UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
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☐ | Preliminary Proxy Statement | |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
☒ | Definitive Proxy Statement | |
☐ | Definitive Additional Materials | |
☐ | Soliciting Material Pursuant to § 240.14a-12 |
LOWES COMPANIES, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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☐ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |||
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☐ | Fee paid previously with preliminary materials. | |||
☐ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |||
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Notice of 2018 Annual Meeting & Proxy Statement
Lowes
April 20, 2018
Dear Fellow Shareholders:
I am pleased to invite you to attend our 2018 Annual Meeting of Shareholders to be held at 10:00 a.m., Eastern Time, on Friday, June 1, 2018 at the Ballantyne Hotel, 10000 Ballantyne Commons Parkway, Charlotte, North Carolina 28277. Details regarding admission to the meeting and the business to be conducted are described in the accompanying Notice of 2018 Annual Meeting of Shareholders and Proxy Statement.
Your vote is important. Regardless of whether you plan to attend the meeting, I strongly encourage you to vote as soon as possible to ensure that your shares are represented at the meeting. The accompanying Proxy Statement explains more about voting. Please read it carefully.
Sincerely,
Robert A. Niblock Chairman of the Board, President and Chief Executive Officer |
LOWES COMPANIES, INC.
1000 Lowes Boulevard
Mooresville, North Carolina 28117
(704) 758-1000
Notice of 2018 Annual Meeting of Shareholders
April 20, 2018
The 2018 Annual Meeting of Shareholders (the Annual Meeting) of Lowes Companies, Inc. (the Company) will be held at 10:00 a.m., Eastern Time, on Friday, June 1, 2018 at the Ballantyne Hotel, 10000 Ballantyne Commons Parkway, Charlotte, North Carolina 28277, for the purpose of voting on the following matters:
1. | To elect the 13 candidates nominated by the Board of Directors for election as directors; |
2. | To approve, on an advisory basis, the Companys named executive officer compensation in fiscal 2017; |
3. | To ratify the appointment of Deloitte & Touche LLP as the Companys independent registered public accounting firm for fiscal 2018; |
4. | To consider and vote upon the shareholder proposal set forth in the accompanying Proxy Statement, if properly presented at the Annual Meeting; and |
5. | To transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof. |
The Board of Directors unanimously recommends a vote FOR items 1, 2 and 3, and a vote AGAINST the shareholder proposal in item 4. The persons named as proxies will use their discretion to vote on other matters that may properly arise at the Annual Meeting or any adjournment or postponement thereof.
Only shareholders of record as of the close of business on March 23, 2018 will be entitled to notice of, and to vote at, the Annual Meeting.
Your vote is important. Whether or not you plan to attend the Annual Meeting, you are encouraged to vote as soon as possible to ensure that your shares are represented at the meeting. If you received a printed copy of the proxy materials by mail, you may vote your shares by proxy using one of the following methods: (i) vote via the Internet; (ii) vote by telephone; or (iii) complete, sign, date and return your proxy card in the postage-paid envelope provided. If you received only a Notice of Internet Availability of Proxy Materials by mail, you may vote your shares at the Internet site address listed on your notice. If you hold your shares through an account with a bank, broker or similar organization, please follow the instructions you receive from the holder of record to vote your shares.
Sincerely,
Ross W. McCanless
Chief Legal Officer and Secretary
Important Notice Regarding the Availability of Proxy Materials
for the Annual Meeting of Shareholders To Be Held on June 1, 2018:
The Notice of 2018 Annual Meeting of Shareholders, Proxy Statement and
2017 Annual Report to Shareholders are available at www.proxyvote.com.
PROXY SUMMARY
We have demonstrated a strong commitment to returning capital to our shareholders and have had continued dividend growth since 1961.
$18.1 Billion | 19% | $4.9 Billion | ||
SHARES REPURCHASED UNDER OUR SHARE REPURCHASE PROGRAM IN THE LAST FIVE YEARS |
2017 INCREASE IN ANNUAL DIVIDEND |
DIVIDENDS PAID IN THE LAST FIVE YEARS |
i | NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 |
FISCAL 2017 FINANCIAL AND OPERATIONAL HIGHLIGHTS
$4.4 Billion |
39 Million Shares |
$1.3 Billion |
$5.1 Billion | |||
IN CAPITAL RETURNED TO SHAREHOLDERS |
REPURCHASED UNDER THE SHARE REPURCHASE PROGRAM |
DIVIDENDS PAID | CASH FLOW FROM OPERATIONS |
2018 PROPOSALS | Board Recommends |
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Proposal 1: Election of Directors
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Proposal 2: Advisory Vote to Approve Named Executive Officer Compensation
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Proposal 3: Ratification of the Appointment of Independent Registered Public Accounting Firm
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Proposal 4: Shareholder Proposal to Reduce the Threshold to Call Special Shareholder Meetings to 10% of Outstanding Shares
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NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 | ii |
Table of Contents
Proxy Statement
The Board of Directors (the Board of Directors or the Board) of Lowes Companies, Inc. is providing these materials to you in connection with the 2018 Annual Meeting of Shareholders (the Annual Meeting). The Annual Meeting will be held at 10:00 a.m., Eastern Time, on Friday, June 1, 2018 at the Ballantyne Hotel, 10000 Ballantyne Commons Parkway, Charlotte, North Carolina 28277. References in this Proxy Statement to Lowes, the Company, we, us, our and similar terms refer to Lowes Companies, Inc.
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 | 1 |
General Information
2 | NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 |
General Information
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 | 3 |
General Information
Understanding the issues that are important to our shareholders is critical in ensuring that we address their interests in a meaningful and effective way. Lowes recognizes the value of and is committed to engaging with our shareholders and soliciting their views and input. In fiscal 2017, members of Lowes management and the Board continued this long-standing practice of shareholder engagement, reinforcing our commitment to building long-term relationships with our shareholders. We conduct shareholder outreach throughout the year to ensure that we understand and consider the issues of importance to our shareholders and are able to address them appropriately. During fiscal 2017, we engaged with representatives of many of our top institutional shareholders to discuss performance, strategy, board composition, refreshment and tenure, cybersecurity and risk management, climate change and sustainability efforts, governance practices, executive compensation and other matters. We report to our Nominating and Governance Committee and Board about these meetings and provide feedback from our shareholders.
The following diagram provides an overview of Lowes shareholder engagement practice:
4 | NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 |
Shareholder Engagement
We have a proven track record of responsiveness to shareholders and are committed to continued engagement. The following diagrams illustrate changes we have made to our governance and executive compensation practices over the years in response to shareholder feedback as well as our commitment to ongoing improvement.
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 | 5 |
Shareholder Engagement
6 | NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 |
Proposal 1: Election of Directors
Proposal 1: Election of Directors
We are asking our shareholders to vote on the election of the 13 candidates nominated by the Board of Directors for election as directors.
The Board has nominated the 13 candidates named in this proposal for election as directors at the Annual Meeting. If elected, each nominee will serve until his or her term expires at the 2019 Annual Meeting of Shareholders or until his or her successor is duly elected and qualified. Each nominee has agreed to be named in this Proxy Statement and to serve if elected.
All of the nominees are currently serving as directors except Mr. Brian C. Rogers, whose Board service would commence upon his election at the 2018 Annual Meeting of Shareholders. Mr. David H. Batchelder and Ms. Lisa W. Wardell were appointed to the Board effective in March 2018. The other current directors were elected to the Board at the 2017 Annual Meeting of Shareholders. In accordance with the Boards mandatory retirement policy, Mr. Robert L. Johnson will not stand for re-election at the 2018 Annual Meeting of Shareholders.
While Robert A. Niblock is nominated for re-election, on March 26, 2018, the Company announced that Mr. Niblock plans to retire as Chairman of the Board, President and Chief Executive Officer after a 25-year career with the Company. The Board has initiated a search for his successor, and in the interim Mr. Niblock will remain in his current role.
The Nominating and Governance Committee identifies, considers and recommends to the Board director candidates who have expertise that would complement and enhance the current Boards skills and experience. It also reviews the existing time commitments of director candidates to ensure that they do not have any obligations that would conflict with the time commitments of a director of the Company. The Nominating and Governance Committee also looks to recruit candidates with different perspectives so that they can contribute to the cognitive diversity on the Board, while also recognizing the importance of having diversity of age, gender, race and ethnicity on the Board. Generally, the Nominating and Governance Committee identifies candidates through third-party search firms and, from time to time, through business and organizational contacts of the directors and management.
In the past five years, the Company has refreshed more than half of its Board by adding eight new independent directors. At the same time, the Company also believes that it benefits from having several seasoned directors, including our Lead Director, on the Board who are familiar with the Companys business and can help facilitate the transfer of institutional knowledge. We believe the average tenure for our independent directors of less than five years reflects the balance the Board seeks between different perspectives brought by longer-serving and new directors.
Although the Company knows of no reason why any of the nominees would not be able to serve, if any nominee is unavailable for election, the proxy holders intend to vote your shares for any substitute nominee proposed by the Board. At the Annual Meeting, proxies cannot be voted for a greater number of individuals than the 13 nominees named in this Proxy Statement.
The Board of Directors unanimously recommends a vote FOR the election of each of the 13 nominees named in this proposal. Unless authority to vote in the election of directors is withheld, it is the intention of the persons named as proxies to vote FOR the election of each of the 13 nominees named in this proposal. |
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 | 7 |
Proposal 1: Election of Directors
IDENTIFYING AND EVALUATING DIRECTOR NOMINEES
consideration by the Nominating and Governance Committee. The Nominating and Governance Committee assesses directors time commitment to the Board throughout the year, including through the annual self-evaluation process, and it determined that all of the director nominees clearly demonstrated the necessary time commitment involved in serving on our Board and its committees.
Further, the Nominating and Governance Committee regularly assesses and closely monitors shareholders views on the appropriate number of public company boards on which directors may serve. In connection with its review in 2017, the Nominating and Governance Committee considered input from our shareholders during our engagement discussions; voting policies of the major proxy advisory firms; corporate governance guidelines adopted by other public companies; board trends at peer companies; and advice from outside advisors. As a result, the Board amended the Companys Corporate Governance Guidelines to reduce the number of public company boards on which our directors may serve from five to four, effective in June 2018.
Board Diversity
The Board is committed to having diverse individuals from different backgrounds with varying perspectives, professional experience, education and skills serving as members of the Board. The Board believes that a diverse membership with a variety of perspectives and experiences is an important feature of a well-functioning board, and the composition of the Board reflects the Boards commitment to diversity.
Board Criteria
Candidates nominated for election or re-election to the Board should possess the following qualifications:
high personal and professional ethics, integrity, practical wisdom and mature judgment;
broad training and experience at the policy-making level in business, government, education or technology;
expertise that is useful to the Company and complementary to the background and experience of other Board members;
willingness to devote the required amount of time to carrying out duties and responsibilities of Board membership;
commitment to serve on the Board over a period of several years to develop knowledge about the Companys principal operations; and
willingness to represent the best interests of all shareholders and objectively appraise management performance.
When determining whether to recommend a director for re-election, the Nominating and Governance Committee also considers the evaluation results of the Board, committees and individual directors and the attendance and overall engagement of the director in Board activities. |
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 | 9 |
Proposal 1: Election of Directors
DIRECTOR NOMINEES
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 | 11 |
Proposal 1: Election of Directors
DIRECTOR NOMINEES
12 | NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 |
Proposal 1: Election of Directors
DIRECTOR NOMINEES
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 | 13 |
Proposal 1: Election of Directors
DIRECTOR NOMINEES
14 | NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 |
Proposal 1: Election of Directors
DIRECTOR NOMINEES
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 | 15 |
Proposal 1: Election of Directors
DIRECTOR NOMINEES
16 | NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 |
Information About the Board of Directors and Committees of the Board
CORPORATE GOVERNANCE GUIDELINES AND CODE OF BUSINESS CONDUCT AND ETHICS
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 | 17 |
Information About the Board of Directors and Committees of the Board
COMPENSATION OF DIRECTORS
Fiscal 2017 Compensation
The following table shows the compensation paid to each non-employee director who served on the Board in fiscal 2017:
Name | Fees Earned or ($) |
Stock Awards ($)(1) |
Total ($) | ||||||||||||
Raul Alvarez |
115,000 | 176,484 | 291,484 | ||||||||||||
Angela F. Braly |
105,000 | 176,484 | 281,484 | ||||||||||||
Sandra B. Cochran |
90,000 | 176,484 | 266,484 | ||||||||||||
Laurie Z. Douglas |
90,000 | 176,484 | 266,484 | ||||||||||||
Richard W. Dreiling |
90,000 | 176,484 | 266,484 | ||||||||||||
Robert L. Johnson |
90,000 | 176,484 | 266,484 | ||||||||||||
Marshall O. Larsen |
135,000 | 176,484 | 311,484 | ||||||||||||
James H. Morgan |
90,000 | 176,484 | 266,484 | ||||||||||||
Bertram L. Scott |
90,000 | 176,484 | 266,484 | ||||||||||||
Eric C. Wiseman |
110,000 | 176,484 | 286,484 | ||||||||||||
The following table shows the number of deferred stock units held by each non-employee director as of February 2, 2018:
Name | Deferred Stock Units(#)
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Raul Alvarez |
26,217 | ||||
Angela F. Braly |
9,876 | ||||
Sandra B. Cochran |
4,178 | ||||
Laurie Z. Douglas |
6,478 | ||||
Richard W. Dreiling |
19,695 | ||||
Robert L. Johnson |
56,931 | ||||
Marshall O. Larsen |
56,931 | ||||
James H. Morgan |
6,478 | ||||
Bertram L. Scott |
4,178 | ||||
Eric C. Wiseman |
19,695 |
(1) | The dollar amount shown for these stock awards represents the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 CompensationStock Compensation (FASB ASC Topic 718) for 2,200 deferred stock units granted to each non-employee director in fiscal 2017. See Note 9, Accounting for Share-Based Payments to the Companys consolidated financial statements in its Annual Report on Form 10-K for the fiscal year ended February 2, 2018 for additional information about the Companys accounting for share-based compensation arrangements, including the assumptions used for calculating the grant date value of the deferred stock units. These amounts do not correspond to the actual value that may be recognized by a director with respect to these awards when they are paid in the form of Common Stock after the termination of the directors service. |
Director Stock Ownership Guidelines
To ensure that our directors become and remain meaningfully invested in Common Stock, non-employee directors are required to own shares of Common Stock having a market value equal to five times the annual retainer fee payable to them. A non-employee director must meet the stock ownership requirement within five years of becoming a member of the Board. In addition to shares owned by non-employee directors, the full value of deferred stock units are counted for purposes of determining a directors compliance with the stock ownership requirement. Except for Ms. Wardell, who joined the Board in March 2018, all of our directors have met or are on track to meet their objectives within the five-year time requirement.
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 | 19 |
Information About the Board of Directors and Committees of the Board
BOARD MEETINGS, COMMITTEES OF THE BOARD AND BOARD LEADERSHIP STRUCTURE
20 | NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 |
Information About the Board of Directors and Committees of the Board
BOARD MEETINGS, COMMITTEES OF THE BOARD AND BOARD LEADERSHIP STRUCTURE
ROLE OF THE LEAD DIRECTOR
The Companys Corporate Governance Guidelines provide that the Lead Director will:
| preside at all meetings of the Board at which the Chairman of the Board is not present, including executive sessions of the non-management directors; |
| serve as a liaison between the Chairman and the independent directors; |
| approve meeting agendas for the Board; |
| approve meeting schedules to assure that there is sufficient time for discussion of all agenda items; |
| have the authority to call meetings of the independent directors; and |
| be available for consultation and direct communication with major shareholders. |
The Lead Director also serves as the Chair of the Nominating and Governance Committee of the Board of Directors, which is comprised entirely of independent directors.
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 | 21 |
Information About the Board of Directors and Committees of the Board
BOARD MEETINGS, COMMITTEES OF THE BOARD AND BOARD LEADERSHIP STRUCTURE
In addition to requiring an independent Lead Director if the roles of Chairman and Chief Executive Officer are served by the same individual, Lowes Board has implemented additional practices to ensure that there is independent oversight of management.
BOARD REFRESHMENT | OVERSIGHT PRACTICES | |||||||||||||
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DIRECTOR NOMINEES JOINED LOWES BOARD WITHIN THE LAST 5 YEARS |
100% |
OF NON-MANAGEMENT DIRECTORS ARE INDEPENDENT |
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THE BOARD IS REFRESHED ON A REGULAR BASIS AND THE AVERAGE CURRENT TENURE OF THE INDEPENDENT DIRECTORS IS LESS THAN FIVE YEARS. | 100% |
OF ALL DIRECTORS ON THE AUDIT, COMPENSATION, NOMINATING AND GOVERNANCE AND PUBLIC POLICY COMMITTEES ARE INDEPENDENT |
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INDEPENDENT DIRECTORS MEET IN EXECUTIVE SESSION AT EACH OF THE REGULARLY SCHEDULED BOARD MEETINGS AND AS NECESSARY AT OTHER BOARD MEETINGS. |
ENHANCED BOARD RECRUITMENT | ||||||||||||||||
The Board is committed to having diverse individuals from different backgrounds with varying perspectives, professional experience, education and skills serving as members of the Board and believes that a diverse membership with a variety of perspectives and experiences is an important feature of a well-functioning board. Currently, our Board has the following expertise and characteristics in addition to the skills outlined on page 9 of this Proxy Statement: |
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1 | 2 | 4 | 7 | 4 | 2 | 1 | ||||||||||
DIRECTOR NOMINEE IS A CHIEF INFORMATION AND SECURITY OFFICER |
DIRECTOR NOMINEES BRING INVESTOR PERSPECTIVES |
DIRECTOR NOMINEES ARE CURRENT OR FORMER CHIEF FINANCIAL OFFICERS |
DIRECTOR NOMINEES HAVE RETAIL EXPERIENCE |
DIRECTOR NOMINEES ARE WOMEN |
DIRECTOR NOMINEES ARE AFRICAN-AMERICAN |
DIRECTOR NOMINEE IS HISPANIC |
Lowes independent directors remain committed to evaluating Lowes Board leadership structure at least annually. Under Lowes Corporate Governance Guidelines, the Board can and will change its leadership structure if it determines that doing so is in the best interest of Lowes shareholders.
22 | NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 |
Information About the Board of Directors and Committees of the Board
BOARD MEETINGS, COMMITTEES OF THE BOARD AND BOARD LEADERSHIP STRUCTURE
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 | 23 |
Information About the Board of Directors and Committees of the Board
BOARD MEETINGS, COMMITTEES OF THE BOARD AND BOARD LEADERSHIP STRUCTURE
Board Committees
The Board has five standing committees: the Audit Committee, the Compensation Committee, the Executive Committee, the Nominating and Governance Committee and the Public Policy Committee. The Board may also establish other committees from time to time as it deems necessary. Committee members and committee chairs are appointed by the Board. The members of these committees are identified in the following table:
🌑 Member
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Raul Alvarez
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Chair
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David H. Batchelder
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Angela F. Braly
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Chair
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Sandra B. Cochran
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Laurie Z. Douglas
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Richard W. Dreiling
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Robert L. Johnson
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Marshall O. Larsen
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Chair
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James H. Morgan
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Robert A. Niblock
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Chair
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Bertram L. Scott
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Lisa W. Wardell
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Eric C. Wiseman
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Chair |
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Each of these committees, with the exception of the Executive Committee, acts pursuant to a written charter adopted by the Board of Directors. The Executive Committee operates in accordance with the Companys Bylaws and Corporate Governance Guidelines. A copy of each written committee charter and the Corporate Governance Guidelines are available on the Companys website at www.Lowes.com/investor.
24 | NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 |
Information About the Board of Directors and Committees of the Board
BOARD MEETINGS, COMMITTEES OF THE BOARD AND BOARD LEADERSHIP STRUCTURE
The following table provides information about the operation and key functions of each of the standing Board committees:
Committee | Key Functions and Additional Information | Number of Meetings in Fiscal 2017 | |||||
Audit Committee
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Oversees the Companys accounting and financial reporting processes, internal controls and internal audit functions.
Reviews and discusses with management and the independent registered public accounting firm the annual and quarterly financial statements and earnings press releases.
Reviews and discusses the Companys major financial risk exposures and the steps management has taken to identify, assess, monitor, control, remediate and report such exposures.
Reviews with the Companys Chief Legal Officer and Chief Compliance Officer legal matters and the program of monitoring compliance with the Companys Code of Business Conduct and Ethics.
Reviews and pre-approves all audit and non-audit services proposed to be performed by the independent registered public accounting firm.
Reports regularly to the Board.
The Board has determined that five of the six members of the Audit Committee, Mssrs. Alvarez, Larsen, Morgan and Scott and Ms. Wardell, are each audit committee financial experts within the meaning of the SEC rules and that each of the members of the Audit Committee has accounting and related financial management expertise in accordance with the NYSE rules.
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Compensation Committee
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Reviews and approves on an annual basis the corporate goals and objectives relevant to the compensation for the executive officers, evaluates at least once a year the Chief Executive Officers performance in light of these established goals and objectives and, based upon this evaluation, determines and approves the Chief Executive Officers compensation, which it forwards to the Board for ratification by the independent directors.
Reviews and approves the compensation for the other executive officers.
Makes recommendations to the Board with respect to incentive compensation and equity-based plans that are subject to Board approval.
Reviews and approves all annual incentive plans for executives and all awards to executives under multi-year incentive plans, including equity-based incentive arrangements authorized under the Companys equity incentive compensation plans.
Oversees regulatory compliance and risk regarding compensation matters.
Reports regularly to the Board.
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Executive Committee
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Has authority to exercise all powers of the Board of Directors, except those reserved to the Board of Directors by the North Carolina Business Corporation Act or the Companys Bylaws.
Considers at least annually succession planning for the Chairman and Chief Executive Officer and provides a report on such succession planning to the Nominating and Governance Committee on a regular basis.
Reviews and recommends to the Board for approval the form and amount of director compensation.
Reports regularly to the Board.
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5 | |||||
Nominating and Governance Committee
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Develops criteria for evaluation of potential candidates for the Board and its committees.
Makes recommendations to the Board concerning committee appointments.
Makes recommendations to the Board with respect to determinations of director independence.
Identifies, evaluates and recommends director candidates to the Board.
Oversees annual evaluation of the Board, the committees of the Board and each individual director.
Develops and recommends to the Board the Corporate Governance Guidelines applicable to the Company.
Reviews and approves, ratifies or disapproves related person transactions.
Considers and recommends to the Board other actions relating to corporate governance.
Reports regularly to the Board.
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5 | |||||
Public Policy Committee
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Oversees the Companys overall corporate social responsibility.
Monitors the Companys reputation generally.
Assists the Board with the Companys enterprise risk management system by identifying, evaluating and monitoring social, political and environmental trends, issues, risks and concerns.
Reviews the Companys compliance with policies, programs and practices with regard to environmental protection and sustainability, government relations, privacy and social media, consumer product safety, responsible sourcing and employee safety.
Reviews and monitors the Companys positions and responses to significant public policy issues including sustainability.
Reviews and monitors the Companys policies and practices with respect to political contributions, lobbying priorities, trade association memberships and political action committees.
Reports regularly to the Board.
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5 |
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 | 25 |
Security Ownership of Certain Beneficial Owners and Management
Security Ownership of Certain Beneficial Owners and Management
The following table provides information about the beneficial ownership of Common Stock as of March 23, 2018, except as otherwise noted, by each person known by the Company to beneficially own more than 5% of the outstanding shares of Common Stock as well as each director, nominee for director, named executive officer and all current directors and executive officers as a group. Except as otherwise indicated below, each of the persons named in the table has sole voting and investment power with respect to the securities indicated as beneficially owned by such person, subject to community property laws where applicable. Unless otherwise indicated, the address for each of the beneficial owners is c/o Lowes Companies, Inc., 1000 Lowes Boulevard, Mooresville, North Carolina 28117.
Name or Number of Persons in Group | Number of Shares(1) | Percent of Class | ||||||||
Raul Alvarez |
26,317 | * | ||||||||
David H. Batchelder |
22,000 | * | ||||||||
Angela F. Braly |
9,914 | * | ||||||||
Sandra B. Cochran |
5,694 | * | ||||||||
Marshall A. Croom |
120,770 | * | ||||||||
Rick D. Damron |
224,327 | * | ||||||||
Laurie Z. Douglas |
6,503 | * | ||||||||
Richard W. Dreiling |
19,771 | * | ||||||||
Robert F. Hull, Jr. |
72,848 | * | ||||||||
Robert L. Johnson |
57,150 | * | ||||||||
Marshall O. Larsen |
59,150 | * | ||||||||
Michael P. McDermott |
94,463 | * | ||||||||
James H. Morgan |
6,503 | * | ||||||||
Robert A. Niblock |
1,769,758 | (2) | * | |||||||
Brian C. Rogers |
0 | * | ||||||||
Bertram L. Scott |
4,194 | * | ||||||||
Lisa W. Wardell |
0 | * | ||||||||
Jennifer L. Weber |
43,843 | * | ||||||||
Eric C. Wiseman |
19,771 | * | ||||||||
Directors and Executive Officers as a Group (21 total) |
2,518,410 | * | ||||||||
BlackRock, Inc. |
58,358,961 | 7.1 | %(3) | |||||||
The Vanguard Group |
65,105,267 | 7.9 | %(4) |
* | Represents holdings of less than 1%. |
(1) | Includes shares that may be acquired or issued within 60 days through exercise of stock options, settlement of PSUs upon vesting or settlement of deferred stock units upon termination of employment or board service under the Companys stock plans as follows: Raul Alvarez 26,317 shares; David H. Batchelder 0 shares; Angela F. Braly 9,914 shares; Sandra B. Cochran 4,194 shares; Marshall A. Croom 69,308 shares; Rick D. Damron 129,257 shares; Laurie Z. Douglas 6,503 shares; Richard W. Dreiling 19,771 shares; Robert F. Hull, Jr. 0 shares; Robert L. Johnson 57,150 shares; Marshall O. Larsen 57,150 shares; Michael P. McDermott 61,908 shares; James H. Morgan 6,503 shares; Robert A. Niblock 1,019,238 shares; Brian C. Rogers 0 shares; Bertram L. Scott 4,194 shares; Lisa W. Wardell 0 shares; Jennifer L. Weber 24,497 shares; Eric C. Wiseman 19,771 shares; and directors and executive officers as a group (21 total) 1,532,353 shares. |
(2) | Includes 93,883 shares with voting and investment power shared with spouse. |
(3) | Shares held at December 31, 2017, according to a Schedule 13G/A filed with the SEC on January 25, 2018 by BlackRock, Inc. (BlackRock), whose address is 55 East 52nd Street, New York, New York 10055. The Schedule 13G/A reports that BlackRock has sole voting power over 49,696,185 shares, shared voting power over no shares, sole investment power over 58,358,962 shares and shared investment power over no shares. |
(4) | Shares held at December 31, 2017, according to a Schedule 13G/A filed with the SEC on February 9, 2018 by The Vanguard Group, Inc. (Vanguard) whose address is 100 Vanguard Boulevard, Malvern, Pennsylvania 19355. The Schedule 13G/A reports that Vanguard has sole voting power over 1,194,413 shares, shared voting power over 194,525 shares, sole investment power over 63,745,883 shares and shared investment power over 1,359,384 shares. |
26 | NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires Lowes directors, executive officers and persons who beneficially own more than 10% of Lowes outstanding Common Stock (collectively, the reporting persons) to file with the SEC initial reports of their beneficial ownership and reports of changes in their beneficial ownership of Common Stock. Based solely on a review of such reports and written representations made by Lowes directors and executive officers that no other reports were required, the Company believes that the reporting persons complied with all applicable filing requirements on a timely basis during fiscal 2017.
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 | 27 |
Compensation Discussion and Analysis
Compensation Discussion and Analysis
This Compensation Discussion and Analysis (CD&A) explains the key elements of our executive compensation program and compensation decisions as they relate to the following named executive officers (NEOs) of the Company in the 2017 fiscal year:
Robert A. Niblock |
Chairman of the Board, President and Chief Executive Officer | |
Robert F. Hull, Jr. |
Chief Financial Officer(1) | |
Marshall A. Croom |
Chief Financial Officer(2) | |
Rick D. Damron |
Chief Operating Officer(3) | |
Michael P. McDermott |
Chief Customer Officer | |
Jennifer L. Weber |
Chief Human Resources Officer |
(1) | Mr. Hull retired as Chief Financial Officer on March 3, 2017. |
(2) | Mr. Croom was promoted to Chief Financial Officer upon Mr. Hulls retirement on March 3, 2017. |
(3) | Mr. Damron retired from the position of Chief Operating Officer on February 3, 2018. |
Our CD&A is organized as follows:
I. | Executive Summary |
II. | Compensation Philosophy and Elements |
III. | Compensation Decision-Making Process |
IV. | 2017 Compensation Actions |
V. | Other Compensation Policies |
VI. | Compensation Committee Report |
28 | NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 |
Compensation Discussion and Analysis
EXECUTIVE SUMMARY
We have demonstrated a strong commitment to returning capital to our shareholders and have had continued dividend growth since 1961.
$18.1 Billion | 19% | $4.9 Billion | ||
SHARES REPURCHASED UNDER OUR SHARE REPURCHASE PROGRAM IN THE LAST FIVE YEARS | FY2017 INCREASE IN ANNUAL DIVIDEND |
DIVIDENDS PAID IN THE LAST FIVE YEARS |
In Fiscal 2017, we delivered top line results above our expectations with positive comparable store sales in the U.S., Canada and Mexico. Total sales grew 5.5% to a record $68.6 billion, driven by comparable sales growth of 4.0%. Supported by our financial results and consistent capital allocation policies, we created and returned value to shareholders through the payment of $1.3 billion in dividends and the repurchase of $3.1 billion of our common stock.
We also made meaningful progress executing our strategy to expand our home improvement reach and further invest in omni-channel capabilities to support customers evolving needs. We are proud of our success in growing sales with the Pro customer, enhancing our in-home selling program, strengthening our market position in Canada and advancing our online shopping experience. In addition, we were pleased to announce a one-time $60 million aggregate cash bonus for hourly U.S. employees and reinvestments in employees through enhanced employee benefit offerings and training programs.
We remain focused on investing in and building the capabilities most relevant to the customer to further strengthen our competitiveness and enhance our position as the omni-channel home improvement project authority.
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 | 29 |
Compensation Discussion and Analysis
EXECUTIVE SUMMARY
The CD&A includes disclosure of our incentive compensation performance measures including: earnings before interest and taxes (EBIT), sales and return on non-cash average assets (RONCAA). EBIT for fiscal 2017 as presented in this Proxy Statement includes adjustments described on page 38, and this adjusted measure is referred to as Adjusted EBIT in this Proxy Statement. Three-Year Average RONCAA for fiscal 2017 includes adjustments described on page 40, and this adjusted measure is referred to as Adjusted Average RONCAA. Each of these performance measures is further described on pages 38 to 40.
30 | NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 |
Compensation Discussion and Analysis
EXECUTIVE SUMMARY
2017 Executive Compensation
Lowes has a long-standing commitment to pay for performance that we implement by providing a significant portion of compensation through variable pay arrangements. These arrangements are designed to hold our executive officers accountable for business results and reward them for consistently strong financial performance and the creation of value for our shareholders.
Our 2017 executive compensation program consisted of the following elements:
| Base salary |
| Annual incentive awards |
| Performance share unit awards (PSUs) |
| Grants of stock options |
| Grants of restricted stock awards (RSAs) |
| Retirement and health benefits |
| Limited perquisites |
Lowes mix is heavily performance-based with 72% of the CEOs and 65% of the other NEOs(¹) target compensation at risk and contingent upon the achievement of performance objectives or share price performance.
(1) | Mr. Hull is not included in the NEO data due to his retirement in March 2017. |
How Our Executive Compensation Is Tied to Performance
A significant portion of our executive compensation program is performance-based with a balanced focus on top- and bottom-line growth and leadership effectiveness.
| Annual Incentive Awards: Payout is based on the Companys achievement of financial (EBIT and sales) and Leadership Effectiveness goals. Minimum payout is zero if performance objectives are not achieved. |
| PSUs: Payout is based on the Companys achievement of a three-year average RONCAA goal established at the beginning of a three-year performance period and, since 2016, a relative total shareholder return (TSR) modifier which compares the Companys TSR to the median TSR of companies listed in the S&P 500 Index over a three-year period. Minimum performance objectives must be achieved for awards to be earned. |
| Stock Options: Value realized is based on the increase in the market value of Common Stock. |
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 | 31 |
Compensation Discussion and Analysis
EXECUTIVE SUMMARY
Based on our performance through fiscal 2017 illustrated below, our executives received the following payouts of performance- based compensation:
| Annual incentive payouts were driven by below target performance in Adjusted EBIT and above target performance in Sales and Leadership Effectiveness, resulting in below target overall award payments. |
| PSUs paid out at 83.5% of target based on Adjusted Average RONCAA achievement for the 2015-17 performance period. |
WHAT WE DO | WHAT WE DO NOT DO | |||||||
|
Provide 81% to 90% of total direct compensation opportunity (assuming target performance) for NEOs in the form of at-risk compensation.
|
|
|
|
Provide single-trigger severance or tax gross-ups following change-in-control in any management continuity agreements executed after 2012.
| |||
|
Annually assess peer group composition, financial and stock price performance, and competitive compensation practices.
|
|
|
|
Permit hedging or unauthorized trading of the Companys securities by our employees or directors.
| |||
|
Annually assess compensation-related risks associated with regulatory, shareholder and market changes.
|
|
|
|
Grant discounted stock options, extend the original option term, reprice or exchange underwater options without shareholder approval.
| |||
|
Annually assess the design, alignment and achievability of our incentive plans in relation to performance goals, business strategy and organizational priorities.
|
|
|
|
Provide an evergreen provision in our Long-Term Incentive Plan.
| |||
|
Link incentive compensation to a clawback policy.
|
|
|
|
Provide employment agreements to executives.
| |||
|
Limit incentive payouts to 200% of target awards.
|
|||||||
|
Require significant stock ownership by all senior executives.
|
|||||||
|
Annually conduct a say-on-pay vote.
|
|||||||
|
Provide limited perquisites.
|
32 | NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 |
Compensation Discussion and Analysis
EXECUTIVE SUMMARY
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 | 33 |
Compensation Discussion and Analysis
COMPENSATION PHILOSOPHY AND ELEMENTS
The following table lists the key elements of the Companys 2017 executive compensation program:
KEY ELEMENTS OF EXECUTIVE COMPENSATION
|
||||||||||
Element
|
Form
|
Key Characteristics
|
Link to Shareholder Value
|
Key Decisions
|
||||||
Base Salary | Cash | Fixed cash compensation tied to the scope and responsibilities of each executives position and the performance and effectiveness of the executive
|
Provide a foundation of fixed income to the executive; encourage retention and attraction of top talent; and recognize collaborative, purpose-driven leadership | Base salaries are reviewed annually each January based on the Compensation Committees evaluation of market compensation and an assessment of the executives performance. Approved adjustments are effective at the start of the fiscal year
|
||||||
Annual Incentive Awards |
Cash | At-risk cash compensation tied to the achievement of annual strategic and financial performance goals established by the Compensation Committee for each fiscal year
|
Promote the achievement of the Companys annual strategic and financial goals; incent and reward financial and operating performance | Annual incentive plan design is reviewed and approved each March. Performance is certified in March following the completion of the fiscal year
|
||||||
Long-Term Incentive Awards |
PSUs | PSUs are based on (i) the Companys average RONCAA(1) relative to pre-determined threshold, target and maximum levels of performance for the three-year performance period, and (ii) a relative TSR modifier
|
Promote the achievement of efficient long-term growth and, starting in 2016, total shareholder return performance | Long-term incentive plan design is reviewed and approved each March
Performance is certified in March following the completion of the performance period |
||||||
Stock Options | Stock options vest ratably over three-years(2)
|
Promote the value-creating actions necessary to increase the market value of Common Stock
|
Awards are approved in March with a 10-year life
|
|||||||
RSAs | RSAs cliff vest on the third anniversary of the grant date(2) | Promote executive retention, stock ownership and alignment of interests with shareholders
|
Executive stock ownership guidelines and actual stock holdings are reviewed annually
|
|||||||
Retirement And Other Benefit Plans |
401(k) Plan
Group Insurance Plan
Employee Stock Purchase Plan
Benefit Restoration Plan
Cash Deferral Plan
|
Broad-based retirement and welfare plans sponsored by the Company on the same terms and conditions applicable to all eligible employees, including supplemental 401(k) and deferred compensation benefits
|
Promote financial and physical wellness to enhance productivity and encourage the retention and attraction of top talent | Reviewed periodically to align with market practice | ||||||
Executive Benefits |
Other Benefits | Reimbursement of costs associated with tax and financial planning, physical examination, and personal use of corporate aircraft (CEO only)
|
Promote financial and physical wellness to enhance productivity and safety and to encourage the retention and attraction of top talent | Utilization is reviewed annually; programs are reviewed periodically to align with market practice |
(1) | RONCAA is a comprehensive long-term financial metric that incorporates both operating income and balance sheet performance in the calculation. This metric motivates management to generate sustained profitable growth over time while balancing the Companys effectiveness at allocating capital to drive future investment and growth. RONCAA is computed by dividing the Companys EBIT for the year by the average of the Companys non-cash assets as of the beginning and end of the fiscal year. The return percentages for each fiscal year in the performance period are averaged to yield a RONCAA measure for the three-year performance period. |
(2) | Executives must maintain employment with the Company during the three-year period, or terminate from the Company due to death, disability or qualified retirement (as defined in the grant agreement), to earn the awards. |
34 | NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 |
Compensation Discussion and Analysis
COMPENSATION DECISION-MAKING PROCESS
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 | 35 |
Compensation Discussion and Analysis
COMPENSATION DECISION-MAKING PROCESS
Compensation Benchmarking and Peer Group
Each year, the independent compensation consultant provides the Compensation Committee a review and analysis of the peer group companies used to assess compensation and performance. The Compensation Committee approved the use of data from two sources for fiscal 2017: the Survey Data Group and the Select Peer Group.
The Survey Data Group is comprised of a broad group of retail and general industry companies with which Lowes competes for executive talent, generally with over $15 billion in annual revenue, available in compensation surveys.
The Select Peer Group is comprised of retail and customer service companies selected for direct relevance to Lowes business using the following criteria:
| Headquartered in the United States with publicly-traded securities listed on a major United States exchange; |
| Operating in the Consumer Discretionary or Food & Staples retail sectors; |
| Annual revenue greater than $15 billion; and |
| Retail or customer service based business model focused on producing strong EBIT and TSR growth. |
The companies in the Select Peer Group for fiscal 2017 were:
Amazon.com, Inc. | Best Buy Co., Inc. | Costco Wholesale Corporation | ||
CVS Health Corporation | Kohls Corporation | Macys, Inc. | ||
Nordstrom, Inc. | Sears Holdings Corporation | Staples, Inc. | ||
Target Corporation | The Home Depot, Inc. | The Kroger Co. | ||
The TJX Companies, Inc. | Walgreen Co. | Wal-Mart Stores, Inc. |
The Select Peer Group was the same in fiscal 2017 as the prior year. The Compensation Committee agreed that these companies were relevant given our peer selection criteria and that the size of the Select Peer Group remained appropriate based on market practices.
SELECT PEER GROUP DATA FOR FISCAL 2017(1) |
||||||||||||||||||||||||||||||
Market | TSR | |||||||||||||||||||||||||||||
Revenues (MM)
|
Capitalization (MM)
|
EBIT (MM)
|
1-year
|
3-year
|
5-year
| |||||||||||||||||||||||||
75th Percentile |
$ | 123,620 | $84,043 | $ | 6,104 | 52.49% | 53.11% | 156.39% | ||||||||||||||||||||||
50th Percentile |
$ | 69,495 | $49,617 | $ | 4,106 | 19.26% | 20.90% | 84.48% | ||||||||||||||||||||||
25th Percentile |
$ | 29,481 | $15,744 | $ | 1,884 | -1.43% | -14.33% | 50.76% | ||||||||||||||||||||||
Lowes Companies, Inc. |
$ | 65,017 | $84,221 | $ | 5,936 | 41.08% | 57.69% | 186.15% | ||||||||||||||||||||||
Percentile Ranking |
43% | 79% | 71% | 64% | 79% | 79% |
Source: S&P Capital IQ
(1) | Revenues and EBIT are as of each companys latest fiscal year. Market Capitalization and TSR are as of February 2, 2018, which was Lowes fiscal year end date. |
At the November 2016 meeting and prior to promoting Mr. McDermott & Mr. Croom, the Compensation Committee reviewed a thorough compensation benchmark based on the two peer groups described above. The Compensation Committee concluded that the benchmark indicated that the NEOs target total direct compensation (TDC) approximated market median, with an opportunity to earn above market pay when the Company delivers results that exceed performance targets and below market pay when the company performance falls short of performance targets. The following chart summarizes Lowes pay positioning versus the market median and the results of the compensation benchmarking report used for the Compensation Committees 2017 compensation actions:
% DEVIATION FROM MARKET MEDIAN
|
||||||||
Salary
|
Target STI
|
Target LTI
|
Target TDC
| |||||
CEO |
-3% | 7% | -5% | -5% | ||||
Other NEOs |
-11% |
-9% |
-11% |
-10% |
36 | NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 |
Compensation Discussion and Analysis
2017 COMPENSATION ACTIONS
Base Salary Adjustments
The Compensation Committee reviews and adjusts the NEO base salaries in January each year after it has considered competitive benchmark and relative compensation positioning. In 2017, the Compensation Committee approved the following base salaries for the NEOs:
Name and Position
|
2016 Base Salary
|
2017 Base Salary
|
% Increase(1)
| ||||||||||||
Robert A. Niblock Chairman of the Board, President and Chief Executive Officer
|
$ |
1,300,000 |
|
$ |
1,300,000 |
|
|
0.0% |
| ||||||
Robert F. Hull(2) Former Chief Financial Officer |
$ |
769,000 |
|
$ |
118,307 |
|
|
|
| ||||||
Marshall A. Croom(2) Chief Financial Officer |
|
|
|
$ |
675,000 |
|
|
|
| ||||||
Rick D. Damron Chief Operating Officer |
$ |
790,000 |
|
$ |
806,000 |
|
|
2.0% |
| ||||||
Michael P. McDermott Chief Customer Officer |
$ |
650,000 |
|
$ |
675,000 |
|
|
3.8% |
| ||||||
Jennifer L. Weber Chief Human Resources Officer |
$ |
545,000 |
|
$ |
561,000 |
|
|
2.9% |
|
(1) | The general Company-wide base salary adjustments averaged approximately 3% for all employees in 2017, and the average Company-wide base salary adjustments averaged approximately 3% for all employees who were Senior Vice Presidents and above. |
(2) | Mr. Croom became the Chief Financial Officer upon Mr. Hulls retirement on March 3, 2017. |
Annual Incentive Awards
Our annual incentive plan provides each NEO the opportunity to receive an annual cash award based on the Companys achievement of predetermined financial and strategic goals. The formula for computing annual incentive payouts is as follows:
BASE SALARY | X | TARGET AWARD PERCENTAGE(1) (% of Base Salary) |
X |
PERFORMANCE GOAL ACHIEVEMENT LEVEL(2) (% of Target Level)
|
= | ANNUAL INCENTIVE AWARD EARNED |
(1) | The target award percentage was 200% of base salary for the CEO and 90% to 100% of base salary for the other NEOs. For fiscal 2017, target awards as a percentage of base salary remained the same as the prior year. |
(2) | The CEO had a maximum opportunity of 200% of target which was increased from 175% in the prior year, and the other NEOs had a maximum opportunity of 200% in fiscal 2017, which was the same percentage of target as the prior year. |
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 | 37 |
Compensation Discussion and Analysis
2017 COMPENSATION ACTIONS
The following table describes the financial and strategic goals for the 2017 annual incentive awards and the weighting assigned to each goal, which is the same for all of the NEOs:
Performance Metric
|
Metric Weighting
| |||||||
Description
|
Performance Measured By
|
|||||||
EBIT |
Rewards executives for profitability of over-all Company operations and focuses management on operational efficiency and expense management
|
Companys EBIT |
60% | |||||
Sales |
Focuses executives on effective merchandising, driving market share gains, and the enhancement of the Companys omni-channel sales and marketing
|
Companys net sales |
25% | |||||
Leadership Effectiveness |
Provides incentive compensation for leadership behavior that has the greatest positive impact on employee motivation, engagement and commitment to executing the Companys long-term strategy
|
Percentage of responses to the Lowes Employee Opinion Survey that rate leadership in the top two categories of effectiveness |
15% |
38 | NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 |
Compensation Discussion and Analysis
2017 COMPENSATION ACTIONS
Based on the performance metrics established by the Compensation Committee and the Companys 2017 performance, the Compensation Committee determined that Lowes achieved approximately 79% and approximately 89% of the target incentive opportunities for the CEO and the other NEOs, respectively.
Performance Metric(1)
|
Threshold
|
Target
|
Maximum
|
2017 Actual Performance
| ||||||||||||||||
EBIT
|
$6.496 billion
|
$7.043 billion
|
$7.408 billion
|
$6.556 billion(2)
| ||||||||||||||||
Sales
|
$66.416 billion
|
$68.335 billion
|
$69.227 billion
|
$68.619 billion
|
(1) | The performance goal achievement for the strategic goal of Leadership Effectiveness is disclosed on page 32. |
(2) | The Compensation Committee adjusted fiscal 2017 EBIT as described on page 38. |
Based on the Compensation Committees determination of the results above, the NEOs earned annual incentive awards for 2017 as follows:
Name
|
Base Salary
|
x
|
Target Award %
|
x
|
Performance Goal
|
=
|
Actual Award Earned
| ||||||||||||||||||||||||||||
Robert A. Niblock
|
$ | 1,300,000 | 200 | % | 79 | $ | 2,051,621 | ||||||||||||||||||||||||||||
Robert F. Hull(1)
|
$ | 769,000 | 90 | % | | | |||||||||||||||||||||||||||||
Marshall A. Croom
|
$ | 675,000 | 90 | % | 90 | $ | 548,768 | ||||||||||||||||||||||||||||
Rick D. Damron
|
$ | 806,000 | 100 | % | 88 | $ | 711,311 | ||||||||||||||||||||||||||||
Michael P. McDermott
|
$ | 675,000 | 100 | % | 88 | $ | 595,701 | ||||||||||||||||||||||||||||
Jennifer L. Weber
|
$ | 561,000 | 90 | % | 90 | $ | 456,087 |
(1) | Mr. Hull was not eligible for the annual incentive award due to his retirement from the Company in March 2017. |
Long-Term Equity Awards
2017 Target Long-Term
|
Equity Awards | Equity Award | |||||||||||||
Name
|
% of Base Salary
|
Target ($000s)
|
Granted ($000s)
| ||||||||||||
Robert A. Niblock(1)
|
|
725
|
%
|
$
|
9,425
|
|
$
|
7,068
|
| ||||||
Robert F. Hull(2)
|
|
|
|
|
|
|
|
|
| ||||||
Marshall A. Croom(3)
|
|
300
|
%
|
$
|
2,025
|
|
$
|
1,847
|
| ||||||
Rick D. Damron(4)
|
|
400
|
%
|
$
|
3,224
|
|
$
|
2,418
|
| ||||||
Michael P. McDermott(3)
|
|
400
|
%
|
$
|
2,700
|
|
$
|
2,559
|
| ||||||
Jennifer L. Weber(5)
|
|
300
|
%
|
$
|
1,683
|
|
$
|
1,683
|
|
(1) | Mr. Niblocks equity target increased from 700% to 725% for 2017. |
(2) | Mr. Hull was not eligible for the long-term incentive due to his retirement from the Company in March 2017. |
(3) | Mr. Croom and Mr. McDermott were granted additional equity related to their promotions as detailed in the Grants of Plan-Based Awards Table. |
(4) | Mr. Damrons 2017 equity awards will vest and be released based on his eligibility for retirement as set forth in his equity award agreements. |
(5) | Ms. Weber was granted a $1.262 million annual award as well as a $420,000 restricted stock award to replace the value of shares she forfeited at her prior employer per her offer letter dated December 31, 2015. |
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 | 39 |
Compensation Discussion and Analysis
2017 COMPENSATION ACTIONS
The chart below illustrates how the relative TSR modifier expands the PSU performance award to range from 34% of target at threshold performance to 200% of target at maximum performance:
PSU Performance Level
|
Payout Percentage (% of Target Award)
|
Lowes 3-Year TSR Percentage Spread from S&P 500 Index
|
Modifier(1) |
PSU Performance Level
|
Final Payout Opportunity (% of Target Award)(1)
| |||||||||||||
PSUs |
Maximum
|
150%
|
³+20%
|
1.33x
|
Maximum
|
200%
| ||||||||||||
Granted |
|
Target
|
100%
|
x | 0%
|
1.00x
|
= | Target
|
100%
| |||||||||
Threshold
|
50%
|
£
(20)%
|
0.67x
|
Threshold
|
34%
| |||||||||||||
<Threshold
|
0%
|
<Threshold
|
0%
|
(1) | Performance between discrete points will be interpolated; TSR modifier cannot be lower than 0.67x; if RONCAA is below threshold, there will be no payout. |
Performance Metric
|
Threshold
|
Target
|
Maximum
|
20152017
|
Performance
| |||||
RONCAA |
17.40% | 19.40% | 21.40% | 18.74% | 83.5 |
Benefit Restoration Plan and Perquisites
40 | NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 |
Compensation Discussion and Analysis
2017 COMPENSATION ACTIONS
Pay-for-Performance Alignment
(1) | PAC measures realizable total direct compensation for 3-year periods ending in the years shown taking 3-year TSR performance delivered into account. |
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 | 41 |
Compensation Discussion and Analysis
OTHER COMPENSATION POLICIES
42 | NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 |
Compensation Discussion and Analysis
COMPENSATION COMMITTEE REPORT
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 Companys Annual Report on Form 10-K for the fiscal year ended February 2, 2018.
Eric C. Wiseman, Chair
David H. Batchelder
Angela F. Braly
Sandra B. Cochran
Richard W. Dreiling
Robert L. Johnson
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 | 43 |
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
|
Option
|
Non-Equity
|
All Other
|
Total ($)
|
||||||||||||||||||||||||
Robert A. Niblock Chairman of the Board, President and Chief Executive Officer |
|
2017
|
|
|
1,300,000
|
|
|
0
|
|
|
6,422,849
|
|
|
1,179,070
|
|
|
2,051,621
|
|
|
255,118
|
|
|
11,208,658
|
| ||||||||
|
2016
|
|
|
1,300,000
|
|
|
0
|
|
|
6,922,556
|
|
|
2,319,098
|
|
|
1,925,716
|
|
|
202,649
|
|
|
12,670,019
|
| |||||||||
|
2015
|
|
|
1,300,000
|
|
|
0
|
|
|
5,955,842
|
|
|
2,988,878
|
|
|
2,657,993
|
|
|
252,451
|
|
|
13,155,164
|
| |||||||||
Robert F. Hull, Jr.* Former Chief Financial Officer |
|
2017
|
|
|
118,307
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
29,883
|
|
|
148,190
|
| ||||||||
|
2016
|
|
|
769,000
|
|
|
0
|
|
|
1,755,249
|
|
|
587,887
|
|
|
559,148
|
|
|
62,774
|
|
|
3,734,058
|
| |||||||||
2015 | 748,000 | 0 | 1,468,869 | 736,931 | 801,123 | 74,144 | 3,829,067 | |||||||||||||||||||||||||
Marshall A. Croom** Chief Financial Officer |
|
2017 |
|
|
675,000 |
|
|
0 |
|
|
1,544,907 |
|
|
417,717 |
|
|
548,768 |
|
|
44,508 |
|
|
3,230,900 |
| ||||||||
Rick D. Damron*** Chief Operating Officer |
|
2017
|
|
|
806,000
|
|
|
0
|
|
|
2,197,144
|
|
|
403,366
|
|
|
711,311
|
|
|
70,879
|
|
|
4,188,700
|
| ||||||||
|
2016
|
|
|
790,000
|
|
|
0
|
|
|
2,403,706
|
|
|
805,273
|
|
|
628,579
|
|
|
73,101
|
|
|
4,700,659
|
| |||||||||
|
2015
|
|
|
790,000
|
|
|
0
|
|
|
2,068,252
|
|
|
1,037,785
|
|
|
939,073
|
|
|
80,572
|
|
|
4,915,682
|
| |||||||||
Michael P. McDermott**** Chief Customer Officer |
|
2017 |
|
|
675,000 |
|
|
0 |
|
|
2,107,496 |
|
|
605,243 |
|
|
595,701 |
|
|
46,662 |
|
|
4,030,102 |
| ||||||||
Jennifer L. Weber Chief Human Resources Officer |
|
2017
|
|
|
561,000
|
|
|
0
|
|
|
1,567,511
|
|
|
210,604
|
|
|
456,087
|
|
|
34,884
|
|
|
2,830,086
|
| ||||||||
|
2016
|
|
|
500,930
|
|
|
0
|
|
|
1,653,963
|
|
|
743,969
|
|
|
364,231
|
|
|
26,384
|
|
|
3,289,477
|
|
* | Mr. Hull retired as Chief Financial Officer on March 3, 2017. |
** | Mr. Croom was promoted to Chief Financial Officer upon Mr. Hulls retirement on March 3, 2017. |
*** | Mr. Damron retired from the position of Chief Operating Officer on February 3, 2018. |
**** | Mr. McDermott was promoted to Chief Customer Officer on October 26, 2016. |
(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 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. Executives receive dividends on unvested shares of 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. |
See Note 9, Accounting for Share-Based Payments, to the Companys consolidated financial statements in its Annual Report on Form 10-K for the fiscal year ended February 2, 2018 for additional information about the Companys accounting for share-based compensation arrangements, including 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 PSU awards and RSAs. The PSUs will be earned based on the Companys RONCAA over a three-year performance period, and for the 2016 and 2017 PSUs, a relative TSR modifier. The PSUs are accounted for as equity awards. The 2017 stock awards amounts include the following grant date fair values of the PSUs: Mr. Niblock $5,244,780, Mr. Croom $1,127,280, Mr. Damron $1,794,315, Mr. McDermott $1,502,430 and Ms. Weber $936,960. The maximum value of the PSUs as of the grant date assuming the highest level of performance at the end of the three-year performance period would have been: Mr. Niblock $10,463,300, Mr. Croom $2,248,887, Mr. Damron $3,579,572, Mr. McDermott $2,997,266 and Ms. Weber $1,869,162. |
44 | NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 |
Compensation Tables
(3) | Amounts presented consist of the following for the 2017 fiscal year: |
Company Matching
|
Cost of ($)
|
|||||||||||||||||||||||||||||
Name
|
401(k)
|
Benefit Restoration ($)
|
Reimbursement of Tax ($)
|
Personal Use of
|
Total
| |||||||||||||||||||||||||
Mr. Niblock
|
|
7,225
|
|
|
129,867
|
|
|
9,304
|
|
|
103,908
|
|
|
4,814
|
|
|
255,118
|
| ||||||||||||
Mr. Hull
|
|
7,704
|
|
|
22,179
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
29,883
|
| ||||||||||||
Mr. Croom
|
|
2,362
|
|
|
38,846
|
|
|
1,200
|
|
|
0
|
|
|
2,100
|
|
|
44,508
|
| ||||||||||||
Mr. Damron
|
|
8,918
|
|
|
52,039
|
|
|
750
|
|
|
0
|
|
|
9,172
|
|
|
70,879
|
| ||||||||||||
Mr. McDermott
|
|
9,391
|
|
|
23,171
|
|
|
12,000
|
|
|
0
|
|
|
2,100
|
|
|
46,662
|
| ||||||||||||
Ms. Weber
|
|
9,578
|
|
|
19,257
|
|
|
6,049
|
|
|
0
|
|
|
0
|
|
|
34,884
|
|
All amounts presented above, other than the amount for personal use of corporate aircraft, equal the actual cost to the Company of the particular benefit or perquisite provided. The amount presented for personal use of corporate aircraft is equal to 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 Companys ownership of the aircraft.
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 | 45 |
Compensation Tables
Grants of Plan-Based Awards
This table presents the potential annual incentive awards the NEOs were eligible to earn in fiscal 2017, the stock options, RSAs and PSUs awarded to the executives in fiscal 2017 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 |
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 ($/Sh) |
Grant Awards ($) |
||||||||||||||||||||||||||||||||||||||||
Threshold ($) |
Target ($) |
Maximum ($) |
Threshold (#) |
Target (#) |
Maximum (#) |
|||||||||||||||||||||||||||||||||||||||||||
Mr. Niblock
|
|
455,000
|
|
|
2,600,000
|
|
|
5,200,000
|
|
|||||||||||||||||||||||||||||||||||||||
|
4/1/2017
|
|
|
3/23/2017
|
|
|
19,202
|
|
|
57,320
|
|
|
114,353
|
|
|
5,244,780
|
| |||||||||||||||||||||||||||||||
|
4/1/2017
|
|
|
3/23/2017
|
|
|
60,800
|
|
|
82.21
|
|
|
1,179,070
|
| ||||||||||||||||||||||||||||||||||
|
4/1/2017
|
|
|
3/23/2017
|
|
|
14,330
|
|
|
1,178,069
|
| |||||||||||||||||||||||||||||||||||||
Mr. Hull(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
Mr. Croom
|
|
236,250
|
|
|
607,500
|
|
|
1,215,000
|
|
|||||||||||||||||||||||||||||||||||||||
|
4/1/2017
|
|
|
3/23/2017
|
|
|
4,127
|
|
|
12,320
|
|
|
24,578
|
|
|
1,127,280
|
| |||||||||||||||||||||||||||||||
|
4/1/2017
|
|
|
3/23/2017
|
|
|
21,540
|
|
|
82.21
|
|
|
417,717
|
| ||||||||||||||||||||||||||||||||||
|
4/1/2017
|
|
|
3/23/2017
|
|
|
5,080
|
|
|
417,627
|
| |||||||||||||||||||||||||||||||||||||
Mr. Damron
|
|
282,100
|
|
|
806,000
|
|
|
1,612,000
|
|
|||||||||||||||||||||||||||||||||||||||
|
4/1/2017
|
|
|
3/23/2017
|
|
|
6,569
|
|
|
19,610
|
|
|
39,121
|
|
|
1,794,315
|
| |||||||||||||||||||||||||||||||
|
4/1/2017
|
|
|
3/23/2017
|
|
|
20,800
|
|
|
82.21
|
|
|
403,366
|
| ||||||||||||||||||||||||||||||||||
|
4/1/2017
|
|
|
3/23/2017
|
|
|
4,900
|
|
|
402,829
|
| |||||||||||||||||||||||||||||||||||||
Mr. McDermott
|
|
236,250
|
|
|
675,000
|
|
|
1,350,000
|
|
|||||||||||||||||||||||||||||||||||||||
|
4/1/2017
|
|
|
3/23/2017
|
|
|
5,500
|
|
|
16,420
|
|
|
32,757
|
|
|
1,502,430
|
| |||||||||||||||||||||||||||||||
|
4/1/2017
|
|
|
3/23/2017
|
|
|
31,210
|
|
|
82.21
|
|
|
605,243
|
| ||||||||||||||||||||||||||||||||||
|
4/1/2017
|
|
|
3/23/2017
|
|
|
7,360
|
|
|
605,066
|
| |||||||||||||||||||||||||||||||||||||
Ms. Weber
|
|
196,350
|
|
|
504,900
|
|
|
1,009,800
|
|
|||||||||||||||||||||||||||||||||||||||
|
4/1/2017
|
|
|
3/23/2017
|
|
|
3,430
|
|
|
10,240
|
|
|
20,428
|
|
|
936,960
|
| |||||||||||||||||||||||||||||||
|
4/1/2017
|
|
|
3/23/2017
|
|
|
10,860
|
|
|
82.21
|
|
|
210,604
|
| ||||||||||||||||||||||||||||||||||
|
4/1/2017
|
|
|
3/23/2017
|
|
|
5,110
|
|
|
420,093
|
| |||||||||||||||||||||||||||||||||||||
|
4/1/2017
|
|
|
3/23/2017
|
|
|
2,560
|
|
|
210,458
|
|
(1) | The executives are eligible to earn annual incentive compensation under the Companys annual incentive plan for each fiscal year based on the Companys achievement of one or more performance measures established at the beginning of the fiscal year by the Compensation Committee. For the 2017 fiscal year ended February 2, 2018, the performance measures selected by the Compensation Committee were the Companys EBIT (weighted 60% for the CEO and all other NEOs), sales (weighted 25% for the CEO and all other NEOs) and strategic initiatives (weighted 15% for the CEO and all other NEOs). The performance levels for the performance measures, the Companys actual performance and the amounts earned by the NEOs for the 2017 fiscal year are shown on page 39. The amounts earned by the executives are also reported in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table on page 44. |
(2) | The PSUs reported in this column are earned based on the Companys RONCAA over a three-year performance period and includes 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 on page 40. |
(3) | The RSAs vest on the third anniversary of the grant date or, if earlier, the date the executive terminates employment due to death or disability or, in the case of Mr. Niblock, in the event of retirement with the approval of the Board. For other executives who meet the retirement provisions of the RSA grant agreements, their awards will vest upon retirement but will not be available to the executive until the original vesting date of the award. Retirement for this purpose is defined as termination of employment with the approval of the Board on or after the date the executive has satisfied an age and service requirement, provided the executive has given the Board advance notice of such retirement. Messrs. Niblock and Croom have satisfied the age and service requirement for retirement specified in their award agreements. Mr. Damron satisfied the age, service and notification requirement for retirement specified in his award agreements and his retirement was approved by the Board, therefore his unvested awards vested upon his retirement and the shares will be available to him on the original vesting dates of his awards. Mr. McDermott and Ms. Weber will satisfy the age and service requirement for retirement once the executives age in addition to years of service equals at least 70; provided the executive is at least 55 years old. Ms. Weber received an additional 5,110 shares of RSAs to replace some of the equity value she forfeited at her previous employer. Mr. Croom received 6,540 PSUs, 3,640 RSAs and 15,410 options related to his promotion to Chief Financial Officer. Mr. McDermott received 10,640 PSUs, 5,920 RSAs and 25,080 options related to his promotion to Chief Customer Officer. |
46 | NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 |
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 executive terminates employment due to death or disability or, in the case of Mr. Niblock, in the event of retirement with approval of the Board, and remain exercisable until their expiration dates. The options granted to Messrs. Croom and McDermott and Ms. Weber will become exercisable in the event of retirement in accordance with the original three-year vesting schedule and remain exercisable until their expiration dates. Mr. Damron satisfied the retirement requirements under his option agreement. |
(5) | Mr. Hull retired as Chief Financial Officer on March 3, 2017. |
Outstanding Equity Awards at Fiscal Year-End
This table presents information about unearned or unvested stock and option awards held by the NEOs on February 2, 2018.
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 ($)(2) |
|
|
Equity Incentive Plan Awards; Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) |
|
|
Equity Incentive Plan Awards; Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) |
| ||||||||||||
Mr. Niblock |
327,000 | | 38.38 | 3/1/2023 | 89,910 | 9,125,865 | 206,235 | 20,932,853 | ||||||||||||||||||||||||||
257,000 | | 53.13 | 9/15/2024 | |||||||||||||||||||||||||||||||
98,287 | 49,143(4) | 69.44 | 9/15/2025 | |||||||||||||||||||||||||||||||
49,074 | 98,146(5) | 71.31 | 9/15/2026 | |||||||||||||||||||||||||||||||
| 60,800(6) | 82.21 | 4/1/2027 | |||||||||||||||||||||||||||||||
Mr. Hull(7) |
| | | | | | | | ||||||||||||||||||||||||||
| | | | |||||||||||||||||||||||||||||||
| | | | |||||||||||||||||||||||||||||||
| | | | |||||||||||||||||||||||||||||||
| | | | |||||||||||||||||||||||||||||||
Mr. Croom |
27,000 | | 38.38 | 3/1/2023 | 12,040 | 1,222,060 | 29,090 | 2,952,635 | ||||||||||||||||||||||||||
19,000 | | 53.13 | 9/15/2024 | |||||||||||||||||||||||||||||||
8,174 | 4,086(4) | 69.44 | 9/15/2025 | |||||||||||||||||||||||||||||||
5,124 | 10,246(5) | 71.31 | 9/15/2026 | |||||||||||||||||||||||||||||||
| 21,540(6) | 82.21 | 4/1/2027 | |||||||||||||||||||||||||||||||
Mr. Damron |
59,333 | | 53.13 | 9/15/2024 | 31,150 | 3,161,725 | 71,216 | 7,228,424 | ||||||||||||||||||||||||||
34,127 | 17,063(4) | 69.44 | 9/15/2025 | |||||||||||||||||||||||||||||||
17,040 | 34,080(5) | 71.31 | 9/15/2026 | |||||||||||||||||||||||||||||||
| 20,800(6) | 82.21 | 4/1/2027 | |||||||||||||||||||||||||||||||
Mr. McDermott |
30,000 | | 53.13 | 9/15/2024 | 16,710 | 1,696,065 | 35,413 | 3,594,420 | ||||||||||||||||||||||||||
11,287 | 5,643(4) | 69.44 | 9/15/2025 | |||||||||||||||||||||||||||||||
6,660 | 13,320(5) | 71.31 | 9/15/2026 | |||||||||||||||||||||||||||||||
| 31,210(6) | 82.21 | 4/1/2027 | |||||||||||||||||||||||||||||||
Ms. Weber |
6,030 | 12,060(8) | 76.50 | 4/1/2026 | 18,760 | 1,904,140 | 29,654 | 3,009,881 | ||||||||||||||||||||||||||
8,817 | 17,633(5) | 71.31 | 9/15/2026 | |||||||||||||||||||||||||||||||
| 10,860(6) | 82.21 | 4/1/2027 |
(1) | The unvested stock awards vest as follows: |
9/15/2018 | 4/1/2019 | 9/15/2019 | 4/1/2020 | Total | ||||||||||||||||
Mr. Niblock |
43,680 | | 31,900 | 14,330 | 89,910 | |||||||||||||||
Mr. Hull |
| | | | | |||||||||||||||
Mr. Croom |
3,630 | | 3,330 | 5,080 | 12,040 | |||||||||||||||
Mr. Damron |
15,170 | | 11,080 | 4,900 | 31,150 | |||||||||||||||
Mr. McDermott |
5,020 | | 4,330 | 7,360 | 16,710 | |||||||||||||||
Ms. Weber |
| 5,360 | 5,730 | 7,670 | 18,760 |
(2) | Amount is based on the closing market price of the Companys Common Stock on February 2, 2018 of $101.50. |
(3) | The number of unearned PSUs in this column is based on the Companys performance during the 2015, 2016 and 2017 fiscal years and equals (i) the target number of PSUs that may be earned based on the Companys RONCAA during the 2015 through 2017 fiscal year period, (ii) the |
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 | 47 |
Compensation Tables
maximum number of PSUs that may be earned based on the Companys RONCAA during the 2016 through 2018 fiscal year period after applying the target relative TSR modifier and (iii) the target number of PSUs that may be earned based on the Companys RONCAA during the 2017 through 2019 fiscal year period after applying the maximum relative TSR modifier. No dividends are paid or accrued on unearned PSUs. |
(4) | These options vest on September 15, 2018. |
(5) | These options vest in two annual installments on September 15, 2018 and September 15, 2019. |
(6) | These options vest in three annual installments on April 1, 2018, April 1, 2019 and April 1, 2020. |
(7) | Mr. Hulls unvested equity awards were canceled upon his retirement and he exercised all vested options prior to February 2, 2018. |
(8) | These options vest in two annual installments on April 1, 2018 and April 1, 2019. |
Option Exercises and Stock Vested at Fiscal Year-End
This table presents information about stock options exercised by the named executive officers and the number and the value of the named executive officers stock awards that vested during the 2017 fiscal year.
Option Awards | Stock Awards | |||||||||||||||||||
Number of Shares Acquired on Exercise |
Value Realized on Exercise |
Number of Shares Acquired on Vesting |
Value Realized on Vesting |
|||||||||||||||||
Name | (#) | ($) | (#) | ($) | ||||||||||||||||
Mr. Niblock |
447,000 | 23,551,052 | 146,000 | 11,766,340 | ||||||||||||||||
Mr. Hull |
345,451 | 16,316,620 | 22,500 | 1,849,725 | ||||||||||||||||
Mr. Croom |
12,700 | 682,752 | 10,000 | 805,220 | ||||||||||||||||
Mr. Damron |
| | 51,500 | 4,149,415 | ||||||||||||||||
Mr. McDermott |
| | 11,500 | 915,875 | ||||||||||||||||
Ms. Weber |
| | | |
Nonqualified Deferred Compensation
The Company sponsors three non-qualified deferred compensation plans for the benefit of senior management employees: the Benefit Restoration Plan (the BRP), the Cash Deferral Plan (the CDP) and the Deferred Compensation Program (the DCP).
48 | NOTICE OF ANNUAL MEETING AND PROXY STATEMENT 2018 |
Compensation Tables
The following table presents information about the amounts deferred by the NEOs under the Companys three deferred compensation plans.
Name
|
Plan
|
Executive ($)(1)
|
Company ($)(2)
|
Aggregate ($)(3)
|
Aggregate
|
Aggregate
|
||||||||||||||||
Mr. Niblock |
BRP
|
|
183,143
|
|
|
129,868
|
|
|
1,489,539
|
|
|
0
|
|
|
9,845,864
|
| ||||||
CDP
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
| |||||||
DCP
|
|
0
|
|
|
0
|
|
|
9,944,519
|
|
|
0
|
|
|
34,074,011
|
| |||||||
Mr. Hull |
BRP
|
|
31,311
|
|
|
22,179
|
|
|
330,644
|
|
|
3,132,772
|
|
|
0
|
| ||||||
CDP
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
|
|
0
|
| |||||||
DCP
|
|
0
|
|
|
0
|
|
|
467,510
|
|
|
0
|