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LOWES COMPANIES INC filed this DEF 14A on 04/17/2025

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LOWES COMPANIES INC - DEF 14A - 20250417 - COMPENSATION_COMMITTEE

Compensation Discussion and Analysis

OTHER COMPENSATION POLICIES

by each senior officer by dividing the applicable salary multiple ownership requirement (expressed as a dollar amount) by the average closing price of the common stock for the preceding fiscal year. Shares of common stock are counted towards ownership as follows:

•

All shares held or credited to a senior officer’s accounts under the Lowe’s 401(k) Plan, benefit restoration, deferred compensation and employee stock purchase plans;

•

All shares owned directly by the senior officer and his or her immediate family members residing in the same household; and

•

100% of the number of shares of unvested RSAs.

Senior officers may not sell the net shares resulting from an RSA or PSU vesting event or stock option exercise until the ownership requirement has been satisfied.

All of our current NEOs are in compliance with the stock ownership guidelines.

Clawback of Incentive Compensation

The Compensation Committee supports transparent governance and compliance practices and protecting the interests of the Company’s shareholders. To reinforce the Company’s practices in these areas, the Company has two clawback policies, to address not only required recovery of incentive-based compensation in the event of an accounting error causing a financial restatement, but also appropriate recovery of compensation in case of officer misconduct. The Company maintains a

“no-fault”

clawback policy as required under NYSE and SEC rules. In the event the Company is required to prepare an accounting restatement due to material

non-compliance

with any financial reporting requirement under the federal securities laws, the Company will recover the amount of any incentive-based compensation received by any covered executive, including current and former NEOs, during the prior three fiscal years that exceeds the amount the executive otherwise would have received had the incentive-based compensation been determined based on the restated financial statements.

Additionally, the Company maintains a fault-based clawback policy applicable to officers at the level of

senior vice president or higher. Under this policy, the Compensation Committee can seek to recover all or a portion of any cash or equity-based compensation that was provided to any current or former officer under the Company’s annual or long-term incentive plans (whether or not such compensation has already been paid or

vested), if the Compensation Committee determines that (i) the compensation was based on the Company having met or exceeded specific performance targets that were satisfied due to the covered officer engaging in fraud or intentional misconduct, including, but not limited to, conduct resulting in a significant restatement of the Company’s financial results or (ii) the current or former officer engaged in any intentional misconduct that results in significant financial or reputational harm to the Company.

Equity Award Grant Practices

The Compensation Committee has followed a practice of granting annual equity awards, including annual awards of PSUs, stock options and time-based RSAs granted to the NEOs, on April 1 each year. Interim equity grants, such as grants made to newly hired executives, are typically made on March 15, June 15, September 15 and December 15 each year. During fiscal 2024, the Compensation Committee did not consider material

non-public

information when determining the timing or terms of equity awards, and the Company

did not time

the disclosure of material

non-public

information for the purpose of affecting the value of any executive compensation awarded during the year.

The Compensation Committee did not grant stock options to any NEO in 2024 during the period beginning four business days before and ending one business day after the filing or furnishing of a Form

10-K,

Form

10-Q

or Form

8-K

that discloses material non-public information.

Trading in Company

Securities

The Company has adopted an Insider Trading Policy that sets forth policies and procedures governing the purchase, sale and other transactions in the Company’s securities by directors, officers, associates and certain other persons, and the Company has established procedures applicable to transactions by the Company itself, that the Company believes are reasonably designed to promote compliance with insider trading laws, rules and regulations and listing standards applicable to the Company.

Persons subject to the Insider Trading Policy are, among other provisions, prohibited from engaging in a transaction involving the Company’s securities or “tipping” while aware of material

non-public

information about the Company. The Policy also prohibits short sales of Company common stock. The Policy limits trading in Company common stock, including stock held in an


44		NOTICE OF ANNUAL MEETING & PROXY STATEMENT 2025

Table of Contents

Compensation Discussion and Analysis

COMPENSATION COMMITTEE REPORT

account under the Lowe’s 401(k) Plan, by an executive and the executive’s immediate family members who reside with the executive or whose transactions are subject to the executive’s influence or control, to open window trading periods designated by the Company’s Chief Legal Officer. All transactions by an executive officer or director involving common stock are to be

pre-cleared

by the Chief Legal Officer. A copy of our Insider Trading Policy was filed as Exhibit 19.1 to our Annual Report on Form

10-K

filed with the SEC on March 24, 2025.

In addition, the Company’s anti-hedging policy prohibits all executive officers, directors and associates from engaging in any transaction involving the use of a security or other investment designed to hedge or offset any decrease in the market value of Company securities or, alternatively, to leverage the potential return of a predicted price movement (up or down) in Company securities. Executive officers, directors and certain designated associates are also prohibited from using common stock as collateral for any purpose, including in a margin account.

VI. COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis with management of the Company. Based on such review and discussion, the Compensation Committee has recommended to the Board of Directors that the

Compensation

Discussion and Analysis be included in this Proxy Statement and in the Company’s Annual Report on

Form 10-K

for the fiscal year ended January 31, 2025.

Raul Alvarez, Chair

David H. Batchelder

Scott

. Baxter

Navdeep Gupta

Mary Beth West


						NOTICE OF ANNUAL MEETING & PROXY STATEMENT 2025		45

Compensation Tables

Summary Compensation Table

This table shows the base salary, annual incentive compensation and all other compensation paid to the NEOs. The table also shows the grant date fair value of the stock and option awards made to the NEOs.



Name and Principal Position	Year		Salary ($)		Bonus ($)		Stock Awards ($)⁽¹⁾⁽²⁾		Option Awards ($)⁽¹⁾		Non-Equity Incentive Plan Compensation ($)⁽³⁾		All Other Compensation ($)⁽⁴⁾		Total ($)

Marvin R. Ellison Chairman, President and Chief Executive Officer		2024		1,494,231		—		11,975,052		3,750,291		2,935,865		9,474		20,164,912
		2023		1,450,000		—		11,193,496		3,591,228		1,826,130		101,418		18,162,272
		2022		1,450,000		—		9,172,764		3,099,490		3,707,360		42,391		17,472,005

Brandon J. Sink Executive Vice President, Chief Financial Officer		2024		759,304		—		2,745,473		859,805		745,940		85,376		5,195,899
		2023		718,577		—		2,505,076		803,703		452,488		69,913		4,549,757
		2022		620,868		—		1,329,324		1,119,902		764,133		75,605		3,909,833

Joseph M. McFarland III Executive Vice President, Stores		2024		875,815		—		3,504,080		1,097,388		860,401		13,829		6,351,513
		2023		857,704		—		3,321,989		1,065,757		540,096		8,384		5,793,930
		2022		832,291		—		2,798,505		945,602		1,064,000		33,903		5,674,302

William P. Boltz Executive Vice President, Merchandising		2024		866,781		—		3,472,239		1,087,386		851,525		89,468		6,367,399
		2023		840,650		—		3,259,415		1,045,694		529,357		68,323		5,743,439
		2022		806,789		—		2,719,575		918,946		1,031,399		96,792		5,573,501

Seemantini Godbole Executive Vice President, Chief Digital and Information Officer		2024		809,988		—		2,922,985		915,323		795,733		87,384		5,531,414
		2023		778,827		—		2,717,485		871,854		490,427		73,299		4,931,893
		2022		745,702		—		2,519,539		851,263		953,305		96,224		5,166,033

(1)

The value of the stock and option awards presented in the table equals the grant date fair value of the awards for financial reporting purposes (excluding the effect of estimated forfeitures) computed in accordance with FASB ASC Topic 718. For financial reporting purposes, the Company determines the fair value of a stock or option award accounted for as an equity award on the grant date. The Company recognizes an expense for a stock or option award over the vesting period of the award. PSUs are expensed over the vesting period based on the probability of achieving the performance goal, with changes in expectations recognized as an adjustment in the period of the change. NEOs receive dividends on unvested shares of time-vested RSAs during the vesting period. Dividends are not paid or accrued on unearned PSUs. The right to receive dividends has been factored into the determination of the fair values used in the amounts presented above.

The assumptions used to calculate the April grant date fair value of the option awards granted in fiscal 2024 for Messrs. Ellison, Sink, McFarland and Boltz and Ms. Godbole are as follows: expected volatility of 31.60%, expected dividend yield of 1.79%, an assumed risk-free interest rate of 4.33% and expected term of seven years. See footnote 5 to the Grants of Plan-Based Awards table below and Note 10, “Share-Based Payments,” to the Company’s consolidated financial statements in its Annual Report on Form 10-K for the fiscal year ended January 31, 2025 for additional information about the Company’s accounting for share-based compensation arrangements, including the assumptions used in calculating the grant date fair values.

(2)

The amounts reported in this column include the sum of the grant date fair values of PSUs and RSAs. The 2024 PSUs will be earned based on the Company’s achievement of a three-year average ROIC goal and a relative TSR modifier. The PSUs are accounted for as equity awards. The 2024 stock award amounts include the following grant date fair values of the PSUs: Mr. Ellison — $8,224,883; Mr. Sink — $1,885,706; Mr. McFarland — $2,406,749; Mr. Boltz — $2,384,880; and Ms. Godbole — $2,007,629. The grant date values of the PSUs, assuming the maximum number of shares would be earned at the end of the three-year performance period, would have been: Mr. Ellison — $15,000,175; Mr. Sink — $3,439,067 ; Mr. McFarland — $4,389,322; Mr. Boltz — $4,349,437; and Ms. Godbole — $3,661,425.


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Compensation Tables

(3)	The amounts shown in this column reflect payments made under the Company’s annual incentive plan, which paid out at 98.24% for NEOs based on performance achievement described in more detail on page 40.

(4)	Company matching contributions to qualified and non-qualified deferred compensation plans and perquisites for the 2024 fiscal year are shown below:



	Company Matching Contributions to:

Name	401(k) Plan ($)		Benefit Restoration Plan ($)		Other ($)⁽ⁱ⁾		Total ($)

Mr. Ellison		—		—		9,474		9,474

Mr. Sink		12,290		51,613		21,474		85,376

Mr. McFarland III		—		—		13,829		13,829

Mr. Boltz		13,324		59,663		16,481		89,468

Ms. Godbole		13,383		54,544		19,457		87,384

All amounts presented in the table above equal the actual cost to the Company of the particular benefit or perquisite provided or, in the case of personal use of corporate aircraft, the incremental cost to the Company of such use. Incremental cost includes fuel, landing and ramp fees and other variable costs directly attributable to personal use. Incremental cost does not include an allocable share of the fixed costs associated with the Company’s ownership of the aircraft.

(i)	“Other” perquisites and benefits include personal use of corporate aircraft, tax and financial planning services, Company-encouraged physical examinations and individual disability insurance.


						NOTICE OF ANNUAL MEETING & PROXY STATEMENT 2025		47

Compensation Tables

Grants of Plan-Based Awards

This table presents the potential annual incentive awards the NEOs were eligible to earn in fiscal 2024, as well as the stock options, RSAs and PSUs awarded to the NEOs in fiscal 2024 and the grant date fair value of those awards.



Name	Grant Date		Date of Committee Action		Estimated Future Payouts Under Non-Equity Incentive Plan Awards⁽¹⁾						Estimated Future Payouts Under Equity Incentive Plan Awards⁽²⁾						All Other Stock Awards: Number of Shares of Stock or Units (#)⁽³⁾		All Other Option Awards: Number of Securities Underlying Options (#)⁽⁴⁾		Exercise or Base Price of Option Awards ($/Sh)		Grant Date Fair Value of Stock and Option Awards ($)⁽⁵⁾
Name	Grant Date		Date of Committee Action		Threshold ($)		Target ($)		Maximum ($)		Threshold (#)		Target (#)		Maximum (#)						Exercise or Base Price of Option Awards ($/Sh)		Grant Date Fair Value of Stock and Option Awards ($)⁽⁵⁾

Mr. Ellison
Annual Incentive						747,115		2,988,462		5,976,923
PSUs		4/1/2024		3/22/2024								10,079		30,087		60,174								8,224,883
Options		4/1/2024		3/22/2024																44,246		249.28		3,750,291
RSAs		4/1/2024		3/22/2024														15,044						3,750,168

Mr. Sink
Annual Incentive						189,826		759,304		1,518,608
PSUs		4/1/2024		3/22/2024								2,310		6,898		13,796								1,885,706
Options		4/1/2024		3/22/2024																10,144		249.28		859,805
RSAs		4/1/2024		3/22/2024														3,449						859,767

Mr. McFarland III
Annual Incentive						218,954		875,815		1,751,631
PSUs		4/1/2024		3/22/2024								2,949		8,804		17,608								2,406,749
Options		4/1/2024		3/22/2024																12,947		249.28		1,097,388
RSAs		4/1/2024		3/22/2024														4,402						1,097,331

Mr. Boltz
Annual Incentive						216,695		866,781		1,733,562
PSUs		4/1/2024		3/22/2024								2,922		8,724		17,448								2,384,880
Options		4/1/2024		3/22/2024																12,829		249.28		1,087,386
RSAs		4/1/2024		3/22/2024														4,362						1,087,359

Ms. Godbole
Annual Incentive						202,497		809,988		1,619,977
PSUs		4/1/2024		3/22/2024								2,460		7,344		14,688								2,007,629
Options		4/1/2024		3/22/2024																10,799		249.28		915,323
RSAs		4/1/2024		3/22/2024														3,672						915,356

(1)

The NEOs are eligible to earn annual incentive compensation under the Company’s annual incentive plan for each fiscal year based on the Company’s achievement of one or more performance measures established at the beginning of the fiscal year by the Compensation Committee. For the 2024 fiscal year ended January 31, 2025, the performance measures selected by the Compensation Committee were the Company’s sales (weighted 40%), operating income (weighted 40%), inventory turnover (weighted 10%) and Pro sales growth (weighted 10%). The performance levels for the performance measures, the Company’s actual performance and the amounts earned by the NEOs for the 2024 fiscal year are shown on page 40. The annual incentive amounts actually earned by the NEOs for the 2024 fiscal year are reported in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table on page 46.

(2)

The PSUs reported in this column are earned based on the Company’s average ROIC over a three-year performance period and a relative TSR modifier. No dividends will accrue or be paid on the PSUs during the three-year performance period. The terms of the PSUs are described in more detail beginning on page 41.

(3)

The time-vested RSAs vest on the third anniversary of the grant date or, if earlier, the date the NEO terminates employment due to death or disability. For the NEOs who meet the retirement provisions of the applicable RSA grant agreements, their awards will vest upon retirement, but will not be transferred to the NEO until the original vesting date of the award. Retirement for this purpose is defined as the voluntary termination of employment with the approval of the Board at least six months after the grant date and on or after the date the NEO has satisfied an age and service requirement, provided the NEO has given the Board advance notice of such retirement. Messrs. Ellison, Sink, McFarland and Boltz and Ms. Godbole will satisfy the age and service requirement for retirement once their age in addition to years of service equals at least 70, provided the NEO is at least 55 years old. The NEOs receive cash dividends paid with respect to the RSA shares during the vesting period on the same terms as the other shareholders of the Company.


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Compensation Tables

(4)

All options have a 10-year term and an exercise price equal to the closing price of the common stock on the grant date. The options vest in three annual installments on each of the first three anniversaries of the grant date or, if earlier, the date the NEO terminates employment due to death or disability. The options granted to the NEOs will become exercisable in the event of retirement, as defined in the applicable grant agreement, in accordance with the original three-year vesting schedule and remain exercisable until their expiration dates.

(5)

Amounts represent the grant date fair value of awards granted in fiscal 2024 for financial reporting purposes (excluding the effect of estimated forfeitures) computed in accordance with FASB ASC Topic 718. The assumptions used to calculate the April grant date fair value of the option awards granted in fiscal 2024 for Messrs. Ellison, Sink, McFarland and Boltz and Ms. Godbole are as follows: expected volatility of 31.60%, expected dividend yield of 1.79%, an assumed risk-free interest rate of 4.33% and expected term of seven years. The assumptions made in the valuation of the PSU awards granted in fiscal 2024 for Messrs. Ellison, Sink, McFarland and Boltz and Ms. Godbole are as follows: expected volatility of 27.14%, expected dividend yield of 1.77%, an assumed risk-free interest rate of 4.49% and expected term of 2.83 years. The valuation of the time-vested RSAs is based on the closing price of our common stock on the grant date.


						NOTICE OF ANNUAL MEETING & PROXY STATEMENT 2025		49

Compensation Tables

Outstanding Equity Awards at Fiscal Year-End

This table presents information about unearned or unvested stock and option awards held by the NEOs on January 31, 2025.



	Option Awards						Stock Awards
Name		Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable		Option Exercise Price ($)	Option Expiration Date		Number of Shares or Units of Stock That Have Not Vested (#)⁽¹⁾	Market Value of Shares or Units of Stock That Have Not Vested ($)⁽²⁾	Equity Incentive Plan Awards; Number of 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 ($)⁽²⁾

Mr. Ellison		166,240	—		94.87	7/2/2028		48,396	12,584,896	104,883	27,273,775
		82,460	—		108.93	4/1/2029
		120,014	—		80.42	4/1/2030
		51,691	—		191.32	4/1/2031
		34,651	17,325	⁽⁴⁾	202.40	4/1/2032
		18,496	36,992	⁽⁵⁾	199.97	4/1/2033
		—	44,246	⁽⁶⁾	249.28	4/1/2034

Mr. Sink		733	—		108.93	4/1/2029		13,762	3,578,670	15,924	4,140,877
		2,395	—		102.20	7/1/2029
		1,798	—		191.32	4/1/2031
		1,160	580	⁽⁴⁾	202.40	4/1/2032
		12,006	6,003	⁽⁷⁾	179.01	6/15/2032
		4,140	8,278	⁽⁵⁾	199.97	4/1/2033
		—	10,144	⁽⁶⁾	249.28	4/1/2034

Mr. McFarland III		43,810	—		114.07	10/1/2028		14,427	3,751,597	31,296	8,138,212
		30,190	—		108.93	4/1/2029
		41,988	—		80.42	4/1/2030
		16,179	—		191.32	4/1/2031
		10,572	5,285	⁽⁴⁾	202.40	4/1/2032
		5,489	10,978	⁽⁵⁾	199.97	4/1/2033
		—	12,947	⁽⁶⁾	249.28	4/1/2034

Mr. Boltz		15,421	—		191.32	4/1/2031		14,155	3,680,866	30,706	7,984,788
		10,274	5,136	⁽⁴⁾	202.40	4/1/2032
		5,386	10,771	⁽⁵⁾	199.97	4/1/2033
		—	12,829	⁽⁶⁾	249.28	4/1/2034

Ms. Godbole		12,270	—		191.32	4/1/2031		12,255	3,186,790	26,810	6,971,672
		9,517	4,758	⁽⁴⁾	202.40	4/1/2032
		4,491	8,980	⁽⁵⁾	199.97	4/1/2033
		—	10,799	⁽⁶⁾	249.28	4/1/2034

(1)	The unvested RSAs vest as follows:



	4/1/2025		6/15/2025		4/1/2026		4/1/2027		Total

Mr. Ellison		15,224		—		18,128		15,044		48,396

Mr. Sink		495		5,761		4,057		3,449		13,762

Mr. McFarland III		4,645		—		5,380		4,402		14,427

Mr. Boltz		4,514		—		5,279		4,362		14,155

Ms. Godbole		4,182		—		4,401		3,672		12,255

(2)	Amount is based on the closing market price of the Company’s common stock on January 31, 2025 of $260.04.


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Compensation Tables

(3)

The number of unearned PSUs reported in this column is calculated in accordance with SEC requirements and is based on our actual performance results for the 2022, 2023 and 2024 PSUs through the end of fiscal 2024 under the applicable performance measures and assuming that the payout will occur at the next highest level (threshold, target or maximum) relative to actual performance results.

(4)	These options vest on April 1, 2025.

(5)	These options vest in two annual installments on April 1, 2025 and April 1, 2026.

(6)	These options vest in three annual installments on April 1, 2025, April 1, 2026 and April 1, 2027.

(7)	These options vest on June 15, 2025.

Option Exercises and Stock Vested at Fiscal Year-End

This table presents information about stock options exercised by the NEOs and the number and the value of the NEOs’ stock awards that vested during the 2024 fiscal year.


	Option Awards				Stock Awards
	Number of Shares Acquired on Exercise		Value Realized on Exercise		Number of Shares Acquired on Vesting		Value Realized on Vesting
Name	(#)		($)		(#)		($)

Mr. Ellison		—		—		63,149		15,741,783

Mr. Sink		4,153		671,202		2,132		531,465

Mr. McFarland III		—		—		19,766		4,927,268

Mr. Boltz		—		—		18,840		4,696,435

Ms. Godbole		53,478		8,754,471		14,990		3,736,707

Non-Qualified Deferred Compensation

The Company sponsors two non-qualified deferred compensation plans for the benefit of senior management employees: the Benefit Restoration Plan (the “BRP”) and the Cash Deferral Plan (the “CDP”).

Benefit Restoration Plan

The BRP allows a senior management employee to defer receipt of the difference between (i) 6% of the sum of base salary and annual incentive plan compensation and (ii) the amount the employee is allowed to contribute to the Company’s tax-qualified 401(k) Plan. The deferred amounts are credited to the employee’s BRP account. The Company makes matching contributions to the employee’s BRP account under the same matching contribution formula that applies to employee contributions to the 401(k) Plan. An employee’s account under the BRP is deemed to be invested in accordance with the employee’s election in one or more of the investment options available under the 401(k) Plan, except an employee may not elect to have any amounts deferred under the BRP after February 1, 2003 be deemed to be invested in common stock. An employee may elect to change the investment of the employee’s BRP account as frequently as each business day. An employee’s account under the BRP is paid to the employee in cash within 90 days of a Section 409A

“separation from service,” unless later distribution is required for a “specified employee” under Code Section 409.

Cash Deferral Plan

The CDP allows a senior management employee to elect to defer receipt of up to 80% of his or her base salary, annual incentive plan compensation and certain other bonuses. The deferred amounts are credited to the employee’s CDP account. The Company does not make any contributions to the CDP. An employee’s CDP account is deemed to be invested in accordance with the employee’s election in one or more of the investment options available under the 401(k) Plan, except an employee may not elect to have any amounts deferred under the CDP be deemed to be invested in common stock. An employee may elect to change the investment of the employee’s CDP account as frequently as each business day. An employee’s account under the CDP is paid within 90 days of a Section 409A “separation from service,” unless later distribution is required for a “specified employee” under Code Section 409A. In addition, an employee may elect to have a portion of the employee’s deferrals segregated into a separate sub-account that is paid at a date elected by the employee so long as the date is at least five years from the date of the employee’s deferral election.


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Compensation Tables

The following table presents information about the amounts deferred by the NEOs under the Company’s two deferred compensation plans.



Name	Plan Name		Executive Contributions in Last FY ($)⁽¹⁾		Company Contributions in Last FY ($)⁽²⁾		Aggregate Earnings in Last FY ($)⁽³⁾		Aggregate Withdrawals/ Distributions ($)		Aggregate Balance at Last FYE ($)⁽⁴⁾

Mr. Ellison		BRP		—		—		—		—		—
		CDP		—		—		—		—		—

Mr. Sink		BRP		69,333		51,613		54,874		—		556,988
		CDP		20,078		—		124,845		—		953,443

Mr. McFarland III		BRP		—		—		—		—		—
		CDP		—		—		—		—		—

Mr. Boltz		BRP		76,054		59,663		65,713		—		804,484
		CDP		—		—		—		—		—

Ms. Godbole		BRP		64,701		54,544		56,912		—		816,856
		CDP		962,711		—		292,906		—		3,942,095

(1)

The amounts presented in this column are elective deferrals made by the NEOs from base salary paid during the 2024 fiscal year and annual incentive awards paid to the NEOs in March 2025 for the 2024 fiscal year. Of the amounts presented in this column, the following amounts have been reported in the “Salary” column for 2024 of the Summary Compensation Table of this Proxy Statement: Mr. Sink – $24,577, Mr. Boltz – $24,962 and Ms. Godbole – $16,957.

(2)	The amounts presented in this column are matching contributions made by the Company with respect to deferrals from base salary paid to the NEOs during the 2024 fiscal year and annual incentive awards paid to the NEOs in March 2025 for the 2024 fiscal year.

(3)

None of the earnings credited under the two deferred compensation plans are considered above-market earnings under the proxy statement disclosure rules of the SEC. Accordingly, none of the amounts presented in this column have been included in the Summary Compensation Table or the proxy statement for any previous annual meeting.

(4)

Of the amounts presented in this column, the following amounts have been reported in the Summary Compensation Table of the Company’s proxy statements for all prior years starting with 2006 when the compensation disclosure rules were revised to include the current form of the Summary Compensation Table: Mr. Sink – $136,460 under the BRP, Mr. Boltz – $258,117 under the BRP and Ms. Godbole – $309,839 under the BRP.

Potential Payments Upon Termination or Change-in-Control

The Company has entered into Change-in-Control Agreements with each of the current NEOs and certain other senior officers of the Company. The agreements provide for certain benefits if the Company experiences a change-in-control followed by termination of the executive’s employment within 24 months following such change-in-control:

•

By the Company’s successor without Cause, which means continued and willful failure to perform duties or conduct demonstrably and materially injurious to the Company or its affiliates; or

•

By the executive for Good Reason, including a downgrading of the executive’s position or duties or a change in compensation or geographic work location.


52		NOTICE OF ANNUAL MEETING & PROXY STATEMENT 2025

Compensation Tables

The following describes the material provisions of the Change-in-Control Agreements that we have entered into with our NEOs. All of the agreements automatically expire on the second anniversary of a change-in-control notwithstanding the length of the terms remaining on the date of the change-in-control.




Accrued Obligations		The NEO receives the sum of (1) the NEO’s annual base salary through date of separation and (2) any accrued vacation pay to the extent not paid (if applicable).

Severance Benefit		The NEO receives 2.99 times the sum of the present value of the NEO’s annual base salary, annual incentive compensation (as calculated pursuant to the agreement) and welfare insurance costs.

No Tax Gross-Up		There are no effective provisions for an excise tax gross-up. Instead, change-in-control payments will be subject to a provision, whereby the NEO will receive either the original amount of the payment or a reduced amount, depending on which amount will provide them a greater after-tax benefit.

Legal Fees		All legal fees and expenses reasonably incurred by the NEO in enforcing the agreement will be paid by the Company.

Restrictive Covenants		The Change-in-Control Agreements include restrictive covenants including, but not limited to, a covenant not to compete against the Company for the longer of (a) two years following termination of employment and (b) the period from the termination of employment through the last date of vesting for any non-vested equity awards held by the NEO and a covenant not to solicit Company employees or customers for two years following termination of employment.

The Company’s 2006 Long Term Incentive Plan, as amended and restated (the “Long Term Incentive Plan”) provides that, if within one year after a change-in-control, an executive’s employment is terminated by the Company without Cause or by the executive for Good Reason (as defined in the Change-in-Control Agreement), then all outstanding stock options will become fully exercisable and all outstanding RSAs will become fully vested. In the event of a change-in-control of the Company, the performance periods for all outstanding PSUs will terminate as of the end of the fiscal quarter preceding the change-in-control and the PSUs will be earned based on Company performance through such date. Under the terms of stock option, RSA and PSU award agreements, the executive is subject to a covenant not to compete against the Company for 24 months following termination of employment and, in the event of a breach, will forfeit awards or be required to repay the Company certain amounts with respect to awards.

Executive Vice Presidents covered by the Severance Plan who experience a Qualified Termination (as defined in

the Severance Plan) are, subject to the terms of the Severance Plan, eligible to receive a benefit consisting of (i) cash severance equal to two times the sum of their annual base salary and target annual bonus to be paid in installments over 24 months in accordance with the Company’s normal payroll practices, (ii) continued participation in the employee health care plan maintained by the Company upon the same terms and conditions in effect for active employees until the earlier of the 12-month anniversary of the termination date or the date the Executive Vice President becomes covered under another employer’s health care plan and (iii) up to one year of Company-paid outplacement services.

In the event Mr. Ellison’s employment with the Company is terminated involuntarily other than for Cause (as defined in his offer letter), and subject to the terms of his offer letter, Mr. Ellison is entitled to receive severance payments equal to two times the sum of his annual base salary and target annual bonus to be paid over 24 months in accordance with the Company’s normal payroll practices.


						NOTICE OF ANNUAL MEETING & PROXY STATEMENT 2025		53

Compensation Tables

The following table shows the amounts payable to the NEOs in the event their employment terminated at the end of the 2024 fiscal year due to their resignation, death, disability or retirement and the amounts payable under the Severance Plan, the Change-in-Control Agreements and the Long Term Incentive Plan if a change-in-control of the Company had occurred at the end of the 2024 fiscal year and/or the NEOs’ employment was terminated by the Company without Cause or by the NEO for Good Reason (in each case, as defined in the Change-in-Control Agreements) on January 31, 2025.



Name and Benefit	Voluntary Resignation ($)		Death ($)		Disability ($)		Retirement ($)⁽¹⁾		Qualified Termination ($)⁽²⁾		Change-in-Control ($)		Change-in-Control and Qualifying Termination ($)
Mr. Ellison
Severance⁽³⁾		—		—		—		—		9,000,000		—		12,479,893
Stock Options⁽⁴⁾		—		3,696,809		3,696,809		—		—		—		3,696,809
Restricted Stock Awards⁽⁴⁾		—		12,584,896		12,584,896		—		—		—		12,584,896
Performance Share Units⁽⁵⁾		—		14,654,814		14,654,814		—		—		14,654,814		14,654,814
Welfare Benefits⁽⁶⁾		—		—		—		—		—		—		95,336
Total		—		30,936,519		30,936,519		—		9,000,000		14,654,814		43,511,748
Mr. Sink
Severance⁽³⁾		—		—		—		—		3,057,200		—		4,241,376
Stock Options⁽⁴⁾		—		1,126,263		1,126,263		—		—		—		1,126,263
Restricted Stock Awards⁽⁴⁾		—		3,578,670		3,578,670		—		—		—		3,578,670
Performance Share Units⁽⁵⁾		—		1,928,717		1,928,717		—		—		1,928,717		1,928,717
Welfare Benefits⁽⁶⁾		—		—		—		—		18,592		—		79,736
Total		—		6,633,650		6,633,650		—		3,075,792		1,928,717		10,954,763
Mr. McFarland III
Severance⁽³⁾		—		—		—		—		3,511,200		—		4,871,229
Stock Options⁽⁴⁾		—		1,103,386		1,103,386		—		—		—		1,103,386
Restricted Stock Awards⁽⁴⁾		—		3,751,597		3,751,597		—		—		—		3,751,597
Performance Share Units⁽⁵⁾		—		4,378,814		4,378,814		—		—		4,378,814		4,378,814
Welfare Benefits⁽⁶⁾		—		—		—		—		14,471		—		76,901
Total		—		9,233,796		9,233,796		—		3,525,671		4,378,814		14,181,926
Mr. Boltz
Severance⁽³⁾		—		—		—		—		3,478,800		—		4,826,279
Stock Options⁽⁴⁾		—		1,081,093		1,081,093		—		—		—		1,081,093
Restricted Stock Awards⁽⁴⁾		—		3,680,866		3,680,866		—		—		—		3,680,866
Performance Share Units⁽⁵⁾		—		4,296,381		4,296,381		—		—		4,296,381		4,296,381
Welfare Benefits⁽⁶⁾		—		—		—		—		18,568		—		99,704
Total		—		9,058,340		9,058,340		—		3,497,368		4,296,381		13,984,323
Ms. Godbole
Severance⁽³⁾		—		—		—		—		3,254,400		—		4,514,960
Stock Options⁽⁴⁾		—		929,877		929,877		—		—		—		929,877
Restricted Stock Awards⁽⁴⁾		—		3,186,790		3,186,790		—		—		—		3,186,790
Performance Share Units⁽⁵⁾		—		3,799,184		3,799,184		—		—		3,799,184		3,799,184
Welfare Benefits⁽⁶⁾		—		—		—		—		18,590		—		85,916
Total		—		7,915,852		7,915,852		—		3,272,990		3,799,184		12,516,727

(1)	No NEOs were eligible for retirement as of the end of the fiscal year 2024.

(2)

The Severance Plan described in more detail on page 53, covers all NEOs below the CEO. Mr. Ellison’s severance entitlements are governed by his offer letter, described in more detail on page 53. For Mr. Ellison, this represents an involuntary termination of employment other than for Cause (as defined in his offer letter) and for each other NEO this represents a Qualified Termination under the Severance Plan.

(3)	The amounts presented are payable as follows: (i) in the case of a Qualified Termination, in equal installments in accordance with the Company’s payroll practices for 24 months and (ii) in the case of a Change-in-Control and Qualified Termination, in cash in a lump sum.

(4)	The amounts presented for the stock options and RSAs are equal to the values of the unvested in-the-money stock options and the restricted shares that would become vested based on the closing market price of the common stock on January 31, 2025 of $260.04.


54		NOTICE OF ANNUAL MEETING & PROXY STATEMENT 2025

Compensation Tables

(5)	The amounts presented for the PSUs are the value for the 2022, 2023 and 2024 PSU awards that would be earned assuming estimated performance through January 31, 2025, and based on the closing market price of the common stock on January 31, 2025 of $260.04.

(6)

The costs for Welfare Benefits include the Company costs for continuing coverage in the case of a Qualified Termination over a period of 12 months, as well as the Company costs for outplacement of all NEOs except Mr. Ellison. In the case of a Change-in-Control and Qualified Termination, these amounts include costs to the Company and to the NEO and would be paid as a cash lump sum. Welfare Benefits costs in the case of death and disability are consistent with Company offerings for all employees.

CEO Pay Ratio

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information regarding the ratio of the annual total compensation, calculated in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K (“Annual Total Compensation”), of our median-paid associate and the Annual Total Compensation of our Chairman, President and Chief Executive Officer, Marvin R. Ellison.

•

For 2024, the Annual Total Compensation for Mr. Ellison, as reported in the Summary Compensation Table on page 46, was $20,164,912.

•

The Annual Total Compensation for 2024 for our median-paid associate, excluding Mr. Ellison, was $30,606.

•

Based on this information, for fiscal 2024, the ratio of the Annual Total Compensation of Mr. Ellison to the Annual Total Compensation of our median associate, a full-time hourly employee, was 659 to 1.

The SEC rules for identifying the median-compensated associate and calculating the pay ratio based on that associate’s Annual Total Compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their employee populations and employment and compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employee populations and employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

To identify our median-compensated associate for 2024, in accordance with SEC rules we used the following methodology, material assumptions, adjustments and estimates:

•

We determined our employee population as of December 31, 2024, which was within the last three months of fiscal 2024 as required by the SEC rules. As of this date, we employed a total of approximately 273,000 associates, including those employed on a full-time, part-time or temporary basis, of which approximately 5,000 were employed outside of the United States. In calculating the pay ratio we excluded, under the de minimis exception to the pay ratio rule, all of our approximately 5,000 associates who reside outside of the United States, or 1.7% of our total global workforce.

•

We compared 2024 W-2 wages of our employee population, annualizing pay for newly hired, non-seasonal associates, as our consistently applied compensation measure (the “Estimated Compensation”). Based on the Estimated Compensation of each associate, we then identified the median-compensated associate.

•

Based on the Estimated Compensation of each employee, we identified a cohort of 61 employees (the “Median Cohort”), consisting of the median employee and 30 employees above and 30 employees below the median Estimated Compensation value. After evaluating the shared characteristics of the Median Cohort, we noted that the median employee’s compensation reflected anomalous characteristics (such as participation in non-U.S. compensation programs, a hire date during the fiscal year, or separation prior to the end of the fiscal year) that could significantly distort the pay ratio calculation. Therefore, we selected a similarly compensated employee from the Median Cohort that did not bear anomalous characteristics as a substitute median compensated employee.

•

We then calculated the Annual Total Compensation of the median-compensated associate using the same methodology used for calculating Mr. Ellison’s Annual Total Compensation.


						NOTICE OF ANNUAL MEETING & PROXY STATEMENT 2025		55

Compensation Tables

Pay Versus Performance Table

The following table provides a summary of compensation actually paid, as defined under SEC rules, to the principal executive officer (the “CEO”), the average compensation actually paid to the other

non-CEO

NEOs (the “Other NEOs”), cumulative TSR for both the Company and the Pay Versus Performance Table peer group (the S&P

Retailing

Industry Group Index, consistent with Item 201(e) of Regulation

S-K),

net income and the Company-selected financial measure of operating income (as adjusted) for fiscal years 2024, 2023, 2022, 2021 and 2020.


										Value of Initial Fixed $100 Investment Based on:
Year	Summary Compensation Table Total for CEO ($)		Compensation Actually Paid to CEO ($)		Average Summary Compensation Table Total for Other NEOs ($)		Average Compensation Actually Paid to Other NEOs ($)			TSR ($)		Peer Group TSR ($)		Net Income ($ in millions)		Company- Selected Financial Measure: Operating Income (as adjusted) ($ in millions)
	(1)		(2)		(3)		(4)			(5)		(6)				(7)
2024		20,164,912		26,169,758		5,861,556		7,371,080			244.70		227.91		6,957		10,289
2023		18,162,272		6,164,094		7,057,240		4,548,064			202.79		174.14		7,726		11,494
2022		17,472,005		13,650,690		4,975,514		(2,118,508	)		195.43		126.69		6,437		12,660
2021		17,871,716		61,282,315		5,954,773		21,264,668			208.44		149.72		8,442		12,093
2020		23,075,881		49,750,173		8,196,572		16,505,885			145.94		141.39		5,835		9,647

(1)	Mr. Ellison has served as CEO for all years reported. The amount in this column is “Total” compensation for the CEO as reported in the Summary Compensation Table for the applicable fiscal year.

(2)

Compensation actually paid to the CEO is defined by the SEC to include not only actual take-home pay for the reported year, but also to include changes in the accounting fair value of vested and unvested equity awards. The equity-related values of compensation actually paid do not reflect compensation actually earned, realized or received by the Company’s NEOs. Equity award fair values were calculated at the applicable measurement date in accordance with FASB ASC Topic 718, and for outstanding PSU awards, reflect trending performance through fiscal

year-end.

See Note 10, “Share-Based Payments,” to the Company’s consolidated financial statements in its Annual Report on Form

10-K

for the fiscal year ended January 31, 2025 for additional information about the Company’s accounting for share-based compensation arrangements, including the assumptions used in calculating the grant date fair values. A reconciliation between Summary Compensation Table Total Compensation and Compensation Actually Paid is set forth in the CEO Compensation Actually Paid table below. The reconciliations for prior fiscal years are included in the Pay Versus Performance section of the proxy statements for our 2023 and 2024 Annual Meeting of Shareholders.



CEO Compensation Actually Paid	2024 ($)

Summary Compensation Table — Total Compensation (a)		20,164,912

- Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year		(15,725,342	)

+ Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year (a)		15,170,313

+ Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years		3,291,856

+ Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years for Which Applicable Vesting Conditions Were Satisfied During Fiscal Year		3,051,882

+ Dividends Paid During Fiscal Year on Unvested Stock Awards		216,136

= CEO Compensation Actually Paid (b)		26,169,758

(a)

None of the awards granted during the reported year vested in the year of grant.

(b)

The CEO was not eligible for any pen

on benefits.

(3)	The amount reported in this column is the average of “Total” compensation for the Other NEOs, as reported in the Summary Compensation Table for the applicable fiscal year. The names of the Other NEOs included for these purposes in each applicable year are as follows:



Fiscal Year		Other NEOs

2024		Brandon J. Sink, Joseph M. McFarland III, William P. Boltz and Seemantini Godbole

2023		Brandon J. Sink, Joseph M. McFarland III, William P. Boltz and Juliette W. Pryor

2022		David M. Denton (who resigned as the Company’s Executive Vice President, Chief Financial Officer, effective April 30, 2022), Brandon J. Sink (who replaced Mr. Denton as Executive Vice President, Chief Financial Officer, effective April 30, 2022), Joseph M. McFarland III, William P. Boltz and Seemantini Godbole

2021		David M. Denton, Joseph M. McFarland III, William P. Boltz and Seemantini Godbole

2020		David M. Denton, Joseph M. McFarland III, William P. Boltz and Marisa F. Thalberg


56		NOTICE OF ANNUAL MEETING & PROXY STATEMENT 2025

Table of Contents

Compensation Tables

(4)

Equity award fair values were calculated at the applicable measurement date in accordance with FASB ASC Topic 718, and, for outstanding PSU awards, reflect trending performance through fiscal

year-end.

See Note 10, “Share-Based Payments,” to the Company’s consolidated financial statements in its Annual Report on Form

10-K

for the fiscal year ended January 31, 2025 for additional information about the Company’s accounting for share-based compensation arrangements, including the assumptions used in calculating the grant date fair values. A reconciliation between Summary Compensation Table Total Compensation and Compensation Actually Paid is set forth in the Other NEO Average Compensation Actually Paid table below. The reconciliations for prior fiscal years are included in the Pay Versus Performance section of the proxy statements for our 2023 and 2024 Annual Meeting of Shareholders.



Other NEO Average Compensation Actually Paid	2024 ($)

Summary Compensation Table — Total Compensation		5,861,556

- Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year		(4,151,170	)

+ Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year (a)		4,004,648

+ Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years		901,809

+ Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years for Which Applicable Vesting Conditions Were Satisfied During Fiscal Year		693,893

+ Dividends Paid During Fiscal Year on Unvested Stock Awards		60,344

= Other NEO Compensation Actually Paid (b)		7,371,080
(a) None of the awards granted during the reported year vested in the year of grant. (b) The CEO was not eligible for any pension benefits.

(5)

Company TSR reflects the

year-end

value assuming $100 was invested in Company stock at the market closing price on the

st trading day of fiscal 2019, determined consistent with reporting requirements under Item 201(e) of Regulation

S-K.

Source: Bloomberg Total Return Analysis. For the relevant reporting year cumulative TSR performance reflects the periods as follows: 2024, fiscal years 2020-2024; 2023, fiscal years 2020-2023; 2022, fiscal years 2020-2022; 2021, fiscal years 2020-2021.

(6)

Peer group TSR reflects the

year-end

value assuming $100 was invested in the S&P Retailing Industry Group Index (the “S&P Retail Index”) at the market closing price on the last trading day of fiscal 2019, consistent with reporting requirements under Item 201(e) of Regulation

S-K.

For the relevant reporting year cumulative TSR performance reflects the periods as follows: 2024, fiscal years 2020-2024; 2023, fiscal years 2020-2023; 2022, fiscal years 2020-2022; 2021, fiscal years 2020-2021.

(7)

Operating income for fiscal 2024 was adjusted for purposes of calculating annual incentive awards to exclude the impact of a $177 million gain in fiscal 2024 associated with the Company’s fiscal 2022 sale of its Canadian retail business, as described on page 39. Operating income for fiscal 2023 and 2022 was adjusted for purposes of calculating annual incentive awards to exclude impacts associated with the Company’s sale of its Canadian retail business. The Compensation Committee did not make any adjustments to GAAP operating income under the annual incentive awards for fiscal years 2020 and 2021.

Most Important Performance Measures

Sales

Operating Income (as adjusted)

Inventory Turnover

Pro Sales Growth

3-year average ROIC

3-year relative TSR vs. the median of S&P 500 companies


						NOTICE OF ANNUAL MEETING & PROXY STATEMENT 2025		57

Table of Contents

Compensation Tables

Relationship Between Compensation Actually Paid and Performance Measures in Table

A significant portion of our executive compensation program is performance-based with a balanced focus on

top-

and bottom-line growth and strategic initiatives. The Company’s most important performance metrics incentivize our executives to focus on operational objectives that are expected to drive shareholder value, which impacts the value of equity awards granted to and held by our executives.

Below are graphs showing the relationship of CEO and Other NEO compensation actually paid amounts to (i) the Company’s

TSR

and the S&P Retail Index TSR, (ii) the Company’s net income and (iii) the Company’s operating income (as adjusted).


58		NOTICE OF ANNUAL MEETING & PROXY STATEMENT 2025

Table of Contents

Compensation Tables

For information concerning the Company’s compensation philosophy and how the Company aligns executive compensation with

financial

performance, refer to the Compensation Discussion & Analysis section of this Proxy Statement.


						NOTICE OF ANNUAL MEETING & PROXY STATEMENT 2025		59