LOWES COMPANIES INC
For the period ended May 30, 2025. Filed Apr 17, 2025.
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May 30, 2025 · Filed Apr 17, 2025
Contents
Compensation Elements
II. COMPENSATION ELEMENTS
To support our compensation philosophy and objectives, the Compensation Committee has designed the executive compensation program with an appropriate balance between both annual and long-term compensation, as well as between fixed andat-risk pay. The largest portion of our executive compensation program is based upon achieving the Company’s financial and strategic performance objectives and contingent on achievement of challenging performance hurdles. The Board places significant emphasis on the long-term success of the Company and strong alignment with the interests of our shareholders, customers, associates and the communities in which we operate. Accordingly, long-term incentive award opportunities, as a percentage of total compensation, are significantly greater than annual incentive award opportunities.
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The following table lists the key elements of the Company’s 2024 executive compensation program:
Note: Compensation mix shown in the preceding table reflects annualized target for CEO compensation. The average annualized compensation mix for our other NEOs is as follows: base salary (14%), annual incentive awards (15%) and long-term incentive awards (71%) with the same award mix of PSUs, stock options and RSAs as shown above.
| (1) | Under the terms of these award agreements, executives must maintain employment with the Company during the three-year period, unless earlier terminated due to death, disability or qualified retirement (as defined in the grant agreement), to earn the awards. |
| (2) | ROIC is computed by dividing the Company’s lease adjusted net operating profit after taxes for the year by the average of the Company’s invested capital as of the beginning and end of the fiscal year. “Invested capital” for these purposes means the average of current year and prior year ending debt and shareholders’ (deficit)/equity. See Appendix A for our fiscal 2024 ROIC calculation. The return percentages for each fiscal year in the performance period are averaged to yield a ROIC measure for the three-year performance period. |
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We also provide broad-based financial and health and welfare benefits on the same terms and conditions applicable to all eligible associates, including a 401(k) Plan with Company match, anon-qualified deferred compensation plan and 401(k) benefit restoration plan with Company match, comprehensive group health insurance, voluntary life, disability and accident benefits, a discounted employee stock purchase plan and other benefits, such as reimbursement of costs associated with tax and financial planning, an annual physical examination, individual disability insurance and limited personal use of corporate aircraft, each of which are designed to enhance productivity and encourage the attraction and retention of top talent. Additionally, we maintain a severance plan for senior officers, which provides for severance payments, the continuation of health care benefits and Company-paid outplacement services in the event of a termination of employment with the Company under qualifying circumstances.
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COMPENSATION DECISION-MAKING PROCESS
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