay Governance LLC, the LDC Committee’s independent compensation consultant |
Political Activity Policy | | The Company’s Political Activity and Government Relations Policy |
| ROIC | | Return on invested capital |
| Say-on-Pay | | Advisory vote to approve executive compensation as presented in this Proxy Statement |
| SEC | | The U.S. Securities and Exchange Commission |
SRS | | SRS Distribution Inc. |
| TCFD | | Task Force on Climate-related Financial Disclosures |
| THD Restoration Plan | | The Home Depot FutureBuilder Restoration Plan |
| TSR | | Total Shareholder Return |
Website addresses are included throughout this Proxy Statement for reference only. The information contained in, or accessible through, these websites is not incorporated by reference into this Proxy Statement.
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ii | The Home Depot 2025 Proxy Statement |
THE HOME DEPOT 2025 PROXY STATEMENT HIGHLIGHTS
This summary highlights information contained in this Proxy Statement. This summary does not contain all of the information you should consider. Please read the entire Proxy Statement carefully before voting as it contains important information about matters upon which you are being asked to vote.
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Date: | Thursday, May 22, 2025 |
Time: | 9:00 a.m., Eastern Time |
| Place: | Virtual meeting site: www.virtualshareholdermeeting.com/HD2025 |
Record Date: | March 24, 2025 |
Admission: | You will need the 16-digit control number found on your proxy card, the Notice, or the voting information form provided by your bank or broker to attend and participate in the Meeting. |
| Meeting Archive: | A recording of the Meeting will be available for replay at https://ir.homedepot.com under “Events and Presentations” shortly after the Meeting. |
To facilitate the participation of our shareholders, associates and other members of our community, the Meeting will be held in a virtual format only. Shareholders can participate from any geographic location with internet connectivity. For more information on attending the Meeting, voting your shares during the Meeting, and submitting questions, please see “About the 2025 Annual Meeting of Shareholders” beginning on page 77 of this Proxy Statement. ITEMS OF BUSINESS
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Proposal | | Board
Recommendation | Page
Number |
| 1. | Election of 12 directors named in this Proxy Statement for one-year terms | For each nominee | |
| 2. | Ratification of appointment of KPMG LLP as our independent registered public accounting firm | For | |
| 3. | Advisory vote to approve executive compensation as set forth in this Proxy Statement (“Say-on-Pay”) | For | |
4. | Shareholder proposal regarding independent Board Chair | Against | |
5. | Shareholder proposal regarding a biodiversity impact and dependency assessment | Against | |
6. | Shareholder proposal regarding a report on packaging policies for plastics | Against | |
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| Shareholders of record may vote without attending the Meeting by one of the following methods: |
Vote by Internet | Vote by Telephone | Vote by Mail | Vote by Mobile Device |
www.proxyvote.com | 1-800-690-6903 | Complete and mail your proxy card | Scan the QR code on your proxy card, Notice, or voting instruction form |
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Your vote is important. Whether or not you plan to attend the Meeting,
we urge you to vote and submit your proxy in advance of the Meeting over the Internet,
by phone, by mail, or by mobile device. |
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The Home Depot 2025 Proxy Statement | iii |
COMPANY CULTURE: DOING THE RIGHT THING (see page 4) The Company’s culture is based on our servant leadership philosophy represented by the inverted pyramid, which puts primary importance on our customers and our associates — particularly our frontline, hourly associates — by positioning them at the top, with senior management at the base in a support role. Our culture is brought to life through our core values, which serve as the foundation of our business and the guiding principles behind the decisions we make every single day.
Our values also guide our efforts to create an environment that will help us attract and retain skilled associates in the competitive marketplace for talent. We believe our culture helps set us apart and provides a distinct competitive advantage for The Home Depot. We empower our associates to deliver a superior customer experience, and we reward associates when they provide excellent customer service and embody The Home Depot values. We routinely assess our culture and values through associate surveys. Our officers and other leaders also participate in programs designed to build and strengthen our culture and to help support the organizational changes necessary to create an interconnected customer experience. That focus on culture extends to our Board as described more fully beginning on page 15. The Board and its committees provide oversight and guidance to support the continued focus on and importance of culture to our Company. FISCAL 2024 COMPANY PERFORMANCE (see page 38) Despite continued pressure on home improvement demand driven by ongoing macroeconomic uncertainty and persistently high interest rates, our strategy allowed us to continue to execute at a high level in Fiscal 2024. Our results for Fiscal 2024, which reflects 53 weeks, include the following:
•Net sales increased by 4.5% to $159.5 billion.
•Operating income decreased by 0.8% to $21.5 billion.
•Net earnings decreased by 2.2% to $14.8 billion and diluted earnings per share decreased by 1.3% to $14.91. Adjusted(1) diluted earnings per share decreased by 0.1% to $15.24.
•Generated $19.8 billion in operating cash flow.
•Returned value to shareholders during Fiscal 2024 through $8.9 billion in dividends and $0.6 billion in share repurchases.
•Generated ROIC(1) of 31.3%, compared to 36.7% in Fiscal 2023.
The 53rd week in Fiscal 2024 added approximately $2.5 billion of net sales and increased diluted earnings per share by approximately $0.30.
FISCAL 2024 EXECUTIVE COMPENSATION HIGHLIGHTS (see pages 37-52) We pay for performance:
• A significant portion of our NEOs’ target compensation is linked to Company performance:
¢ Approximately 90.8% for our CEO
¢ Approximately 81.5% for our other NEOs
• 100% of NEO annual cash incentive compensation and 80% of NEO annual equity compensation are tied to Company performance against pre-established, specific, measurable performance goals
We seek to mitigate compensation-related risk through a variety of means:
• Compensation risk assessment performed on at least an annual basis
• An executive compensation clawback policy applicable to all executive officers that extends beyond mandated requirements and, among other things, allows the LDC Committee, in its discretion, to recoup compensation, including equity awards, following intentional misconduct that causes the Company material financial or reputational harm
1 The Company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). As used above and throughout this Proxy Statement, adjusted diluted earnings per share and ROIC are non-GAAP financial measures. Refer to Appendix A of this Proxy Statement for an explanation of these non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures. | | | | | |
iv | The Home Depot 2025 Proxy Statement |
• Anti-hedging policy applicable to all associates, officers, and directors and prohibition on pledging Company stock and opening margin accounts containing Company stock for officers subject to Section 16 of the Exchange Act (“Section 16 officers”) and directors
• Robust stock ownership and retention guidelines for executive officers
• No change in control agreements
CORPORATE GOVERNANCE BEST PRACTICES (see pages 1-14) Our corporate governance policies reflect best practices:
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| Shareholder Protections | | Board Engagement and Oversight |
| ü | Annual election of directors, with majority voting standard in uncontested director elections | | ü | Annual Board strategy session and review of the Company’s strategic plan |
| ü | Shareholder ability to call special meetings and act by written consent | | ü | Director overboarding policy |
| ü | A market standard shareholder right of proxy access | | ü | Director store and facility walk policy |
| ü | Independent Lead Director | | ü | Board education and orientation program |
| ü | Approximately 92% of director nominees and all Board committee members are independent | | ü | Annual Board and committee self-evaluations, including individual director interviews |
| ü | Director mandatory retirement age (age 72) | | ü | Management succession policy set forth in Corporate Governance Guidelines |
| ü | No shareholder rights plan, also referred to as a “poison pill” and annual Board-level review of Shareholder Rights Plan Policy | | ü | Independent directors meet without management at each regularly scheduled meeting |
SHAREHOLDER ENGAGEMENT PROGRAM (see page 8-9) The Company values the views of its shareholders. For a number of years, the Company has had an engagement program with institutional shareholders. Topics discussed in these engagements include our strategy, corporate governance matters including Board and management oversight of material risks and opportunities, our executive compensation program, and the alignment between our business priorities and our efforts around sustainability and human capital management. In Fiscal 2024, we proactively sought engagement with our 40 largest institutional shareholders, who represented approximately 44% of our outstanding shares. We ultimately engaged with many of these holders as well as a number of other institutional shareholders on these topics. We also sought feedback on each shareholder proposal on the ballot at our 2024 annual meeting. We value the feedback these engagements provide and intend to continue these efforts, on which our Board or its committees, as applicable, receives periodic updates.
Together with our commitment to corporate governance best practices, this feedback has informed several changes in recent years. These changes included enhancements to our disclosures and the introduction of a page dedicated to disclosure of sustainability and human capital management matters to better enable our investors to access key information about our oversight and management of these areas on our Investor Relations website, which can be found at https://ir.homedepot.com/sustainability. This website highlights the three key pillars of focus for our sustainability and human capital management initiatives: Focus on Our People, Operate Sustainably and Strengthen Our Communities.
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The Home Depot 2025 Proxy Statement | v |
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Director Nominees | Board Committee Composition** |
Name | Director
Since | Position | Audit | LDC | NCG | Finance |
Gerard J. Arpey* | 2015 | Partner, Emerald Creek Group, LLC | | | ü | ü |
Ari Bousbib* | 2007 | Chairman and Chief Executive Officer, IQVIA Holdings Inc. | ü | | | Chair |
Jeffery H. Boyd* | 2016 | Former Chairman and Chief Executive Officer, Booking Holdings Inc. | | | Chair | ü |
Gregory D. Brenneman* Lead Director | 2000 | Executive Chairman, CCMP Capital Advisors, LP | | | | |
J. Frank Brown* Audit Committee Financial Expert | 2011 | Former Managing Director and Chief Risk Officer, General Atlantic LLC | Chair | | | ü |
| Edward P. Decker | 2022 | Chair, President and Chief Executive Officer, The Home Depot, Inc. | | | | |
| Wayne M. Hewett* | 2014 | Chairman, Cambrex Corporation | ü | Chair | | |
| Manuel Kadre* | 2018 | Chairman and Chief Executive Officer, Kollective Auto Group | ü | | | ü |
| Stephanie C. Linnartz* | 2018 | Former President, Chief Executive Officer and Director, Under Armour, Inc. | ü | ü | | |
Paula A. Santilli* | 2022 | Chief Executive Officer, Latin America Foods, PepsiCo, Inc. | | | ü | ü |
| Caryn Seidman-Becker* | 2022 | Chair and Chief Executive Officer, CLEAR Secure, Inc. | | ü | ü | |
Asha Sharma* New Director Nominee | N/A | Corporate Vice President and Head of Product, AI Platform, Microsoft Corporation | ü | ü | | |
* All director nominees are independent except Mr. Decker, our Chair, President and Chief Executive Officer. ** The table reflects anticipated Board committee assignments, subject to each nominee’s election to the Board at the Meeting. Please see “Committees of the Board of Directors” on pages 2-3 for information on our current Board Committee Composition. |
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vi | The Home Depot 2025 Proxy Statement |
The Company has a long-standing commitment to strong corporate governance, which promotes the long-term interests of shareholders, strengthens Board and management accountability, and helps build public trust in the Company. The Board has adopted policies and processes that foster effective Board oversight of matters such as strategy, risk management, financial and other controls, compliance, culture, sustainability, human capital management, and management succession planning. The Board regularly reviews our major governance documents, policies, and processes in the context of current corporate governance trends, regulatory changes, and recognized best practices. The following sections provide an overview of our corporate governance structure, policies, and processes, including key aspects of our Board operations.
BOARD OF DIRECTORS
Our Board currently has 11 members: Gerard J. Arpey, Ari Bousbib, Jeffery H. Boyd, Gregory D. Brenneman, J. Frank Brown, Edward P. Decker, Wayne M. Hewett, Manuel Kadre, Stephanie C. Linnartz, Paula A. Santilli and Caryn Seidman-Becker. Each director who served during Fiscal 2024 was, and each current director nominee continues to be, independent other than Mr. Decker, our Chair, President and CEO. As discussed further below, the Board has nominated Asha Sharma, whom the Board has also determined to be independent, to serve on the Board. Effective upon her election, the size of the Board will be increased to 12 members.
BOARD LEADERSHIP
On at least an annual basis, our Board assesses its leadership structure, including the appointment of the Chair of the Board. Our Lead Director is annually elected by the independent members of the Board. The Board believes that, given the Company’s current circumstances, having a combined Chair and CEO, a strong independent Lead Director, and Board committees composed entirely of independent directors currently provides the best Board leadership structure for the Company. This structure, together with our other robust corporate governance practices, provides strong independent oversight of management while ensuring clear strategic alignment throughout the Company.
Our Chair, with input from our Lead Director, proposes strategic priorities to the Board and communicates the Board’s guidance to management, which is ultimately responsible for implementing the Company’s key strategic initiatives. Gregory D. Brenneman currently serves as our Lead Director and brings to the role a high level of energy, engagement and oversight. He has broad and varied business experience, including in various CEO roles; has served on our Board through multiple business cycles; and as Lead Director, has guided a number of successful leadership transitions and management changes. This experience makes Mr. Brenneman a particularly valued advisor to our Chair, President and CEO, and provides him with a deep level of understanding of our business that enhances his independence from management and his ability to provide strong oversight. Our Lead Director:
•Chairs Board meetings when the Chair is not present, including presiding at executive sessions of the Board (without management present) at every regularly scheduled Board meeting;
•Works with management to determine the information and materials provided to Board members;
•Approves Board meeting agendas, schedules and other information provided to the Board;
•Consults regularly with the Chair on other matters that are pertinent to the Board and the Company;
•Has the authority to call meetings of the independent directors;
•Is available for communication and consultation with major shareholders upon request;
•Serves as liaison between the Chair and the independent directors; and
•Conducts annual interviews of each independent director as part of the annual evaluation process.
To maximize the effectiveness of the Lead Director role, our Lead Director does not serve on any standing Board committees but is available to attend meetings of any of our Board committees and serve as a resource for the committees as needed.
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The Home Depot 2025 Proxy Statement | 1 |
ATTENDANCE AT BOARD, COMMITTEE AND ANNUAL SHAREHOLDER MEETINGS
Directors are expected to attend all Board meetings and meetings of the Committees of the Board on which they serve. Directors are also expected to attend the annual meeting of shareholders, absent extraordinary circumstances. The Board met 13 times during Fiscal 2024. Each incumbent director attended at least 75% of the meetings of the Board and of the committees of which he or she was a member during Fiscal 2024, and all incumbent directors attended the 2024 annual meeting. All director nominees are expected to attend the Meeting.
COMMITTEES OF THE BOARD OF DIRECTORS
During Fiscal 2024, the Board had standing Audit, LDC, NCG, and Finance Committees. The charter for each committee is available on the Company’s Investor Relations website at https://ir.homedepot.com under “Corporate Governance > Committee Members & Charters.” The current members of our committees, the principal functions of each committee and the number of meetings held in Fiscal 2024 are shown below. Each member of each committee during Fiscal 2024 was, and each current member continues to be, independent under our Director Independence Standards, as well as applicable SEC rules and NYSE listing standards.
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Committee | | Committee Functions |
Audit: J. Frank Brown, Chair Ari Bousbib Wayne M. Hewett Manuel Kadre Stephanie C. Linnartz Number of Meetings: 9 | • | Oversees the Company’s accounting and financial reporting process, as well as the integrity of the Company’s consolidated financial statements and its internal control over financial reporting, including the audits thereof |
• | Has primary responsibility for overseeing risk assessment and risk management |
• | Has primary responsibility for overseeing data protection and cybersecurity risks |
• | Reviews the Company’s compliance with legal and regulatory requirements, including the FCPA and other anti-bribery laws |
• | Reviews the qualifications, performance and independence of the Company’s independent registered public accounting firm |
• | Oversees the performance of the Company’s internal audit function |
• | Reviews the Company’s compliance programs, including the whistleblower program, and the Company’s monitoring of such programs |
Leadership Development and Compensation: Wayne M. Hewett, Chair Stephanie C. Linnartz Caryn Seidman-Becker Number of Meetings: 5 | • | Reviews and evaluates the performance of executive officers |
• | Reviews and recommends compensation of directors and the CEO and approves compensation of other executive officers, as well as overseeing compliance with and administering the Company’s executive compensation clawback policy |
• | Reviews and recommends policies, practices and procedures concerning compensation strategy and other human capital management matters |
• | Administers stock incentive and stock purchase plans, including determining grants of equity awards under the plans |
• | Undertakes annual review and risk assessment of compensation policies and practices |
• | Oversees senior management succession planning policies and procedures |
• | Monitors the independence of its compensation consultant |
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2 | The Home Depot 2025 Proxy Statement |
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Committee | | Committee Functions |
Nominating and Corporate Governance: Jeffery H. Boyd, Chair Gerard J. Arpey Paula A. Santilli Caryn Seidman-Becker Number of Meetings: 4 | • | Makes recommendations for director nominees |
• | Reviews and monitors the performance and composition of the Board and its committees |
• | Reviews the independence of directors |
• | Develops the Company’s corporate governance practices and procedures and oversees the related risks |
• | Provides oversight and makes recommendations for Company corporate social responsibility and environmental efforts and their alignment with business priorities, including matters such as safety, sustainability initiatives, responsible sourcing, and Company political activity |
• | Oversees communications between directors and shareholders |
• | Reviews and approves related person transactions involving executive officers and directors |
• | Oversees policies and procedures regarding insider trading, to the extent not expressly allocated to other Board committees |
• | Oversees director engagement, education and orientation activities |
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Finance: Ari Bousbib, Chair Gerard J. Arpey Jeffery H. Boyd J. Frank Brown Manuel Kadre Paula A. Santilli Number of Meetings: 4 | • | Oversees the management of the Company’s long-range financial outlook and finance-related risks |
• | Reviews and recommends policies, practices and strategies concerning financial matters, including the Company’s capital structure, investments, use of derivatives, dividends, share repurchases, credit programs, credit ratings, tax strategy, and insurance |
• | Oversees the Company’s annual capital plan, significant capital investments, and strategies with respect to mergers and acquisitions activity |
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• | Oversees the Company’s digital strategy and the execution of that strategy |
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In determining the composition of the committees, the Board and the NCG Committee considered directors’ skills and qualifications in key areas relevant to the Company and each committee’s responsibilities. The table below lists the key skills and qualifications held by the members of our committees. For more information about the skills, qualifications and attributes of our Board members, see “2025 Director Nominees” beginning on page 17. | | | | | | | | | | | | | | | | | | | | |
| Audit | | Leadership Development and Compensation | | Nominating and Corporate Governance | | Finance |
| Strategic Management | | Strategic Management | | Strategic Management | | Strategic Management |
| Retail/Merchandising | | Retail/Merchandising | | Retail/Merchandising | | Retail/Merchandising |
| CEO Experience | | CEO Experience | | CEO Experience | | CEO Experience |
| Supply Chain | | Supply Chain | | Human Capital Management | | Supply Chain |
| IT | | IT | | IT | | IT |
| Risk Management | | E-commerce | | E-commerce | | E-commerce |
| Finance | | Human Capital Management | | Governance | | Finance |
| Cybersecurity | | Marketing/Communications | | Marketing/Communications | | Real Estate |
| International | | International | | International | | International |
Sustainability | | Sustainability | | Sustainability | | Sustainability |
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The Home Depot 2025 Proxy Statement | 3 |
Subject to the election of the 12 nominees discussed below under “Election of Directors,” the members of the committees following the Meeting are expected to be as follows. The Board has determined that Ms. Sharma satisfies the independence requirements applicable to the Board and the committees on which she would serve following her election pursuant to our Director Independence Standards, as well as applicable SEC rules and NYSE listing standards.
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| Audit | | Leadership Development and Compensation | | Nominating and Corporate Governance | | Finance |
J. Frank Brown, Chair | | Wayne M. Hewett, Chair | | Jeffery H. Boyd, Chair | | Ari Bousbib, Chair |
Ari Bousbib | | Stephanie C. Linnartz | | Gerard J. Arpey | | Gerard J. Arpey |
Wayne M. Hewett | | Caryn Seidman-Becker | | Paula A. Santilli | | Jeffery H. Boyd |
Manuel Kadre | | Asha Sharma | | Caryn Seidman-Becker | | J. Frank Brown |
Stephanie C. Linnartz | | | | | | Manuel Kadre |
Asha Sharma | | | | | | Paula A. Santilli |
COMPANY CULTURE: DOING THE RIGHT THING
The Home Depot has a strong commitment to ethics and integrity, and we are a values- and culture-centric company. Our values are present in the way we do business and are more formally codified in the Company’s Business Code of Conduct and Ethics. These values and our culture are also reflected in our annual voluntary sustainability and human capital management-related disclosures, which can be found on our website at https://ir.homedepot.com/sustainability, and which is discussed in more detail under “Oversight of Sustainability and Human Capital Management” beginning on page 7 below. Our focus on culture extends to our Board, and we look for directors who focus on doing the right thing and have a servant-leader mindset. The Board and its committees provide oversight and guidance to support the continued focus on and importance of culture to our Company. Inverted Pyramid and Values Wheel
The Company’s culture is based on our servant leadership philosophy represented by the inverted pyramid, which puts primary importance on our customers and our associates by positioning them at the top, with senior management at the base in a support role. We bring our culture to life through our core values, which serve as the foundation of our business and the guiding principles behind the decisions we make every day. We believe our culture helps set us apart and provides a distinct competitive advantage for The Home Depot.
Our values also guide our efforts to create an environment that will help us attract and retain skilled associates in the competitive marketplace for talent. We empower our associates to deliver a superior customer experience, and we position our associates to embody our core values by integrating the importance of our culture into ongoing development programs and rewards programs. We routinely assess our culture and values through associate surveys, which are done on an annual basis for all associates and more frequently as “pulse check” surveys for groups of associates. Our officers and other leaders also regularly participate in programs designed to build and strengthen our culture, such as training on leadership skills, cross-functional collaboration, leading with our values, and associate engagement.
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4 | The Home Depot 2025 Proxy Statement |
Business Code of Conduct and Ethics
The Company has a Business Code of Conduct and Ethics that is applicable to all directors, officers and associates of the Company, including the CEO and the CFO. The Business Code of Conduct and Ethics reflects our strong commitment to ethics and integrity and provides guidance on making decisions that align with our core values. The complete text of the code is available on the Company’s Investor Relations website at https://ir.homedepot.com under “Corporate Governance > Overview” and is also available in print upon request at no charge. The Company will post any amendments to or waivers from the Business Code of Conduct and Ethics (to the extent applicable to the Company’s executive officers and directors) at this location on its website.
BOARD ROLE IN STRATEGIC PLANNING
The Company’s strategy is rooted in its culture, guided by our inverted pyramid to put customers first and focus on investments that better meet their changing needs and expectations. We are focused on bringing to life our vision of an interconnected, frictionless shopping experience that enables our customers to seamlessly blend the digital and physical worlds.
Our Board plays an important role in the continued evolution of the Company’s strategic planning process. At a dedicated strategy session each fall and through regular discussions at each quarterly Board meeting, our Board reviews the Company’s strategy and capabilities and actively engages with management to ensure that the Company is well-positioned to continue creating shareholder value. In Fiscal 2024, those discussions focused on removing friction from the customer experience, driving engagement and associate selling culture, developing differentiated capabilities for our consumer and Pro customers, enhancing delivery speed and reliability, and leveraging SRS for growth with specialty trade Pros. As discussed in “Election of Directors” beginning on page 15, each director nominee, including our new nominee, Asha Sharma, possesses specific skills and qualifications that provide or will provide the Company with key insights into elements necessary to continue to enhance our customer experience and support our strategy. As a result of our focus on Board composition, we believe we have a Board with an appropriate mix of skills, backgrounds and experiences that leverages its diversity to effectively oversee our strategy as the Company positions itself to remain agile in a dynamic retail environment. BOARD OVERSIGHT OF RISK
The Board’s oversight of risk is accomplished through (1) the identification of key risks facing the Company and (2) the mapping of those risks to the appropriate Board committee and/or to the Board for oversight, based on the nature of the risk. The enterprise risk framework that we use to identify, prioritize, and manage those key risks considers a number of enterprise-level risks, including competitive environment, brand and reputation, regulatory and compliance, and security, as well as external and internal factors that could distract the Company from our business or derail our strategic objectives. The Board reviews these key risks and the related framework annually, including periodic surveys of Board members and senior management to identify and assess key enterprise risks. The Board or appropriate Board committees also discuss selected risks in more detail throughout the year.
The table below identifies key risk areas overseen by the Board and its committees.
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Key Areas of Risk Oversight |
Full Board |
• | Has primary responsibility for risk oversight, including approval of strategic objectives and defining risk appetite |
• | Delegates oversight of management of certain risks to Board committees |
• | Receives regular reports from the committees regarding risk-related matters |
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The Home Depot 2025 Proxy Statement | 5 |
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Audit | Leadership Development and Compensation | Nominating and Corporate Governance | Finance |
• | Overall risk assessment and management | • | Senior executive compensation | • | Corporate governance | • | Long-range strategic planning |
• | Financial exposures, statements, controls, systems, and reporting | • | Senior executive succession planning | • | Director succession planning and board composition | • | Long-range financial outlook and finance-related risks |
• | Regulatory and compliance, including FCPA/anti-bribery and our whistleblower program | • | Overall risk related to the Company’s compensation policies and practices | • | Corporate social responsibility, environmental, and responsible sourcing initiatives, risks and opportunities | • | Capital structure, including investments and capital allocation principles |
• | Data protection and cybersecurity | • | Human capital management | • | Related person transactions | • | Annual capital plan and key capital investments |
• | Internal audit and related investigatory matters | • | Non-employee director compensation | • | Safety matters with respect to associates, customers and products | • | Merger and acquisition strategy |
• | Financial and controls aspects of sustainability- and human capital management-related disclosures | • | Diversity, inclusion and pay equity | • | Policies on political activity, including political spending and payments to trade associations | • | Tax strategy |
| • | Digital strategy and execution of that strategy |
• | Policies and procedures regarding insider trading |
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While the Board and its committees have responsibility for general risk oversight, management is charged with managing risk. As part of our risk assessment process, the Board and each committee receive presentations from management throughout the year regarding specific potential risks and trends as necessary. At each Board meeting, our Chair has the opportunity to discuss in a directors-only session matters of particular importance or concern, including any significant, evolving or nascent risks that may be of concern to the Board or the Company, and our Lead Director presides over an executive session of our independent directors at which risks faced by the Company may be discussed. Additionally, during Board-level review of the Company’s short- and long-term strategies, as discussed in more detail above, the Board considers significant risks facing the Company, as well as emerging risks and current trends, and their potential impact. We believe that the practices described above and our current leadership structure facilitate effective Board oversight of our key risks.
Certain of the risk areas identified in the table above are discussed in more detail below.
Enterprise Risk Management
In accordance with NYSE requirements and our Audit Committee charter, our Audit Committee has primary responsibility for overseeing risk assessment and management, including the Company’s major financial exposures and compliance risks and the steps management has taken to monitor and control those exposures and risks. The Audit Committee stays informed of significant actual and potential risks faced by the Company in part through review of quarterly reports on our top enterprise risks. These reports denote whether primary oversight of each risk resides with a particular Board committee or the Board. Our Internal Audit and Corporate Compliance team holds quarterly risk discussions with each member of our senior leadership team, which inform the development and updating of the top enterprise risks. In addition, leaders from Internal Audit, Corporate Compliance and Legal hold quarterly meetings to discuss key risks. The Company also maintains an Enterprise Risk Council composed of leaders from the Company’s principal functional areas of the Company who can be called as needed to discuss significant new or emerging risks. Our Vice President of Internal Audit and Corporate Compliance attends each of the various risk-related meetings and reports the top enterprise risks to senior management regularly, attends each quarterly Audit Committee meeting, and leads the Board’s annual review of the Company’s risk framework.
Data Protection and Cybersecurity
The Audit Committee has primary responsibility for overseeing risks related to cybersecurity and privacy, although the Board also exercises oversight over these risks. In Fiscal 2024, the Audit Committee and/or the
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Board received detailed reports on data protection and cybersecurity matters from senior IT leaders, including our Chief Information Officer and Chief Information Security Officer, and/or the Chair of our Data Security and Privacy Governance Committee (discussed below). The Board also held a meeting dedicated to cybersecurity topics. The topics covered at the various Audit Committee and Board meetings during Fiscal 2024 included risk identification and management strategies, consumer data protection, the Company’s ongoing risk mitigation activities, results of third party assessments and testing, results of tabletop exercises, updates on potential cybersecurity threats, cybersecurity resilience, and cybersecurity strategy and governance structure. In addition, our Internal Audit department routinely performs audits on various aspects of data protection and cybersecurity and reports the results of these audits in its quarterly reports to the Audit Committee. Periodically, our Board has received presentations on cybersecurity matters from third-party cybersecurity experts.
Our management-level Data Security and Privacy Governance Committee provides governance over cybersecurity matters, including discussion of cybersecurity priorities, emerging risks, awareness and training programs, risk mitigation efforts, and regulatory compliance. This committee, which meets quarterly, is chaired by our Vice President of Internal Audit and Corporate Compliance and is composed of a cross-functional team of senior leaders, including our CEO. Its activities are reported to the Audit Committee and/or the Board by the chair of the committee, as appropriate.
FCPA and Anti-Bribery
The Audit Committee is responsible for oversight of risks relating to bribery, corruption and FCPA compliance, in part through quarterly reports from our FCPA Oversight Committee, which oversees enterprise-wide compliance with the FCPA and the anti-bribery laws of the other jurisdictions in which we conduct business. The FCPA Oversight Committee meets quarterly and is composed of our Executive Vice President, General Counsel and Corporate Secretary, who chairs the committee; our Executive Vice President and CFO; our Vice President of Internal Audit and Corporate Compliance; and representatives from each non-U.S. division, the business functions responsible for administration of our policies, and the business functions that manage our transactions outside of the U.S. The FCPA Oversight Committee receives regular updates and manages enhancements to Company policies, regular risk assessments, the Company’s training program for key associates and third parties, and its third-party diligence and monitoring program. It also oversees any relevant investigatory work and FCPA-specific audits of our international operations performed through our internal audit team and utilizing outside anti-bribery experts.
OVERSIGHT OF SUSTAINABILITY AND HUMAN CAPITAL MANAGEMENT
We view sustainability and human capital management matters through the lens of our business, with an understanding that if we support our associates, our customers, our suppliers, and the communities we serve, we also support our business and create value for our shareholders. We believe these priorities are embedded in how we run our business, align closely with our corporate culture and strategy, and support value creation for our business and shareholders. We have three key pillars of focus for our sustainability and human capital management initiatives: (1) Focus on Our People, (2) Operate Sustainably, and (3) Strengthen Our Communities. The Company maintains a dedicated webpage to provide access to information about the Company’s oversight and management of these matters, which can be found at https://ir.homedepot.com/sustainability. Our 2024 ESG Report, which is available on this dedicated webpage, describes the key sustainability, human capital management, and governance issues relevant to the Company, our initiatives and goals related to those issues, and our progress with respect to those initiatives.
Board and Committee Oversight
Because it encompasses such a broad area, oversight of sustainability and human capital management is shared among several committees and the Board.
•Each year, the Board receives a report on our sustainability and human capital management strategy and activities, including a discussion of our related efforts and communications, our annual voluntary sustainability reports, and emerging sustainability and human capital management issues as necessary. In Fiscal 2024, the Board held a separate, longer meeting to allow us to better cover a range of sustainability and human capital management matters, which was held on the same day as the Board’s dedicated cybersecurity meeting. Our Board also receives quarterly updates on safety matters.
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•The NCG Committee has primary responsibility for governance of sustainability generally and the alignment of those matters with our business priorities. The NCG Committee also oversees risks related to customer and associate safety, as well as our responsible sourcing program and related supply chain risks. In addition, the NCG Committee provides oversight of corporate political activity, reviewing corporate donations, payments to trade associations, and our Political Activity Policy at least annually and more frequently as needed. The NCG Committee receives regular reports on engagements with shareholders and related investor feedback, as well as information on recent developments with respect to sustainability.
•The LDC Committee oversees risks related to human capital management, including matters relating to associate compensation and benefits; associate engagement, development and training; and diversity, inclusion, and pay equity. The LDC Committee also receives regular updates on the findings from our reviews of compensation practices for our U.S. associates.
•The Audit Committee oversees risks related to the financial and controls aspects of disclosures on these matters and receives periodic updates on these matters from our Chief Accounting Officer.
Management-Level Oversight
To provide management-level oversight and coordination of our sustainability and human capital management efforts, the Company has formed a cross-functional governance committee chaired by our Senior Vice President – Finance, Chief Accounting Officer and Controller and composed of representatives across several business functions, including Communications, Corporate Governance, Finance, Government Relations, Human Resources, Internal Audit, Investor Relations, Legal, Sustainability, and Tax. This committee is focused on identifying key sustainability- and human capital management-related issues of concern to our stakeholders and further developing our strategies to ensure they support the business and long-term value creation and receives regular updates on the progress of our sustainability efforts.
SHAREHOLDER OUTREACH AND ENGAGEMENT
We approach shareholder engagement as an integrated, year-round process involving senior management, our investor relations team, and our corporate governance team, as well as other subject matter experts as appropriate. In Fiscal 2024, we proactively sought engagement with our 40 largest institutional shareholders, who represented approximately 44% of our outstanding shares. We ultimately engaged with many of these holders as well as a number of other institutional shareholders on a variety of topics, including the matters raised by the shareholder proposals on the ballot at our annual meetings and other topics of interest to our investors. We also have an active investor relations program that engages throughout the year with a significant portion of our shareholders and potential holders on matters regarding corporate strategy, financial performance, business environment, and other relevant topics. We value the feedback these engagements provide and intend to continue our engagement efforts.
The Board values our shareholders’ perspectives, and feedback from our shareholders on our business, corporate governance, compensation, sustainability practices, human capital management, and other matters has been important for discussions with the Board and its committees. This engagement, together with our cross-functional sustainability and human capital management efforts and our commitment to robust corporate governance, has led to a number of enhancements and best practices over the past several years, including the following:
•We expanded our Executive Compensation Clawback Policy to specifically include conduct that causes significant reputational harm to the Company. This approach extends our executive compensation clawback policy beyond the mandatory clawback of incentive compensation following an accounting restatement that is required by NYSE listing standards. We discussed our policy extensively with shareholders in Fiscal 2024, including as part of our proxy season engagement, and reviewed the results with the NCG Committee both prior to and following the 2024 annual meeting. We plan to continue monitoring evolving practices in this area going forward.
•As noted above, we include disclosure of sustainability and human capital management matters on a dedicated page on our Investor Relations website, available at https://ir.homedepot.com/sustainability, to better enable our investors to access key information about our oversight and management of these areas, including related goals.
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•We have enhanced our annual voluntary sustainability reports to provide more transparent and quantitative disclosure informed by Global Reporting Initiative (GRI), Sustainable Accounting Standards Board (SASB), and TCFD frameworks and have continued our participation in CDP’s disclosure process, including with respect to climate change and forestry matters.
•In Fiscal 2024, the Science Based Targets initiative (SBTi) approved our near-term science-based emissions reduction targets to reduce our combined absolute Scope 1 and 2 greenhouse gas (GHG) emissions and our absolute Scope 3 Category 11 (“Use of Sold Products”) GHG emissions by 42%, both by the end of Fiscal 2030 from a Fiscal 2020 base year. The SBTi has validated that our enhanced goals conform with its criteria and has determined that our Scope 1 and 2 target is in line with a 1.5-degree Celsius trajectory.
•We have continued to identify ways to reduce our environmental impact by embedding sustainability into our business strategy through investments in operational efficiencies and partnering with suppliers to provide our customers with more sustainable solutions in product and packaging options.
GOVERNANCE BEST PRACTICES
Our Board believes that effective governance means regular and thoughtful evaluation of the Company’s governance policies and processes in light of the broader governance landscape. As a result, our governance framework contains a variety of methods for shareholder engagement, as well as mechanisms to ensure effective Board operations.
Shareholder Rights
Our shareholders have the following important rights:
•Right of the holders of 15% or more of our common stock to call a special meeting of shareholders.
•Right to act by majority written consent in lieu of a meeting.
•Right to include director nominees in our Proxy Statement. Our “proxy access” right permits a shareholder, or group of up to 20 shareholders, owning at least 3% of the Company’s outstanding common stock continuously for at least three years to nominate and include in the Company’s proxy materials director nominees constituting up to the greater of two individuals or 20% of the Board, provided that the shareholders and the nominees satisfy the requirements specified in our By-Laws.
In addition, as described in more detail beginning on page 13, shareholders may recommend Board candidates for consideration by the NCG Committee. Corporate Governance Guidelines
The Company maintains Corporate Governance Guidelines that establish a common set of expectations to assist the Board and its committees in performing their duties. The table below provides an overview of several key elements of our Corporate Governance Guidelines, which are available on the Company’s Investor Relations website at https://ir.homedepot.com under “Corporate Governance > Overview” and in print at no charge upon request.
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Key Corporate Governance Guidelines Provisions |
Outside Board Policy |
We limit the number of other public company boards our directors may join to ensure that a director is not “overboarded” and is able to devote the appropriate amount of time and attention to the oversight of the Company. Generally, a director who is an executive officer with another public company may only serve on the board of that company in addition to his or her service on our Board. If the only executive officer role held by a director is that of executive chair of another company, the director may serve on the board of that company, our Board, and the board of one other public company, subject to a determination by the NCG Committee that the additional commitment, when added to the director’s existing executive chair role, permits sufficient time for, and will not impair his or her service on, our Board. Other directors may not serve on more than three other public company boards, and no member of the Company’s Audit Committee may serve on more than two other public company audit committees. In addition, our CEO may not serve on more than one other public company board. Any director seeking to join the board of directors of another public company or for-profit organization must first notify the NCG Committee and obtain its approval to continue as a member of our Board. |
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Management Succession Planning |
A key responsibility of the Board is overseeing the identification and development of senior leadership. Both the Board and LDC Committee are actively engaged in succession planning. The LDC Committee oversees the development and implementation of succession plans for senior leadership positions. This process includes review and discussion of the performance and development of senior leadership on a regular basis, along with management’s evaluation and recommendations for senior leadership succession. The Board also annually reviews succession plans for senior management and the CEO, including both a long-term succession plan and an emergency succession plan. To assist the Board, our CEO annually provides an assessment of senior leaders and their potential to succeed at key senior management positions. The Board meets potential leaders at many levels across the organization through formal presentations and informal events throughout the year, including through the store and facility walks and management meetings that are part of our director engagement program. |
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Director Engagement, Continuing Education and Orientation Program |
The NCG Committee oversees the director engagement, continuing education and orientation program, which includes both internal activities and access to external programming. Our ongoing engagement program includes periodic walks of our stores and other facilities, product walks, and in-depth meetings with management to provide our directors with the opportunity to observe our strategic initiatives in action and to expand their insight into business operations and activities. We also have a structured director orientation program for new directors during their first year on the Board. This program includes information sessions with committee chairs and senior management and visits to our stores and facilities to accelerate their on-boarding. We also provide all directors with membership in the NACD and continuing education opportunities. |
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Board Self-Evaluations |
Each year, the Board conducts an evaluation of its performance and effectiveness, in accordance with our Corporate Governance Guidelines. As set forth in its charter, the NCG Committee oversees this process, which includes two key components: |
•The Board and each committee conduct self-evaluations, which solicit feedback on a range of issues, including Board and committee structure, leadership, culture and dynamics; meeting content; and interactions with management. The results of these self-evaluations are discussed in executive session, generally at the first regularly scheduled meeting of the fiscal year. |
•Our Lead Director conducts individual interviews with each of the directors. These interviews address similar topics, with the one-on-one setting permitting more detailed feedback on Board operations and director performance, as well as providing opportunities for mentoring newer directors. The feedback from these interviews is typically discussed with the Board at its February meeting. |
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