Lowe's Companies (LOW) DEF 14ADefinitive proxy

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

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Filed by a Party other than the Registrant  ☐

Check the appropriate box:

LOWE’S 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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Dear Fellow Shareholders:

We thank you for your continued investment in Lowe’s. 2021 was Lowe’s centennial, a year in which we celebrated our remarkable growth from a small-town hardware store in Wilkesboro, North Carolina, to one of the world’s largest home improvement retailers. We extend our appreciation to our customers, our business partners and the more than 300,000 associates who demonstrated an unwavering commitment to delivering exceptional customer service and results in 2021.

We would like to highlight several of the ways the Board and management team have been working on your behalf this past year.

Oversight of Company Strategy: The Board has been actively engaged with management to implement our Total Home strategy, which is focused on providing our customers with the products and services they need for every project in the home. In 2021, the successful execution of our strategic priorities has enabled us to increase sales to our Pro and DIY customers and to continue to grow our market share. We delivered outstanding results this past year, with total sales growth of 7.4%, driven by comparable sales growth of 6.9%. Importantly, we drove improvements in two of our key growth areas, with consolidated Pro customer sales up 24% and Lowes.com sales up 18%. At the same time, we drove more than 170 basis points of operating margin improvement with our relentless focus on productivity improvements. The combination of higher sales and greater operating productivity resulted in a 55% increase in diluted earnings per share to $12.04 and a 36% increase compared to adjusted diluted earnings per share last year of $8.86.*

Board Composition: The Board is focused on maintaining a balance of distinguished leadership, diverse perspectives, strategic skill sets and professional experience relevant to its oversight of Lowe’s strategic objectives. Ten of our 11 director nominees are independent, 36% are women and 45% are racially or ethnically diverse. The Board is mindful of refreshing its membership, with more than half of the independent directors nominated for election at the Annual Meeting having joined the Board in the last six years.

Robust Shareholder Engagement Program: In 2021, we continued our robust shareholder engagement program, meeting with a broad range of shareholders throughout the year. This past winter, as part of our ESG-focused engagement efforts, we reached out to 34 investors, representing approximately 45% of shares outstanding at the time of outreach and met with 18 investors, representing approximately 32% of shares outstanding. These conversations focused on our strategy, human capital management efforts, diversity and inclusion programs and initiatives, Board composition, environmental sustainability and our corporate governance and executive compensation practices.

Focus on Operating Responsibly and Sustainably: The Board is focused on providing strong oversight of Lowe’s corporate responsibility efforts. The full Board provides oversight of overall sustainability risks, and the Sustainability Committee of the Board directly oversees Lowe’s corporate sustainability strategies. Our sustainability strategies and goals are based on commitments across three pillars: Our People & Our Communities, Product Sustainability and Operational Excellence. We are proud to share that we have committed to setting a science based net-zero target in 2022.

We value your continued engagement and support for Lowe’s. We encourage you to vote your shares at our Annual Meeting on Friday, May 27, 2022.

Sincerely,

Marvin R. Ellison Chairman, President and Chief Executive Officer		Richard W. Dreiling Lead Independent Director

LOWE’S COMPANIES, INC.

1000 Lowes Boulevard

Mooresville, North Carolina 28117

(704) 758-1000

Notice of 2022 Annual Meeting of Shareholders

April 14, 2022

The 2022 Annual Meeting of Shareholders (the “Annual Meeting”) of Lowe’s Companies, Inc. (the “Company”) will be held online via audio webcast at 10:00 a.m., Eastern Time, on Friday, May 27, 2022 at www..virtualshareholdermeeting.com/LOW2022, for the purpose of voting on the following matters:

The Board of Directors unanimously recommends a vote “FOR” each of the director nominees in proposal 1, “FOR” proposals 2, 3 and 4 and a vote “AGAINST” the shareholder proposals. 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 21, 2022 will be entitled to notice of, and to vote at, the Annual Meeting or any adjournment or postponement thereof.

We are holding the Annual Meeting in an online-only format. You will not be able to attend the Annual Meeting in person. To attend the Annual Meeting, vote and submit your questions during the Annual Meeting, you will need to visit the Annual Meeting website noted above and enter your 16-digit control number found on your proxy card, voting instruction form, Notice of Internet Availability of Proxy Materials or legal proxy, as applicable. Shareholders of record may follow these same instructions during the Annual Meeting to view the list of shareholders of record entitled to notice of the meeting. Prior to the Annual Meeting, you will be able to vote at www..proxyvote.com using your 16-digit control number or by the other methods described in the Proxy Statement. For more information about the online-only meeting format, please see pages 83 to 84 of the Proxy Statement.

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.

Sincerely,

Ross W. McCanless

Executive Vice President, General Counsel and Corporate Secretary

Table of Contents

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This document includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements including words such as “believe,” “expect,” “anticipate,” “plan,” “project,” “estimate,” “intend,” “will,” “should,” “could,” “would,” “may,” “strategy,” “potential,” “opportunity,” “outlook,” “guidance,” “scenario” and similar expressions are forward-looking statements. Forward-looking statements involve, among other things, expectations, projections and assumptions about future priorities, shareholder value, Lowe’s strategic initiatives and our environmental, social and other sustainability plans and goals. Such statements involve risks and uncertainties and we can give no assurance that they will prove to be correct. Actual results and outcomes may differ materially from those expressed or implied in such statements. Investors should carefully consider the risk and uncertainties described in “Item 1A – Risk Factors” in our most recent Annual Report on Form 10-K and as may be updated from time to time in Item 1A in our quarterly reports on Form 10-Q or other subsequent filings with the Securities and Exchange Commission (the “SEC”). All such forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update these statements other than as required by law. Inclusion of information in this Proxy Statement is not an indication that the subject or information is material to our business or operating results. Website references throughout this document are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this document.

PROXY SUMMARY

We seek to generate sustainable shareholder value by driving operational excellence throughout the enterprise, consistently generating high levels of cash flow and optimizing our capital deployment. We have demonstrated a strong commitment to returning capital to our shareholders and continued dividend growth since 1961.

This summary highlights certain information for your review in connection with the Annual Meeting. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting. References to “Lowe’s,” the “Company,” “we,” “us,” “our” and similar terms refer to Lowe’s Companies, Inc.

FISCAL 2021 FINANCIAL HIGHLIGHTS

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LAUNCHING OUR TOTAL HOME STRATEGY

At the end of 2020, we launched the next chapter in our evolution to becoming a best-in-class omnichannel retailer. Building on the success of our Retail Fundamentals strategy, the Lowe’s Total Home strategy is focused on accelerating market share gains by providing do-it-yourself (“DIY”), do-it-for-me (“DIFM”) and Pro customers the products and services they need to complete the entire project.

Lowe’s Total Home strategy has enabled us to increase sales to our DIY and Pro customers and to continue to grow our market share in 2021. As a result of our outstanding financial performance, we were able to deliver value to shareholders through the payment of $2.0 billion in dividends and the repurchase of $13.1 billion of our common stock this fiscal year. We are confident that we are making the right investments in the business to generate long-term growth and continue to create sustainable shareholder value.

OVERVIEW OF OUR EXECUTIVE COMPENSATION PROGRAM

Our Executive Compensation Program is Linked to Our Strategy

Our executive compensation program is designed to drive long-term shareholder value by aligning executive pay with our strategy and shareholder interests and attracting and retaining talented executives. Lowe’s has a long-standing commitment to pay for performance and provides a significant portion of compensation opportunities through variable pay arrangements. The Board of Directors (the “Board”) places significant emphasis on the long-term success of the Company and strong alignment with the interests of all stakeholders, including shareholders, customers, our associates and the communities in which we operate.

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Our executive compensation program is designed to reward executives for growth in the Company’s sales and earnings, the creation of long-term shareholder value and the effective execution of our business strategies and operating priorities. The primary objectives of our program are to:

Key Elements of Our 2021 Executive Compensation Program

Lowe’s compensation mix is heavily performance-based with 72% of the CEO’s and 67% of the other named executive officers’ (“NEOs”) annualized target compensation at-risk and contingent upon the achievement of performance objectives or relative and absolute share price performance. Additionally, 71% of the CEO’s and 65% of the other NEOs’ compensation is in the form of long-term incentives.

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Compensation Best Practices

CORPORATE RESPONSIBILITY

Corporate responsibility is a cornerstone of our Company and a key focus of management and the Board. We are committed to our people, communities and planet. The Sustainability Committee of the Board oversees Lowe’s environmental and social strategies, and our Sustainability Steering Committee, which is composed of executives and subject matter experts from across the Company, leads the Company’s efforts to integrate corporate responsibility into our business. In 2020, we refreshed our relevant priorities, which help to inform our sustainability strategies and goals. We are focused on our commitments across three pillars – Our People & Our Communities, Product Sustainability and Operational Excellence.

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Our People & Our Communities

Human Capital

The full Board oversees and regularly engages with our Chairman, President and Chief Executive Officer, our Executive Vice President, Human Resources and senior leadership on a broad range of human capital management topics, including culture, talent management and succession planning, compensation and benefits, diversity and inclusion and feedback gathered from the Company’s annual Building Engagement and Success Together (“BEST”) associate engagement survey. The full Board reviews talent management topics as standing agenda items, including CEO and senior management succession planning, diversity and inclusion and culture.

Lowe’s strives to be an employer of choice. We are committed to creating valuable career opportunities for our associates, supporting them and the communities where they live, and cultivating a culture that invites and encourages diverse opinions and ideas. We enable associates to build meaningful careers that unlock their potential in an inclusive workplace as we work together to deliver the right home improvement products to our customers, with the best service and value, across every channel and community we serve.

Diversity and Inclusion

We believe that, by building diverse and inclusive teams, we drive better ideas, positive business results and improve service through a deeper connection with our customers. We continue to execute on our multi-year program to integrate diversity and inclusion initiatives into our corporate strategy across three key areas: talent, culture and business. In our efforts to foster an inclusive culture, we launched a new multigenerational business resource group (“BRG”) in 2021, building upon the seven existing associate-led BRGs that are sponsored by our executive leadership team. We have also introduced badges for our store uniforms that identify the store associates who speak Spanish or American Sign Language. In 2021, we held our ninth annual Women’s Leadership Summit, focused on developing women leaders across our corporate and field locations. Additionally, Lowe’s joined the OneTen Coalition in 2020, with the joint commitment to advance the careers of one million Black Americans over the next 10 years.

In 2021, we continued to make progress with respect to diverse candidate slates for director-level-and-above positions, and we are partnering with our talent acquisition team and hiring managers to promote diverse interview panels for all open roles. Additionally, diversity is now integrated into quarterly business reviews, so leaders have visibility into their team’s actions and progress on driving Lowe’s culture, diversity and inclusion strategy.

In 2021, we published our inaugural diversity report, the 2020 Culture, Diversity & Inclusion Update, which highlights our diversity and inclusion initiatives and opportunities and provides additional information on how we assess diversity among our associates. We plan on publishing these reports annually to keep our stakeholders abreast of our strategy and results. In addition, we began publicly disclosing our consolidated EEO-1 report data in 2021.

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Below please find the diverse composition of our director nominees and executive officers.

Talent Development

We are committed to securing top talent and providing ongoing training and other developmental opportunities to facilitate meaningful careers at Lowe’s. In 2021, we enhanced our onboarding process so that new hires can quickly learn the skills needed for their position. We also offer a variety of leadership and development programs that develop skills and capabilities from product knowledge in our stores to advanced leadership principles for our leaders.

This year we expanded Lowe’s University Academies offerings and included certification programs for store and technology associates that further develop their skills and knowledge base.

Additionally, through Lowe’s Track to the Trades program, we provide tuition reimbursement to our associates, encouraging them to complete apprentice certifications in carpentry, plumbing, electrical, heat, air ventilation and cooling (“HVAC”) or appliance repair.

Total Rewards and Wellness

In the spirit of building the best team and providing them with the best care, we are proud of the financial and well-being benefits we offer to our associates. We have a strong track record of investing in our workforce by offering locally competitive salaries and wages. We offer a wide variety of health, welfare and financial benefits to our full-time and part-time associates, including health care and insurance benefits, retirement plans, an employee stock purchase plan, paid time off, leave programs and tuition assistance, among many others.

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In response to the evolving COVID-19 pandemic, we continued to evolve our benefits and wellness programs to increase access to care. We waived co-payments on pharmacy home deliveries, covered 100% of COVID-19 testing and vaccines, continued to operate our onsite clinics in a virtual care model and launched a new virtual behavioral health app. In partnership with CVS retail pharmacy and Premise onsite clinics, we launched a vaccine program, providing onsite access to sites across the country. In 2021, we also continued to offer emergency paid leave for associates who are suffering from COVID-19.

Store and Workplace Safety

Our associates and customers drive our success. Providing them with a safe environment for both working and shopping is essential. We strive to maintain a culture of safety which begins with our leaders modeling the behaviors we want our associates to adopt. We embed safety into associate onboarding, developmental e-learning and on-the-job training. In response to the COVID-19 pandemic, we instituted rigorous safety standards in support of social distancing and enhanced sanitizing and cleaning.

Product Sustainability

Lowe’s strives to put the customer first by providing high quality items that our customers can feel good about purchasing. We offer products and select vendors that promote human and environmental health. We are also expanding our pursuit of innovative, more efficient eco-products and educating customers on how to reduce their footprint at home.

We focus our product sustainability efforts on supplier social and environmental practices, responsible sourcing of natural resources and improvements to the environmental performance of our products. These include promoting compliance with our Vendor Code of Conduct, Human Rights Policy and Conflict Minerals Compliance Programs, pursuing our commitment to responsible wood sourcing, seeking to maintain products that are safe and compliant with applicable industry standards and state and federal regulations and increasing our offering of independently-certified products that have validated environmental claims.

Operational Excellence

We are focused on strengthening our business resilience and improving operational efficiency to reduce our impact on the environment. Our Board and the Sustainability Committee monitor and oversee progress toward our climate-related goals and targets, while our Sustainability Steering Committee leads the Company’s efforts to integrate corporate responsibility into our business, and our retail facilities and sustainability teams manage and track our operational energy use. Lowe’s actively combats climate change by working to lower operational and transportation-related energy use and greenhouse gas (“GHG”) emissions. In January 2022, building on our long-standing commitment to protect the climate, we announced a commitment to set a science based net-zero target in 2022, which will include near and long-term GHG emissions reduction goals for our full value chain, including Scopes 1, 2 and 3.

Lowe’s participates in the CDP’s climate, forestry and water security questionnaires to benchmark and quantify our environmental practices, to provide transparency on our progress and assist in the reduction of our contributions to climate change. We continue to align our sustainability reporting with the appropriate Sustainable Accounting Standards Board (“SASB”) standards for our industry, the Global Reporting Initiative (“GRI”) and the UN Sustainable Development Goals (“SDGs”). We also published our first Task Force on Climate-related Financial Disclosures (“TCFD”) report in 2021 to assess our climate-related risks and opportunities and better understand the potential impacts on our value chain.

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More information about Lowe’s corporate responsibility efforts and initiatives, including our Corporate Responsibility Report and Culture, Diversity & Inclusion Report, our sustainability policies and disclosure along sustainability frameworks is available on the Company’s website. Our corporate responsibility goals are aspirational and may change, and statements regarding our goals are not guarantees or promises that they will be met.

SHAREHOLDER ENGAGEMENT

Lowe’s recognizes the value of and is committed to engaging with our shareholders and soliciting their views and input. This past year, members of Lowe’s management and the Board continued our long-standing practice of shareholder engagement, reinforcing our commitment to building strong, 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.

Since the beginning of fiscal 2021, we have met with shareholders representing approximately 70% of our institutionally-held shares in a number of forums, including as part of our regular investor relations outreach efforts and environmental, social and governance (“ESG”)-focused dialogues. We report the feedback from our shareholders on a regular cadence to the full Board and its relevant committees, who have used this information to inform numerous changes to enhance our compensation, governance and sustainability efforts, including:

The following diagram provides an overview of Lowe’s shareholder engagement cycle:

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This past winter, we conducted a round of investor engagement focused primarily on ESG topics, including our strategy, human capital management efforts, diversity and inclusion programs and initiatives, Board composition, environmental sustainability and our corporate governance and executive compensation practices. As part of this engagement effort, we contacted 34 investors, representing approximately 45% of our outstanding shares at the time of outreach and met with 18 investors, representing approximately 32% of our outstanding shares. Our Lead Independent Director met with shareholders representing approximately 21% of our outstanding shares to provide a direct line of communication between our shareholders and the Board of Directors. Overall, we received generally positive feedback on our current governance, compensation and sustainability practices. We plan to continue robust ESG-focused investor engagement going forward.

Winter 2021 – 2022 ESG Engagement^*

*Percentages of outstanding shares are as of the time of outreach.

CORPORATE GOVERNANCE BEST PRACTICES

Sound and Effective Board Practices

Active Board oversight of Lowe’s strategy, business initiatives, industry positioning, human capital management, diversity and inclusion and environmental and social topics

Active Board oversight of risk management, including cybersecurity and data protection

Robust shareholder engagement program, including participation of independent directors

Active Board engagement in succession planning of executive officers

Annual Board, committee, individual director and CEO evaluations

Engaged Board with Demonstrated Commitment to Refreshment and Independence

10 out of 11 director nominees (91%) are independent

Annual review of Board leadership structure

Lead Independent Director with robust and well-defined responsibilities

Audit, Compensation, Nominating and Governance, Sustainability and Technology Committees are composed solely of independent directors

Executive sessions of independent directors led by the Lead Independent Director at each Board meeting

Director mandatory retirement age of 75 years old

Proactive Board and committee refreshment with focus on optimal mix of skills and experience

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Commitment to Shareholder Rights

Shareholder ability to call special meetings (reduced ownership threshold to 15% in 2020)

Market standard shareholder right of proxy access

Directors elected annually to serve one-year terms

Majority voting standard in uncontested director elections

No shareholder rights plan

Robust year-round shareholder engagement process

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Proposal 1: Election of Directors

Proxy Statement

The Board of Directors of Lowe’s Companies, Inc. is providing these materials to you in connection with the 2022 Annual Meeting of Shareholders (the “Annual Meeting”). The Annual Meeting will be held online via audio webcast at 10:00 a.m., Eastern Time, on Friday, May 27, 2022 at www..virtualshareholdermeeting..com/LOW2022. This Proxy Statement and related materials were first made available starting April 14, 2022.

Proposal 1: Election of Directors

We are asking our shareholders to vote on the election of the 11 candidates nominated by the Board of Directors for election as directors.

The Board has nominated the 11 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 2023 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 Colleen Taylor, whose Board service would commence upon her election at the 2022 Annual Meeting of Shareholders. The other current directors were elected to the Board at the 2021 Annual Meeting of Shareholders.

The Nominating and Governance Committee identifies, considers and recommends to the Board director candidates who have expertise that would complement and enhance the current Board’s skills and experience. It also reviews the existing time commitments of director candidates to confirm 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. The Nominating and Governance Committee considers a diverse slate of candidates for nomination to the Board from a number of sources, including third-party search firms and, from time to time, business and organizational contacts of the directors and management.

Among our 11 nominees for election to the Board, four self-identify as women and five self-identify as people of color (meaning an individual who self-identifies as Black or African American, Hispanic or Latino, Asian, Native Hawaiian or Other Pacific Islander or American Indian or Alaska Native).

The Board has remained mindful of refreshing its membership, with more than half of the independent directors nominated for election at the Annual Meeting having joined the Board in the last six years. At the same time, the Company also believes that it benefits from having several longer tenured directors on the Board, including our Lead Independent Director, who are familiar with the Company’s business and can help facilitate the transfer of institutional knowledge. We believe the average tenure for our independent director nominees of 5.2 years reflects the appropriate 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 11 nominees named in this Proxy Statement.

		The Board of Directors unanimously recommends a vote “FOR” the election of each of the 11 nominees named in this proposal.

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Proposal 1: Election of Directors

IDENTIFYING AND EVALUATING DIRECTOR NOMINEES

IDENTIFYING AND EVALUATING DIRECTOR NOMINEES

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Proposal 1: Election of Directors

IDENTIFYING AND EVALUATING DIRECTOR NOMINEES

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Proposal 1: Election of Directors

IDENTIFYING AND EVALUATING DIRECTOR NOMINEES

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Proposal 1: Election of Directors

IDENTIFYING AND EVALUATING DIRECTOR NOMINEES

Director Nominees’ Skills, Backgrounds and Expertise

Our director nominees possess a balance of distinguished leadership, diverse perspectives, strategic skill sets, backgrounds and professional experience relevant to our business and strategic objectives.

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Proposal 1: Election of Directors

DIRECTOR NOMINEES

DIRECTOR NOMINEES

RAUL ALVAREZ

 

		Director Since: 2010   Age: 66   Lowe’s Board Committees: • Compensation, Chair • Sustainability • Technology   Current Public Company Directorships: • Eli Lilly and Company • First Watch Restaurant Group, Inc. • Traeger, Inc.

Mr. Alvarez has been an Operating Partner of Advent International Corporation, a private equity firm, since 2017. He retired as a director and the Chairman of Skylark Co., Ltd., a public Japanese holding company operating more than 3,000 restaurants, in March 2018. Mr. Alvarez served as President and Chief Operating Officer of McDonald’s Corporation, which franchises and operates over 32,000 McDonald’s restaurants in the global restaurant industry, from August 2006 until his retirement in December 2009. Previously, he served as President of McDonald’s North America from January 2005 to August 2006 and as President of McDonald’s USA from July 2004 to January 2005. Mr. Alvarez joined McDonald’s in 1994 and held a variety of leadership positions during his tenure with the company, including Chief Operations Officer and President of the Central Division, both with McDonald’s USA, and President of McDonald’s Mexico. Before joining McDonald’s, Mr. Alvarez served as a Corporate Vice President and as Division Vice President-Florida for Wendy’s International, Inc. from 1990 to 1994. Prior to that, he was with Burger King Corporation from 1977 to 1989 where he held a variety of positions, including Managing Director of Burger King Spain, President of Burger King Canada and Regional Vice President for the Florida Region.

Mr. Alvarez served on the boards of Realogy Holdings Corp. from August 2013 to May 2018 and Dunkin’ Brands Group, Inc. from May 2012 to December 2020.

 

Specific Experience, Qualifications, Attributes and Skills Relevant to Lowe’s

Mr. Alvarez brings to the Lowe’s Board more than 40 years of experience in the retail industry, as well as extensive executive leadership experience in managing some of the world’s best known brands. As a senior executive of the leading global foodservice retailer and other global restaurant businesses, Mr. Alvarez developed in-depth knowledge of consumer marketing, brand management, multi-national operations and strategic planning.

DAVID H. BATCHELDER

 

		Director Since: 2018   Age: 72   Lowe’s Board Committees: • Compensation • Nominating and Governance

 

 

Mr. Batchelder was a founder, principal and member of the investment committee at Relational Investors, which managed over $6.5 billion for some of the largest pension funds in the world, from 1996 to 2015. He has over 30 years of financial management and mergers and acquisitions experience. Mr. Batchelder has served as a director of both large public and private companies in a wide range of industries (including retail, pharmaceuticals, waste disposal, healthcare, technology, energy and construction), including his service as a director on the board of The Home Depot, Inc. from 2007 to 2011.

From 1988 to 2005, Mr. Batchelder was also a Principal of Relational Advisors LLC, a financial advisory and investment banking firm. Prior to founding Relational Investors, Mr. Batchelder held various executive positions at Mesa Petroleum Company, including Chief Financial Officer and President and Chief Operating Officer, and served on Mesa’s board of directors. Prior to working at Mesa, Mr. Batchelder was an Audit Manager with Deloitte & Touche LLP.

 

Specific Experience, Qualifications, Attributes and Skills Relevant to Lowe’s

Mr. Batchelder’s experience as a board member of several public and private companies provides him with valuable perspectives on corporate governance and board dynamics. In addition, his experience from Relational Investors provides our Board invaluable insights into the views of institutional investors and perspectives on Company performance and opportunities. Having served in a number of senior executive positions at Mesa, Mr. Batchelder contributes to the operational management and strategic business development skills of our Board.

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Proposal 1: Election of Directors

DIRECTOR NOMINEES

SANDRA B. COCHRAN

 

		Director Since: 2016   Age: 63   Lowe’s Board Committees: • Audit • Sustainability, Chair   Current Public Company Directorships: • Cracker Barrel Old Country Store, Inc.

Ms. Cochran has served as a director and as President and Chief Executive Officer of Cracker Barrel Old Country Store, Inc., which operates over 664 old country stores and restaurants across 45 states, since September 2011. Ms. Cochran joined Cracker Barrel in April 2009 as Executive Vice President and Chief Financial Officer and was named President and Chief Operating Officer in November 2010. She was previously Chief Executive Officer at book retailer Books-A-Million, Inc. from February 2004 to April 2009 and also served as that company’s President from August 1999 to February 2004, Chief Financial Officer from September 1993 to August 1999 and Vice President of Finance from August 1992 to September 1993.

Ms. Cochran served on the board of Dollar General Corporation from December 2012 to April 2020.

 

Specific Experience, Qualifications, Attributes and Skills Relevant to Lowe’s

Ms. Cochran brings to Lowe’s Board more than 25 years of retail experience as well as expertise in a number of critical areas, including marketing, risk management and strategic planning. Ms. Cochran also has significant executive-level financial experience, which she developed while serving in multiple leadership finance positions, including Chief Financial Officer of both Cracker Barrel Old Country Store, Inc. and Books-A-Million, Inc. Her financial expertise will continue to be a tremendous asset as the Company continues to develop as an omnichannel home improvement company.

LAURIE Z. DOUGLAS

 

		Director Since: 2015   Age: 58   Lowe’s Board Committees: • Audit • Nominating and Governance • Technology, Chair

Ms. Douglas has served as Senior Vice President, Chief Information Officer and Chief Digital Officer of Publix Super Markets, Inc., an operator of retail food and pharmacy in Florida, Georgia, Alabama, South Carolina, Tennessee, North Carolina and Virginia, since 2019. From 2006 through 2018, she was Senior Vice President, Chief Information Officer and Chief Security Officer of Publix Super Markets. Before joining Publix Super Markets, Ms. Douglas served as Senior Vice President and Chief Information Officer of FedEx Kinko’s Office and Print Services, Inc. from 2004 to 2005. From 2003 to 2004, she was Senior Vice President and Chief Information Officer of Kinko’s, Inc.

 

Specific Experience, Qualifications, Attributes and Skills Relevant to Lowe’s

Ms. Douglas brings to Lowe’s Board many years of setting the enterprise technology, digital and security visions and driving the related implementations for two Fortune 500 companies. Ms. Douglas’ expertise spans broad IT disciplines, including application development and infrastructure, digital and mobile, omnichannel, data security and regulatory compliance. Ms. Douglas is a highly respected technology leader focused on driving shareholder value with technology solutions that foster premier customer service, operational excellence and profitable growth and who has financial management responsibility for IT investments. Ms. Douglas also has relevant experience with emerging technologies to ensure ongoing relevance as technology changes at an unprecedented rate.

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Proposal 1: Election of Directors

DIRECTOR NOMINEES

RICHARD W. DREILING

 

		Director Since: 2012   Age: 68   Lowe’s Board Committees: •  Nominating and Governance   Current Public Company Directorships: •  Dollar Tree, Inc. •  Kellogg Company

 

 

Mr. Dreiling serves as the Lead Independent Director of the Lowe’s Board of Directors. Mr. Dreiling has served as a director and Executive Chairman of Dollar Tree, Inc., a leading operator of discount variety stores, since March 2022. Mr. Dreiling retired in June 2015 from Dollar General Corporation, the nation’s largest small-box discount retailer, as Chief Executive Officer, a position he held since January 2008. Mr. Dreiling served as Chairman of Dollar General Corporation from December 2008 until January 2016 and as Senior Advisor from June 2015 until January 2016. Before joining Dollar General, Mr. Dreiling served as Chief Executive Officer, President and a director of Duane Reade Holdings, Inc. and Duane Reade Inc., the largest drugstore chain in New York City, from November 2005 until January 2008, and as Chairman of Duane Reade from March 2007 until January 2008. Prior to that, beginning in July 2003, Mr. Dreiling served as Executive Vice President-Chief Operating Officer of Longs Drug Stores Corporation, an operator of a chain of retail drug stores on the West Coast and Hawaii. Prior to joining Longs Drug Stores, his roles included Executive Vice President-Marketing, Manufacturing and Distribution at Safeway, Inc. and President of Vons, a division of Safeway.

Mr. Dreiling served on the boards of PulteGroup, Inc. from December 2015 to May 2022 and Aramark Corporation from February 2016 to April 2022.

 

Specific Experience, Qualifications, Attributes and Skills Relevant to Lowe’s

Mr. Dreiling brings to Lowe’s Board more than 40 years of retail industry experience at all operating levels and a unique perspective as a result of his experience progressing through the ranks within various retail companies. Over the course of his career, Mr. Dreiling has developed deep insight into all key areas of a retail business as a result of his experience overseeing the operations, marketing, manufacturing and distribution functions of a number of retail companies. Mr. Dreiling also has strong business development expertise in expanding the footprint and offerings provided by several retailers into new regions.

MARVIN R. ELLISON

 

		Director Since: 2018   Age: 57   Current Public Company Directorships: •  FedEx Corporation

Mr. Ellison has served as President and Chief Executive Officer of Lowe’s since July 2018 and as Chairman of the Lowe’s Board of Directors since May 2021. Mr. Ellison previously served as Chief Executive Officer of J. C. Penney Company, Inc., a department store retailer, from August 2015 to May 2018 and Chairman of the Board from August 2016 to May 2018. He served as President of J. C. Penney from November 2014 to July 2015. Mr. Ellison served as Executive Vice President–U.S. Stores of The Home Depot, Inc., a home improvement retailer, from August 2008 to October 2014. He also served in a variety of operations roles at The Home Depot, including as President–Northern Division from 2006 to 2008, Senior Vice President–Logistics from 2005 to 2006, Vice President–Logistics from 2004 to 2005, and Vice President–Loss Prevention from 2002 to 2004. From 1987 to 2002, Mr. Ellison served in a variety of operational roles with Target Corporation.

Mr. Ellison served as a director of H&R Block, Inc. from 2011 to 2014 and a director of J. C. Penney Company, Inc. from 2014 to 2018. Mr. Ellison also serves on the board of the Retail Industry Leaders Association.

 

Specific Experience, Qualifications, Attributes and Skills Relevant to Lowe’s

Mr. Ellison has more than 35 years of leadership and operational experience in the retail industry, including expertise in managing a large network of stores and employees as well as global logistics networks. He brings extensive experience in the home improvement industry, having spent 12 years in senior-level operations roles with The Home Depot, where he oversaw U.S. sales, operations, install services and pro strategic initiatives, and improved customer service and efficiency across the organization to serve both DIY and Pro customers.

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Proposal 1: Election of Directors

DIRECTOR NOMINEES

DANIEL J. HEINRICH

 

		Director Since: 2021   Age: 66   Lowe’s Board Committees: • Compensation • Technology   Current Public Company Directorships: • Aramark Corporation • Dollar Tree, Inc.

Mr. Heinrich most recently served as Executive Vice President, Chief Financial Officer of The Clorox Company, a global manufacturer and marketer of consumer and professional products, from June 2009 to November 2011. Mr. Heinrich joined Clorox in 2001 as Vice President, Controller and served in that role until 2003. In 2003, he became Vice President, Chief Financial Officer and in 2004 he became Senior Vice President, Chief Financial Officer. Prior to joining Clorox, his roles included Senior Vice President and Treasurer of Transamerica Finance Corporation, Senior Vice President, Treasurer and Controller of Granite Management Company, Senior Vice President, Controller and Chief Accounting Officer of First Nationwide Bank and Senior Audit Manager with Ernst & Young.

Mr. Heinrich served on the boards of Edgewell Personal Care Company (formerly Energizer Holdings, Inc.) from April 2012 to February 2022 and Ball Corporation from August 2016 to April 2022.

 

Specific Experience, Qualifications, Attributes and Skills Relevant to Lowe’s

As the former Chief Financial Officer of a large, global organization, Mr. Heinrich brings extensive executive-level financial knowledge and experience to the Lowe’s Board. Mr. Heinrich has strong expertise in the areas of strategic business development, risk management, mergers and acquisitions, accounting and information technology. Additionally, Mr. Heinrich brings to our Board valuable perspectives on corporate governance through his experience serving as a director of several public companies.

BRIAN C. ROGERS

 

		Director Since: 2018   Age: 66   Lowe’s Board Committees: •  Audit •  Nominating and Governance, Chair   Current Public Company Directorships: •  Raytheon Technologies Corporation

 

Mr. Rogers retired as the Non-Executive Chairman of T. Rowe Price Group, Inc., a global investment management organization, in April 2019. He served as the Chairman from 2007 to 2017 and as Chief Investment Officer from 2004 to 2017. Mr. Rogers served as a director of the Price Group from 1997 to 2019. In addition, Mr. Rogers was portfolio manager of one of the firm’s largest funds, the T. Rowe Price Equity Income Fund, from its inception until October 2015. Mr. Rogers held a variety of other senior leadership roles and had been involved in investment management with T. Rowe Price since beginning his career there in 1982. Prior to joining T. Rowe Price, Mr. Rogers worked at Bankers Trust Company.

 

Specific Experience, Qualifications, Attributes and Skills Relevant to Lowe’s

Through his extensive investment and management roles, including Chief Investment Officer of a large investment management firm, Mr. Rogers provides the Board with financial, investment and risk management expertise. In addition, Mr. Rogers’ experience at T. Rowe Price provides our Board invaluable insights into the views of institutional investors and perspectives on Company performance and opportunities.

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Proposal 1: Election of Directors

DIRECTOR NOMINEES

BERTRAM L. SCOTT

 

		Director Since: 2015   Age: 71   Lowe’s Board Committees: • Audit, Chair • Nominating and Governance   Current Public Company Directorships: • Becton, Dickinson and Company • Dollar Tree, Inc. • Equitable Holdings, Inc. and certain wholly-owned subsidiaries

Mr. Scott retired as Senior Vice President of Population Health and Value Based Care at Novant Health, a leading healthcare provider, in May 2019, after serving in that role since 2015. Prior to that, Mr. Scott was President, Chief Executive Officer and a director of Affinity Health Plan, a provider of New York State-sponsored health coverage, from 2012 to 2014; President, U.S. Commercial of CIGNA Corporation, a global health services organization, from 2010 to 2011; Executive Vice President and Chief Institutional Development and Sales Officer of TIAA-CREF from 2000 to 2010; and President and Chief Executive Officer of TIAA-CREF Life Insurance Company from 2000 to 2007.

Mr. Scott currently serves on the board of Equitable Holdings, Inc. (“EQH”) and continues to serve on the boards of Equitable America and Equitable Financial Life Insurance Company of America, which are wholly-owned subsidiaries of EQH. Mr. Scott served on the board of AllianceBernstein Holding L.P. from September 2020 to March 2022.

 

Specific Experience, Qualifications, Attributes and Skills Relevant to Lowe’s

Mr. Scott has served in a variety of senior leadership positions in organizations that are in highly regulated industries and brings invaluable experience to Lowe’s Board in the areas of development and implementation of strategy, mergers and acquisitions and integration. Mr. Scott also brings significant experience and responsibility in the areas of sales and marketing in his roles as Executive Vice President and Chief Institutional Development and Sales Officer of TIAA-CREF and President and Chief Executive Officer of TIAA-CREF Life Insurance Company.

COLLEEN TAYLOR

 

		New Director Nominee   Age: 54     Current Public Company Directorships: • Bill.com Holdings, Inc.

 

Ms. Taylor has served as President, U.S. Merchant Services at American Express Company, a diversified financial services company, since September 2020. From August 2019 to September 2020, Ms. Taylor served as Executive Vice President, Merchant Services at Wells Fargo & Company, a banking and financial services company. Prior to that, Ms. Taylor served as Executive Vice President, New Payments at Mastercard Incorporated, a technology company in the global payments industry, from March 2017 to August 2019, and in a variety of other roles, including as Executive Vice President, Head of Treasury Management, Merchant Services and Enterprise Payments at Capital One Financial Corporation, a diversified financial services holding company, from April 2009 to March 2017.

 

Specific Experience, Qualifications, Attributes and Skills Relevant to Lowe’s

Ms. Taylor brings to the Lowe’s Board many years of senior leadership experience in the highly-regulated financial services industry with expertise in banking, merchant services and payments, as well as a strong background in a number of other critical areas, including strategic planning, mergers and acquisitions and brand management. In her roles, Ms. Taylor has been responsible for technology risk management, the development of complex enterprise technology roadmaps and cybersecurity oversight. Additionally, Ms. Taylor is a highly experienced people leader and has led large global sales, product management and operations teams.

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Proposal 1: Election of Directors

DIRECTOR NOMINEES

MARY BETH WEST

 

		Director Since: 2021   Age: 59   Lowe’s Board Committees: • Audit • Sustainability   Current Public Company Directorships: • Albertsons Companies, Inc. • Hasbro, Inc.

Ms. West retired as Senior Vice President, Chief Growth Officer of The Hershey Company, a global confectionary manufacturer and marketer, in January 2020 after serving in that role since May 2017. Prior to that, Ms. West served as Executive Vice President, Chief Customer and Marketing Officer of J. C. Penney Company, Inc., a department store retailer, from 2015 to March 2017. From 2012 to 2014, she served as Executive Vice President, Chief Category and Marketing Officer of Mondelez International, Inc., one of the world’s largest snack companies. Ms. West served as Chief Marketing Officer of Kraft Foods, Inc. from 2007 to 2012 and held a variety of other general management and marketing roles at Kraft Foods, Inc., since beginning her career there in 1986.

Ms. West served on the board of J.C. Penney Company, Inc. from 2005 to 2015.

 

Specific Experience, Qualifications, Attributes and Skills Relevant to Lowe’s

Ms. West brings to the Lowe’s Board extensive executive leadership experience in marketing and building some of the world’s most iconic brands. Ms. West has a strong background in developing compelling retail and sales experiences and brings expertise in a number of critical areas, including strategic and operational planning and execution, merchandising, communications, disruptive innovation, research and development and mergers and acquisitions.

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Corporate Governance

CORPORATE GOVERNANCE GUIDELINES AND CODE OF BUSINESS CONDUCT AND ETHICS

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Corporate Governance

COMPENSATION OF DIRECTORS

COMPENSATION OF DIRECTORS

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Corporate Governance

COMPENSATION OF DIRECTORS

2022 Compensation

Effective for fiscal 2022, the Board, upon recommendation of the Compensation Committee following its review of the Company’s Peer Group and broader market data prepared by the Compensation Committee’s independent compensation consultant, approved the following changes to non-employee director fees and stock awards:

•  The annual retainer for each non-employee director was set at $100,000 and the annual deferred stock unit equity award for non-employee directors was set at $200,000 to bring the total annual compensation paid to each non-employee director closer to the Peer Group and market median practice, and

•  The additional annual retainer for the Chairs of the Nominating and Governance Committee, the Sustainability Committee and the Technology Committee was set at $20,000 and the additional cash retainer for the Lead Independent Director was set at $100,000 to align with the scope of responsibilities and activity level of the roles at the Company.

Deferral of Annual Retainer Fees

Each non-employee director may elect to defer receipt of all, or a portion in 25% increments, of the annual retainer and any committee Chair, Lead Independent Director or, if applicable, Chairman fees otherwise payable to the director in cash. Deferrals are credited to a bookkeeping account as of the date retainers or fees would have otherwise been paid, and account values are adjusted based on the investment alternative selected by the director. One investment alternative adjusts the account value based on interest calculated in the same manner and at the same rate as interest on amounts invested in the short-term interest fund option available to employees participating in the Lowe’s 401(k) Plan, a tax-qualified, defined contribution plan sponsored by the Company. The other investment alternative assumes that the deferrals are invested in Common Stock with reinvestment of all dividends. At the end of each year, a director participating in the plan makes an election to allocate the fees deferred for the following year between the two investment alternatives in 25% increments. Account balances may not be reallocated between the investment alternatives. Account balances are paid in cash in a single sum payment following the termination of a director’s service.

Fiscal 2021 Compensation

The following table shows the compensation paid to each non-employee director who served on the Board in fiscal 2021:

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Corporate Governance

BOARD MEETINGS, BOARD LEADERSHIP STRUCTURE, KEY BOARD RESPONSIBILITIES AND COMMITTEES

The following table shows the number of deferred stock units held by each non-employee director as of January 28, 2022:

BOARD MEETINGS, BOARD LEADERSHIP STRUCTURE, KEY BOARD RESPONSIBILITIES AND COMMITTEES

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Corporate Governance

BOARD MEETINGS, BOARD LEADERSHIP STRUCTURE, KEY BOARD RESPONSIBILITIES AND COMMITTEES

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Corporate Governance

BOARD MEETINGS, BOARD LEADERSHIP STRUCTURE, KEY BOARD RESPONSIBILITIES AND COMMITTEES

In order to ensure independent leadership, the Board has a robust set of responsibilities for the Lead Independent Director role as outlined below.

The Board will review its leadership structure at least once a year, and otherwise as appropriate, to help it maintain a leadership model best suited to the Company and our shareholders.

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Corporate Governance

BOARD MEETINGS, BOARD LEADERSHIP STRUCTURE, KEY BOARD RESPONSIBILITIES AND COMMITTEES

ACTIVE BOARD OVERSIGHT CORPORATE STRATEGY HUMAN CAPITAL MANAGEMENT ENVIRONMENTAL AND SOCIAL ISSUES POLITICAL ADVOCACY RISK MANAGEMENT CYBERSECURITY AND DATA PRIVACY

Board’s Role in Corporate Strategy

Our Board is actively involved in overseeing, reviewing and guiding our corporate strategy. Our Board formally reviews our Company’s business strategy, including the risks and opportunities facing the Company and its portfolio, at an annual strategic planning session. In addition, long-range strategic issues, including the performance and strategic fit of our businesses, are discussed as a matter of course at Board meetings. Our Board regularly discusses corporate strategy throughout the year with management formally as well as informally and during executive sessions of the Board as appropriate. As discussed in “Board’s Role in Risk Oversight” below, our Board views risk management and oversight as an integral part of our strategic planning process, including mapping key risks to our corporate strategy and seeking to manage and mitigate risk. Our Board also views its own composition as a critical component to effective strategic oversight. Accordingly, our Board and relevant Board committees consider our business strategy and the Company’s regulatory, geographic and market environments when assessing Board composition, director succession, executive compensation, human capital management, diversity and inclusion, environmental and social issues and other matters of importance.

Board’s Role in Human Capital Management

The Board views effective human capital management as key to the Company’s ability to execute its long-term strategy. As a result, the full Board oversees and regularly engages with our Chairman, President and Chief Executive Officer, our Executive Vice President, Human Resources and senior leadership on a broad range of human capital management topics, including culture, talent management and succession planning, compensation and benefits, diversity and inclusion and feedback gathered from the Company’s annual associate engagement survey. The full Board reviews talent management topics as standing agenda items, including CEO and senior management succession planning, diversity and inclusion and culture.

Board’s Role in Environmental and Social Issues

The Board views oversight and effective management of environmental and social issues and their related risks as important to the Company’s ability to execute its strategy and achieve long-term sustainable growth. The Board receives regular updates on environmental and social topics from our Vice President, Corporate Sustainability. In addition to oversight by the full Board, the Board has also delegated primary responsibility for more frequent and in-depth oversight of the Company’s environmental and social strategy to the Sustainability Committee. The Board also coordinates with its other committees to provide active Board- and committee-level oversight of the Company’s management of environmental and social related risks across the relevant committees.

Board’s Role in Oversight of Political Advocacy

The Nominating and Governance Committee has oversight of Lowe’s political advocacy activities, including political contributions, trade association memberships, lobbying priorities and the Lowe’s Companies, Inc. Political Action Committee (“LOWPAC”). As part of its oversight role, it reviews our political engagement and contribution policy and monitors our ongoing political strategy as it relates to the overall public policy objectives for the Company. Lowe’s generally does not make contributions from corporate funds to political campaigns, super political action committees or political parties. Political contributions made by LOWPAC are approved by its advisory board, which consists of members of management across corporate and operational roles. All political advocacy is conducted to promote the interests of the Company and is made without regard for the private political preferences of Lowe’s directors or executives. In 2021 and 2020, we ranked in the First Tier of the CPA-Zicklin Index, an annual assessment which benchmarks political disclosure and accountability policies and practices for election-related spending of leading U.S. public companies.

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Corporate Governance

BOARD MEETINGS, BOARD LEADERSHIP STRUCTURE, KEY BOARD RESPONSIBILITIES AND COMMITTEES

Board’s Role in Risk Oversight

Overview

A summary of the current allocation of general risk oversight functions among management, the Board and its committees is as follows:

The primary responsibility for the identification, assessment and management of the various risks that we face begins with management. At the management level, risks are prioritized and assigned to senior leaders based on the risk’s relationship to the leader’s business area and focus. Those senior leaders develop plans to respond to the risks and measure the progress of risk management efforts. Our General Counsel provides centralized oversight of Lowe’s enterprise risk management program, which includes the Enterprise Risk Council (“ERC”) comprised of senior leaders with broad enterprise experience. The ERC supports the execution of the enterprise risk management program by working to identify, assess and categorize existing risks faced by the Company and evaluating action plans to appropriately respond to those risks. Additionally, the ERC identifies and assesses emerging risks in partnership with other senior leaders in alignment with new strategic initiatives and in response to an evolving business and industry landscape.

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Corporate Governance

BOARD MEETINGS, BOARD LEADERSHIP STRUCTURE, KEY BOARD RESPONSIBILITIES AND COMMITTEES

The Audit Committee coordinates the Board’s and each committee’s risk oversight. The Board’s oversight of risks is designed to confirm that management has processes in place to deal appropriately with risk and is integral to the oversight of the business as a whole. For example, our principal strategic risks are reviewed as part of the Board’s regular discussion of our strategy and alignment of specific initiatives with that strategy. Similarly, at every meeting the Board reviews the principal factors influencing our operating results, including the competitive environment, and discusses the major events, activities and challenges affecting the Company with our senior executive officers.

The Board’s ongoing oversight of risk also occurs at the Board committee level on a more focused basis as detailed above. The General Counsel annually presents an overview of the enterprise risk management program to the full Board of Directors and provides the Board with regular updates on the program and status of key risks facing the business. The Audit Committee regularly receives updates on key risk areas from members of management with primary responsibility for managing those risk areas and receives regular updates from the General Counsel and Chief Compliance Officer on legal and regulatory risk and compliance matters.

Cybersecurity and Data Protection Risk Oversight

Securing the information our customers, associates, vendors and other third parties entrust to Lowe’s is important to us. We have adopted physical, technological and administrative controls on data security, and have a defined procedure for data incident detection, containment, response and remediation. While everyone at Lowe’s plays a part in managing these risks, oversight responsibility is shared by the Board, the Audit Committee and management.

Our Chief Information Officer or Chief Information Security Officer provide regular cybersecurity updates in the form of written reports and presentations to the Audit Committee at every quarterly meeting. The Audit Committee regularly reviews metrics about cyber threat response preparedness, program maturity milestones, risk mitigation status and the current and emerging threat landscape. As part of our enterprise risk management program, Lowe’s receives external assessment for Payment Card Industry Data Security Standards compliance. Additionally, we leverage the National Institute of Standards and Technology security framework to drive strategic direction and maturity improvement and engage third-party security experts for risk assessments and program enhancements. We also maintain information security risk insurance coverage.

Compensation Committee Advisors

The Compensation Committee has sole authority under its charter to retain compensation consultants and other advisors and to approve such consultants’ and advisors’ fees and retention terms. In 2021, Semler Brossy Consulting Group, LLC acted as the independent compensation consultant and provided the Compensation Committee with advice and support on executive compensation issues. The compensation consultant assists with peer group identification and benchmarking, design of the Company’s executive compensation program and conduct of an annual risk assessment related thereto, review of compensation-related disclosures and related services. A more detailed description of the services performed by the Compensation Committee’s compensation consultant in fiscal 2021 is included in the “Compensation Discussion and Analysis” section of this Proxy Statement.

The Compensation Committee has reviewed and confirmed the independence of its compensation consultant. Neither the compensation consultant nor any of its affiliates provide any services to the Company except for services provided to the Compensation Committee.

How to Communicate with the Board of Directors and Independent Directors

Shareholders and other interested parties can communicate directly with the Board by sending a written communication addressed to the Board or to any member individually in care of Lowe’s Companies, Inc., 1000 Lowes Boulevard, Mooresville, North Carolina 28117. Shareholders and other interested parties wishing to communicate with Mr. Dreiling, as Lead Independent Director, or with the independent directors as a group may do so by sending a written communication addressed to Mr. Dreiling, in care of Lowe’s Companies, Inc. at the above address. Any communication addressed to a director that is received at Lowe’s principal executive offices will be delivered or forwarded to the individual director as soon as practicable. Lowe’s will forward all communications received from its

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Corporate Governance

BOARD MEETINGS, BOARD LEADERSHIP STRUCTURE, KEY BOARD RESPONSIBILITIES AND COMMITTEES

shareholders or other interested parties that are addressed simply to the Board, to the Chairman, to the Lead Independent Director or to the Chair of the committee of the Board whose purpose and function is most closely related to the subject matter of the communication. All such communications are promptly reviewed before being forwarded to the addressee. Lowe’s generally will not forward to directors a shareholder communication that it determines to be primarily commercial in nature or that relates to an improper or irrelevant topic or requests general information about the Company.

Board Committees

The Board has five current standing committees: the Audit Committee, the Compensation Committee, the Nominating and Governance Committee, the Sustainability Committee and the Technology 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 as of January 28, 2022 are identified in the following table:

Member

Raul Alvarez(1)				Chair
David H. Batchelder
Sandra B. Cochran(2)								Chair
Laurie Z. Douglas										Chair
Richard W. Dreiling
Marvin R. Ellison
Daniel J. Heinrich
Brian C. Rogers						Chair
Bertram L. Scott		Chair
Mary Beth West
Number of Meetings in Fiscal 2021		6		6		5		2		2

Each of the current committees acts pursuant to a written charter adopted by the Board. A copy of each committee charter and the Corporate Governance Guidelines are available on the Company’s website at ir.lowes.com.

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Corporate Governance

BOARD MEETINGS, BOARD LEADERSHIP STRUCTURE, KEY BOARD RESPONSIBILITIES AND COMMITTEES

The following table provides information about the operation and key functions of each of the current standing Board committees, each of which report regularly to the full Board:

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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 21, 2022, 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 Lowe’s Companies, Inc., 1000 Lowes Boulevard, Mooresville, North Carolina 28117.

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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 2021 fiscal year:

Our CD&A is organized as follows:

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Compensation Discussion and Analysis

EXECUTIVE SUMMARY

I. EXECUTIVE SUMMARY

We seek to generate sustainable shareholder value by driving operational excellence throughout the enterprise, consistently generating high levels of cash flow and optimizing our capital deployment. We have demonstrated a strong commitment to returning capital to our shareholders and continued dividend growth since 1961.

Our Total Shareholder Return (“TSR”) results over the last 1-, 3- and 5-years outperformed peers and the broader market.

            TSR data is as of January 28, 2022, the Company’s fiscal year end.

⁽¹⁾ Includes companies in the Peer Group identified on page 34.                

Fiscal 2021 Financial Highlights

In fiscal 2021, we delivered another year of outstanding financial performance, with a 55% increase in diluted EPS to $12.04 and a 36% increase compared to adjusted diluted EPS last year of $8.86,* driven by total sales growth of 7.4%, with comparable sales growth of 6.9%, and a 25% increase in operating income. Through disciplined execution of our Total Home strategy, we delivered growth in consolidated Pro customer sales of 24% and growth in Lowes.com sales of 18%. We also delivered over 7% growth in our Home Décor merchandise division as we expanded our private brand offerings for our DIY customers to appeal to a wide array of tastes and styles. At the same time, our focus on our Perpetual Productivity Improvement initiatives generated over 170 basis points of operating margin improvement.

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Compensation Discussion and Analysis

EXECUTIVE SUMMARY

Continuing to Support Our Front-Line Associates and Rewarding Outperformance

Our highest priority is providing our customers and associates with a safe store environment as we continue to navigate the challenges posed by the ongoing pandemic. We continue to provide associates with emergency paid leave to recover from the effects of COVID-19.

In every quarter of 2021, 100% of our stores earned the Winning Together profit-sharing bonuses for front-line associates, with a total payout of $475 million. Given our better than expected performance, this represented an incremental $184 million over the target payment level. Additionally, in recognition of their commitment and hard work throughout 2021, we rewarded our front-line associates with a year-end special discretionary bonus totaling $265 million.

In September 2021, all of our corporate bonus-eligible associates below the Senior Vice President level received a mid-year annual incentive award payout equal to approximately 190% of the target payout level given achievement of pre-defined semi-annual performance goals for the annual incentive plan. The payment was prorated for active days in the first half of the fiscal year.

Supporting our associates is a critical aspect of our Company’s culture and strategy. In 2020 and 2021, we made a total of over $1 billion in discretionary payments directly to associates, in addition to quarterly Winning Together profit-sharing bonuses, which have totaled more than $850 million since 2020. Additionally, Lowe’s has invested well over $2 billion in incremental wage and equity programs to front-line associates since 2018.

Launching our Total Home Strategy

At the end of 2020, we launched the next chapter in our evolution to becoming a best-in-class omnichannel retailer. Building on the success of our Retail Fundamentals strategy, the Lowe’s Total Home strategy is focused on accelerating market share gains by providing DIY, DIFM, and Pro customers the products and services they need to complete the entire project.

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Compensation Discussion and Analysis

EXECUTIVE SUMMARY

Lowe’s Total Home strategy has enabled us to increase sales to our DIY and Pro customers and to continue to grow our market share in 2021. As a result of our outstanding financial performance, we were able to deliver value to shareholders through the payment of $2.0 billion in dividends and the repurchase of $13.1 billion of our Common Stock this fiscal year. We are confident that we are making the right investments in the business to generate long-term growth and continue to create sustainable shareholder value.

Compensation Philosophy and Objectives

Our long-term success depends on our ability to attract and retain highly talented leaders who are committed to our mission, growth and strategy. Our executive compensation program is designed to drive long-term shareholder value by aligning our business strategies and operating priorities with shareholders’ interests and rewarding executives for growth in the Company’s sales and earnings. A significant portion of compensation is based on variable pay arrangements that align pay with performance against metrics tied to our strategy and business plan with a balanced focus on top- and bottom-line growth.

The primary objectives of our program are to:

Annual Say-on-Pay Vote and Shareholder Engagement

The Board and the Compensation Committee carefully consider the results of our shareholders’ annual advisory “say-on-pay” vote. Lowe’s shareholders continue to express strong support for the Company’s executive compensation program with the Company receiving more than 92% advisory approval in 2021. This is consistent with the advisory approval over the past 10 years. In consideration of this continued support and belief that the program continues to support our strategy and drive performance, the Compensation Committee maintained the principal features and performance-based elements of the executive compensation program for 2021. At the Annual Meeting, the Company’s shareholders will again have the opportunity to approve Lowe’s executive compensation program through the advisory say-on-pay vote included as Proposal 2 in this Proxy Statement.

We believe that engaging with investors is fundamental to our commitment to sound governance and is essential to maintaining strong corporate governance practices. Since the beginning of 2021, we have engaged with representatives of approximately 70% of our institutionally-held shares as part of our regular investor relations outreach efforts and ESG-focused dialogue. Understanding the issues that are important to our shareholders is critical to ensuring that our program remains aligned with their interests and that we address any concerns they may have in a meaningful and effective way.

We report the feedback from our shareholders on a regular cadence to the full Board and its relevant committees, who have used this information to inform numerous changes to enhance our compensation, governance and sustainability efforts over the past several years. These have included: the amendment of our Bylaws in 2020 to reduce the ownership threshold to call shareholder special meetings to 15% of outstanding shares, the annual release of our consolidated EEO-1 report data beginning in 2021 and our commitment to set a science based net-zero target including our emissions reduction goals for Lowe’s full value chain in 2022.

This past winter, we conducted a round of investor engagement focused primarily on ESG topics, including strategy, human capital management efforts, diversity and inclusion programs and initiatives, Board composition, environmental sustainability and our corporate governance and executive compensation practices. As part of this engagement effort, we contacted 34 investors, representing approximately 45% of our outstanding shares at the time of outreach and met

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Compensation Discussion and Analysis

EXECUTIVE SUMMARY

with 18 investors, representing approximately 32% of our outstanding shares. Our Lead Independent Director met with shareholders representing approximately 21% of our outstanding shares to provide a direct line of communication between our shareholders and the Board of Directors.

Winter 2021 – 2022 ESG Engagement

*Percentages of outstanding shares are as of the time of outreach.

During these meetings, we discussed key corporate governance topics and shared our thoughts on the Compensation Committee’s approach to setting executive compensation. We asked our shareholders whether they had any concerns or feedback about our current executive compensation program. Overall, we received generally positive feedback on the structure, evolution and responsiveness of our compensation program, including the metrics in our annual and long-term incentive plans.

2021 Executive Compensation

Lowe’s has a long-standing commitment to pay for performance and provides a significant portion of compensation opportunities 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. To align pay with performance, our incentive compensation programs use objective pre-established performance measures: sales, operating income, inventory turnover and Pro sales growth for our annual incentive plan and ROIC for our performance share units. Each of these performance measures is further described beginning on page 36.

Our 2021 executive compensation program consisted of the following elements:

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EXECUTIVE SUMMARY

Lowe’s compensation mix is heavily performance-based with 72% of the CEO’s and 67% of the other NEOs’ annualized target compensation at-risk and contingent upon the achievement of performance objectives or relative and absolute share price performance. Additionally, 71% of the CEO’s and 65% of the other NEOs’ compensation is in the form of long-term incentives.

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 strategic initiatives. The metrics determined by the Compensation Committee, as described below, incentivize our executives to focus on operational objectives that are expected to drive shareholder value.

Based on our performance in fiscal 2021, eligible executives received the following payouts of performance-based compensation:

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EXECUTIVE SUMMARY

Pay Decisions and Compensation Governance Practices

		WHAT WE DO						WHAT WE DO NOT DO
		Provide 80% to 90% of total direct compensation opportunity (assuming target performance) for NEOs in the form of annual and long-term incentives						Provide single-trigger severance or tax gross-ups following change-in-control
		Annually assess peer group composition, financial and stock price performance and competitive compensation practices						Permit hedging, pledging or unauthorized trading of the Company’s 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 and alignment of our incentive plans in relation to performance goals, business strategy, organizational priorities and shareholder interests						Provide an evergreen provision in our Long Term Incentive Plan
		The fully independent Compensation Committee retains an independent compensation consultant						Provide employment agreements to executives
		Link incentive compensation to a clawback policy, which was updated in January 2020 to incorporate misconduct that may result in significant financial or reputational harm
		Limit incentive payouts as a percentage of target awards
		Require significant stock ownership by all senior executives
		Provide limited perquisites

II. COMPENSATION ELEMENTS

To support our compensation philosophy and objectives, the Compensation Committee has designed the executive compensation program with an appropriate balance between annual and long-term compensation, as well as between fixed and at-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 all stakeholders, including shareholders, customers, our associates and the communities in which we operate. Accordingly, long-term incentive award opportunities, as a percentage of total compensation, are greater than annual incentive award opportunities.

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Compensation Discussion and Analysis

COMPENSATION ELEMENTS

The following table lists the key elements of the Company’s 2021 executive compensation program:

KEY ELEMENTS OF EXECUTIVE COMPENSATION Element Form Key Characteristics Link to Shareholder Value Key Benchmarks/Metrics Base Salary Cash Fixed cash compensation tied to the scope and responsibilities of each executive's 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 effective leadership Subject to annual adjustment after consideration of competitive benchmark and relative compensation positioning Annual Incentive Awards Cash At-risk cash compensation tied to the achievement of annual financial performance and strategic goals established by the Compensation Committee for each fiscal year Promote the achievement of the Company's annual financial and strategic goals; and incent and reward financial and operating performance Sales (40%) Operating Income (40%) Inventory Improvement (10%) Pro Sales Growth (10%) Long-Term Incentive Awards PSUs 50% of LTI PSUs, which cliff vest at the end of the three-year performance period, are based on (i) the Company's average ROIC(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 TSR performance Three-year average ROIC goal Relative TSR modifier Stock Options 25% of LTI Stock options with a 10-year term vest ratably over three years(2) Promote the value-creating actions necessary to increase the market value of Common Stock Realized value is based on increases in the market value of our Common Stock relative to the value when the award was made RSAs 25% of LTI RSAs granted pursuant to the annual long-term equity grant cliff vest on the third anniversary of the grant date(2) Promote executive retention, stock ownership and alignment of interests with shareholders Realized value is based on market value of our Common Stock 10% 19% 71%KEY ELEMENTS OF EXECUTIVE COMPENSATION Element Form Key Characteristics Link to Shareholder Value Key Benchmarks/Metrics Base Salary Cash Fixed cash compensation tied to the scope and responsibilities of each executive's 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 effective leadership Subject to annual adjustment after consideration of competitive benchmark and relative compensation positioning Annual Incentive Awards Cash At-risk cash compensation tied to the achievement of annual financial performance and strategic goals established by the Compensation Committee for each fiscal year Promote the achievement of the Company's annual financial and strategic goals; and incent and reward financial and operating performance Sales (40%) Operating Income (40%) Inventory Turnover (10%) Pro Sales Growth (10%) Long-Term Incentive Awards PSUs 50% of LTI PSUs, which cliff vest at the end of the three-year performance period, are based on (i) the Company's average ROIC(2) 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 strong long-term growth and TSR performance Three-year average ROIC goal Relative TSR modifier Stock Options 25% of LTI Stock options with a 10-year term vest ratably over three years(1) Promote the value-creating actions necessary to increase the market value of Common Stock Realized value is based on increases in the market value of our Common Stock relative to the value when the award was granted RSAs 25% of LTI RSAs granted pursuant to the annual long-term equity grant cliff vest on the third anniversary of the grant date(1) Promote executive retention, stock ownership and alignment of interests with shareholders Realized value is based on market value of our Common Stock 10% 19% 71%

Note: Compensation mix shown in the preceding table reflects target CEO compensation. The average compensation mix for other NEOs is as follows: base salary 17%, annual incentive awards 18% and long-term incentive awards 65% with the same award mix of PSUs, stock options and RSAs as shown above.

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Compensation Discussion and Analysis

COMPENSATION ELEMENTS

We also provide broad-based financial and health and welfare benefits on the same terms and conditions applicable to all eligible employees, including a 401(k) Plan with Company match, a non-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, including reimbursement of costs associated with tax and financial planning, an annual physical examination and limited personal use of corporate aircraft, each of which are designed to enhance productivity and encourage the retention and attraction of our top talent. Effective January 1, 2022, NEOs are also eligible for individual disability insurance, which supplements the Company’s long-term disability plan. Additionally, we offer a severance plan for senior officers, which provides for severance payments, the continuation of health care benefits and Company-paid outplacement services.

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Compensation Discussion and Analysis

COMPENSATION DECISION-MAKING PROCESS

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COMPENSATION DECISION-MAKING PROCESS

Compensation Market Data and Peer Group

Each year, the Compensation Committee reviews the peer group companies used to assess compensation and performance with the advice of the independent compensation consultant. The Compensation Committee approved the use of data from two sources for fiscal 2021: the Peer Group and the Survey Group.

The Peer Group is comprised of retail and customer service companies selected for direct relevance to Lowe’s business using the following criteria: