DEF 14A of W.w. Grainger, Inc., Mar 10, 2026

DEF 14A of W.w. Grainger, Inc.

Filed Mar 10, 2026 · FY20250001104659-26-025575

Open on EDGAR

  1. Director Nominees’ Qualifications, Attributes, Skills, and Background Matrix

    Director Nominees’ Qualifications, Attributes, Skills, and Background Matrix The following table highlights specific experience, qualifications, attributes, skills, and background information that the Board considered for each Director nominee. A particular Director nominee may possess additional experience, qualifications, attributes or skills, even if not indicated below.

  2. Director Nominees’ Qualifications, Attributes, Skills, and Background Matrix

    | Corporate Governance/Public Company Experience | Human Resources/Compensation | Operational/Strategy | | | | | | Experience serving as a public company director; demonstrated understanding of current corporate governance standards and best practices in public companies | Experience managing a human resources/ compensation function; experience with executive compensation and broad-based incentive planning | Experience developing and implementing operating plans and business strategy | | Digital/eCommerce | International | Real Estate | | | | | | Experience implementing digital and omnichannel strategies and/or operating an eCommerce business | Experience overseeing a complex global organization | Experience overseeing complex real estate matters that are integral to a business | | Business Ethics | Public Company/Leadership | Risk Assessment & Risk Management | | | | | | Track record of integrity, uncompromising moral principles and strength of character | “C-Suite” experience with a public company and/or leadership experience as a division president or functional leader within a complex organization | Experience overseeing complex risk management matters | | Finance/Capital Allocation | Supply Chain/Logistics | Technology/Cybersecurity | | | | | | Knowledge of finance or financial reporting; experience with debt and capital markets transactions and/or mergers and acquisitions (“M&A”) | Experience in supply chain management encompassing the planning and management of all activities involved in sourcing, and procurement, conversion, and all logistics management | Experience implementing technology strategies and managing/mitigating cybersecurity risks | | Government/Public Policy | Marketing/Sales & Brand Management | | | | | | | Experience overseeing complex regulatory matters that are integral to a business | Experience managing a marketing/sales function, and in increasing the perceived value of a product line or brand over time in the market | |

  3. Director Nominees’ Qualifications, Attributes, Skills, and Background Matrix

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  4. Director Nominees’ Qualifications, Attributes, Skills, and Background Matrix

    | ● | 6 | 2026 proxy statement |

  5. Director Nominees’ Qualifications, Attributes, Skills, and Background Matrix

    | | Adkins | Davis | Jaspon | Klein | Macpherson | Miller | Novich | Perez | Santi | Slavik Williams | Watson | White | | | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | | | ☑ | | | | ☑ | | | ☑ | | | ☑ | ☑ | | | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | | | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | | | ☑ | ☑ | | | ☑ | | | ☑ | ☑ | | ☑ | ☑ | | | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | | | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | | ☑ | ☑ | | ☑ | | | | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | | | ☑ | | | | ☑ | ☑ | ☑ | | | | ☑ | ☑ | | | ☑ | | | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | | | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | | | ☑ | ☑ | ☑ | ☑ | | | | | | ☑ | | ☑ | | | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | ☑ | | ☑ | ☑ | ☑ | ☑ | | | ☑ | ☑ | | | ☑ | | ☑ | | ☑ | | ☑ | ☑ |

  6. Director Nominees’ Qualifications, Attributes, Skills, and Background Matrix

    The following age, Board tenure, gender, and race/ethnicity information of the Board nominees is as of March 2, 2026:

  7. Board Refreshment Process

    Board Refreshment Process The Board believes that a fully engaged Board is a strategic asset of the Company, and fresh viewpoints and perspectives are important for informed decision-making. At the same time, the Company believes that year-over-year Director continuity is beneficial to shareholders as Directors develop a deeper understanding of the Company over time. The Board generally plans for vacancies well before they arise and periodically evaluates whether its Directors collectively have the right mix of experiences, qualifications, attributes, skills, backgrounds, and diverse viewpoints necessary for it to be a good steward for the Company’s shareholders.

  8. Board Refreshment Process

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  9. Board Refreshment Process

    | invest.grainger.com | 7 | ● |

  10. Board Refreshment Process

    The results of these evaluations are used to help inform searches for potential Board nominees and to screen Director candidates. In planning for Board refreshment and Director succession, the BANC periodically considers potential Director candidates. As a result of these ongoing reviews, six new independent Directors have joined the Board since 2020. The Board has established principles for selecting Directors in the Company’s Criteria for Membership on the Board of Directors (the “Criteria”), which are reviewed on a periodic basis. The Criteria list various factors that the BANC should consider in reviewing candidates for the Board. Grainger’s Criteria provide that Directors who will be age 72 as of the next annual meeting generally will not be nominated.

  11. Board Tenure

    Board Tenure As a group, the average Board tenure of the 2026 nominees for election to the Board is approximately 9 years, with 45% of the non-employee nominees having tenure of five years or less. See Board Qualifications, Attributes, Skills, and Background beginning on page 5 for a matrix reflecting tenure for each nominee.

  12. Board Diversity

    Board Diversity In addition to stating the desired relevant business experience, qualifications, attributes, and skills for Directors, the Criteria also enumerate personal characteristics that should be considered, including reputation for ethics and integrity, sound judgment, independent and objective thought, and respect for diverse opinions. Regarding diversity, the Criteria specify that consideration will be given to candidates without regard to race, color, religion, gender or national origin. To ensure that the Board benefits from diverse perspectives, it seeks qualified nominees from a variety of backgrounds, to ensure that its composition reflects the right balance of skills, qualifications, and attributes.

  13. Attendance of Directors at Meetings

    Attendance of Directors at Meetings As set forth in the Operating Principles, all Directors are expected to attend the annual meeting of shareholders, Board, and Committee meetings, and to spend the time needed to properly discharge their duties. All Directors attended the 2025 annual meeting of shareholders (the “2025 Annual Meeting”). In addition, during 2025, no Director attended fewer than 75% of the total number of meetings of the Board and of the Committees on which they served. This strong attendance, in addition to high engagement levels amongst our Directors, underscores that our processes designed to ensure our Directors are not overcommitted remain effective.

  14. Annual Election of Directors

    Annual Election of Directors The Company’s Directors are elected for a one-year term each year at the annual meeting of shareholders. Each nominee will, therefore, serve until the 2027 annual meeting of shareholders (the “2027 Annual Meeting”) if elected or until their successors have been elected and qualified. Twelve Director nominees, all current Board members, have been nominated by the Board for election. Majority voting applies to all Director elections, as required under Illinois law. Under the majority voting standard, Directors are elected by vote of a majority of the shares of the Company’s common stock present or represented by proxy and entitled to vote on the matter at the annual meeting. Each share is entitled to one vote. In addition to “For” votes, shareholders may vote “Against” a Director nominee or elect to “Abstain.” A shareholder’s abstention on a Director nominee will have the same effect as a vote against the election of that Director nominee. Assuming a quorum is present, broker non-votes will not affect the outcome of the vote. If any of the nominees for Director mentioned below should be unavailable for election, a circumstance that is not expected, the person or persons voting your proxy may exercise discretion to vote for a substitute nominee selected by the Board.

  15. Candidates for Board Membership

    Candidates for Board Membership The BANC recommends to the Board candidates for Board membership. Before making any recommendation, the BANC reviews the results of the annual Board evaluation process and its skills matrix in determining the desired skill set for potential new candidates. The BANC then determines the preferred qualities and characteristics for potential Board nominees by periodically evaluating whether the Board members collectively have the right mix of experience, qualifications, attributes, skills, backgrounds, and diverse viewpoints necessary for the Board to be a good steward for the Company’s shareholders. The BANC screens Board candidates based on a number of criteria, including ethical standards, judgment, independence and objectivity, strategic perspective, record of accomplishment, business knowledge and diversity of experience and background applicable to the Company’s goals.

  16. Candidates for Board Membership

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  17. Candidates for Board Membership

    | ● | 8 | 2026 proxy statement |

  18. Candidates for Board Membership

    The BANC has established a long-standing relationship with a nationally recognized third-party search firm. This firm has assisted the BANC over the years in identifying, evaluating, recruiting and screening potential new Directors that satisfy the Criteria. In addition to Board candidates identified by the BANC, suggestions as to nominees may be received from the Directors, employees, shareholders, and other parties. Any shareholder who would like the BANC to consider a candidate for Board membership should send a letter of recommendation containing the name and address of the proposing shareholder and of the proposed candidate and setting forth the business, professional, and educational background of the proposed candidate, as well as a description of any agreement or relationship between the proposing shareholder and proposed candidate. A written consent of the proposed candidate to be identified as a nominee and to serve as a Director if elected must also be provided. The communication should be sent by mail or other delivery service to the attention of the Office of the Corporate Secretary at the Company’s headquarters. See Questions and Answers beginning on page 78 for more information. In addition, the By-laws, which can be found at https://invest.grainger.com under “Governance Documents,” include proxy access rights under which qualified shareholders can submit director nominations for inclusion in our proxy statement.

  19. Agreement Involving Director Nominee

    Agreement Involving Director Nominee Pursuant to a letter agreement entered into between the Company and Ms. Slavik Williams, dated April 30, 2025 (the “Letter of Understanding”), the Company has agreed to provide Ms. Slavik Williams with the right to nominate up to one individual for inclusion in the Board’s recommended slate of nominees for the election at the Company’s annual meeting of shareholders, subject to certain conditions. The nomination right is effective until the earliest to occur of (i) five years from the date of the Letter of Understanding (subject to an automatic five-year renewal unless timely notice is provided), (ii) the date on which Ms. Slavik Williams ceases to beneficially own at least 5% of the Company’s outstanding common stock, or (iii) Ms. Slavik Williams’ death. Any nominee must be either Ms. Slavik Williams, her spouse or a member of her immediate or extended family. Each nominee is subject to review and consent by the BANC and must satisfy the Board’s director qualification standards and applicable independence requirements. With respect to any submitted nominee approved by the BANC, the Company has agreed, among other things, to include such nominee in the Company’s slate of director nominees and recommend such nominee for election at the applicable annual meeting of shareholders, subject to applicable law and the Board’s fiduciary duties. In 2026, pursuant to the Letter of Understanding. Ms. Slavik Williams nominated herself for election at the 2026 Annual Meeting.

  20. Agreement Involving Director Nominee

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  21. Agreement Involving Director Nominee

    | invest.grainger.com | 9 | ● |

  22. Agreement Involving Director Nominee

    | | PROPOSAL 1: Election of Directors | | What are you voting on? | | | At the 2026 Annual Meeting, 12 Directors are to be elected to hold office until the 2027 Annual Meeting or until their successors have been elected and qualified. Each Nominee is a current Grainger Board member who was elected by shareholders at the 2025 Annual Meeting. | | | The Board recommends a vote “FOR” each of the Director Nominees named in this proxy statement. | |

  23. Director Nominees’ Experience and Qualifications

    Director Nominees’ Experience and Qualifications The nominees have provided the following information about themselves, including their ages as of March 2, 2026, and their relevant background, including experience for at least the past five years. The Company’s nominees have varied experience, qualifications, attributes, skills, and backgrounds that assist them in their oversight of the Company. The Board believes each of the current nominees qualifies for service on the Board. Moreover, each of the current nominees has significant leadership experience in large, multifaceted organizations. This leadership experience includes developing and executing corporate strategy, overseeing operations, and identifying and managing risks in organizations similar in size or complexity to the Company. The summaries provided below are not comprehensive of each nominee’s background, but are provided to describe the primary experience, qualifications, attributes, skills, and background that led the Board to nominate each individual.

  24. Director Nominees’ Experience and Qualifications

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  25. Director Nominees’ Experience and Qualifications

    | ● | 10 | 2026 proxy statement |

  26. Director Nominees’ Experience and Qualifications

    | | Rodney C. Adkins Independent Director President, 3RAM Group LLC; Former Senior Vice President, International Business Machines Corporation | Age: 67 Years on Grainger’s Board: 12 Director Since: 2014 Grainger Board Committees: Audit BANC |

  27. Director Nominees’ Experience and Qualifications

    | Mr. Adkins serves as president of 3RAM Group, LLC and served as a Senior Vice President at International Business Machines Corporation (“IBM”), where he held various senior roles, including heading Corporate Strategy and Systems and Technology. In over 30 years with IBM, he developed a broad range of experience, including extensive experience in emerging technologies, global business operations, product development, and brand management. He also gained significant experience managing and understanding corporate finance, financial statements, and accounting through his many operational roles with IBM. Additionally, Mr. Adkins managed IBM’s supply chain and procurement, giving him direct insight into global trade and supply chains, and the role of distributors in those efforts. Mr. Adkins has extensive experience in corporate governance matters, is a recognized leader in technology and technology strategy, and serves as a director of other publicly traded companies with additional responsibilities, including a board chairmanship and assignments to a compensation committee and an audit committee. | | | | Other Current Public Company Boards • Avnet, Inc. (Chairman of the Board; Chair, executive committee; corporate governance committee) • United Parcel Service, Inc. (Chair, risk committee; executive committee; compensation and human capital committee) | Business and Other Experience • 3RAM Group LLC (2015-present), a privately held company specializing in capital investments, business consulting services and property management, where Mr. Adkins serves as President • IBM, a globally integrated technology and consulting company, where Mr. Adkins held numerous development and management roles, including Senior Vice President of Corporate Strategy (2013-2014); Senior Vice President of Systems and Technology Group (2009-2013); Senior Vice President of Development & Manufacturing (2007-2009); and Vice President of Development of IBM Systems and Technology Group (2003-2007) | Prior Public Company Boards • PayPal Holdings, Inc. (2017-June 2025) (audit, risk, and compliance committee; corporate governance and nominating committee) • PPL Corporation (2014-2019) (audit committee; finance committee) • Pitney Bowes Inc. (2007-2013) (audit committee; executive compensation committee) | | Qualifications, Attributes and Skills | | | | | | |

  28. Director Nominees’ Experience and Qualifications

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  29. Director Nominees’ Experience and Qualifications

    | invest.grainger.com | 11 | ● |

  30. Director Nominees’ Experience and Qualifications

    | | George S. Davis Independent Director Former Interim Chief Executive Officer, Pallidus; Former Executive Vice President and Chief Financial Officer, Intel Corporation | Age: 68 Years on Grainger’s Board: 3 Director Since: 2023 Grainger Board Committees: Chair, Audit (Audit Committee Financial Expert), BANC |

  31. Director Nominees’ Experience and Qualifications

    | Mr. Davis served as Interim CEO of Pallidus, a provider of silicon carbide technology, from December 2023 through November 2024 in conjunction with his role as a Board member. Previously he served as CFO for three global, public companies for 16 years as part of a career spanning over 40 years and has deep knowledge of the semiconductor industry. From 2019-2022, he served as Executive Vice President, Chief Financial Officer of Intel Corporation, where he headed the global finance organization. Prior to joining Intel, Mr. Davis spent six years as Executive Vice President and Chief Financial Officer at Qualcomm Inc. and seven years in the same role at Applied Materials, Inc. At Applied Materials, he became the CFO after six years with the company where he began as Corporate Vice President and Treasurer, overseeing the treasury and tax organizations. Prior to that he spent 19 years at Atlantic Richfield Company (“ARCO”) in roles, including in assistant treasurer positions and later as CFO for ARCO’s EMEA business. Mr. Davis has expertise in corporate strategy and transformation, capital markets, M&A, information technology, cybersecurity, corporate responsibility and investor and government relations among others. His background includes engaging with boards on strategy, finance, risk management, governance, compensation, and activism. Mr. Davis serves as a trustee for the Old Globe Theater in San Diego and as chairman for the United States arm of A4S (Accounting for Sustainability), a non-profit under the King’s Trust, seeking to embed sustainability in organizations’ strategy, operations, and reporting. | | Business and Other Experience • Pallidus (2022-Present): A provider of silicon carbide technology, where Mr. Davis has been a director since 2022 and served as interim CEO from December 2023-November 2024 • Intel Corporation (2019-2022): A leading semiconductor company, where Mr. Davis held the position of Executive Vice President and Chief Financial Officer (2019-2022) • Qualcomm, Inc. (2013-2019): A wireless technology innovator, where Mr. Davis held the position of Executive Vice President and Chief Financial Officer (2013-2019) • Applied Materials, Inc. (2000-2013): A semiconductor equipment and solutions provider, where Mr. Davis held the position of Executive Vice President, Chief Financial Officer (2006-2013), Group Vice President, Corporate Business Development (2005-2006), and Corporate Vice President and Treasurer (2000-2005) | | Qualifications, Attributes and Skills |

  32. Director Nominees’ Experience and Qualifications

    | | Katherine D. Jaspon Independent Director Chief Financial Officer, Inspire Brands, Inc. | Age: 49 Years on Grainger’s Board: 5 Director Since: 2021 Grainger Board Committees: Audit (Audit Committee Financial Expert), BANC |

  33. Director Nominees’ Experience and Qualifications

    | Ms. Jaspon serves as Chief Financial Officer of Inspire Brands, Inc., a multi-brand restaurant company whose portfolio includes 33,000+ restaurants worldwide. Ms. Jaspon oversees all accounting and reporting, tax, financial planning and analysis, treasury, and internal audit functions for Inspire and its brands. She is also responsible for managing Inspire’s relationships with lending institutions, investors, and the financial community. Prior to joining Inspire in December 2020, Ms. Jaspon served as the Chief Financial Officer of Dunkin’ Brands Group, Inc., the former parent company of Dunkin’ and Baskin-Robbins, where she led all finance-related functions, as well as investor relations since 2017. In this role, she oversaw global financial planning and analysis, accounting, financial reporting, tax, treasury, enterprise risk management, payments, insurance, and demand planning functions. During her 15-year tenure with Dunkin’ Brands, Ms. Jaspon led several transactions, including the company’s initial public offering and follow-on equity offerings, securitizations and numerous debt transactions, the divestiture of a brand, and the sale of Dunkin’ Brands to Inspire. Previously, Ms. Jaspon spent eight years at KPMG LLP as an auditor. She is a certified public accountant. Ms. Jaspon previously served as a member and chair of the audit committee of the board of directors of MOD Pizza LLC and also serves on various non-profit boards. | | Business and Other Experience • Inspire Brands, Inc. (2020-Present), a multi-brand restaurant company, where she serves as Chief Financial Officer • Dunkin’ Brands Group, Inc. (2005-2020), a quick service restaurant franchisor (Dunkin’ Brands), where Ms. Jaspon has held various roles, including Senior Vice President, Chief Financial Officer (2017-present), Vice President, Finance and Treasury (2014-2017), Vice President, Controller and Corporate Treasurer (2010-2014), and Director, Assistant Controller (2005-2010). In December 2020, Inspire Brands acquired Dunkin’ Brands • KPMG LLP (1997-2005), a global audit, tax, and advisory services firm, where Ms. Jaspon held various roles, including Senior Manager | | Qualifications, Attributes and Skills |

  34. Director Nominees’ Experience and Qualifications

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  35. Director Nominees’ Experience and Qualifications

    | ● | 12 | 2026 proxy statement |

  36. Director Nominees’ Experience and Qualifications

    | | Christopher J. Klein Independent Director Former Executive Chairman and Chief Executive Officer, Fortune Brands Home & Security, Inc. | Age: 62 Years on Grainger’s Board: 2 Director Since: 2023 Grainger Board Committees: Audit (Audit Committee Financial Expert), BANC |

  37. Director Nominees’ Experience and Qualifications

    | Mr. Klein served as Chief Executive Officer, Fortune Brands Home & Security, Inc. He led the spin-off of the Fortune Brands Home & Security division into its own public company in October 2011. From the initial public offering until his 2020 retirement, the newly public company’s revenues doubled and profits increased by 15 times. Prior to joining Fortune Brands, Mr. Klein served in a series of roles in the financial services sector and as a management consultant at McKinsey & Co. advising clients in this sector. He acquired significant experience in corporate strategy, distribution, branding, M&A, and restructuring and developing businesses. Mr. Klein has extensive experience in corporate governance matters and serves as a director of other publicly traded companies with additional responsibilities, including chairing at separate companies a nominating / ESG committee and a compensation committee. He also previously served as an executive chairman of the Fortune Brands Home & Security board. Mr. Klein also serves as a life trustee and former Chairman of the Board of Ravinia Music Festival, a board member of the University of Iowa’s Center for Advancement and an Emeritus Advisory Board Member to the University of Iowa Tippie School of Business, a Trustee of the Naples Children’s Foundation and a board member of the Saint Ann School Foundation. | | | | Other Current Public Company Boards • Thor Industries (Chair, nominating / ESG committee, audit committee) • Vontier Corporation (Chair compensation committee) (Mr. Klein is not standing for re-election to the Vontier Corporation board at its next annual meeting of shareholders) | Business and Other Experience • Fortune Brands Home & Security, Inc. (spun out of Fortune Brands in 2011) (2003-2020), a manufacturer of home and securities products, where Mr. Klein joined in 2003 as SVP Strategy / Corporate Development / HR, was named President and CEO Fortune Brands Home Division in 2009, and became CEO of Fortune Brands Home & Security, Inc. upon its public listing in October 2011. Upon his retirement as CEO in January 2020, he became Executive Chairman of the Board through December 2020 • Bank One (2001-2003), a bank now merged with JPMorgan Chase & Co., where as Executive Vice President, Mr. Klein restructured businesses and developed the bank’s payments strategy • McKinsey & Co. (1992-2000), Partner serving financial services organizations across North America | Prior Public Company Boards • Fortune Brands Home & Security, Inc. (2011-2020) | | Qualifications, Attributes and Skills | | |

  38. Director Nominees’ Experience and Qualifications

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  39. Director Nominees’ Experience and Qualifications

    | invest.grainger.com | 13 | ● |

  40. Director Nominees’ Experience and Qualifications

    | | D.G. Macpherson Director Chairman and Chief Executive Officer, W.W. Grainger, Inc. | Age: 58 Years on Grainger’s Board: 9 Director Since: 2016 |

  41. Director Nominees’ Experience and Qualifications

    | Mr. Macpherson has served Grainger in many capacities over his more than 17 years, including developing Company strategy, overseeing the launch of Grainger’s U.S. Endless Assortment business, Zoro Tools, Inc., building the Company’s supply chain capabilities globally and realigning the U.S. business to create greater value for customers of all sizes. Mr. Macpherson also has extensive experience in strategic planning, development, and execution. Mr. Macpherson joined Grainger in 2008 after working closely with Grainger for six years as a partner and managing director at The Boston Consulting Group, a global management consulting firm, where he was a member of the Industrial Goods Leadership Team. Mr. Macpherson currently serves on the Griffin Museum of Science and Industry Board of Trustees and as the Vice Chair of the Civic Committee of the Commercial Club of Chicago. | | | | Other Current Public Company Boards • DuPont de Nemours, Inc. (Director) (January 2026) | Business and Other Experience • Chairman of the Board of the Company, a position assumed in October 2017, and Chief Executive Officer of the Company, a position assumed in October 2016, at which time Mr. Macpherson was also appointed to the Board of Directors • Numerous senior management roles at the Company, including Chief Operating Officer (2015-2016); Senior Vice President and Group President, Global Supply Chain and International (2013-2015); Senior Vice President and President, Global Supply Chain and Corporate Strategy (2012-2013); and Senior Vice President, Global Supply Chain (2008-2012) • The Boston Consulting Group, Partner, and Managing Director (2002-2008) | Prior Public Company Boards • International Paper Company (2021-2024) | | Qualifications, Attributes and Skills | | |

  42. Director Nominees’ Experience and Qualifications

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  43. Director Nominees’ Experience and Qualifications

    | ● | 14 | 2026 proxy statement |

  44. Director Nominees’ Experience and Qualifications

    | | Cindy J. Miller Independent Director Former Director, President and Chief Executive Officer, Stericycle, Inc. | Age: 63 Years on Grainger’s Board: 2 Director Since: 2024 Grainger Board Committees: Compensation Committee of the Board (“CCOB”), BANC |

  45. Director Nominees’ Experience and Qualifications

    | Ms. Miller served Stericycle, Inc. as a Director from February 2019 and as President and Chief Executive Officer from May 2019 until her retirement in November 2024. Prior to Stericycle, after serving as President and COO since October 2018, Ms. Miller served as President, Global Freight Forwarding for United Parcel Service, Inc. (“UPS”), a multinational package delivery and supply chain management company, from April 2016 to September 2018 and as President of UPS’s European region from March 2013 to March 2016. Ms. Miller has significant transportation and logistics expertise, and she also has deep knowledge and experience in the healthcare industry, business transformation and change management, operations management, strategy, safety and international business. | | | | Other Current Public Company Boards • Allspring Global Fund (Trustee) (January 2026) | Business and Other Experience • Stericycle, Inc. (2018-November 2024): A business-to-business services company and leading provider of compliance-based solutions, including regulated waste management, secure information destruction, and compliance, training where, prior to joining the Board of Directors and becoming President and Chief Executive Officer in May 2019, Ms. Miller joined in 2018 as President and COO • United Parcel Service, Inc. (1988-2018): A package delivery company and a leading provider of global supply chain management solutions, where she held various roles of increasing responsibility including as President, Global Freight Forwarding; President, Europe Region; Managing Director, UPS UK and Managing Director, UPS South Europe, Middle East and Africa | Prior Public Company Boards • Stericycle, Inc. (2019-2024) • UGI Corporation (2020-2024) | | Qualifications, Attributes and Skills | | |

  46. Director Nominees’ Experience and Qualifications

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  47. Director Nominees’ Experience and Qualifications

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  48. Director Nominees’ Experience and Qualifications

    | | Neil S. Novich Independent Director Former Chairman of the Board, President and Chief Executive Officer, Ryerson Inc. | Age: 71 Years on Grainger’s Board: 27 Director Since: 1999 Grainger Board Committees: Audit (Audit Committee Financial Expert), BANC |

  49. Director Nominees’ Experience and Qualifications

    | Mr. Novich served as the Chairman of the Board, President, and Chief Executive Officer of Ryerson Inc., a global public company where he was deeply engaged in its distribution operations on a domestic and international basis, and also on leadership development and human resources functions. He also spent 13 years with a major management consulting firm, where he was a partner and led the firm’s Distribution and Logistics Practice. As a result, Mr. Novich has in-depth operational experience in supply chain, distribution and logistics as well as experience in developing strategy across a variety of industries. Mr. Novich also has extensive experience in corporate governance matters and served as a director of other publicly traded companies with service on various board committees. As a public company director, he has previously chaired two audit committees and four compensation committees. Mr. Novich is a trustee of the Field Museum of Natural History. | | Business and Other Experience • Endeavor Health (December 2025-present), a community-based, fully integrated health system, where Mr. Novich serves as a member of its regional Board of Directors • Hillenbrand, Inc. (2010-February 2026) (Chair, audit committee; mergers and acquisitions committee; nominating and corporate governance committee, former Chair, compensation committee) • Beacon Roofing Supply, Inc. (2012-April 2025) (nominating and governance; audit committee; former Chair, audit committee; former Chair, compensation committee) • Analog Devices, Inc. (2008-2020) (audit committee; former Chair, compensation committee) • Ryerson Inc., Chairman of the Board (1999-2007) • Ryerson, Inc. (1994-2007), a global metal distributor and fabricator, where Mr. Novich joined in 1994 as Chief Operating Officer, was named President and CEO in 1996, and was additionally appointed Chairman in 1999. He remained Chairman and CEO until 2007, when the company was sold • Bain & Company (1981-1994), an international management consulting firm, where Mr. Novich spent several years as a partner and led the firm’s Distribution and Logistics Practice | | Qualifications, Attributes and Skills | | |

  50. Director Nominees’ Experience and Qualifications

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  51. Director Nominees’ Experience and Qualifications

    | ● | 16 | 2026 proxy statement |

  52. Director Nominees’ Experience and Qualifications

    | | Beatriz R. Perez Independent Director Executive Vice President and Global Chief Communications, Sustainability & Strategic Partnerships Officer, The Coca-Cola Company | Age: 56 Years on Grainger’s Board: 9 Director Since: 2017 Grainger Board Committees: Chair, CCOB BANC |

  53. Director Nominees’ Experience and Qualifications

    | Ms. Perez is an Executive Vice President of The Coca-Cola Company, where she leads an integrated team across public affairs and communications, sustainability, and strategic partnerships to support the company’s growth model and strategic initiatives. In this role, Ms. Perez aligns a diverse portfolio of work against critical business objectives to support brands, communities, consumers, and partners worldwide. During her tenure of more than two decades at that company, she has held several leadership roles while garnering significant experience in marketing and sustainability programs. Ms. Perez also has experience in corporate governance matters and serves as a director of another publicly traded company, with additional responsibilities, including a governance committee assignment. Ms. Perez is a strong advocate for community service, serving on various non-profit boards, including The Coca-Cola Foundation. | | | | Other Current Public Company Boards • Primerica, Inc. (corporate governance committee) (Ms. Perez is not standing for re-election to the Primerica, Inc. board at its annual meeting of stockholders, scheduled to be held in May 2026) | Business and Other Experience • The Coca-Cola Company (1996-present), a global beverage company, where prior to assuming her current position in March 2017, Ms. Perez held several leadership positions including as the company’s first Chief Sustainability Officer (2011-2017). Prior to that she held various roles of increasing responsibility at The Coca-Cola Company in the North America Operating Division, including Chief Marketing Officer, Senior Vice President Integrated Marketing, and multiple field operating roles | Prior Public Company Boards • HSBC North America Holdings, Inc. (2007-2014), the HSBC Finance Corporation (2008-2014), and the HSBC Bank Nevada, N.A. (2011-2013) | | Qualifications, Attributes and Skills | | | | | | |

  54. Director Nominees’ Experience and Qualifications

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  55. Director Nominees’ Experience and Qualifications

    | invest.grainger.com | 17 | ● |

  56. Director Nominees’ Experience and Qualifications

    | | E. Scott Santi Independent Director Non-Executive Chairman, and Former Chief Executive Officer, Illinois Tool Works Inc. | Age: 64 Years on Grainger’s Board: 16 Director Since: 2010 Grainger Board Committees: Audit (Audit Committee Financial Expert), Chair, BANC |

  57. Director Nominees’ Experience and Qualifications

    | Mr. Santi is the Non-Executive Chairman and former Chief Executive Officer of Illinois Tool Works Inc. (“ITW”). In the course of his more than 40 years with ITW, he served in various leadership roles for ITW including serving as the company’s CEO from 2012-2023. Mr. Santi has significant experience with acquisitions and divestitures and integrating acquired companies, strategic marketing. global manufacturing, innovation driven growth, international operations, and talent management including compensation policy, leadership development, and succession planning. Mr. Santi currently serves as a trustee or director of various civic and nonprofit organizations including the Rush System for Health, Northwestern University, the Art Institute of Chicago, the Lyric Opera of Chicago, and the Chicago Symphony Orchestra Association. | | | Other Current Public Company Boards • Illinois Tool Works Inc. (Non-Executive Chairman of the Board) | Business and Other Experience • ITW (1983-present), a global multi-industry manufacturing leader of engineered components and systems, where Mr. Santi serves as Non-Executive Chairman. He served as ITW’s Chief Executive Officer (2012- 2023), and held various senior management roles, including Vice Chairman (2008-2012) and Executive Vice President (2004-2008) | | Qualifications, Attributes and Skills | | | | |

  58. Director Nominees’ Experience and Qualifications

    | | Susan Slavik Williams Independent Director Founder, President, and Manager, Four Palms Ventures; President and Director, The Donald J. Slavik Family Foundation | Age: 57 Years on Grainger’s Board: 6 Director Since: 2020 Grainger Board Committees: CCOB BANC |

  59. Director Nominees’ Experience and Qualifications

    | Ms. Slavik Williams is a private investor who has been a long-term significant shareholder of the Company as well as an entrepreneur and environmentalist. She has expansive knowledge in investments, financing, and real estate, including as a result of her 30-plus years of service on the board of directors of Mark IV Capital, Inc. She also has a deep understanding of environmental and social matters, working for 29 years as President and member of the board of directors of a foundation focused on wildlife preservation in the United States, Africa, South America, and Asia. Since 2017, Ms. Slavik Williams has served as a member of the board of directors of iSelect Fund, a venture capital investment firm. For 12 years, Ms. Slavik Williams was a director of the Saint Louis Zoo and currently serves on the conservation committee of its strategic planning group. As a longstanding significant shareholder of the Company, she possesses extensive knowledge of the Company’s business, organization, and culture. | | Business and Other Experience • Four Palms Ventures, a venture capital firm founded by Ms. Slavik Williams focused on investing in early stage agtech and other technology companies, where Ms. Slavik Williams serves as President and Manager (2019-present) • iSelect Fund, a venture capital investment firm, where Ms. Slavik Williams serves on the board (2017-present) • The Donald J. Slavik Family Foundation, a nonprofit organization supporting programs that preserve wildlife and the environment, where Ms. Slavik Williams presently serves as President and a member of its Board of Directors (1995-present) • Mark IV Capital, Inc., a private commercial real estate development and investment company, where Ms. Slavik Williams served on its Board of Directors (1989-2025) • Ernst & Young Consulting (now Capgemini), a global consulting and technology services company, where Ms. Slavik Williams was a Manager (1994-1998) | | Qualifications, Attributes and Skills | | |

  60. Director Nominees’ Experience and Qualifications

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  61. Director Nominees’ Experience and Qualifications

    | ● | 18 | 2026 proxy statement |

  62. Director Nominees’ Experience and Qualifications

    | | Lucas E. Watson Independent Director Partner, Archer Venture Capital and Former President, MSG Sphere at Madison Square Garden Entertainment Corp. | Age: 55 Years on Grainger’s Board: 8 Director Since: 2017 Grainger Board Committees: CCOB BANC |

  63. Director Nominees’ Experience and Qualifications

    | Mr. Watson is a Partner at Archer Venture Capital. Previously he served as President, MSG Sphere at Madison Square Garden Entertainment Corp. where he led the strategy and execution of all business aspects of the Sphere, which opened in Las Vegas in September 2023. Prior to that he served as Senior Vice President, Go To Market, and Chief Marketing Officer and General Manager, at Cruise LLC where he led Cruise’s go to market strategy with respect to the company’s autonomous vehicle fleet. Before Cruise, he served as Executive Vice President and Chief Marketing and Sales Officer at Intuit, where he led the company’s global sales and go to market efforts. Prior to Intuit, Mr. Watson was Vice President for Global Brand Solutions at Google, where he led the company’s brand advertising business, working with many of the world’s leading companies. Early in his career, Mr. Watson held a variety of marketing and general management roles at Procter & Gamble. | | Business and Other Experience • Partner, Archer Venture Capital (2023-present), a leading venture capital firm that invests in high growth technology companies. Member of the Board of Directors of Hatch Baby, Inc. which is one of Archer’s portfolio investments • Madison Square Garden Entertainment Corp. (2022-2023), a leader in live entertainment where Mr. Watson served as President, MSG Sphere • Cruise LLC (2018-2021), an autonomous vehicle and technology company owned by General Motors Company, a global automotive company, where Mr. Watson served as Senior Vice President, Go to Market (2020-2021) and Chief Marketing Officer and General Manager (2018-2020) • Intuit, Inc. (2016-2018), a global provider of business and financial management solutions, where Mr. Watson served as an Executive Vice President and Chief Marketing and Sales Officer • Google, Inc. (2011-2016), a global technology company, where Mr. Watson served as Vice President, Global Brand Solutions | | Qualifications, Attributes and Skills |

  64. Director Nominees’ Experience and Qualifications

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  65. Director Nominees’ Experience and Qualifications

    | invest.grainger.com | 19 | ● |

  66. Director Nominees’ Experience and Qualifications

    | | Steven A. White Independent Director Former President, Special Counsel to the Chief Executive Officer, Comcast Cable | Age: 65 Years on Grainger’s Board: 5 Director Since: 2020 Grainger Board Committees: CCOB BANC |

  67. Director Nominees’ Experience and Qualifications

    | Mr. White brings over 30 years of experience in eCommerce, sales, marketing, operations, and general management across multiple industries. In over 22 years at Comcast Corporation, Mr. White served in various senior management roles with significant operating and financial responsibility over a number of states, thousands of employees, millions of customers, and billions of dollars in revenue. In December 2024, Mr. White retired from Comcast as President, Special Counsel to the CEO, Comcast Cable. Mr. White also served for 11 years as President, Comcast West. In that capacity, he was responsible for all Comcast cable operations in 13 states, leading nearly 30,000 employees, serving more than nine million customers, and driving annual revenue of nearly $20 billion. Prior to that, Mr. White was responsible for Comcast’s operations in California. Before joining the cable industry, Mr. White held various positions at Colgate-Palmolive, including Marketing Director of Colgate-Palmolive’s Toothbrush Products Division. Mr. White also has experience in corporate governance matters and serves as a director of one other public company, where he serves on various committees. Mr. White also serves on the board of directors of the Metropolitan Football Stadium District and is a member of the Executive Leadership Council. He is a published author and public speaker. | | | | Other Current Public Company Boards • Hormel Food Corporation (governance committee; audit committee) | Business and Other Experience • Comcast Corporation (2022-October 2024): A global media and technology company, where Mr. White held various roles, including President, Comcast West Division (2009-2020), Regional Senior Vice President, Comcast California (2007-2009), and Regional Senior Vice President, Comcast Mid-South Region (2002-2007) • AT&T Broadband, LLC (2000-2002): A leading provider of global telecommunications, media and technology services that merged with Comcast in 2002, where Mr. White was Senior Vice President (2000-2002) • KeHe Distributors, LLC (January 2026-Present): A major North American distributor of natural, organic, specialty, and fresh foods, where Mr. White is a director | Prior Public Company Boards • Shaw Communications Inc. (2021-2023) (human resources and compensation committee) | | Qualifications, Attributes and Skills | | |

  68. Director Nominees’ Experience and Qualifications

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  69. Director Nominees’ Experience and Qualifications

    | ● | 20 | 2026 proxy statement |

  70. Director Compensation

    Director Compensation Grainger’s non-employee Directors each receive an annual cash retainer of $115,000 and an annual deferred stock unit (“DSU”) grant of $175,000. The Lead Director and Directors serving as Committee Chairs receive an additional annual cash retainer. Grainger aims to compensate its non-employee Directors at a level that approximates median market practice. In benchmarking Director pay, Grainger uses the same compensation comparator group as used to benchmark compensation for Grainger’s executives as described in the Compensation Discussion and Analysis section beginning on page 40. The Compensation Committee’s independent compensation consultant advises on Director compensation. The Directors’ compensation program, which was last adjusted in April 2024, consists of the following:

  71. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION

  72. 2025 Director Compensation Table

    2025 Director Compensation Table

  73. 2025 Director Compensation Table

    | Name | Fees Earned or Paid in Cash(1) | Stock Awards(2) | All Other Compensation(3) | Total | | Rodney C. Adkins | $115,000 | $180,262 | $7,500 | $302,762 | | George S. Davis | $145,000 | $180,262 | $0 | $325,262 | | Katherine D. Jaspon | $115,000 | $180,262 | $7,500 | $302,762 | | Christopher J. Klein | $115,000 | $180,262 | $0 | $295,262 | | Cindy J. Miller | $115,000 | $180,262 | $0 | $295,262 | | Neil S. Novich | $115,000 | $180,262 | $7,500 | $302,762 | | Beatriz R. Perez | $140,000 | $180,262 | $0 | $320,262 | | E. Scott Santi | $172,500 | $180,262 | $7,500 | $360,262 | | Susan Slavik Williams | $115,000 | $180,262 | $0 | $295,262 | | Lucas E. Watson | $115,000 | $180,262 | $7,500 | $302,762 | | Steven A. White | $115,000 | $180,262 | $0 | $295,262 |

  74. 2025 Director Compensation Table

    (1) Represents the annual cash retainers received in 2025 by all non-employee Directors. (2) Represents the fair value of the non-employee Directors’ 2025 award of 178 DSUs on the grant date of April 30, 2025, using the closing price of $1,012.71 per share of Grainger’s common stock as of April 29, 2025. The DSUs immediately vest upon the grant date and will be paid in shares of Grainger common stock on a 1:1 basis upon departure from the Board, computed in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. Represents amount paid by the Company to charitable organizations as part of the Company’s Matching Gifts Program with respect to donations made and matched in 2025. The Directors receive no direct or indirect benefit from the matching contributions.

  75. 2025 Director Compensation Table

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  76. 2025 Director Compensation Table

    | invest.grainger.com | 33 | ● |

  77. 2025 Highlights

    | Metrics Aligned with Our Priorities | Reflect Solid 2025 Performance | Executive Pay is Pay for Performance | | NEO incentive programs and metrics were aligned with our priorities to: • Execute on our growth drivers to provide customers with a flawless experience and tangible value. • Encourage operational excellence and productivity to keep the business healthy and enable future investments. • Drive long-term shareholder value creation. | • Delivered $17.9 billion in sales, up 4.9% on a daily, organic constant currency basis.(1) • Produced strong total Company adjusted return on invested capital (“ROIC”) of 39.1%.(1) • Outgrew the total U.S. MRO market by approximately 250 basis points (“bps”) in High-Touch Solutions—U.S. business. • Operating margin decreased 50 bps to 15.0% on an adjusted basis(1) • Diluted adjusted earnings per share (“EPS”) decreased by 8.6% on a reported basis and increased by 1.3% on an adjusted basis.(1) Delivered a one-year Total Shareholder Return (“TSR”) of -3.4% and three-year TSR of 86.4%. | 2025 NEO compensation reflects our pay for performance design: • 2025 short- and long-term incentive payouts correspond with solid performance. • The annual incentive payout was 93% of target and the 2023 PSU cycle payout was 90% of target.(2) |

  78. 2025 Program Performance and Financial Highlights

    | How We Performed (Incentive Program Financial Measures) |

  79. 2025 Program Performance and Financial Highlights

    | 2025 NEO annual incentives paid out at 93% of target, reflecting a year of solid growth |

  80. 2025 Program Performance and Financial Highlights

    Throughout 2025, the Compensation Committee evaluated our compensation programs against the following factors: • Company performance, including whether the programs remain aligned with near- and long-term objectives; • Appropriateness of the original targets to remain relevant and challenging under current conditions; • Alignment to the broader Grainger team and performance to peer companies; and • Ability for Company programs to attract, motivate, and retain critical talent. The Committee did not alter the core structure of existing incentive programs or adjust payouts for 2025 annual incentives as it believes the programs remained strongly aligned with the Company’s pay for performance objectives and consistent with shareholder interests. The discussion of the Company’s annual incentives within this CD&A refer to the Company Management Incentive Program (“MIP”), which is tied to total Company financial performance (High-Touch Solutions segment and Endless Assortment segment). The 2025 MIP payout potential was defined as a percentage of the NEO’s annualized base salary as of December 31, 2025. The 2025 MIP was based on 2025 year-over-year total Company daily, organic constant currency sales, and total Company adjusted ROIC. Short-term financial results fell just short of expectations and therefore the payout for the 2025 MIP was slightly below target. Total Company daily, organic constant currency sales growth was 4.0%, resulting in a 48% total Company daily, organic constant currency sales payout, and 2025 total Company adjusted ROIC was 39.1%, resulting in a 45% total Company adjusted ROIC payout. The resulting 2025 MIP payout was equal to 93%. Total Company daily, organic constant currency sales excludes the impact on Company’s sales due to foreign currency exchange rate fluctuations. See Annual Incentives and Appendix B of this proxy statement for information regarding compensation and non-GAAP financial measures, including a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures.

  81. 2025 Program Performance and Financial Highlights

    | 2023-2025 NEO Performance Share Units (PSUs) achieved 90% of target payout |

  82. 2025 Program Performance and Financial Highlights

    The Compensation Committee approved the final results of the 2023-2025 PSU program at 90% of target. The 2023-2025 cycle covered a three-year performance period starting January 1, 2023 and ending December 31, 2025. The 2023 PSU cycle was based on three performance metrics— U.S. share gain (a relative metric), Endless Assortment daily, organic constant currency sales growth in local days, and total Company adjusted, constant currency operating margin performance, each equally weighted. As outlined in detail on pages B-3 and B-4, U.S. share gain was 284 bps, Endless Assortment daily, organic constant currency sales growth in local days was 12.6% and total Company adjusted, constant currency operating margin performance expanded 18 bps on average over the three-year performance period. Therefore, the Committee approved the payout for these PSUs at 90% of target.(1) See Appendix B of this proxy statement for information regarding compensation and non-GAAP financial measures, including a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures.

  83. 2025 Program Performance and Financial Highlights

    | 2025 Long-Term Incentive Equity Mix |

  84. 2025 Program Performance and Financial Highlights

    The equity mix for the 2025 long-term incentive program for the CEO was 60% PSUs and 40% time-vested RSUs; the other NEOs had an equity mix of 50% PSUs and 50% time-vested RSUs. The three-year performance period for the PSUs granted in 2025 runs from 2025-2027. The RSUs granted in 2025 vest annually on a pro rata basis over a three-year period based on continued employment.

  85. Role of Management

    Role of Management Management assists the Compensation Committee in the design, recommendation, and implementation of compensation programs. Members of management (including the NEOs and the CEO’s other direct reports) recommend programs to the Compensation Committee that management believes will provide the appropriate level of compensation and incentives consistent with the Company’s compensation philosophy. Consistent with this process, management works with the Compensation Committee’s independent compensation consultant to develop market information and recommends adjustments in base salaries, annual incentive targets and long-term incentive awards, as well as changes to programs required for regulatory compliance to be reviewed by the Compensation Committee and approved by the Board. For NEOs other than Mr. Macpherson, the recommendations also include the structure and targets of short- and long-term incentive programs. These recommendations are reviewed with, and subject to input from, the Chairman of the Board and CEO before they are presented to the Compensation Committee. Mr. Macpherson’s compensation is reviewed by the Compensation Committee in conjunction with its independent compensation consultant and is approved by the independent directors of the Board in executive session without management present.

  86. Independent Compensation Consultant

    Independent Compensation Consultant In overseeing the Company’s compensation programs, the Compensation Committee develops programs based on its own deliberations and considers recommendations from management and compensation and benefits consultants, including its independent compensation consultant. After a review of the factors prescribed by the SEC and the NYSE rules and regulations, the Compensation Committee determined that Pay Governance is independent and retained Pay Governance as its independent compensation consultant. At the Compensation Committee’s direction, the independent compensation consultant: • Attends Compensation Committee meetings and select executive sessions; • Assists the Compensation Committee in the review of goals and objectives for NEO compensation; • Provides the Compensation Committee with comparable position executive compensation market data, including pay levels and pay practices of both our comparator companies and general industry; • Helps the Compensation Committee evaluate recommendations proposed by management; • Assists with incentive compensation program design, structure, and selection of the metrics; • Annually reviews and recommends appropriate comparator companies used for compensation studies; • Conducts or assists in risk reviews of the Company’s performance and incentive-based compensation programs; • Provides regular updates on executive compensation trends and regulatory developments; and • Undertakes special projects as assigned by the Compensation Committee. The Compensation Committee seeks advice from the independent compensation consultant on compensation trends and best practices, as well as in reviewing the Company’s programs and policies to ensure they are designed and operate to achieve their purposes and goals. The independent compensation consultant did not provide any additional services to the Company in 2025.

  87. How Annual NEO Compensation is Determined

    | Define Market | Analyze & Benchmark | Final Assessment | | Review comparator companies to maintain a group of companies that are relatively similar in complexity and size to Grainger. Review nationally recognized survey data for comparably sized general industry companies to gain a broader perspective of market practice, as the pool for executive talent extends beyond the comparator group. | Analyze data from an executive compensation study that includes total compensation paid to comparator group executives and survey positions with similar duties and responsibilities. Review competitive compensation benchmarking data at the 25th, 50th and 75th percentiles of the market. Evaluate considerations such as individual and Company performance, internal equity, management’s recommendation and the NEO’s overall experience, replaceability and unique skills. | Review the final assessment and analysis of NEO compensation versus comparator group and survey data to ensure relative competitiveness of the Company’s compensation practices. Evaluate recommendations for base salaries and changes to the structure and targets of short and long-term incentive programs are made in part based on market data. CEO Pay: Reviewed and recommended by the Compensation Committee. NEO Pay: Reviewed by the Chairman and CEO, then reviewed and recommended by the Compensation Committee. | | Action: Reviewed and approved by the Compensation Committee in July. | Action: Reviewed by the Compensation Committee in October. | CEO Pay: Approved by independent directors in executive session without management present in February. NEO Pay: Approved by the Board in February. |

  88. Compensation Comparator Group

    Compensation Comparator Group The Company’s compensation programs are regularly benchmarked against a Compensation Committee-approved comparator group of companies that are similar to the Company in size and complexity and nationally recognized compensation surveys. The Company performs these studies to understand current market practices and to provide a reference point for compensation discussions. Every year, the Compensation Committee determines a compensation comparator group of companies and undertakes a study of total compensation paid to executives occupying similar positions with similar duties and responsibilities in the comparator companies. All elements of total direct compensation (base salary, annual incentive and long-term incentive) are valued and considered when determining the relative competitiveness of the Company’s compensation levels. Consistent with this practice, a comparator group compensation study was conducted in 2024 to determine 2025 compensation (the “2025 Compensation Study”). The 2025 comparator group consists of 20 companies that are relatively similar in complexity and size to Grainger and represent the types of major companies with which Grainger has historically competed for executive talent. The companies that were evaluated for the 2025 Compensation Study were approximately within a range of 0.4 to 2.5 times Grainger’s annual revenue. The competitive market for executive talent includes companies both within and outside the same industry or sector as the Company. Most of the Company’s publicly traded direct competitors tend to be too small in sales or scope of operations for compensation comparisons with the Company. Including a broader range of companies provides a more representative depiction of the Company’s competitive market for talent. Therefore, companies used for compensation comparison purposes differ from those in the industry indices used in the Company Performance Graph in Part II, Item 5 of the Annual Report. The role of management in selecting the comparator group was limited to providing general comments on the relevance of each company represented by the comparator group. The 2025 Compensation Study comparator group is listed on the next page.

  89. Compensation Comparator Group

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  90. Compensation Comparator Group

    | invest.grainger.com | 49 | ● |

  91. Compensation Comparator Group

    | Compensation Comparator Group(1) | | | | AutoZone, Inc. | Fastenal Company | Parker-Hannifin Corporation | | CDW Corporation | Genuine Parts Company | Stanley Black & Decker, Inc. | | Cintas Corporation | Henry Schein, Inc. | Tractor Supply Company | | Cummins Inc. | Illinois Tool Works Inc. | United Rentals, Inc. | | Eaton Corporation plc | Johnson Controls International plc | Watsco, Inc. | | eBay Inc. | LKQ Corporation | WESCO International, Inc. | | Expeditors International of Washington, Inc. | PACCAR Inc. | |

  92. Compensation Comparator Group

    | | 2024 Revenue Rank(2) | 2024 Enterprise Value Rank(3) | | W.W. Grainger, Inc. | 55th Percentile | 57th Percentile |

  93. Compensation Comparator Group

    (1) For the purposes of determining fiscal year 2025 pay, Cummins Inc., Johnson Controls International plc, and PACCAR Inc. were added due to business similarities. Avnet, Inc. was removed due to small market cap relative to Grainger. (2) Revenue rank reflects the most recent fiscal year-end revenue for the Compensation Comparator Group revenue, as of December 31, 2024. (3) Enterprise Value reflects the Compensation Comparator Group’s Enterprise Value, calculated as market capitalization plus debt, minority interest and preferred shares, minus total cash and cash equivalents, as of December 31, 2024. The latest Compensation Study and comparator group validation was completed in July 2025. For purposes of determining fiscal year 2026 pay, the Company adjusted its comparator group to remove Watsco, Inc. due to its relatively low revenue and market cap and added Ferguson Enterprises Inc. due to its comparable size and business similarities.

  94. Compensation Elements and Pay Mix

    Compensation Elements and Pay Mix Consistent with the Company’s pay for performance philosophy, the Company’s compensation programs are designed to be aligned with shareholders. Total target compensation for the Company’s employees is generally set to approximate the market median, with differentiation based on tenure, skills, proficiency, and performance as required to attract and retain key talent. The weighting of the individual compensation components varies by level, with more senior level executives having a greater emphasis on performance-based long-term compensation which aligns management incentives to the interests of shareholders. The 2025 NEO compensation mix is comprised of base salary, annual incentives (under the MIP plan) and long-term equity incentives constituted of Performance Share Units (“PSUs”) and Restricted Stock Units (“RSUs”). NEO compensation is generally structured so that the largest individual component is long-term equity. The charts below show compensation components as a percentage of the fiscal year 2025 total target compensation package. The charts above reflect total target compensation (based on rounded percentage of annualized base salary, target annual and long-term incentive at the grant date fair value for 2025). CEO and average NEO pay mix charts reflect annual target data as of December 31, 2025.

  95. Compensation Elements and Pay Mix

    | | Component | Purpose | Link to Strategy & Performance | | Short- Term | Base Salary | Establishes a market competitive and appropriate level of fixed compensation to attract and retain leaders. | Fixed and based on individual performance which considers the Grainger Edge®. | | | Annual Incentives: Management Incentive Program | Encourages annual results that create shareholder value. | Linked to annual achievement of predetermined Company objectives—daily, organic constant currency sales and total Company adjusted ROIC. | | Long- Term | Long-Term Incentive Plan | Supports retention through a balanced mix of performance-based and time-based incentives. | The initial grant value is linked to individual performance and potential. | | | Performance-based: Performance Share Units | Aligns compensation with the Company’s long-term strategic growth and profitability goals while also connected to stock price performance. | Performance-based, linked to Company strategy and requires achieving predetermined Company three-year average profitability and growth goals. | | | Time-based: Restricted Stock Units | Encourages retention and links long-term incentives to stock price performance. | The ultimate value of the program is linked to stock price performance; align NEOs’ interests to stock price performance over time and three-year vesting encourages meaningful retention. |

  96. Annual Incentives

    Annual Incentives Annual incentives are intended to provide an appropriate level of variable compensation to encourage executives to achieve annual results that create shareholder value without encouraging excessive risk-taking. NEOs are eligible to receive short-term cash-based incentives on the achievement of specified annual Company-wide financial performance measures set forth in the MIP. The Company structures the MIP to motivate performance that balances short- and long-term results and aligns the interests of management with shareholders. Each NEO’s target incentive award under the annual incentive program is based on a review of competitive market practice and is designed to approximate a market value that is generally at the median of the comparator group. The 2025 target incentive opportunity for each NEO, expressed as a percent of base salary, remained unchanged from the prior year. The following describes the 2025 MIP target payment applicable to each NEO:

  97. Annual Incentives

    | Name | 2025 Target Incentive (as a % of base salary) | Performance Results (as a % of the target) | | D.G. Macpherson | 150% | 93% | | Deidra C. Merriwether | 100% | 93% | | Paige K. Robbins | 100% | 93% | | Nancy L. Berardinelli-Krantz | 80% | 93% | | Melanie J. Tinto(1) | 80% | —% |

  98. Annual Incentives

    (1) New NEO for 2025. Refer to Cash and Equity Awards for New NEO section for additional details. The 2025 MIP payout was based on each NEO’s target incentive, which equals a percentage of the NEO’s annualized base salary as of December 31, 2025. The 2025 MIP was based on 2025 year-over-year total Company daily, organic constant currency sales and total Company adjusted ROIC. The MIP is always capped at 200% of the target award. The financial metrics that determine the MIP remain consistent over the years as the Company believes the annual incentive program effectively drives shareholder value by promoting profitable sales growth and effective use of capital. The core financial metrics that underpin the MIP have been in place for more than 20 years, although specific objectives and performance target levels have been modified on a year-by-year basis in light of the current economic and competitive environment. The financial metrics were selected to align with Company strategy and to balance sales growth with profitability, efficiency, expense management and asset management. Total Company adjusted ROIC reflects how effectively management uses Company assets and is generally defined by the Company as pre-tax annual adjusted operating earnings divided by average net working assets for the period. Year-over-year daily sales growth is determined by year-over-year results and modified for the Company’s current year planned foreign currency exchange rates used when setting initial targets. Therefore, total Company daily, organic constant currency sales for the purpose of MIP, excludes the impact of foreign current exchange rate fluctuations on the Company’s sales. Business results from acquisitions, divestitures, and liquidations that occur during the year are generally not included in the calculation of total Company daily, organic constant currency sales or total Company adjusted ROIC. These measures are consistent with the Company’s objective of growing profitably over time, which it believes is closely linked with shareholder value creation. For 2025, the Company eliminated the environmental, social, and governance modifier from the MIP, thereby streamlining the calculation to reflect only financial performance outcomes. This change was approved by the Company’s Compensation Committee. The following table shows the performance and payout scenarios established at the beginning of the year for 2025:

  99. Annual Incentives

    | Total Company Daily, Organic Constant Currency Sales Growth Performance(1) | % Payout(2) | | <0% | 0% | | 3.1% | 40% | | 4.2 – 4.9% | 50% | | 5.6% | 60% | | 8.3% | 100% |

  100. Annual Incentives

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  101. Annual Incentives

    | ● | 52 | 2026 proxy statement |

  102. Annual Incentives

    | Total Company Adjusted ROIC Performance(1) | % Payout(2) | | <37.5% | 0% | | 38.4% | 40% | | 39.9% – 40.5% | 50% | | 41.6% | 60% | | 43.1% | 100% |

  103. Annual Incentives

    (1) The 2025 MIP financial metrics are modified for the Company’s current year planned foreign currency exchange rates used when setting initial targets resulting in total Company daily, organic constant currency sales of 4.0% and total Company adjusted ROIC of 39.1%. This resulted in a final MIP payout of 93% of target. No adjustments to payouts were made. See Appendix B of this proxy statement for information regarding compensation and non-GAAP financial measures, including a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures. (2) Payouts are interpolated on a straight-line basis. Short-term financial results fell just short of expectations; therefore, the payout for the 2025 MIP was slightly below target. Total Company daily, organic constant currency sales was 4.0%, corresponding to a 48% total Company daily, organic constant currency sales payout, and 2025 total Company adjusted ROIC was 39.1%, corresponding to a 45% total Company adjusted ROIC payout. The 2025 MIP financial metrics are modified for the Company’s current year planned foreign currency exchange rates used when setting initial targets. The final 2025 MIP payout calculation was 93%. Based on the Compensation Committee’s review of the Company’s executive compensation programs, including the results driven by the programs and the strong level of shareholder support in 2025, the Compensation Committee determined that the program results are aligned with shareholder value creation and approved the 93% payout based on the financial results and incentive payout scales disclosed herein. The Company believes that it establishes total Company adjusted ROIC and sales growth targets that are rigorous and provide an appropriate level of motivation. Under the terms and conditions of the MIP, the Compensation Committee has the ability to adjust the reported financial results for incentive plan purposes to correct for any unusual circumstances, both positive and negative, that might affect total Company adjusted ROIC or sales growth. The Compensation Committee and Board also have the ability to modify the payout formula, in their discretion, to take into account additional factors affecting performance that they deem relevant. However, the Compensation Committee did not exercise this discretion or make any modifications to the payout formula for 2025.

  104. Long-Term Incentives

    Long-Term Incentives The Company provides annual long-term incentives to NEOs and other key managers in order to: • Align the Company’s long-term business strategy and goals with those that increase shareholder value; • Achieve financial performance that balances growth, profitability, and asset management; • Reward management for taking prudent action and achieving results that create shareholder value; •

  105. Attract qualified leaders to join the Company; and

    | Name | 2024 LTIP Award | 2025 LTIP Award | | D.G. Macpherson | $7,750,000 | $8,537,500 | | Deidra C. Merriwether | $2,200,000 | $2,675,000 | | Paige K. Robbins | $2,100,000 | $2,200,000 | | Nancy L. Berardinelli-Krantz | $1,600,000 | $1,700,000 | | Melanie J. Tinto(1) | $— | $1,500,000 |

  106. Attract qualified leaders to join the Company; and

    New NEO for fiscal year 2025. The amount reflected above for 2025 represents Ms. Tinto’s initial equity award. She also received a one-time, sign-on RSU award in respect of forfeited equity from a former employer. Refer to Cash and Equity Awards for New NEO section for additional details.

  107. 2025 NEO Long-Term Incentives Overview

    2025 NEO Long-Term Incentives Overview The long-term incentives provided to NEOs during 2025 are summarized as follows:

  108. 2025 NEO Long-Term Incentives Overview

    | Award | Weight as a Percentage of Total LTI | | Vesting | Performance Measure | | | CEO | Other NEOs | | | | PSUs | 60% | 50% | Three-year cliff vesting contingent on performance | U.S. share gain,(1)(2) Endless Assortment daily, organic constant currency sales growth in local days(2), and total Company adjusted, constant currency operating margin performance,(2) with each metric equally weighted | | RSUs | 40% | 50% | Three-year graded vesting | Long-term value is based on performance in stock price |

  109. 2025 NEO Long-Term Incentives Overview

    (1) U.S. share gain is a relative metric which refers to volume outgrowth measured as High-Touch Solutions—U.S. daily, organic sales growth excluding price/ customer mix contribution less estimated U.S. MRO market volume component. (2) See Appendix B of this proxy statement for information regarding compensation and non-GAAP financial measures, including a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures. As noted earlier, the Compensation Committee did not make any adjustments to its existing 2025 NEO long-term incentive program design from the program used in 2024. The Company regularly evaluates its long-term incentive program against its objective to provide appropriate incentives to drive long-term shareholder value creation, align management with the Company’s strategic initiatives and remain responsive to market practice.

  110. Performance Share Units (PSUs)

    Performance Share Units (PSUs) The Company’s 2025 PSU program provides the NEOs and other executives with a potential share payout depending on three performance metrics—U.S. share gain (a relative metric), Endless Assortment daily, organic sales growth in constant currency, local days, and total Company adjusted, operating margin performance in constant currency—over a three-year cycle measured at the end of the third year based on the period average. The Compensation Committee selected these performance measures because they are directly aligned with the Company’s business strategy to gain share and grow profitability. • U.S. share gain: Focuses the Company on top line growth and expanding its leadership position in the U.S. MRO space by being the go-to-partner for customers who build and run safe, sustainable, and productive operations. • Endless Assortment daily, organic constant currency sales growth in local days: Supports profitable revenue growth in the Endless Assortment segment as it is an important growth driver for the Company. • Total Company adjusted, constant currency operating margin performance: Balances the above growth initiatives by focusing management on attaining profitability targets as the Company grows, which over time, we believe will lead to improved shareholder returns. The Company believes that these metrics are the appropriate performance measures to align with our pay for performance philosophy. The 2024 and 2025 awards will remain at risk through 2026 and 2027, respectively. Actual results are calculated on a constant currency basis in order to exclude foreign exchange impact. The Compensation Committee (with the assistance of its independent compensation consultant) and management perform a thorough analysis in setting the financial measures and threshold, target, and maximum goals for a three-year performance cycle that begins January 1 of the first year. No dividend equivalents are paid on PSUs. The Compensation Committee has the flexibility to use different objectives and targets from year to year to maximize alignment with then-current business objectives and to reflect economic conditions.

  111. Performance Share Units (PSUs)

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  112. Performance Share Units (PSUs)

    | ● | 54 | 2026 proxy statement |

  113. Restricted Stock Units

    Restricted Stock Units The Company’s RSU program applicable for 2025 and in prior years provides the NEOs and other executives with RSU grants allocated based on individual performance. RSUs align NEOs and other executives’ interests to stock price performance over time and three-year graded vesting encourages meaningful retention.

  114. 2023 Performance Share Unit Program

    2023 Performance Share Unit Program The Compensation Committee approved the final results of the 2023-2025 PSU program at 90%. The 2023-2025 cycle was based on a three-year performance period from January 1, 2023 and ending December 31, 2025 and was underpinned by three equally weighted performance metrics—U.S. share gain (a relative metric), Endless Assortment daily, organic constant currency sales growth in local days, and total Company adjusted, constant currency operating margin performance. U.S. share gain was 284 bps(1)(2), Endless Assortment daily, organic constant currency sales growth in local days was 12.6%(1)(3), and total Company adjusted, constant currency operating margin performance expanded 18 bps(1)(4) on average over the three-year performance period. Therefore, the payout for these PSUs was 90% of target.(5) No dividend equivalents were paid on PSUs. The following table shows the performance and payout scenarios that were established at the beginning of 2023:

  115. 2023 Performance Share Unit Program

    | Total Payout(1)(5) | U.S. Share Gain(1)(2) | Endless Assortment Daily, Organic Constant Currency Sales Growth in Local Days(1)(3) | Total Company Adjusted, Constant Currency Operating Margin Performance(1)(4) | | 0% | < 100 bps | ≤ 0% | ≤ -30 bps | | 1% to 79% | 100 bps to 299 bps | 1% to 8% | -29 bps to -11 bps | | 80% to 99% | 300 bps to 399 bps | 9% to 13% | -10 bps to 9 bps | | 100% | 400 bps to 600 bps | 14% to 18% | 10 bps to 30 bps | | 101% to 120% | 601 bps to 700 bps | 19% to 23% | 31 bps to 50 bps | | 121% to 199% | 701 bps to 1,000 bps | 24% to 33% | 51 bps to 70 bps | | 200% | > 1,000 bps | > 33% | > 70 bps |

  116. 2023 Performance Share Unit Program

    (1) See Appendix B of this proxy statement for information regarding compensation and non-GAAP financial measures, including a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures. (2) Based on three-year average U.S. share gain performance for 2023 (+518 bps), 2024 (+97 bps) and 2025 (+235 bps). (3) Based on three-year average Endless Assortment daily, organic constant currency sales growth performance in local days for 2023 (9.3%), 2024 (12.5%) and 2025 (16.1%). (4) Based on three-year average year-over-year change in total Company adjusted, constant currency operating margin performance for 2023 (+126 bps), 2024 (-29 bps) and 2025 (-44 bps). (5) Payouts are interpolated on a straight-line basis.

  117. Cash and Equity Awards for New NEO

    Cash and Equity Awards for New NEO The Company may grant off-cycle inducements when necessary to attract top talent. In connection with the hire and appointment of Ms. Tinto as Senior Vice President and Chief Human Resources Officer, effective April 28, 2025, the Committee approved the following cash and equity awards designed to attract and retain Ms. Tinto. Sign-on Bonus: The Committee approved a cash payment totaling $500,000 to offset compensation forfeited at a prior employer, delivered in two installments: $250,000 was paid in May 2025 and $250,000 to be paid in May 2026. Each installment is subject to repayment if employment is voluntarily terminated within one year of receipt. Annual Incentive Opportunity: Ms. Tinto will participate in the Company’s MIP program with a target incentive opportunity of 80% of base salary. To facilitate recruitment, the Committee approved a guaranteed payout equal to 100% of Ms. Tinto’s MIP target opportunity for the full 2025 performance year. Equity Awards: On May 1, 2025, Ms. Tinto was granted an RSU award with a target value of $2,200,000 to replace forfeited equity from a prior employer. This award vests 50% on the first anniversary, 25% on the second anniversary, and 25% on the third anniversary of the grant date, which is generally aligned with the vesting of the forfeited awards. In addition, on May 1, 2025, Ms. Tinto was granted an initial annual equity award with a target value of $1,500,000, delivered as 50% restricted stock units and 50% performance share units, consistent with the vesting and other features of the Company’s 2025 Long-Term Incentive Program. The number of shares for both awards was determined using the closing price of the Company’s common stock on the day preceding the grant date, which is always the 1st day of the month following the employee’s start date, in line with the Company’s practice for all off-cycle grants. Any and all unvested equity awards are forfeited if employment is voluntarily terminated, in line with the terms of the applicable award agreements.

  118. Cash and Equity Awards for New NEO

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  119. Cash and Equity Awards for New NEO

    | invest.grainger.com | 55 | ● |

  120. Compensation Recoupment Policy (Clawback)

    Compensation Recoupment Policy (Clawback) The Company has established strong recoupment policies. For current or former executive officers only, the Company established a ‘no fault’ clawback policy that follows the incentive-based compensation recovery provisions of the Dodd-Frank Act and the NYSE listing requirements. Under this policy, the Company is required to recoup (on a pre-tax basis) erroneously paid incentive compensation received during the three-year recoupment period from covered executive officers in the event of a mandatory accounting restatement even if there was no fault, no misconduct or no failure of oversight on the part of the officer. Discretion is generally not permitted under this policy except in very limited circumstances as prescribed by the Dodd-Frank Act and NYSE listing requirements. In addition to this policy, all executive officer and non-officer equity award recipients, are subject to long-standing recoupment policies with expanded recoupment triggers beyond those required by the Dodd-Frank Act and the NYSE listing requirements. In connection with using long-term incentives as a method to align management and shareholder interests, the Company provides an annual equity award agreement that sets forth the terms of the award, including continued employment, compliance with the Company’s Business Conduct Guidelines and applicable laws and regulations. The Company’s equity award agreements contain recoupment (or clawback) provisions that specify situations granting the Board the right to recoup both cash incentives and equity compensation from the NEOs and other employees.

  121. Other Benefits

    Other Benefits All other benefits, including the Retirement Savings Plan, which provides for an annual, fixed 6% Company contribution to the 401(k) plan for NEOs and all other U.S.-based eligible employees and various welfare benefits provided to NEOs and other executive officers, are comparable to those provided to the majority of salaried and hourly U.S.-based Company employees, except as noted in this section. • The Company provides Supplemental Profit Sharing Plans (each, an “SPSP”) solely to maintain an equal Company retirement contribution percentage of 6% to approximately 124 employees, including NEOs, who would be subject to contribution or compensation limitations imposed on qualified plans by the Internal Revenue Code. The Company does not provide any other supplemental retirement benefits to its NEOs or other employees based in the United States. Other components of the Company’s compensation programs that apply only to NEOs: • Physical Exams: Effective April 2011, the Company requires that certain Company officers (including certain NEOs) have periodic physical examinations that are paid for by the Company. The Company believes that periodic physical exams are helpful in maintaining the effectiveness of its executive talent. • Transportation: Officers also are allowed the business and personal use of a car and driver, subject to reimbursement of the incremental cost of use. Officers are allowed the business use of corporate aircraft chartered by the Company from a third-party provider on an as-needed basis, while Mr. Macpherson is allowed personal use, subject to reimbursement of the full cost of use. These benefits represent a cost-effective method of allowing the Company’s top executives to more effectively use their time. • Discontinued Benefit Plans: Mr. Macpherson has grandfathered participation in the Company’s Executive Death Benefit Plan (the “EDBP”), which was closed to new participants effective December 31, 2009, at which time benefit formulas for existing participants were frozen. Under this program, the beneficiary of a participant who dies while employed by the Company is entitled to a taxable benefit of 120 monthly payments of 50% of the participant’s monthly base salary and target annual incentive. If a participant who is retirement-eligible under the EDBP dies after retirement or other separation of service from the Company, the beneficiary is entitled to a lump sum death benefit equal to 100% of the participant’s annual base salary and target annual incentive, unless such participant elects to receive, in lieu of the post-retirement death benefit, a lump sum cashout of the participant’s death benefit upon retirement. The Company’s policy is that, unless offered to other employees, it will not make payments, grants or awards following the death of an executive in the form of unearned salary or unearned bonuses, accelerated vesting or the continuation in force of unvested equity grants, awards or un-granted equity, perquisites, and other payments or awards made in lieu of compensation. • Relocation Assistance: The Company provides relocation benefits, including cost offsets and tax reimbursement under Company policy. Maximum benefits vary by job level. In 2025, Ms. Tinto received $35,493 in relocation assistance and $13,841 in related tax reimbursement.

  122. Post-Employment Compensation

    Post-Employment Compensation The Committee periodically reviews the Company’s executive compensation and governance practices to ensure they remain competitive and aligned with market standards. As part of this ongoing review, the Company adopted the Executive Severance Plan and Executive Change in Control Severance Plan effective December 31, 2025. These plans cover the CEO, Senior Vice Presidents, and any other participants as designated by the Board of Directors.

  123. Post-Employment Compensation

    These plans were implemented to: • Align with Market Practices: The plans reflect prevailing market standards for executive severance and change in control protections among similarly situated companies, supporting the Company’s ability to attract and retain top executive talent. • Provide Consistency and Transparency: By replacing individual change in control agreements with a uniform policy, the Company ensures consistent treatment of executives and enhances transparency for shareholders. • Support Leadership Stability: The plans are designed to provide executives with clarity and security regarding post-employment benefits, which helps maintain focus on long-term strategic objectives and shareholder value. • Protect Shareholder Interests: The plans include robust restrictive covenants and require a release of claims, safeguarding the Company’s confidential information and business relationships. Information regarding post-employment compensation can be found in Employment Agreements, Change in Control and Termination of Employment Arrangements starting on page 63.

  124. Summary Compensation Table

    Summary Compensation Table

  125. Summary Compensation Table

    | Name and Principal Position(1) | Year | Salary | Bonus | Stock Awards(3) | Non-Equity Incentive Plan Comp.(4) | All Other Comp.(5) | Total | | D.G. Macpherson Chairman of the Board & Chief Executive Officer | 2025 | $1,176,370 | $0 | $8,451,819 | $1,653,075 | $328,244 | $11,609,508 | | | 2024 | $1,137,568 | $0 | $7,817,946 | $1,673,250 | $252,925 | $10,881,689 | | | 2023 | $1,100,000 | $0 | $6,631,385 | $2,112,000 | $317,288 | $10,160,673 | | Deidra C. Merriwether Senior Vice President & Chief Financial Officer | 2025 | $743,836 | $0 | $2,656,087 | $697,500 | $92,036 | $4,189,459 | | | 2024 | $718,784 | $0 | $2,224,167 | $703,250 | $100,775 | $3,746,976 | | | 2023 | $693,836 | $0 | $2,000,793 | $873,905 | $110,883 | $3,679,417 | | Paige K. Robbins Senior Vice President & President Grainger Business Unit | 2025 | $743,836 | $0 | $2,183,807 | $697,500 | $92,311 | $3,717,454 | | | 2024 | $718,784 | $0 | $2,123,526 | $703,250 | $100,775 | $3,646,335 | | | 2023 | $693,836 | $0 | $2,000,793 | $873,905 | $110,883 | $3,679,417 | | Nancy L. Berardinelli-Krantz Senior Vice President & Chief Legal Officer | 2025 | $668,836 | $0 | $1,688,108 | $502,200 | $75,605 | $2,934,749 | | | 2024 | $641,298 | $0 | $1,618,307 | $504,400 | $78,341 | $2,842,346 | | | 2023 | $566,137 | $900,000 | $2,400,939 | $576,293 | $351,541 | $4,794,910 | | Melanie J. Tinto Senior Vice President & Chief Human Resources Officer | 2025 | $427,885 | $750,000(2) | $3,682,358 | $0 | $94,098 | $4,954,341 |

  126. Summary Compensation Table

    (1) Position titles correspond to the last executive position held during 2025. (2) For 2025, includes the first $250,000 installment of a cash sign-on bonus payable under Ms. Tinto’s offer letter, subject to continued employment and repayment provisions. Also includes a guaranteed payout of $500,000, which is equal to 100% of Ms. Tinto’s MIP target opportunity for the full 2025 performance year. For additional details, see Compensation Discussion and Analysis—Cash and Equity Awards for New NEO on page 54. (3) Represents the grant date fair value of stock awards computed in accordance with FASB ASC Topic 718 and with PSUs calculated based on the probable outcome of such conditions (which was determined to be target). For an explanation of the assumptions made by the Company in the valuation of the awards shown in these columns, see Note 9—Stock Incentive Plans to the Company’s Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. PSUs have a maximum payout of 200% of the target award. Therefore, the PSU awards at 200% of target for 2025 would have a grant date fair value of $10,042,171; $2,623,300; $2,156,850; $1,667,270; and $1,462,643 for Mr. Macpherson, Ms. Merriwether, Ms. Robbins, Ms. Berardinelli-Krantz, and Ms. Tinto, respectively. (4) Amounts reported represent actual payouts under the applicable year MIP. For 2025, includes contributions accrued under the Company’s Retirement Savings plan and the related SPSP of $170,930; $86,791; $86,791; $70,360; and $39,519 for Mr. Macpherson, Ms. Merriwether, Ms. Robbins, Ms. Berardinelli-Krantz, and Ms. Tinto, respectively. Amounts in this column also include: the incremental cost of the frozen EDBP of $150,568 for Mr. Macpherson, relocation costs of $35,493 and associated relocation benefit tax reimbursement of $13,841 pursuant to the Company’s relocation policy related to the relocation of Ms. Tinto and the cost of executive physicals of $6,746; $5,245; $5,520; $5,245; and $5,245 for Mr. Macpherson, Ms. Merriwether, Ms. Robbins, Ms. Berardinelli-Krantz, and Ms. Tinto, respectively.

  127. Summary Compensation Table

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  128. Summary Compensation Table

    | invest.grainger.com | 59 | ● |

  129. Grants of Plan-Based Awards Table

    Grants of Plan-Based Awards Table

  130. Grants of Plan-Based Awards Table

    | Name | Grant Date | Approval Date | Estimated Potential Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: No. of Shares of Stock or Units | Grant Date Fair Value of Stock and Option Awards(3) | | | | | Threshold | Target | Maximum | Threshold | Target | Maximum | | | | D.G. Macpherson | | | $0 | $1,777,500 | $3,555,000 | | | | | | | | 4/1/25 | 2/18/25 | | | | 0 | 5,210 | 10,420 | | $5,021,085 | | | 4/1/25 | 2/18/25 | | | | | | | 3,473 | $3,430,734 | | Deidra C. Merriwether | | | $0 | $750,000 | $1,500,000 | | | | | | | | 4/1/25 | 2/18/25 | | | | 0 | 1,361 | 2,722 | | $1,311,650 | | | 4/1/25 | 2/18/25 | | | | | | | 1,361 | $1,344,437 | | Paige K. Robbins | | | $0 | $750,000 | $1,500,000 | | | | | | | | 4/1/25 | 2/18/25 | | | | 0 | 1,119 | 2,238 | | $1,078,425 | | | 4/1/25 | 2/18/25 | | | | | | | 1,119 | $1,105,382 | | Nancy L. Berardinelli-Krantz | | | $0 | $540,000 | $1,080,000 | | | | | | | | 4/1/25 | 2/18/25 | | | | 0 | 865 | 1,730 | | $833,635 | | | 4/1/25 | 2/18/25 | | | | | | | 865 | $854,473 | | Melanie J. Tinto | | | $0 | $500,000 | $1,000,000 | | | | | | | | 5/1/25 | 4/29/25 | | | | 0 | 733 | 1,466 | | $731,321 | | | 5/1/25 | 4/29/25 | | | | | | | 733 | $750,819 | | | 5/1/25 | 4/29/25 | | | | | | | 2,148(4) | $2,200,218 |

  131. Grants of Plan-Based Awards Table

    (1) Represents potential amounts under the 2025 MIP. Actual payout amounts under the 2025 MIP are included in the “Non-Equity Incentive Plan Comp.” column of the Summary Compensation Table. (2) The number of shares that may be earned for the 2025 grant of PSUs from 0% to 200% of the target awards made under the 2022 Incentive Plan. (3) Represents the grant date fair value of awards of RSUs and PSUs (based on the probable outcome of the performance conditions) as calculated under FASB ASC Topic 718 without allocating over the vesting period. In addition to her 2025 initial annual RSU and PSU grants, Ms. Tinto was granted 2,148 RSUs as part of hiring inducement to replace forfeited equity from a prior employer. For additional details, see Compensation Discussion and Analysis—Cash and Equity Awards for New NEO on page 54.

  132. Grants of Plan-Based Awards Table

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  133. Grants of Plan-Based Awards Table

    | ● | 60 | 2026 proxy statement |

  134. Outstanding Equity Awards at Fiscal Year-End Table

    Outstanding Equity Awards at Fiscal Year-End Table

  135. Outstanding Equity Awards at Fiscal Year-End Table

    | Name | | Option Awards | | | | | Stock Awards | | | | | | Grant Date | No. of Securities Underlying Unexercised Options Exercisable(1) | No. of Securities Underlying Unexercised Options Unexercisable(1) | Equity Incentive Plan Awards: No. of Securities Underlying Unexercised Unearned Options | Option Exercise Price(2) | Option Expiration Date(3) | No. of Shares or Units of Stock That Have Not Vested(4) | Market Value of Shares or Units of Stock That Have Not Vested(5) | Equity Incentive Plan Awards: No. of Unearned Shares, Units or Other Rights That Have Not Vested(6) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(7) | | D.G. Macpherson | 4/1/23 | | | | | | 1,307 | $1,318,828 | 5,292 | $5,339,893 | | | 4/1/24 | | | | | | 2,076 | $2,094,788 | 9,342 | $9,426,545 | | | 4/1/25 | | | | | | 3,473 | $3,504,431 | 10,420 | $10,514,301 | | Deidra C. Merriwether | 4/1/19 | 2,339(8) | | | $311.26 | 3/31/29 | | | | | | | 4/1/23 | | | | | | 492 | $496,453 | 1,327 | $1,339,009 | | | 4/1/24 | | | | | | 737 | $743,670 | 2,210 | $2,230,001 | | | 4/1/25 | | | | | | 1,361 | $1,373,317 | 2,722 | $2,746,634 | | Paige K. Robbins | 4/1/23 | | | | | | 492 | $496,453 | 1,327 | $1,339,009 | | | 4/1/24 | | | | | | 704 | $710,371 | 2,110 | $2,129,096 | | | 4/1/25 | | | | | | 1,119 | $1,129,127 | 2,238 | $2,258,254 | | Nancy L. Berardinelli-Krantz | 2/1/23 | | | | | | 623 | $628,638 | | | | | 4/1/23 | | | | | | 320 | $322,896 | 863 | $870,810 | | | 4/1/24 | | | | | | 536 | $540,851 | 1,608 | $1,622,552 | | | 4/1/25 | | | | | | 865 | $872,828 | 1,730 | $1,745,657 | | Melanie J. Tinto | 5/1/25 | | | | | | 2,881(9) | $2,907,073 | 1,466 | $1,479,267 |

  136. Outstanding Equity Awards at Fiscal Year-End Table

    (1) Represents stock option awards with a 10-year term and three-year graded vesting. Upon retirement from the Company, unvested options automatically vest and may be exercised within the lesser of six years or the remaining term of the option. (2) Awards were issued at fair market value, which is the closing stock price on the grant date. (3) Represents 10 years after the award date. (4) Unless otherwise noted, the RSUs reported in this column vest in three equal annual installments on the first, second and third anniversary of the date of the grant, subject to the executive’s continued employment through each vesting date. (5) Represents the number of shares or units of stock that have not vested multiplied by the year-end closing price of $1,009.05. (6) Unless otherwise noted, the amounts in this column represent maximum potential payments for PSU programs established in 2023, 2024, and 2025 for the 2023-2025, 2024-2026, and 2025-2027 performance periods. The number of earned PSUs will be determined at the end of each three-year performance period based on the Company’s achievement of the approved performance criteria and vest on April 1 of the year following the performance period. The earned number of PSUs for each grant can range from 0% to 200% of target. The 2023-2025 PSUs included in this column were earned at 90% of target and vest on April 1, 2026. (7) Represents the performance awards outstanding multiplied by the year-end closing price of $1,009.05. (8) 100% of these options vested on April 1, 2022. Represents the aggregate of RSU grants for Ms. Tinto. For additional details and vesting information, see Compensation Discussion and Analysis—Cash and Equity Awards for New NEO on page 54.

  137. Outstanding Equity Awards at Fiscal Year-End Table

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  138. Outstanding Equity Awards at Fiscal Year-End Table

    | invest.grainger.com | 61 | ● |

  139. Option Exercises and Stock Vested Table

    Option Exercises and Stock Vested Table

  140. Option Exercises and Stock Vested Table

    | Name | Option Awards | | Stock Awards | | | | No. of Shares Acquired on Exercise(1) | Value Realized on Exercise(2) | No. of Shares Acquired on Vesting | Value Realized on Vesting(3) | | D.G. Macpherson | 30,663 | $20,286,625 | 10,917 | $10,784,140 | | Deidra C. Merriwether | 0 | $0 | 3,440 | $3,398,135 | | Paige K. Robbins | 0 | $0 | 5,195 | $5,142,816 | | Nancy L. Berardinelli-Krantz | 0 | $0 | 1,209 | $1,240,837 | | Melanie J. Tinto | 0 | $0 | 0 | $0 |

  141. Option Exercises and Stock Vested Table

    (1) Represents the number of stock options exercised. (2) Represents the difference between the exercise price and the market price of the common stock on the date of exercise. Represents the value of the RSU and PSU awards on the vesting date.

  142. Option Exercises and Stock Vested Table

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  143. Option Exercises and Stock Vested Table

    | ● | 62 | 2026 proxy statement |

  144. Nonqualified Deferred Compensation Table

    Nonqualified Deferred Compensation Table

  145. Nonqualified Deferred Compensation Table

    | Name | Executive Contributions in Last Fiscal Year | Registrant Contributions in Last Fiscal Year(1) | Aggregate Earnings in Last Fiscal Year(2) | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last Fiscal Year End(3) | | D.G. Macpherson | $0 | $174,212 | $676,858 | $0 | $4,814,663 | | Deidra C. Merriwether | $0 | $74,830 | $126,574 | $0 | $841,881 | | Paige K. Robbins | $0 | $74,830 | $160,851 | $0 | $1,231,429 | | Nancy L. Berardinelli-Krantz | $0 | $52,312 | $24,301 | $0 | $149,782 | | Melanie J. Tinto | $0 | $0 | $0 | $0 | $0 |

  146. Nonqualified Deferred Compensation Table

    (1) The Company provides the SPSPs solely to maintain an equal percentage of profit-sharing contribution to employees (including all NEOs) who would be subject to contribution or compensation limits imposed on qualified plans by the Internal Revenue Code. This represents the Company SPSP contribution. These contributions were disclosed as part of “All Other Comp.” in the Summary Compensation Table. (2) Represents earnings on all nonqualified balances, including SPSP earnings. Aggregate year-end balances for the SPSPs (contributions are disclosed as “All Other Comp.” in the Summary Compensation Table) and includes contributions previously reported in the Summary Compensation Tables for prior years of $710,108; $275,452; $277,166; and $119,864 for Mr. Macpherson, Ms. Merriwether, Ms. Robbins, and Ms. Berardinelli-Krantz, respectively.

  147. Nonqualified Deferred Compensation Table

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  148. Nonqualified Deferred Compensation Table

    | invest.grainger.com | 63 | ● |

  149. Nonqualified Deferred Compensation Table

    | Employment Agreements, Change in Control and Termination of Employment Arrangements |

  150. Retirement

    Retirement The definition of retirement eligibility is the same for all U.S. employees. Under the MIP plan, an employee is retirement-eligible upon reaching age 60. Upon retirement, our NEOs are entitled to receive a pro-rated portion of the annual incentive for the year in which such retirement occurs, based on actual business performance. There are no NEOs who are retirement-eligible as December 31, 2025, for the purposes of the Company’s MIP plan. For equity awards made under the prior 2015 Incentive Plan, an employee is retirement-eligible upon attaining age 60, age 55 with 20 years of service, or 25 years of service. Under the retirement definition applicable to the 2022 Incentive Plan, an additional 5 years of service was added to the age 60 requirement such that an employee is retirement-eligible upon attaining any of the following: • age 60 and 5 years of service; • age 55 and 20 years of service; or • 25 years of service. Under the 2022 Incentive Plan, the Company provides the following upon termination of active employment due to retirement for all retirement-eligible employees, including NEOs: • Outstanding stock options become vested and executives have the right to exercise such stock options within six years from date of termination or for the remaining term of the stock option, whichever is less; • Settlement of PSUs occurs after the end of the performance period in common stock equal to the number of the executive’s outstanding PSUs earned for the performance period; • Continued vesting for RSUs granted under the 2022 Incentive Plan; and • Cash payments equal to account balances under retirement profit sharing, any supplemental retirement profit sharing program and the Frozen Voluntary Salary and Incentive Deferral Plan will be made in installment payments for up to 15 years or in a lump-sum payment based on the election made by the executive in accordance with the terms and conditions of those plans. There are no NEOs who are retirement-eligible as of December 31, 2025 for purposes of the Company’s active retirement programs and discontinued EDBP. Mr. Macpherson is only considered early retirement-eligible under the Company’s discontinued EDBP, which was closed to new participants effective December 31, 2009 (see Other Benefits on page 56 for details on the frozen EDBP).

  151. CEO Pay Ratio

    CEO Pay Ratio As part of its annual process, the Company calculates the ratio of the annual total compensation of Mr. Macpherson, Chairman and CEO, to the annual total compensation of the Company’s median employee. Further, the median employee should be identified once every three years, unless there has been a change to the Company’s employee population or compensation arrangements that it reasonably believes would result in a significant change in the pay ratio disclosure. The Company last identified the median employee in 2023, and the same median employee has been used for purposes of the 2025 CEO pay ratio disclosure. The 2025 ratio of CEO pay to median employee pay is 172:1. In calculating 2025 total compensation for our median employee and CEO, we included the estimated Company cost of their respective Company-provided health and wellness benefits. The CEO’s total compensation reported in the Summary Compensation Table for 2025 is $11,609,508. The CEO’s total compensation for purposes of our pay ratio disclosure calculation is $11,622,917, which differs from the total compensation described in the Summary Compensation Table on page 58 by the amount of his estimated health and wellness benefits. The median employee’s estimated 2025 total compensation was $67,858 (which includes compensation of $54,449 and estimated benefits of $13,409).

  152. CEO Pay Ratio

    | Element | Chairman and CEO ($) | Median Employee ($) | | Base Salary | $1,176,370 | $51,367 | | Stock Awards | $8,451,819 | $0 | | Non-Equity Incentive Plan Compensation | $1,653,075 | $0 | | All Other Compensation | $328,244 | $3,082 | | Estimated Company Health and Wellness Benefits | $13,409 | $13,409 | | Total | $11,622,917 | $67,858 | | CEO PAY RATIO | 172:1 | |

  153. Pay Versus Performance

    Pay Versus Performance In accordance with rules adopted by the SEC pursuant to the Dodd-Frank Act of 2010, we provide the following disclosure regarding executive compensation for our principal executive officer (“PEO”) and our other NEOs (“Non-PEO NEOs”) and Company performance for the fiscal years listed below. While we are required to identify total Company adjusted ROIC as the Company Selected Measure (“CSM”) in accordance with Item 402(v) of Regulation S-K of the Exchange Act, adjusted ROIC and daily sales growth are the financial measures we consider the two most important in linking performance to compensation actually paid to the NEOs for the 2025 fiscal year to Company performance, as the Company’s overall NEO compensation structure is designed to drive profitable growth leading to shareholder value creation.

  154. Pay Versus Performance

    | Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(1)(2)(3) | Average Summary Compensation Table Total for Non-PEO NEOs(1) | Average Compensation Actually Paid to Non-PEO NEOs(1)(2)(3) | Value of Initial Fixed $100 Investment Based On: | | Net Income ($MM) | Adjusted ROIC(5) | Daily, Organic Constant Currency Sales Growth(5) | | | | | | | TSR | Peer Group TSR(4) | | CSM | Supplemental Measure | | 2025 | $11,609,508 | $9,107,336 | $3,949,001 | $3,497,275 | $261 | $231 | $1,706 | 39.1% | 4.0% | | 2024 | $10,881,689 | $15,759,913 | $3,053,409 | $4,239,678 | $270 | $208 | $1,909 | 41.4% | 4.5% | | 2023 | $10,160,673 | $23,002,860 | $3,042,195 | $4,822,536 | $211 | $179 | $1,829 | 42.8% | 9.2% | | 2022 | $9,967,658 | $14,293,346 | $3,121,115 | $3,736,729 | $140 | $121 | $1,547 | 40.6% | 16.5% | | 2021 | $9,015,594 | $16,301,335 | $2,138,920 | $2,891,203 | $129 | $137 | $1,043 | 31.9% | 12.8% |

  155. Pay Versus Performance

    (1) D.G. Macpherson was our PEO for each year presented. The individuals comprising the Non-PEO NEOs for each year presented are listed below.

  156. Pay Versus Performance

    | 2021 | 2022 | 2023 | 2024 | 2025 | | Deidra C. Merriwether | Deidra C. Merriwether | Deidra C. Merriwether | Deidra C. Merriwether | Deidra C. Merriwether | | Paige K. Robbins | Paige K. Robbins | Paige K. Robbins | Paige K. Robbins | Paige K. Robbins | | John L. Howard | John L. Howard | Nancy L. Berardinelli-Krantz | Nancy L. Berardinelli-Krantz | Nancy L. Berardinelli-Krantz | | Kathleen S. Carroll | Kathleen S. Carroll | Matthew E. Fortin | Jonny LeRoy | Melanie J. Tinto | | Robert F. O’Keef, Jr. | | John L. Howard | | | | | | Kathleen S. Carroll | | |

  157. Pay Versus Performance

    (2) The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K of the Exchange Act and do not reflect compensation actually realized or received by the Company’s NEOs. These amounts reflect total compensation as set forth in the Summary Compensation Table above for each year, adjusted as described in footnote 3 below. (3) Compensation Actually Paid reflects the exclusions and inclusions of certain amounts for the PEO and the Non-PEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the Exclusion of Stock Awards and Option Awards column are the totals from the Stock Awards and Option Awards column set forth in the Summary Compensation Table. PEO:

  158. Pay Versus Performance

    | Year | Summary Compensation Table Total for Mr. Macpherson | Exclusion of Stock Awards and Option Awards for Mr. Macpherson | Total—Inclusion of Equity Values for Mr. Macpherson | Compensation Actually Paid to Mr. Macpherson | | 2025 | $11,609,508 | $(8,451,819) | $5,949,647 | $9,107,336 |

  159. Pay Versus Performance

    Non-PEO NEOs (Average):

  160. Pay Versus Performance

    | Year | Average Summary Compensation Table Total for Non-PEO NEOs | Average Exclusion of Stock Awards and Option Awards for Non-PEO NEOs | Total—Average Inclusion of Equity Values for Non-PEO NEOs | Average Compensation Actually Paid to Non-PEO NEOs | | 2025 | $3,949,001 | $(2,552,590) | $2,100,864 | $3,497,275 |

  161. Pay Versus Performance

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  162. Pay Versus Performance

    | ● | 72 | 2026 proxy statement |

  163. Pay Versus Performance

    The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following tables. The amounts reported in the total columns reflect rounding, which may result in slight variations when compared with the sum of the components listed in the tables: PEO:

  164. Pay Versus Performance

    | Year | Year-End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Mr. Macpherson ($) | Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Mr. Macpherson ($) | Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for Mr. Macpherson ($) | Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Mr. Macpherson ($) | Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Included for Mr. Macpherson ($) | Total—Inclusion of Equity Values for Mr. Macpherson ($) | | 2025 | $8,240,586 | $(1,597,827) | $0 | $(755,208) | $62,096 | $5,949,647 |

  165. Pay Versus Performance

    Non-PEO NEOs (Average):

  166. Pay Versus Performance

    | Year | Average Year- End Fair Value of Equity Awards Granted During Year That Remained Unvested as of Last Day of Year for Non-PEO NEOs ($) | Average Change in Fair Value from Last Day of Prior Year to Last Day of Year of Unvested Equity Awards for Non-PEO NEOs ($) | Average Vesting-Date Fair Value of Equity Awards Granted During Year that Vested During Year for Non-PEO NEOs ($) | Average Change in Fair Value from Last Day of Prior Year to Vesting Date of Unvested Equity Awards that Vested During Year for Non- PEO NEOs ($) | Average Value of Dividends or Other Earnings Paid on Equity Awards Not Otherwise Included for Non-PEO NEOs ($) | Total—Average Inclusion of Equity Values for Non-PEO NEOs ($) | | 2025 | $2,508,372 | $(272,512) | $0 | $(156,832) | $21,835 | $2,100,864 |

  167. Pay Versus Performance

    For the equity values included in the above tables, the valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of the grant. (4) The Peer Group TSR set forth in this table utilizes the Dow Jones U.S. Industrial Suppliers Total Stock Market Index, which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K of the Exchange Act included in our Annual Report. The comparison assumes $100 was invested for the period starting December 31, 2020, through the end of the listed year in the Company and in the Dow Jones U.S. Industrial Suppliers Total Stock Market Index, respectively. Historical stock performance is not necessarily indicative of future stock performance. (5) While we are required to identify total Company adjusted ROIC as the CSM in accordance with Item 402(v) of Regulation S-K of the Exchange Act, adjusted ROIC and daily sales growth are the financial measures we consider the two most important in linking performance to compensation actually paid to the NEOs for the 2025 fiscal year to Company performance, as the Company’s overall NEO compensation structure is designed to drive profitable growth leading to shareholder value creation. The 2025 MIP financial metrics are modified for the Company’s current year planned foreign currency exchange rates used when setting initial targets resulting in total Company daily, organic constant currency sales of 4.0% and total Company adjusted ROIC of 39.1%. Total Company adjusted ROIC and total Company daily, organic constant currency sales are non-GAAP financial measures. See Appendix B of this proxy statement for information regarding compensation and non-GAAP financial measures for year ended December 31, 2025. As it relates to Grainger’s prior year financial targets and result for its MIP and PSU grants, including the Company’s reconciliations of non-GAAP and other financial measures to the directly comparable GAAP measure, refer to the Company’s proxy statement on Form DEF 14A filed with the SEC on March 7, 2025.

  168. Pay Versus Performance

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  169. Pay Versus Performance

    | invest.grainger.com | 73 | ● |

  170. Pay Versus Performance

    Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and TSR The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our other NEOs, and the Company’s cumulative TSR over the five-year period from 2021 through 2025, as well as the relationship between the Company’s cumulative TSR and the TSR of the Dow Jones U.S. Industrial Suppliers Total Stock Market Index (peer group TSR). PEO and Average NEO Compensation Actually Paid Versus Grainger TSR and Grainger TSR Versus Peer Group TSR, 2021-2025 Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Net Income The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and our net income during the five most recently completed fiscal years. PEO and Average NEO Compensation Actually Paid Versus Grainger Net Income, 2021-2025

  171. Pay Versus Performance

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  172. Pay Versus Performance

    | ● | 74 | 2026 proxy statement |

  173. Pay Versus Performance

    Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Total Company Adjusted ROIC The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and total Company Adjusted ROIC during the five most recently completed fiscal years.(1) PEO and Average NEO Compensation Actually Paid Versus Grainger Total Company Adjusted ROIC, 2021-2025 Relationship Between PEO and Non-PEO NEO Compensation Actually Paid and Daily, Organic Constant Currency Sales Growth The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and total Company Daily, Organic Constant Currency Sales Growth during the five most recently completed fiscal years.(1) PEO and Average NEO Compensation Actually Paid Versus Grainger Daily, Organic Constant Currency Sales Growth, 2021-2025 Total Company adjusted ROIC and total Company daily, organic constant currency sales for purposes of the relevant incentive program reflects certain non-GAAP adjustments as previously disclosed for certain program years. See Appendix B of this proxy statement for information regarding compensation and non-GAAP financial measures. As it relates to Grainger’s prior year financial targets and result for its MIP and PSU grants, including the Company’s

  174. Pay Versus Performance

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  175. Pay Versus Performance

    | invest.grainger.com | 75 | ● |

  176. Pay Versus Performance

    reconciliations of non-GAAP and other financial measures to the directly comparable GAAP measure, refer to the Company’s proxy statement on Form DEF 14A filed with the SEC on March 7, 2025. Tabular List of Most Important Financial Performance Measures The following table presents the financial performance measures that the Company considers to have been the most important in linking Compensation Actually Paid to our PEO and other NEOs for 2025 to Company performance. The measures in this table are not ranked.

  177. Pay Versus Performance

    | Most Important Performance Measures (3 to 7 metrics w/o ranking)(1) | | Adjusted ROIC—Total Company | | Daily, Organic Constant Currency Sales—Total Company | | Share Gain—High-Touch Solutions—U.S. | | Daily, Organic Constant Currency Sales in Local Days—Endless Assortment | | Adjusted, Constant Currency Operating Margin—Total Company |

  178. Pay Versus Performance

    The following are non-GAAP financial measures. See Appendix B of this proxy statement for information regarding non-GAAP financial measures, including reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures.

  179. Pay Versus Performance

    | CORPORATE GOVERNANCE | PROPOSAL 1: ELECTION OF DIRECTORS | PROPOSAL 2: RATIFY THE INDEPENDENT AUDITOR | EXECUTIVE COMPENSATION | PROPOSAL 3: SAY ON PAY | QUESTIONS AND ANSWERS | APPENDICES |

  180. Pay Versus Performance

    | ● | 76 | 2026 proxy statement |