DEF 14A of Costco Wholesale Corp /New, Dec 4, 2025

DEF 14A of Costco Wholesale Corp /New

Filed Dec 4, 2025 · FY20250000909832-25-000159

Open on EDGAR

  1. TABLE OF CONTENTS

    | | Page | | Solicitation and Revocation of Proxy | 1 | | Proposal 1: Election of Directors | 3 | | Committees of the Board | 7 | | Compensation of Directors | 10 | | Shareholder Communications to the Board | 11 | | Principal Shareholders | 11 | | Equity Compensation Plan Information | 12 | | Executive Compensation | 13 | | Compensation Discussion and Analysis | 13 | | Report of the Compensation Committee of The Board of Directors | 18 | | Summary Compensation Table | 19 | | Fiscal 2025 All Other Compensation | 20 | | Fiscal 2025 Grants of Plan-Based Awards | 20 | | Outstanding Equity Awards at Fiscal 2025 Year-End | 21 | | Fiscal 2025 Restricted Stock Units Vested | 21 | | Fiscal 2025 Non-Qualified Deferred Compensation | 22 | | Potential Payments Upon Termination or Change-in-Control | 22 | | CEO Pay Ratio | 24 | | Pay Versus Performance | 25 | | Certain Relationships and Transactions | 28 | | Report of the Audit Committee | 29 | | Independent Public Accountants | 29 | | Proposal 2: Ratification of Selection of Independent Public Accountants | 30 | | Proposal 3: Advisory Vote to Approve Named Executive Officer Compensation | 30 | | Proposal 4: Shareholder Proposal Regarding Greenwashing Risk Audit | 31 | | Other Matters | 33 | | Shareholder Proposals for the 2027 Annual Meeting | 33 | | Annual Report to Shareholders and Form 10-K | 34 | | General Information | 34 | | Appendix A: Non-GAAP Financial Measures | 35 |

  2. PROPOSAL 1: ELECTION OF DIRECTORS

    PROPOSAL 1: ELECTION OF DIRECTORS Directors are elected annually for terms expiring at the next annual meeting of shareholders. The Board has not nominated individuals to fill two vacancies on the Board created by the recent retirements of two of our directors (Richard Galanti and Craig Jelinek) at last year's Shareholders meeting. Vacancies on the Board, including these vacancies and any vacancies created by an increase in the number of directors, may be filled by the Board for a term continuing until the next election of directors by the shareholders following a recommendation to the Board from the Nominating and Governance Committee in accordance with the procedures outlined under the “Committees of the Board — Nominating and Governance Committee.” Each of Susan L. Decker, Kenneth D. Denman, Helena B. Foulkes, Hamilton E. James, Sally Jewell, Jeffrey S. Raikes, Gina M. Raimondo, John W. Stanton, Ron M. Vachris, and Mary Agnes (Maggie) Wilderotter is nominated to serve for a one-year term until the annual meeting of shareholders in 2027 and until a successor is elected and qualified. All nominees other than Ms. Raimondo are current directors. Each nominee has indicated a willingness and ability to serve as a director. If any nominee becomes unable or unwilling to serve, the accompanying proxy may be voted for the election of such other person as will be designated by the Board. The proxies being solicited will be voted for no more than ten nominees at the Annual Meeting. Each director will be elected by a majority of the votes cast, virtually or by proxy, at the Annual Meeting, assuming a quorum is present. The candidates for election have been nominated by the Board based on the recommendation of the Nominating and Governance Committee. In addition to the information presented below regarding each nominee’s specific experience, qualifications, attributes and skills that led the Board to conclude that he or she should serve as a director, the Board believes that each nominee has demonstrated: outstanding achievement in his or her professional career; relevant experience; personal and professional integrity; the ability to make independent, analytical inquiries; experience with and understanding of the business environment; and willingness and ability to devote adequate time to Board duties. We also believe that our directors collectively have the skills and experience that make them well-suited to oversee the Company. They are or have been established leaders in important areas of business, government, and non-profit service. In addition, members of our Board have a great diversity of experiences and bring a wide variety of views that strengthen their ability to guide our Company. The Board of Directors unanimously recommends that you vote FOR Proposal 1.

  3. DIRECTORS

    DIRECTORS The following tables set forth information regarding the ten nominees for election as a director, each to hold office until the 2027 annual meeting of shareholders and until their successors have been duly elected and qualified.

  4. DIRECTORS

    | Name | Current Position with the Company | Age | | Hamilton E. James | Chairman of the Board of Directors | 74 | | Susan L. Decker | Director | 63 | | Kenneth D. Denman | Director | 67 | | Helena B. Foulkes | Director | 61 | | Sally Jewell | Director | 69 | | Jeffrey S. Raikes | Director | 67 | | Gina M. Raimondo | Director Candidate | 54 | | John W. Stanton | Director | 70 | | Ron M. Vachris | Chief Executive Officer, President and Director | 60 | | Mary Agnes (Maggie) Wilderotter | Director | 70 |

  5. DIRECTORS

    | BOARD NOMINEES DIVERSITY MATRIX (As of 12/04/2025) | | | | | Female | Male | | Part I: Gender Identity | | | | Director Nominees | 5 | 5 | | Part II: Demographic Background | | | | African American or Black | — | 1 | | White | 5 | 4 |

  6. DIRECTORS

    | INDIVIDUAL BOARD SKILLS MATRIX | | | | | | | | | | | | Qualifications, Skills, and Experience | Hamilton E. James | Susan L. Decker | Kenneth D. Denman | Helena B. Foulkes | Sally Jewell | Jeffrey S. Raikes | Gina M. Raimondo | John W. Stanton | Ron M. Vachris | Maggie Wilderotter | | Senior Leadership: Service in senior leadership positions, in government and/or business, including past CEO experience, with expertise in governance, strategy, development, human capital management, and workforce development | • | • | • | • | • | • | • | • | • | • | | Financial Expertise: Understanding of financial markets, accounting, and/or financial reporting processes | • | • | • | • | • | | • | • | | • | | Retail Industry Experience: Understanding of operational, financial, and strategic issues facing large retail companies | • | | | • | • | | | | • | • | | Technology or E-commerce: Leadership and expertise in technology, e-commerce and digital platforms | | • | • | | | • | | • | | • | | Risk Management: Governmental public policy, legal and risk management experience and expertise, including data security and/or experience managing cybersecurity and information security risks | • | • | • | • | • | • | • | • | • | • | | Global Operations: Experience at multinational companies or in international markets | • | • | • | • | | • | • | • | • | • | | Marketing and Brand Management: Experience in consumer marketing, sales or brand management | | • | | • | • | • | | • | • | • |

  7. DIRECTOR BIOGRAPHIES

    DIRECTOR BIOGRAPHIES Set forth below is information with respect to each director of the Company. Hamilton E. James has been a director of the Company since August 1988. He was the Lead Independent Director from 2005 until becoming the non-executive Chairman of the Board in August 2017. He is chairman of Jefferson River Capital, his family investment firm. He was Executive Vice Chairman of The Blackstone Group, a global alternative asset manager and provider of financial advisory services, until January 31, 2022, and served as its President and Chief Operating Officer from 2002 until 2018. He was also a member of the board of directors of its general partner, Blackstone Group Management L.L.C., until January 31, 2022. Mr. James’s qualifications to serve on the Board include the knowledge and experience he has gained, and contributions he has made, during his tenure as a director of our Company and his broad-ranging experiences in the financial services industry, including senior leadership positions. Susan L. Decker has been a director of the Company since October 2004. She is Chief Executive Officer and founder of Raftr, Inc., a community experience platform for campuses, founded in 2018. From 2000 to 2009, Ms. Decker served in various executive management roles at Yahoo! Inc., including President from 2007 to 2009 and Executive Vice President and Chief Financial Officer from 2000 to 2007. She is a director of Berkshire Hathaway Inc., Vail Resorts, Inc., and Chime Financial, Inc., and of private corporations Vox Media, Inc., and Automattic, Inc. She was previously a director of Intel Corporation, Pixar and Momentive Global Inc. Ms. Decker’s qualifications to serve on the Board include the knowledge and experience she has gained, and contributions she has made, during her tenure as a director of our Company, her service on the boards of other public companies, and her broad-ranging experiences, including senior leadership positions, in the areas of finance, technology and marketing. Kenneth D. Denman has been a director of the Company since March 2017. He has been a General Partner at Sway Ventures, a venture capital firm, since March 2017. He was President and Chief Executive Officer of Emotient, Inc., a developer of software technology to analyze facial expressions, until the company was acquired by Apple in January 2016. Previously, Mr. Denman was the Chief Executive Officer of Openwave Systems, Inc., chairman and CEO of iPass, Inc., and a Senior Vice President and COO for MediaOne. He is a member of the board of directors of Motorola Solutions, Inc., where he is the lead independent director and chair of the Nominating and Governance Committee. Previously he was a director at VMware Inc., Mitek Systems Inc., LendingClub Inc., ShoreTel, Inc., and United Online, Inc. Mr. Denman sits on the advisory board of the University of Washington's Foster School of Business, is the immediate past chairperson of the University of Washington Foundation Board, and is a member of the Seattle Children's Hospital Board of Trustees. Mr. Denman’s qualifications to serve on the Board include knowledge and experience from service on the boards of other public companies, and his broad-ranging experiences, including chief executive and other leadership positions, in the areas of technology and international business. Helena B. Foulkes has been a director of the Company since August 2023. She was CEO and a member of the board of directors of Hudson's Bay Company from February 2018 to March 2020. Prior to that, she spent 25 years at CVS Health Corporation, including as President of CVS Pharmacy from January 2014 to January 2018, and Executive Vice President and Chief Health Care Strategy and Marketing Officer from 2011 to 2013. Ms. Foulkes is also a member of the boards of directors of Skillsoft Corp. and private companies Follett Higher Education Group, where she serves as Executive Chair, PM Pediatrics Care, and Harry's Inc. She was previously a director of The Home Depot, Inc. Ms. Foulkes served as President of Harvard University's Board of Overseers for the 2021-2022 academic year. Ms. Foulkes' qualifications to serve on the Board include her substantial experience in retail and as a board member of prominent companies. Sally Jewell has been a director since January 2020. From June 2019 until May 2020, she served as the interim Chief Executive Officer of The Nature Conservancy, a global environmental non-profit organization, where she continues to serve as a global board member. She served as U.S. Secretary of the Interior under President Barack Obama from 2013 to 2017. Prior to her government service, she was CEO of Recreational Equipment Inc., a retailer of outdoor recreation equipment and services, from 2005 to 2013, COO from 2000 to 2005 and a board member from 1996 to 2013. Previously, she worked in commercial banking for 19 years, including in various executive capacities. She serves as chair of the board of Symetra Financial Corporation, a wholly-owned subsidiary of Sumitomo Life Insurance Company. Mrs. Jewell’s qualifications to serve on the Board include her extensive board service at other public and private corporations and non-profit organizations, and her diverse experience, including serving in leadership positions in government, academia, retail and environmental sustainability. Jeffrey S. Raikes has been a director of the Company since December 2008. He is a co-founder of the Raikes Foundation, which invests in youth-serving institutions and systems to make them more effective in supporting young people, especially those that have been most marginalized. Mr. Raikes served as a trustee of Stanford University from 2012 to May 2022, including as board chair from 2017 to 2021. He was the Chief Executive Officer of the Bill & Melinda Gates Foundation from 2008 to 2014. Mr. Raikes held several positions with Microsoft Corporation from 1981 to 2008, including President of the Business Division from 2005 to 2008. Mr. Raikes' qualifications to serve on the Board are broad-ranging experiences, including senior leadership positions, in the areas of technology, agriculture, marketing, academia, and at one of the world's largest foundations. Gina M. Raimondo has been nominated to stand for election at the 2026 annual meeting. She is a distinguished fellow at the Council on Foreign Relations. Secretary Raimondo served as Secretary of Commerce from 2021 to 2025, as Governor of Rhode Island from 2015 to 2021, and as General Treasurer of Rhode Island from 2011 to 2015. Prior to her government service Secretary Raimondo was a co-founder of Rhode Island's first venture-capital firm. Her qualifications to serve on the Board include her extensive government service, involving international, national and state level issues, and her experience in finance. John W. Stanton has been a director of the Company since October 2015. He is the Chairman of Trilogy Equity Partners, which invests in wireless-related companies, and Chairman of First Avenue Entertainment LLLP, which is the owner of the Seattle Mariners. Mr. Stanton founded and served as Chairman and Chief Executive Officer of Western Wireless Corporation, a wireless telecommunications company, from 1992 until shortly after its acquisition by Alltel Corporation in 2005. He was Chairman and a director of T-Mobile USA, formerly VoiceStream Wireless Corporation, a mobile telecommunications company, from 1994 to 2004, and was Chief Executive Officer from 1998 to 2003. Mr. Stanton was a director of Clearwire Corp. from 2008 to 2013, Chairman between 2011 and 2013, and interim Chief Executive Officer during 2011. He is

  8. DIRECTOR BIOGRAPHIES

    currently a director of Microsoft Corporation and was previously a director of Trilogy International Partners and Columbia Sportswear Company. Mr. Stanton's qualifications to serve on the Board are his broad-ranging experiences, including senior leadership positions, in the areas of telecommunications and technology, and service on the boards of other companies. Ron M. Vachris has been a director of the Company since February 2022, and Chief Executive Officer and President since January 2024. Mr. Vachris previously served as President and Chief Operating Officer from February 2022 to January 2024. He served as Executive Vice President of Merchandising from June 2016 to January 2022, as Senior Vice President of Real Estate Development from August 2015 to June 2016, and Senior Vice President, General Manager of the Northwest Region, from 2010 to July 2015. He spent the previous 28 years in various management positions in warehouse operations. Mr. Vachris’s qualifications to serve on the Board include his extensive knowledge of the Company’s business developed over the course of his long career, particularly in the areas of operations and merchandising. Mary Agnes (Maggie) Wilderotter has been a director of the Company since October 2015. She served as Chief Executive Officer and Chair of the Grand Reserve Inn from December 2016 to June 2023. Mrs. Wilderotter was the Interim CEO of DocuSign, Inc. from June through October 2022. Currently, she is providing senior advisor work for several private equity and venture firms. Mrs. Wilderotter was the Executive Chairman of Frontier Communications, a public telecommunications company, from April 2015 until April 2016 and served as Frontier's Chief Executive Officer from 2004 to 2015 and Chair of the Board from December 2005. Prior to joining Frontier, she was a Senior Vice President of Microsoft Corporation from 2002 to 2004. From 1997 to 2002, she was President and Chief Executive Officer of Wink Communications, an interactive telecommunications and media company. Mrs. Wilderotter was previously a director of Sana Biotechnology, Inc., Fortinet, Inc., Xerox Corporation, DreamWorks Animation SKG, Cadence Design Systems, Hewlett Packard Enterprise, The Procter & Gamble Company and Lyft, Inc. She is currently Chairman of the Board at DocuSign, Inc. and serves on the board of private companies Sonoma Biotherapeutics, Inc. and Tanium, Inc. Her qualifications to serve on the Board include the knowledge and experience she has gained, and contributions she has made, during her service on the boards of over thirty public companies in her career, and her broad-ranging corporate experiences, including senior leadership positions, in the areas of telecommunications, retail, media, healthcare, and technology. No family relationship exists among any of the directors or executive officers. No arrangement or understanding exists between any director or executive officer and any other person pursuant to which any director was selected as a director or executive officer of the Company.

  9. COMPENSATION OF DIRECTORS

    COMPENSATION OF DIRECTORS For fiscal 2025, each non-employee director earned $37,000 for serving on the Board. Each non-employee director also received a grant of restricted stock units (“RSUs”), with a target value of $270,000. Based on the closing share price at the time of grant, October 22, 2024, each director received 303 RSUs. RSUs vest one-third annually, generally beginning on the first anniversary of the date of grant and are subject to accelerated vesting upon the director’s retirement: 50% and 100% with five and ten years of service, respectively. Stock ownership requirements mandate that within five years of joining the Board a non-executive board member shall own and retain shares of Company common stock worth at least $1 million based on the value at the time of acquisition. All non-executive board members are in compliance. Board members receive a free Costco executive membership and are reimbursed for travel expenses incurred in connection with their duties.

  10. FISCAL 2025 DIRECTOR COMPENSATION

    FISCAL 2025 DIRECTOR COMPENSATION The following table summarizes compensation for the non-employee directors of the Company for fiscal 2025.

  11. FISCAL 2025 DIRECTOR COMPENSATION

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)1 | Total ($) | | Hamilton E. James | 37,000 | 267,664 | 304,664 | | Susan L. Decker | 37,000 | 267,664 | 304,664 | | Kenneth D. Denman | 37,000 | 267,664 | 304,664 | | Helena B. Foulkes | 37,000 | 267,664 | 304,664 | | W. Craig Jelinek2 | 18,500 | 267,664 | 286,164 | | Sally Jewell | 37,000 | 267,664 | 304,664 | | Jeffrey S. Raikes | 37,000 | 267,664 | 304,664 | | John W. Stanton | 37,000 | 267,664 | 304,664 | | Mary Agnes (Maggie) Wilderotter | 37,000 | 267,664 | 304,664 |

  12. FISCAL 2025 DIRECTOR COMPENSATION

    _______________________ (1) Represents the grant-date fair value of the RSUs granted in October 2024. The value is calculated as the market value of the common stock on the grant date less the present value of the expected dividends forgone during the vesting period. These amounts thus do not reflect the amount of compensation actually received during the fiscal year. For a description of the assumptions used in calculating the fair value of equity awards, see Note 1 of our financial statements in our Form 10-K for the year ended August 31, 2025. (2) Craig Jelinek retired from the Board of Directors in January 2025. For fiscal 2025, Mr. Jelinek's account balance in the Company's non-qualified deferred-compensation plan representing amounts deferred when he was serving as an employee of the Company was credited with $332,189. No amounts were credited to Mr. Jelinek's account relating to his service as a director. For additional information, see footnote 5 of the Summary Compensation Table. At the end of fiscal 2025, non-employee directors held the following outstanding equity awards and shares:

  13. FISCAL 2025 DIRECTOR COMPENSATION

    | Name | Restricted Stock Units | Shares Owned | Total | | Hamilton E. James | 826 | 55,577 | 56,403 | | Susan L. Decker | 826 | 10,705 | 11,531 | | Kenneth D. Denman | 826 | 4,877 | 5,703 | | Helena B. Foulkes | 635 | 205 | 840 | | Sally Jewell | 826 | 2,501 | 3,327 | | Jeffrey S. Raikes | 826 | 19,416 | 20,242 | | John W. Stanton | 826 | 23,400 | 24,226 | | Mary Agnes (Maggie) Wilderotter | 826 | 11,845 | 12,671 |

  14. Role of the Compensation Committee

    Role of the Compensation Committee The Committee determines the amounts and elements of compensation for our Chief Executive Officer. For other executive officers, it reviews the recommendations of the Chief Executive Officer, with which it generally agrees. The Committee’s function is more fully described under “Committees of the Board — Compensation Committee.” During fiscal 2025, the Committee consisted of Mr. Stanton (chair), and Mmes. Jewell and Wilderotter. The Committee has authority under its charter to engage compensation consultants but did not use any. The Committee’s primary activity occurs in the fall, following the close of the fiscal year, when the Committee: (i) approves grants of RSUs, including performance targets for RSUs granted to executive officers for the current fiscal year; (ii) determines whether performance targets have been satisfied for RSUs granted during the prior fiscal year; (iii) approves total compensation levels for executive officers for the fiscal year just concluded, including any salary increases and cash bonuses; and (iv) approves the executive officer cash-bonus program for the current fiscal year. The bonuses concerning environmental and social progress are overseen jointly with the Nominating and Governance Committee.

  15. Elements of Compensation

    Elements of Compensation The components of our executive compensation programs are equity compensation (consisting generally of performance-based RSUs), base salary, cash bonuses, and other benefits (primarily consisting of health plans, a 401(k) plan and a deferred compensation plan). The Committee believes that these components are appropriate and are consistent with the Company’s long-standing approach to executive compensation, which has made equity awards the most significant form of compensation. The Committee did not reevaluate for fiscal year 2025 whether there is an optimal mix of equity, salary, bonus and other compensation components for each executive officer. Rather, it relied upon the fact that the current structure has been utilized successfully in years past and gave more particular attention to the incremental changes in the components of the mix and the value of the total compensation packages. RSUs. RSU grants represent the largest component of compensation, based on their fair value at the time of grant. The Committee believes that emphasizing this form of compensation helps align the interests of employee-grantees with those of shareholders, both in the shorter term (with one-year performance conditions) and in the longer term (with share ownership requirements and time-based vesting of up to five years, subject to earlier vesting for long service, as described below). All named executive officers received performance-based RSU grants for fiscal 2025. Base salary. Base salary is the second largest compensation component. It is consistent with the need for executive officers to have predictable cash compensation, which has been subject generally to modest annual increases. Cash bonus. Cash bonuses are based on a variety of metrics. They address short-term incentives and are linked to performance during the fiscal year. Historically, at least some portion of the cash bonuses has been paid each year. For fiscal 2025, the Committee believes that maintaining cash bonuses at or near the current proportion is consistent with preferring long-term equity incentives as being in the greater interest of the Company and its shareholders. Approximately 8,000 employees were eligible for cash bonuses for fiscal 2025. To be eligible for the annual bonus, the individual must be employed by the Company at the time the bonuses are paid (historically in November). Other elements. Consistent with its position as a low-overhead operator, the Company has modest “other compensation.” Significant components of this compensation include health care and helping executives fund their retirement needs (through the 401(k) and the deferred compensation plans); the Company provides no pensions. These components of compensation mix incentives that are intended to reward shorter-term (twelve months) and longer-term performance (five years and beyond). Shorter-term incentives come primarily from the initial award of RSUs being subject to achievement of a one-year performance metric and, to a significantly lesser extent, cash bonuses that are subject to one-year performance metrics. Longer-term incentives come primarily from the RSU award vesting of up to five years, and, to a lesser extent, share ownership requirements for executive officers and vesting elements in certain benefit plans (such as the deferred compensation and 401(k) plan matches). The Committee believes that these elements do not promote unreasonable risk-taking behavior. The value of shorter-term incentives (including cash bonus awards and performance conditions for awards of RSUs) is substantially exceeded by longer-term incentives (including equity awards that vest over up to five years) and share ownership requirements, which the Committee believes reward sustained performance that is aligned with shareholder interests. In addition, the Company’s Corporate Governance Guidelines and Rule 10D-1 Policy on Recovery of Incentive Compensation (described more fully below) require or enable the Committee to seek the return of incentive compensation improperly earned, depending on the circumstances.

  16. Peer Companies

    Peer Companies For fiscal 2025, the Committee primarily considered executive compensation data obtained from proxy statements for the following peer companies: Walmart Inc., The Home Depot, Inc., Lowe’s Companies, Inc., The TJX Companies, Inc., Target Corporation, The Kroger Company, Best Buy Inc., BJ's Wholesale Club Holdings, Inc., CVS Health Corporation, Ross Stores Inc., and Wesfarmers Ltd. The peer companies were selected because they are recognized as successful retailers and two of them operate membership warehouse clubs. The Committee took into account that the current market capitalization of one of the companies is substantially larger than the Company. The Committee did not use the comparable company data to set mid-points or other specific quantitative comparisons of executive compensation; it used them only for general reference.

  17. Equity Compensation

    Equity Compensation If fully earned based upon the achievement of performance targets and fully vested, equity compensation is the largest component of compensation for executive officers. RSU grants to executive officers are generally performance-based, with performance-vesting over a one-year period, time-vesting over up to five years, and vesting for long service. Following satisfaction of performance targets, RSUs become time-vested RSUs that, subject to accelerated vesting for long service (described below) vest 20% upon the first anniversary of the grant date (following the determination by the Committee that the performance criteria have been satisfied) and 20% vest over each of the ensuing four years. (Vesting of RSUs awarded to non-executive officers and employees is not performance-based.) To the extent accelerated or time-vesting requirements are met, RSUs are settled and paid in shares of common stock (net of shares withheld for taxes). Recipients are not entitled to vote or receive dividends on unvested and undelivered RSUs. Except as noted below, all officers and employees who received RSU grants in fiscal 2025 and prior years were eligible to receive accelerated vesting once they have achieved long service with the Company (33% vesting credited on the first anniversary of the date of grant after 25 years of service, 66% vesting after 30 years of service, and 100% vesting after 35 years of service, with any remainder vesting ratably over the remaining vesting period). This accelerated vesting, following satisfaction of the performance conditions as to executive officers, entitles individuals to receive shares within ten business days of the anniversary of the grant date or of the initial grant date if the years of service requirement has been met prior to the grant date. Mr. Vachris's fiscal 2025 award is not subject to accelerated vesting prior to termination for long service and instead vests under the five-year vesting schedule. The performance-based awards granted to Messrs. Millerchip and Polit in fiscal 2025 vested one-fifth on October 22, 2025, and will vest one-fifth on October 22, in each of the ensuing four years. For awards vested on October 22, 2025, all other Named Executive Officers received 100% long-service vesting. In May 2025, the Compensation Committee approved changes to the vesting schedule applicable only to future RSU grants to ensure continued quality and competitiveness of our compensation program. The changed vesting schedule will apply only to grants beginning in October 2025 and does not affect previously granted awards or the compensation of the named executive officers disclosed in this proxy statement. Executive officers, along with all other grantees, had the option to make a one-time election to remain under the five-year vesting schedule with acceleration for long service or to change to a three-year vesting schedule with no such acceleration. All executive officers elected to remain under the five-year vesting schedule with acceleration, except for Messrs. Millerchip and Polit, who elected to change to a three-year vesting schedule. The criteria for the fiscal 2025 performance-based grants were (versus fiscal 2024) a 3% increase in net sales or a 2% increase in pre-tax income (both adjusted for changes in foreign currencies). The Committee determined that both goals were exceeded. Accordingly, the executive officers who received performance-based grants earned all of the RSUs granted, subject to time-based and long-service vesting. All recipients, other than Messrs. Vachris, Millerchip and Polit received accelerated vesting for long service for these RSUs. The Board adopted in July 2008 a fixed date of October 22 for RSU grants, with exceptions as approved in advance by the Committee. For fiscal 2025, RSU grants were made on October 22, 2024, and the performance criteria for the grants were established in November 2024. All grants in fiscal 2025 were made under the Company’s 2019 Incentive Plan, approved by the shareholders in January 2019.

  18. 2025 Compensation of Other Named Executive Officers

    2025 Compensation of Other Named Executive Officers The most significant component of compensation in fiscal 2025 was performance-based RSUs. Performance-based RSU amounts awarded to Messrs. Millerchip, Galanti, Miller, Riel, and Polit were 6,268, 5,937, 4,654, 4,654, and 4,219. Performance-based RSU levels increased 3% for Messrs. Galanti, Miller, Riel, and Polit, based on the closing share price at the time of the grant. Mr. Millerchip received an award in the previous year for five months of service with the Company and he received a full award this year. While this represents a 100% increase, if he received a full award last year, the increase would have been 3%, consistent with all others. The amounts awarded were based on the recommendations of Mr. Vachris and approved by the Committee before the grants. The performance criteria were, as noted above, exceeded, and the Named Executive Officers earned all of the RSUs granted, with accelerated-vesting for long service and further time-based vesting. Salaries for other Named Executive Officers were based upon the recommendation of Mr. Vachris, who focused on the amount of increase deserved over the prior year’s salary level. Base salary levels for these officers increased between 2% and 5% over the previous fiscal year. Other Named Executive Officers received cash bonuses of $200,000. The potential bonus amount was $232,000, which did not change from last year. This amount included $80,000 based on the achievement of targets relating to net sales and $80,000 based on the achievement of targets relating to pre-tax income. The potential payment attributable to each of these performance goals was from zero up to 120% of the award target amount, based on the level of achievement. Up to $40,000 in potential related to environmental and social objectives: $24,000 relating to achievement of quantitative performance metrics, including environmental and human capital metrics, on an all or nothing basis depending upon whether a majority of the quantitative metrics were satisfied; and up to $16,000 based on discretionary assessment by the Chief Executive Officer of the officer's environmental and social achievements (including, without limitation, progress in controlling emissions). For fiscal 2025, the pre-tax income component of the bonus earned was $80,000, based on the Company's achieving 101.3% of the pre-tax profit target. The net sales component of the bonus earned was $80,000, based on the Company's achieving 100.3% of the net sales target. The environmental and social objective bonus was fully earned, which included the achievement of quantitative performance metrics and 100% of the discretionary amount, as recommended by Mr. Vachris. Mr. Polit also received a signing bonus of $3 million, earned on October 22, 2024, with remaining amounts of $2.2 million, $1.5 million, and $740,000 payable on October 22 in three subsequent years, contingent on his continued employment.

  19. SUMMARY COMPENSATION TABLE

    SUMMARY COMPENSATION TABLE The following table sets forth information regarding compensation for the Named Executive Officers for fiscal 2025, 2024, and 2023.

  20. SUMMARY COMPENSATION TABLE

    | Name and Principal Position | Year | Salary ($)1 | Bonus ($)2 | Stock Awards ($)3 | Non-Equity Incentive Plan Compensation ($)4 | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)5 | All Other Compensation ($)6 | Total ($) | | Ron M. Vachris | 2025 | 1,183,270 | — | 12,036,800 | 600,000 | 53,896 | 58,631 | 13,932,597 | | Chief Executive Officer, President and Director | 2024 | 1,078,077 | — | 10,592,029 | 434,333 | 69,138 | 56,164 | 12,229,741 | | | 2023 | 937,500 | — | 7,151,883 | 248,000 | 62,801 | 52,658 | 8,452,842 | | Gary Millerchip | 2025 | 915,115 | 16,000 | 5,453,713 | 184,000 | — | 201,685 | 6,770,513 | | Executive Vice President, Chief Financial Officer | 2024 | 456,923 | 4,008,615 | 9,651,671 | 79,693 | — | 82,542 | 14,279,444 | | Russ D. Miller | 2025 | 765,192 | 16,000 | 4,123,770 | 184,000 | 27,861 | 64,855 | 5,181,678 | | Senior Executive Vice President, COO - U.S. and Mexico Operations | 2024 | 743,231 | 16,000 | 4,212,982 | 148,000 | 32,763 | 61,862 | 5,214,838 | | | 2023 | 728,135 | 16,000 | 4,004,156 | 108,000 | 32,752 | 59,403 | 4,948,446 | | Pierre Riel7 | 2025 | 713,654 | 16,000 | 4,123,770 | 184,000 | 361 | 249,232 | 5,287,017 | | Executive Vice President, COO - International Division | 2024 | 680,250 | 16,000 | 4,212,982 | 148,000 | — | 331,811 | 5,389,043 | | | 2023 | 679,258 | 16,000 | 3,629,438 | 108,000 | — | 616,169 | 5,048,865 | | Javier Polit | 2025 | 541,116 | 3,016,000 | 3,670,902 | 184,000 | — | 96,191 | 7,508,209 | | Executive Vice President, Chief Information and Digital Officer | 2024 | 370,000 | 3,112,308 | 6,140,740 | 113,846 | — | 75,965 | 9,812,859 | | Richard A. Galanti8 | 2025 | 502,079 | — | 5,260,598 | — | 594,005 | 148,054 | 6,504,736 | | Former Executive Vice President | 2024 | 916,615 | 16,000 | 5,374,408 | 148,000 | 703,348 | 55,334 | 7,213,705 | | | 2023 | 919,231 | 16,000 | 5,108,767 | 108,000 | 612,858 | 51,543 | 6,816,399 |

  21. SUMMARY COMPENSATION TABLE

    _______________________ (1) Salaries in 2023 reflect the additional week in that year with certain salaries restated to reflect retroactive pay when earned rather than received. Mr. Galanti's salary includes a vacation payout when he retired. (2) Awarded under the Company’s cash bonus program based on a discretionary assessment by the Chief Executive Officer of the executive officer's environmental and social accomplishments. Mr. Polit's bonus in 2025 also includes a sign-on bonus of $3M earned after approximately one year of service. Messrs. Millerchip and Polit bonus in 2024 also includes a sign-on bonus of $4M and $3.1M, respectively, when they joined the Company in consideration of compensation earned from their previous employers but forfeited as a result of their resigning their former positions. (3) The award value represents the grant-date fair value of performance-based and time-based RSUs granted to the Named Executive Officers during fiscal 2025, 2024 and 2023. Performance-based RSUs were earned upon attainment of performance criteria and subject to additional time-based vesting. The performance criteria for fiscal 2025 are described under “Compensation Discussion and Analysis – Equity Compensation.” The value of both type of awards are calculated as the market value of the common stock on the measurement date less the present value of the expected dividends forgone during the vesting period. For a description of the assumptions used in calculating the fair value of RSUs, see Note 1 of our financial statements in our Form 10-K for the year ended August 31, 2025. The measurement date for performance-based RSUs are the date that the Compensation Committee establishes the performance conditions, near the end of the first fiscal quarter. The measurement date for time-based RSUs is the date that the CEO approves the grants. These amounts thus do not reflect the amount of compensation actually received by the Named Executive Officer during the fiscal year. (4) Awarded under the Company's cash bonus program for fiscal 2025, 2024, and 2023. (5) Each Named Executive Officer (among certain other employees) is eligible to participate in the Company’s non-qualified deferred-compensation plan, which allows the employee to defer up to 80% of salary and 90% of bonus and to receive a Company match of 50% of the deferred amount, up to a maximum annual match of $5,000. The minimum deferral period is five years, unless a participant elects to receive distributions upon separation from service. The matching contribution vests ratably over five years, unless the participant has attained a sum of age and years of service totaling 65 and a minimum of five years of service, in which case the Company match vests immediately when credited to the executive's account. Interest accrues on deferred amounts at the Bank of America prime rate. An additional 1% interest is credited upon the participant’s attaining a sum of age and years of service totaling 65 and a minimum of five years of service. The amounts reported in this column represent the interest on the officer’s balance to the extent that it is “above market” – greater than 120% of the applicable federal long-term rate. (6) Detail is provided below in the All Other Compensation table. (7) Mr. Riel's compensation earned in Canada was converted to USD using the average exchange rate for fiscal periods 2024 and 2023 equaling $1.360 CAD and $1.346 CAD. (8) Mr. Galanti served as Chief Financial Officer until March 2024 and as Executive Vice President until January 2025.

  22. FISCAL 2025 GRANTS OF PLAN-BASED AWARDS

    FISCAL 2025 GRANTS OF PLAN-BASED AWARDS The following table provides information regarding grants of awards under any plan during fiscal 2025.

  23. FISCAL 2025 GRANTS OF PLAN-BASED AWARDS

    | Name | Type of Award | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards1 | | Estimated Future Payouts Under Equity Incentive Plan Awards (Units)2 | Grant-Date Fair Value of Awards ($)3 | | | | | Target ($) | Maximum ($) | | | | Ron M. Vachris | Annual Incentive | 10/14/2025 | 600,000 | 700,000 | — | — | | | Performance RSUs | 10/22/2024 | — | — | 13,834 | 12,036,800 | | Gary Millerchip | Annual Incentive | 10/14/2025 | 184,000 | 216,000 | — | — | | | Performance RSUs | 10/22/2024 | — | — | 6,268 | 5,453,713 | | Russ D. Miller | Annual Incentive | 10/14/2025 | 184,000 | 216,000 | — | — | | | Performance RSUs | 10/22/2024 | — | — | 4,654 | 4,123,770 | | Pierre Riel | Annual Incentive | 10/14/2025 | 184,000 | 216,000 | — | — | | | Performance RSUs | 10/22/2024 | — | — | 4,654 | 4,123,770 | | Javier Polit | Annual Incentive | 10/14/2025 | 184,000 | 216,000 | — | — | | | Performance RSUs | 10/22/2024 | — | — | 4,219 | 3,670,902 | | Richard A. Galanti | Annual Incentive | 10/14/2025 | 184,000 | 216,000 | — | — | | | Performance RSUs | 10/22/2024 | — | — | 5,937 | 5,260,598 |

  24. FISCAL 2025 GRANTS OF PLAN-BASED AWARDS

    _______________________ (1) The amounts shown represent the target and maximum amounts of annual cash bonus compensation that, depending on Company and individual performance, might have been paid for fiscal 2025 performance. The actual amount paid for fiscal 2025 is included in the "Non-Equity Incentive Plan Compensation" column and corresponding footnote of the Summary Compensation Table on page 19. See description under "Compensation Discussion and Analysis - 2025 Compensation of the Chief Executive Officer" and "2025 Compensation of Other Named Executive Officers." (2) The number of performance-based RSUs granted during fiscal 2025, subject to attainment of the performance criteria described under “Compensation Discussion and Analysis – Equity Compensation.” After the end of fiscal 2025, the Compensation Committee determined that the performance criteria had been exceeded and the awards were earned. The earned awards vested 20% on October 22, 2025, and will vest 20% on October 22 for the following four years, with acceleration of vesting for long service. (3) The grant-date fair value of RSU awards granted, computed as described in footnote 3 to the Summary Compensation Table.

  25. OUTSTANDING EQUITY AWARDS AT FISCAL 2025 YEAR-END

    OUTSTANDING EQUITY AWARDS AT FISCAL 2025 YEAR-END The following table sets forth information regarding unvested stock awards held at August 31, 2025.

  26. OUTSTANDING EQUITY AWARDS AT FISCAL 2025 YEAR-END

    | Name | Type of Award | Stock Award Grant Date | Number of Shares or Units of Stock Unvested at Fiscal Year-End1,2 | Market Value of Shares or Units of Stock Unvested at Fiscal Year-End ($)3 | | Ron M. Vachris | Performance RSUs | 10/22/2024 | 13,834 | 13,049,889 | | | Performance RSUs | 10/22/2023 | 15,319 | 14,450,719 | | Gary Millerchip | Performance RSUs | 10/22/2024 | 6,268 | 5,912,730 | | | Performance RSUs | 3/11/2024 | 3,138 | 2,960,138 | | | Time-based RSUs | 3/11/2024 | 6,536 | 6,165,540 | | Russ D. Miller | Performance RSUs | 10/22/2024 | 4,654 | 4,390,211 | | Pierre Riel | Performance RSUs | 10/22/2024 | 4,654 | 4,390,211 | | Javier Polit | Performance RSUs | 10/22/2024 | 4,219 | 3,979,867 | | | Performance RSUs | 12/18/2023 | 5,390 | 5,084,495 | | | Time-Based RSUs | 12/18/2023 | 2,947 | 2,779,964 | | Richard A. Galanti | Performance RSUs | 10/22/2024 | 5,937 | 5,600,491 |

  27. OUTSTANDING EQUITY AWARDS AT FISCAL 2025 YEAR-END

    _______________________ (1) Reflects adjustments for special dividends. (2) Performance RSUs are subject to satisfaction of one-year performance conditions. RSUs are also subject to accelerated vesting prior to termination for long service (other than grants to the Chief Executive Officer). RSUs with the following grant dates vest as follows:

  28. OUTSTANDING EQUITY AWARDS AT FISCAL 2025 YEAR-END

    | Grant Date | Type of Award | Vesting | | 10/22/2023, 12/18/2023, and 3/11/2024 | Performance RSUs | Vest 20% on October 22, 2025, and will vest 20% on October 22 for the following three years. | | 3/11/2024 | Time-based RSUs | Vest 33% annually on each subsequent March 11, over the next two years. | | 12/18/2023 | Time-based RSUs | Vest 20% annually on each subsequent October 22, over the next four years. | | 10/22/2024 | Performance RSUs | After the end of fiscal 2025, the Compensation Committee certified that the performance criteria had been exceeded and that the awards were earned. The earned awards vested 20% on October 22, 2025, and will vest 20% on October 22 for the following four years. All grants are made annually on October 22. The shares above do not reflect accelerated vesting for long service as the awards were not yet released. |

  29. OUTSTANDING EQUITY AWARDS AT FISCAL 2025 YEAR-END

    (3) Based on the closing market price of $943.32 on August 29, 2025.

  30. FISCAL 2025 NON-QUALIFIED DEFERRED COMPENSATION

    FISCAL 2025 NON-QUALIFIED DEFERRED COMPENSATION The following table provides information relating to the non-qualified deferred compensation plan. See footnote 5 to the Summary Compensation Table for additional information about the plan.

  31. FISCAL 2025 NON-QUALIFIED DEFERRED COMPENSATION

    | Name | Executive Contributions in Last Fiscal Year ($)1 | Registrant Contributions in Last Fiscal Year ($)2 | Aggregate Earnings in Last Fiscal Year ($)3 | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year-End ($)4 | | Ron M. Vachris | 104,508 | 5,000 | 144,162 | (290,176) | 1,688,366 | | Gary Millerchip | — | — | — | — | — | | Russ D. Miller | 437,989 | 5,000 | 74,008 | (214,201) | 1,102,864 | | Pierre Riel | 10,000 | 5,000 | 998 | — | 15,998 | | Javier Polit | — | — | — | — | — | | Richard A. Galanti | 177,058 | 5,000 | 1,574,114 | (724,573) | 18,777,522 |

  32. FISCAL 2025 NON-QUALIFIED DEFERRED COMPENSATION

    _______________________ (1) Amounts were included in “Salary,” “Bonus,” or "Non-Equity Incentive Plan Compensation" in the Summary Compensation Table. (2) Amounts were included in "All Other Compensation" in the Summary Compensation Table. (3) Amounts representing interest on the Named Executive Officer's balance that is "above market" (greater than 120% of the applicable federal long-term rate) are included in "Change in Pension Value and Nonqualified Deferred Compensation Earnings" in the Summary Compensation Table. (4) Of these amounts, the following amounts have also been reported in the Summary Compensation Table:

  33. FISCAL 2025 NON-QUALIFIED DEFERRED COMPENSATION

    | Name | Reported for Fiscal 2025 ($) | Previously Reported for Fiscal 2024 ($) | Previously Reported for Fiscal 2023 ($) | | Ron M. Vachris | 167,035 | 194,925 | 209,340 | | Gary Millerchip | — | — | — | | Russ D. Miller | 472,790 | 94,788 | 76,566 | | Pierre Riel | 15,396 | — | — | | Javier Polit | — | — | — | | Richard A. Galanti | 817,276 | 1,248,871 | 1,085,358 |

  34. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL

    POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL The Company does not have any individual change-in-control agreements with any executive officer, director, or employee. Plans under which RSUs have been granted provide for accelerated vesting under certain circumstances in the event of a change in control. The amounts shown in the following table reflect the potential value to the Named Executive Officers as of the end of fiscal 2025 of full acceleration of all unvested RSUs under certain circumstances in connection with a change in control of the Company and acceleration of unvested RSUs upon certain terminations of employment. The amounts shown assume that a change in control or termination was effective as of the last business day of fiscal 2025 and that the price of Costco common stock on which the calculations were based was the closing price on August 29, 2025 ($943.32). They are estimates of the incremental amounts that would be received upon a change in control or termination of employment; the actual amount could be determined only at the time of any actual change in control or termination of employment. In the event of a termination other than for cause: (i) proportional vesting (measured on a quarterly basis) occurs for the time period between termination and the grant date or grant date anniversary; and (ii) accelerated vesting for long service occurs based on years of service. For purposes of the foregoing, the vesting formula for long service is: 33% for 25 or more years of service; 66% for 30 or more years of service; and 100% for 35 or more years of service. RSUs also provide for accelerated vesting for long service prior to termination. There is no accelerated vesting in the event of a termination for cause. The following table provides information regarding the estimated potential incremental payments upon termination or change in control for the Named Executive Officers who were officers at fiscal year-end.

  35. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL

    | | | Change in Control | | | Name | Total Value of RSUs Vested Upon Termination Without Cause or for Good Reason ($)1 | Total Value of RSUs That May Vest ($)1, 2 | Total Value of RSUs Vested Upon Termination Without Cause or for Good Reason ($)1, 2, 3 | | Ron M. Vachris | 27,500,608 | 27,500,608 | 27,500,608 | | Gary Millerchip | — | 15,038,407 | 15,038,407 | | Russ D. Miller | — | 4,390,211 | 4,390,211 | | Pierre Riel | — | 4,390,211 | 4,390,211 | | Javier Polit | — | 11,844,326 | 11,844,326 |

  36. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL

    (1) Total value calculated assuming a termination or change-in-control date of August 31, 2025, and utilizing the closing market price on August 29, 2025. (2) Maximum value of RSUs that in the event of a change in control of the Company are not assumed or substituted under the 2019 Plan. (3) Maximum value of RSUs that in the event of termination without cause or for good reason after a change in control are not assumed or substituted under the 2019 Plan. Deferred Compensation Plan. In the event that a Named Executive Officer’s employment with the Company is terminated, either voluntarily or involuntarily, the officer will receive the balance of the deferred compensation account no sooner than six months following termination of employment or death. The balance of each Named Executive Officer’s deferred compensation account as of the end of fiscal 2025 is set forth in the table titled “Fiscal 2025 Non-qualified Deferred Compensation.” In the event of a threatened change in control of the Company, the Compensation Committee may act to protect the participants, including accelerating vesting or terminating the plan and paying benefits to participants. Potential Payments Under Mr. Vachris’s Employment Agreement. In December 2024, the Company and Mr. Vachris renewed his employment agreement effective January 1, 2025, with a one-year term. If Mr. Vachris’s employment is terminated by the Company without cause or by Mr. Vachris with good reason, Mr. Vachris will receive a lump-sum cash payment equal to 1.5 times his annual base salary and target bonus and full acceleration of unvested RSUs. The estimated amount Mr. Vachris would have received as cash severance in the event of such termination as of August 31, 2025, is $2.7 million. The actual amount could be determined only at the time of any actual termination. Upon termination due to disability, Mr. Vachris would be eligible for continued medical coverage and receive full acceleration of unvested RSUs as described above. “Good reason” is defined in the agreement as a material diminution in Mr. Vachris's salary or target bonus, in authority, duties or responsibilities, or in the budget over which he retains authority, causing him to report to anyone other than the Board, a material change in geographic location at which he must perform services, or any breach by the Company of the employment agreement. “Cause” is defined in the agreement as an intentional tort causing substantial loss, damage or injury to the Company, any serious crime or intentional, material act of fraud or dishonesty against the Company, the commission of a felony that results in other than immaterial harm to the Company’s business or to the reputation of the Company or Mr. Vachris; habitual neglect of reasonable duties, disregard of written, material policies of the Company that causes other than immaterial loss, damage or injury to the property or reputation of the Company, or any material breach of Mr. Vachris's obligation to not disclose confidential information or to assign intellectual property developed during employment. Under the terms of Mr. Vachris’s fiscal employment agreement, in the event of termination of his employment for any reason other than cause, if the Compensation Committee of the Board determines that the performance goals established for the outstanding performance RSU award have been met, Mr. Vachris will receive the award, subject to the long service and quarterly vesting provisions generally applied for terminations in connection with RSU awards as described above. The table above shows the estimated incremental amounts Mr. Vachris would receive in respect of his fiscal 2025 award in connection with a hypothetical termination of employment at August 31, 2025. Potential Payments under Mr. Millerchip's Offer Letter. Under Mr. Millerchip’s offer letter entered into in January 2024, if at the time of a termination other than for cause he has achieved ten years of service he will vest in 25% of his unvested RSUs, subject to the achievement of any outstanding performance conditions. This is in addition to the long service and quarterly vesting provisions generally applied for terminations in connection with RSU awards as described above. Equity Compensation Plans. Under the Company’s 2019 Incentive Plan, in the event of a “fundamental transaction” or “change in control”: (i) with respect to stock awards that are assumed, substituted or continued, if the Company terminates the participant’s employment without “cause” or the participant terminates with “good reason” upon or during the 12-month period following the fundamental transaction or change in control, the stock award will become fully vested and any performance conditions imposed with respect to the award will be deemed to be achieved at the greater of the actual levels of achievement as of the date of such termination and the target performance levels; and (ii) if the stock award is not assumed, substituted or continued, the Board will fully accelerate time-based awards and provide for pro-rata acceleration of performance-based stock awards at the greater of actual levels of achievement or target, or cancel the awards in exchange for cash payments to the participant. The plan has detailed definitions of “good reason”, “cause,” “change in control” and “fundamental transaction.” Generally speaking, “good reason,” except as otherwise defined in an employment agreement, is defined as a material diminution in the participant’s authority, duties or responsibilities or a material change in geographic location at which the participant must perform services. “Cause” is defined as dishonesty, fraud, misconduct, disclosure or misuse of confidential information, conviction of, or a plea of guilty or no contest to, a felony or similar offense, habitual absence from work for reasons other than illness, intentional conduct that could cause significant injury to the Company or an affiliate, or habitual abuse of alcohol or a controlled substance. “Change in control” is defined as the occurrence of any of the following events: (i) a majority of the Board is replaced in any two-year period other than by directors approved by existing directors; or (ii) any person or group acquires shares having 30% or more of the voting power of all outstanding shares; or (iii) a merger or in which outstanding shares are converted into shares of another company or other securities (of either the Company or another company) or cash or other property. “Fundamental transaction” is defined as the merger of the Company with another entity in a transaction in which the Company is not the surviving entity or if, as a result of any other transaction or event, other securities are substituted for Company shares or shares may no longer be issued.

  37. CEO PAY RATIO

    CEO PAY RATIO As required by SEC rules, we are reporting the ratio of the annual total compensation of our CEO to the annual total compensation of our “median employee.” The latter is an estimate calculated consistent with SEC rules, based on our payroll and employment records and the methodology described below. SEC rules allow a variety of methodologies and exclusions and permit reasonable estimates and assumptions. Identification of the Median Employee The year to date period ended June 30, 2025, was utilized to determine the median employee. At that date, we had approximately 336,700 employees worldwide, of which approximately 222,000 were located in the United States and its territories. As permitted by SEC rules, we excluded as de minimis employees of the following when identifying the median employee: Spain, France, Iceland, Sweden, China, New Zealand and Taiwan. As a result, the “considered population” for identifying the median employee was approximately 323,800. The pool included full-time, part-time, seasonal, and temporary employees. For determining the median employee, we used a combination of salary, bonus, equity compensation, and other measurable benefits considered in determining that employee's identity. Non-U.S. employees’ compensation was converted to U.S. dollars using an average exchange-rate for the year to date period. The median employee in the considered population had a total compensation of $49,186. Ratio The CEO's total compensation as shown in the Summary Compensation Table was $13,932,597. Based upon the estimates, assumptions, and methodology described above, the pay ratio is 283:1. This ratio may not be comparable to that reported by other companies due to differences in industries, scope of international operations, business models and scale, as well as the differences in estimates, assumptions, and methodologies. Supplemental Ratio Approximately 37% of the “considered population” were part-time, seasonal or temporary workers, which significantly impacts the ratio shown above. We believe it is appropriate to present a supplemental calculation using the same methodology as above except that it includes only workers who are full-time. Using this methodology, the median employee has a total compensation of $66,262, resulting in a pay ratio of 210:1.

  38. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE As required by Item 402(v) of Regulation S-K, this section describes the relationship between compensation actually paid and certain financial performance measures of the Company. For information about the philosophy, objectives and criteria of executive pay as they pertain to the Company's performance, refer to the Compensation Discussion and Analysis section.

  39. PAY VERSUS PERFORMANCE

    | Year | Summary Compensation Table Total for PEO($)1 | Summary Compensation Table Total for Former PEO($)1 | Compensation Actually Paid to PEO($)1,2 | Compensation Actually Paid to Former PEO($)1,2 | Average Summary Compensation Table Total for Non-PEO NEOs($)1 | Average Compensation Actually Paid to Non-PEO NEOs($)1,2 | Value of Initial Fixed $100 Investment Based On: | | Net Income($)5 (in millions) | Net Sales Adjusted for Changes in Foreign Currencies($)6 (in millions) | | | | | | | | | TSR($)3 | Peer Group TSR($)4 | | | | 2025 | 13,932,597 | — | 15,633,675 | — | 6,250,431 | 6,854,360 | 293.59 | 173.48 | 8,099 | 271,855 | | 2024 | 12,229,741 | 16,049,870 | 18,702,319 | 29,445,370 | 8,381,978 | 11,133,897 | 276.32 | 154.78 | 7,367 | 250,099 | | 2023 | — | 16,870,623 | — | 18,733,773 | 6,304,715 | 6,926,922 | 163.78 | 129.00 | 6,292 | 241,194 | | 2022 | — | 9,905,070 | — | 11,868,875 | 5,806,023 | 6,353,825 | 158.84 | 128.26 | 5,844 | 224,492 | | 2021 | — | 8,804,752 | — | 10,342,108 | 4,724,776 | 5,794,960 | 133.65 | 184.84 | 5,007 | 189,293 |

  40. PAY VERSUS PERFORMANCE

    _______________________ (1) The principal executive officer(s) (PEOs), Former PEO and Non-PEO named executive officers (Non-PEO NEOs) for each year were as follows:

  41. PAY VERSUS PERFORMANCE

    | Year | PEO | Former PEO | Non-PEO NEOs | | 2025 | Ron M. Vachris | | Gary Millerchip, Richard A. Galanti, Russ D. Miller, Pierre Riel, Javier Polit | | 2024 | Ron M. Vachris | W. Craig Jelinek | Gary Millerchip, Richard A. Galanti, Russ D. Miller, Pierre Riel, Javier Polit | | 2023 | W. Craig Jelinek | | Ron M. Vachris, Richard A. Galanti, Russ D. Miller, Pierre Riel | | 2022 | W. Craig Jelinek | | Ron M. Vachris, Richard A. Galanti, Russ D. Miller, James P. Murphy | | 2021 | W. Craig Jelinek | | Ron M. Vachris, Richard A. Galanti, James P. Murphy, Joseph P. Portera |

  42. PAY VERSUS PERFORMANCE

    (2) The dollar amounts represent the amount of "compensation actually paid" or "CAP" as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned or paid to the PEO or Non-PEO NEOs during the applicable year. The following table represents the adjustments made to the Summary Compensation Table (SCT) total compensation for fiscal 2025 to calculate the compensation actually paid. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of the grant.

  43. PAY VERSUS PERFORMANCE

    | | PEO($) | Average for Non-PEO NEOs($) | | SCT Total | 13,932,597 | 6,250,431 | | Deduct, amounts reported under "stock awards" column in the SCT Table | (12,036,800) | (4,526,551) | | Add, fair value at fiscal year end of outstanding and unvested stock awards granted in the current fiscal year | 12,885,866 | 4,829,832 | | Add, change in fair value of outstanding and unvested stock awards granted in prior fiscal years | 847,762 | 193,693 | | Add, change in fair value as of vesting date (from the end of the prior fiscal year) for stock awards granted in any prior fiscal year for which vesting conditions were satisfied during the fiscal year | 4,250 | 106,955 | | Compensation Actually Paid | 15,633,675 | 6,854,360 |

  44. PAY VERSUS PERFORMANCE

    (3) The Total Shareholder Return (TSR) represents the cumulative total return on an initial fixed investment of $100 invested in the Company's common stock from the last day of trading in fiscal 2020 to the last day of trading in each of the applicable fiscal years. The return assumes reinvestment of dividends. (4) The Peer Group TSR represents the S&P Retail Select Index, the index we use in the stock performance graph required by Item 201(e) of Regulation S-K, included in our fiscal year 2025 Form 10-K, filed with the SEC on October 7, 2025. (5) Represents net income reflected in the Company's audited financial statements. (6) Represents net sales adjusted for changes in foreign currencies. This selected measure is used as a performance condition for certain annual performance-based awards for both the PEO and Non-PEO NEOs. Please refer to Appendix A: Non-GAAP Financial Measures for a reconciliation of net sales adjusted for changes in foreign currencies, which is a non-GAAP measure, to net sales under GAAP.

  45. Relationship among Compensation Actually Paid and Performance Measures

    Relationship among Compensation Actually Paid and Performance Measures The charts below reflect the relationship among compensation actually paid compared to the Company's TSR and peer group TSR, net income, and net sales adjusted for changes in foreign currencies over the past four fiscal years. Compensation actually paid reflects the value of outstanding performance-based grants at specified fiscal year ends and does not have a direct comparison to performance trends. The following chart shows the relationship among compensation actually paid to our PEO, Former PEO, the average compensation actually paid to our Non-PEO NEOs, and TSR for the applicable fiscal years. Our peer group TSR is also included. Refer to footnotes 3 and 4 in the table above for TSR methodology for Costco and the peer group. The following chart shows the relationship among compensation actually paid to our PEO, Former PEO, the average compensation actually paid to our Non-PEO NEOs, and net income for the applicable fiscal years. The following chart shows the relationship among compensation actually paid to our PEO, Former PEO, the average compensation actually paid to our Non-PEO NEOs, and net sales adjusted for changes in foreign currencies for the applicable fiscal years. Refer to Appendix A for a reconciliation of this non-GAAP measure to net sales under GAAP.