DEF 14A of Advance Auto Parts Inc, Apr 8, 2024

DEF 14A of Advance Auto Parts Inc

Filed Apr 8, 2024 · FY20230001158449-24-000094

Open on EDGAR

  1. Director Nominees

    Director Nominees

  2. Director Nominees

    | | Name and Age | Director Since | Occupation | Current Committees | Other Current Public Company Boards | | | Carla J. Bailo, 63 Independent | 2020 | President and Chief Executive Officer, ECOS Consulting, LLC | Nominating & Corporate Governance Audit | SM Energy Company Vesuvius plc | | | John F. Ferraro, 68 Independent | 2015 | Former Global Chief Operating Officer, Ernst & Young | Audit (Chair) | International Flavors & Fragrances Inc. ManpowerGroup, Inc. | | | Joan M. Hilson, 64 Independent | 2022 | Chief Financial & Strategy Officer, Signet Jewelers Ltd. | Audit Finance (Chair) | | | | Jeffrey J. Jones II, 56 Independent | 2019 | President, Chief Executive Officer, H&R Block, Inc. | Compensation (Chair) Nominating & Corporate Governance | H&R Block, Inc. | | | Eugene I. Lee, Jr., 62 Independent Chair of the Board | 2015 | Former Chairman and Chief Executive Officer, Darden Restaurants, Inc. | Finance | | | | Shane M. O'Kelly, 55 President and Chief Executive Officer | 2023 | President and Chief Executive Officer, Advance Auto Parts, Inc. | | | | | Douglas A. Pertz, 69 Independent | 2018 | Former President and Chief Executive Officer, The Brink's Company | Nominating & Corporate Governance (Chair) Compensation | Vestis Corporation | | | Thomas W. Seboldt, 57 Independent | 2024 | President, Seboldt Consulting Services LLC | Committees not yet assigned | | | | Gregory L. Smith, 60 Independent | 2024 | Executive Vice President, Global Operation and Supply Chain, Medtronic plc | Committees not yet assigned | | | | Sherice R. Torres, 50 Independent | 2021 | Chief Marketing Officer, ChargePoint, Inc. | Compensation | | | | A. Brent Windom, 63 Independent | 2024 | President, Windom Consulting LLC | Committees not yet assigned | |

  3. Election of Directors

    Election of Directors At the 2024 annual meeting of stockholders (the "Annual Meeting"), you will vote to elect as directors the eleven nominees listed below to serve until our 2025 annual meeting of stockholders or until their respective successors are elected and qualified. Our Board has nominated Carla J. Bailo, John F. Ferraro, Joan M. Hilson, Jeffrey J. Jones II, Eugene I. Lee, Jr., Shane M. O'Kelly, Douglas A. Pertz, Thomas W. Seboldt, Gregory L. Smith, Sherice R. Torres and A. Brent Windom for election as directors. All of the nominees are current members of our Board. Each nominee has consented to being named in this Proxy Statement as a nominee and has agreed to serve as a director if elected. None of the nominees to our Board has any family relationship with any other nominee or with any of our executive officers. The Board does not have any vacancies. The persons named as proxies in the accompanying form of proxy have advised us that at the Annual Meeting, unless otherwise directed, they intend to vote the shares covered by the proxies FOR the election of the nominees named above. If one or more of the nominees are unable to serve, or will not serve, the persons named as proxies may vote for the election of any substitute nominees that our Board may propose. The persons named as proxies may not vote for a greater number of persons than the number of nominees named above. Our by-laws provide that a nominee for director in an uncontested election must receive a majority of the votes cast at the Annual Meeting for the election of that director in order to be elected. If a nominee for director who is an incumbent director is not elected and no successor has been elected at the Annual Meeting, the director is expected to tender his or her resignation from the Board contingent on acceptance of such resignation by the Board.

  4. Nominees for Election to Our Board

    Nominees for Election to Our Board The following information is provided about our nominees for director effective as of the record date, March 25, 2024 (the "Record Date").

  5. Former Global Chief Operating Officer, Ernst & Young

    Former Global Chief Operating Officer, Ernst & Young

  6. Former Global Chief Operating Officer, Ernst & Young

    | Age: 68 Director Since: February 2015 Committee: Audit (Chair) Other Current Public Company Boards: International Flavors & Fragrances Inc. ManpowerGroup Inc. | Key Experience and Skills Mr. Ferraro has extensive financial, corporate management, governance and public policy experience which enables him to assist the Board in identifying trends and developments that affect public companies. In addition, the Board benefits from his experience in the areas of marketing and the development of corporate strategy. He has been designated by the Board as an audit committee financial expert consistent with SEC regulations. Professional Experience Mr. Ferraro served as our independent Lead Director from November 2015 to May 2016. Mr. Ferraro founded RP Intellectual Partners LLC, a successor to a part of Alpha Alpha Intellectual Partners LLC, in November 2022. He also served as Executive Vice President, Strategy and Sales of Aquilon Energy Services, a software and services company for the energy industry from February 2019 to July 2019. He served as Global Chief Operating Officer ("COO") of Ernst & Young ("EY"), a leading professional services firm, from 2007 to December 2014 and retired as a partner of EY at the end of January 2015. In addition, Mr. Ferraro served as a member of EY’s Global Executive Board for more than 10 years. Mr. Ferraro joined EY in 1976 and prior to his COO role he served in several senior leadership positions at EY, including Global Vice Chair Audit. Mr. Ferraro practiced as a Certified Public Accountant for 35 years. Mr. Ferraro has served as a director for ManpowerGroup Inc., a provider of workforce solutions, since January 2016, and for International Flavors & Fragrances Inc., a manufacturer of flavors and fragrances, since May 2015. |

  7. JOAN M. HILSON Independent

    JOAN M. HILSON Independent Chief Financial & Strategy Officer, Signet Jewelers Ltd.

  8. JOAN M. HILSON Independent

    | Age: 64 Director Since: March 2022 Committees: Audit Finance (Chair) Other Current Public Company Boards: None | Key Experience and Skills Ms. Hilson brings more than 35 years of finance experience and deep specialty retail experience to our Board. In her role as Chief Financial & Strategy Officer of Signet Jewelers, she has been integral to leading transformation on a strategy intended to drive profitable growth through innovation, capital management, real estate optimization and expansion of market share, which brings valuable perspective to our Board. She has been designated by the Board as an audit committee financial expert consistent with SEC regulations. Professional Experience Ms. Hilson has served as Chief Financial & Strategy Officer of Signet Jewelers, Ltd., the world's largest retailer of diamond jewelry, since March 2021, and she has served as Signet's Chief Financial Officer since April 2019. Prior to joining Signet, Ms. Hilson served as Chief Financial Officer of David’s Bridal Inc., a large specialty clothing retailer from 2014 to 2019; Executive Vice President and Chief Financial Officer and other executive financial leadership roles at American Eagle Outfitters, Inc., a lifestyle, clothing and accessories retailer from 2005 to 2012; and in several financial reporting, financial planning and merchandise planning positions at Limited Brands, Inc., a specialty retailer, including as Executive Vice President and Chief Financial Officer for Victoria’s Secret Stores division. Ms. Hilson served as the Controller of Sterling Jewelers (now Signet Jewelers) from 1985 to 1992. She began her career as an auditor at Coopers & Lybrand LLP, one of the oldest professional financial and consulting services firms in the United States (which subsequently merged with PricewaterhouseCoopers). |

  9. JEFFREY J. JONES II Independent

    JEFFREY J. JONES II Independent President and Chief Executive Officer, H&R Block, Inc.

  10. JEFFREY J. JONES II Independent

    | Age: 56 Director Since: February 2019 Committees: Compensation (Chair); Nominating and Corporate Governance Other Current Public Company Boards: H&R Block, Inc. | Key Experience and Skills Mr. Jones brings to the Board over 30 years of executive management, innovative leadership and operational excellence experience while holding key roles with top companies in the retail, consumer products, agency and technology industries. He has served as President and Chief Executive Officer of a leading tax services provider for nearly a decade, where he has had substantial experience with launching initiatives to drive traffic, brand affinity and loyalty. Additionally, his position as a director of another public company also enables him to share with the Board his experience with governance issues facing public companies. Professional Experience Mr. Jones is currently President and Chief Executive Officer of H&R Block, Inc., a global consumer tax services provider, a position he has held since October 2017. Prior to October 2017, Mr. Jones served as H&R Block’s President and Chief Executive Officer-Designate beginning in August 2017. Previously, Mr. Jones served as President, Ride Sharing at Uber Technologies Inc., an on-demand car service company, from September 2016 until March 2017 and Executive Vice President and Chief Marketing Officer at Target Corporation, a retail sales company, from April 2012 to September 2016. Prior to his time at Target Corporation, Mr. Jones held various executive and leadership roles related to sales, agency and marketing with iconic brands such as The Coca-Cola Company and The Gap, Inc. He has served as a director of H&R Block, Inc. since 2017. |

  11. EUGENE I. LEE, JR. Independent (Chair of the Board)

    EUGENE I. LEE, JR. Independent (Chair of the Board) Former Chairman and Chief Executive Officer, Darden Restaurants, Inc.

  12. EUGENE I. LEE, JR. Independent (Chair of the Board)

    | Age: 62 Director Since: November 2015 Committee: Finance Other Current Public Company Boards: None | Key Experience and Skills Mr. Lee’s prior experience as the Chief Executive Officer of a national group of chain restaurants provides him with strong insights into customer service and the types of management issues that face companies with large numbers of employees in numerous locations throughout the country. In addition, he brings experience in marketing, real estate, strategic planning and change management. His long tenured service on the boards of directors of RARE Hospitality International, Inc. and Darden Restaurants, Inc., as well as his temporary service as Interim Executive Chair of the Advance Auto Parts Board, have deepened his governance expertise and board leadership experience. Professional Experience Mr. Lee served as the President and Chief Executive Officer of Darden Restaurants, Inc. (“Darden”), the owner and operator of Olive Garden, LongHorn Steakhouse, Bahama Breeze, Cheddar’s Scratch Kitchen, Seasons 52, The Capital Grille, Eddie V’s and Yard House restaurants in North America, from February 2015 through January 2021. Previously, Mr. Lee served as Darden’s President and Interim Chief Executive Officer from October 2014 to February 2015, and President and Chief Operating Officer from September 2013 to October 2014. He served as President of Darden’s Specialty Restaurant Group from October 2007 to September 2013 following Darden’s acquisition of RARE Hospitality International, Inc., where he had served as President and a member of the Board of Directors since 2001. Mr. Lee served as a member of the Darden Board of Directors from February 2015 through September 2023. |

  13. SHANE M. O'KELLY

    SHANE M. O'KELLY President and Chief Executive Officer, Advance Auto Parts, Inc.

  14. SHANE M. O'KELLY

    | Age: 55 Director Since: September 2023 Committee: None Other Current Public Company Boards: None | Key Experience and Skills Mr. O'Kelly has served as our President and Chief Executive Officer and a member of our Board since 2023. Previously, Mr. O'Kelly was the Chief Executive Officer of HD Supply, Inc. ("HD Supply") where he improved operational execution, oversaw the transition of a distribution center network and delivered record sales and profit numbers. Mr. O'Kelly brings to the Board significant experience and leadership in the areas of general management, retail operations and strategic planning. Professional Experience Mr. O’Kelly joined Advance Auto Parts as President and Chief Executive Officer in September 2023. Prior to joining Advance, Mr. O’Kelly served as the Chief Executive Officer of of HD Supply, a national distributor and provider of maintenance, repair and operations (“MRO”) products and a wholly-owned subsidiary of The Home Depot, Inc. (the “Home Depot”), a leading home improvement retailer, from December 2020 to September 2023. From March 2018 through December 2020, Mr. O’Kelly served as Chief Executive Officer of Interline Brands, Inc., a leading national distributor and marketer of MRO products that was merged into Home Depot in December 2020. He previously served as Chief Executive Officer of PetroChoice Holdings, Inc., a leading national lubricant distributor, from June 2011 to March 2018, and as Chief Executive Officer of AH Harris & Sons, Inc., a specialty construction supply distributor, from January 2008 to June 2011. Mr. O’Kelly formerly served as a Captain in the U.S. Army. |

  15. President, Seboldt Consulting Services LLC

    President, Seboldt Consulting Services LLC

  16. President, Seboldt Consulting Services LLC

    | Age: 57 Director Since: March 2024 Committee: Not yet assigned Other Current Public Company Boards: None | Key Experience and Skills Mr. Seboldt has over three decades of service in the automotive industry. In particular, his deep experience in merchandising at O'Reilly Automotive, Inc. brings key experience in a focus area for the Company. He has also served in leadership roles on several prominent industry associations, which provides the Board with valuable insights on matters of particular importance in the aftermarket automotive industry. Professional Experience Mr. Seboldt is a seasoned executive in the automotive retail industry with over three decades of industry experience. Mr. Seboldt has been the President of Seboldt Consulting Services LLC, an automotive industry consulting firm, since January 2019. Previously, Mr. Seboldt spent the vast majority of his career with O’Reilly Automotive, Inc., an American auto parts retailer, from 1987 until November 2018, where he held several titles of increasing responsibility, including Vice President, Merchandising. Mr. Seboldt has also served on the board of prominent industry associations including the California Automotive Wholesalers’ Association (“CAWA”) and the Auto Care Association. During his tenure on the CAWA Board, Mr. Seboldt has served in a variety of positions, including President, Vice President, Executive Committee member and Treasurer. |

  17. GREGORY L. SMITH Independent

    GREGORY L. SMITH Independent

  18. Executive Vice President, Global Operations and Supply Chain, Medtronic plc

    Executive Vice President, Global Operations and Supply Chain, Medtronic plc

  19. Executive Vice President, Global Operations and Supply Chain, Medtronic plc

    | Age: 60 Director Since: March 2024 Committee: Not yet assigned Other Current Public Company Boards: None | Key Experience and Skills Mr. Smith brings deep expertise in supply chain to the Board, providing valuable insights in a key area of focus for the Company. His executive experience in multinational retail organizations, including organizations that serve both consumers and other businesses, brings valuable perspective to the Board. Professional Experience Mr. Smith is a proven supply chain expert with nearly 40 years of experience across a variety of industries. Mr. Smith currently serves as Executive Vice President, Global Operation and Supply Chain of Medtronic plc, a leading global healthcare technology company. Prior to joining Medtronic in 2021, Mr. Smith was Executive Vice President, Supply Chain of Walmart Inc., a multinational omni-channel retail corporation, from 2017 to 2021 and Senior Vice President, Global Operations of The Goodyear Tire and Rubber Company, a multinational tire manufacturer, from 2011 to 2016. Earlier in his career, Mr. Smith spent a decade with Conagra Foods, Inc., a consumer packaged goods company, where he served in several leadership positions, including Executive Vice President, Supply Chain. He previously held roles with United Signature Foods LLC and Aurora Foods Inc. |

  20. SHERICE R. TORRES Independent

    SHERICE R. TORRES Independent Chief Marketing Officer, ChargePoint, Inc.

  21. SHERICE R. TORRES Independent

    | Age: 50 Director Since: September 2021 Committee: Compensation Other Current Public Company Boards: None | Key Experience and Skills Ms. Torres has nearly 25 years of executive management experience with top companies in marketing, brand management, strategic planning and social responsibility. This deep experience in digital marketing is complemented by her experience with and commitment to enhancing diversity, equity and inclusion. Professional Ms. Torres has served as the Chief Marketing Officer of ChargePoint, Inc., a leading provider of networked hardware and software solutions for charging electric vehicles, since August 2023. Previously, Ms. Torres served as Chief Marketing Officer of Circle Internet Financial, LLC, a global internet finance firm, from January 2022 to August 2023. From November 2020 until January 2022, she served as Chief Marketing Officer of Novi, a division of Meta, a leading technology company, where she led all aspects of global marketing across Facebook's payment products. From August 2014 to May 2020, Ms. Torres served as Global Marketing Director for Google, Inc., a leading technology company, and from May 2020 to October 2020, she served as Global Inclusion Director for Google. Prior to 2014, Ms. Torres served in a variety of leadership roles at Viacom (now Paramount), a media and entertainment company, across consumer products, strategic planning and digital. She began her career in the change management consulting practice of Deloitte Touche Tohmatsu Limited, a multinational professional services provider. Ms. Torres also served on the board of directors of LogicMark, LLC, a seller of medical alert devices, from February 2022 to March 2023. |

  22. A. BRENT WINDOM Independent

    A. BRENT WINDOM Independent

  23. President, Windom Consulting LLC

    President, Windom Consulting LLC

  24. President, Windom Consulting LLC

    | Age: 63 Director Since: March 2024 Committee: Not yet assigned Other Current Public Company Boards: None | Key Experience and Skills Mr. Windom's deep automotive industry experience, including service as chief executive officer at multiple organizations, provides the Board with valuable insights. Mr. Window's expertise in operations, particularly in the automotive aftermarket, provide highly relevant subject matter expertise. He also brings experience in Canadian operations to the Board. Professional Experience Mr. Windom, 63, is an experienced automotive industry executive, having spent nearly four decades working in roles across the sector. Most recently, Mr. Windom has served as the President of Windom Consulting LLC, an executive consulting services business, since July 2021. From May 2019 to June 2021, Mr. Windom served as President and Chief Executive Officer of Uni-Select Inc., a leading automotive refinish, industrial coatings and automotive aftermarket parts distributor. Previously, Mr. Windom was President and COO of Canadian Automotive Group, Uni-Select’s Canadian business, from July 2017 to May 2019. Mr. Windom also served as president and Chief Executive Officer of Auto Plus | Pep Boys, a major U.S.-based distributor of automotive aftermarket parts and an aftermarket retailer, from February 2016 until July 2017, which was formed following Icahn Enterprises L.P.’s acquisition of Uni-Select USA, Inc. and Beck/Arnley Worldparts, Inc. Prior to joining IEH Auto Parts, Mr. Windom spent 10 years with Uni-Select, where he held positions of increasing responsibility including President and Chief Operating Officer, Uni-Select USA. |

  25. President, Windom Consulting LLC

    | THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF OUR BOARD NOMINEES. |

  26. Director Compensation

    Director Compensation Under our director compensation program, each non-management director receives annual compensation consisting of a combination of cash and equity based compensation. Management directors do not receive any additional compensation for services as a director. Each non-management director receives an annual retainer of $100,000 and additional applicable retainers or fees as set forth in the following paragraph. Directors who chair Board committees receive additional retainer amounts annually for their committee chair responsibilities. The Audit Committee Chair receives $25,000, the Compensation Committee Chair receives $20,000, the Nominating and Corporate Governance Chair receives $17,500 and the Finance Committee Chair receives $17,500. The independent Board Chair (or the independent Lead Director in the event the Board Chair is not independent) receives an additional $200,000 annual retainer. Members of the Succession Committee, which included Jeffrey J. Jones II (Chair), Carla J. Bailo and John F. Ferraro, received $5,000 per month of service ($10,000 for the Chair) while such Committee was in service during 2023. Each non-management director may elect to defer or receive all or a portion of his or her retainer amounts in the form of deferred stock units, or DSUs. Each DSU is equivalent to one share of our common stock. Dividends paid by us are credited toward the purchase of additional DSUs and are distributed together with the underlying DSUs. DSUs are payable in the form of common stock to participating directors over a specified period of time as elected by the participating director, or whenever their service with the Company ends, whichever is sooner. In addition, each non-management director receives equity compensation valued at $165,000 per year as of the date of grant. The equity compensation is awarded annually in the form of DSUs, granted to directors shortly after the date of the annual stockholder meeting, and will be distributed in common shares after the director’s service with the Company ends. Board members who are appointed at any time other than at the annual meeting receive a prorated DSU award with a grant value based upon the number of months from their election date until the next annual stockholder meeting. The annual grant of DSUs may vest pro-rata based upon the number of months the director has served during the current term in the event that a director's service as a member of the Board ends before one year from the date of grant. On June 12, 2023, each non-management director serving at the time received 2,466 DSUs valued at $165,000 on the date of grant. During 2023, the Board temporarily expanded the role of the Chair of the Board to serve as Interim Executive Chair of the Board to provide additional operational oversight and support to the management team in light of the Chief Executive Officer transition. The Compensation Committee, in consultation with F.W. Cook, designed the compensation for the Interim Executive Chair role to provide meaningful compensation while retaining the compensatory structure for independent directors. Although not performing executive duties, the expectations for devotion of time and variety of duties for the Interim Executive Chair role were significant. The Compensation Committee determined that the role would receive DSUs valued at $1,125,000 on a quarterly basis so long as the role existed, with the expectation that the role would cease after one quarter’s service following the appointment of a new Chief Executive Officer. Such amounts were benchmarked against, and established at less than the pro-rated annual median level, for a target annual long-term incentive award for a chief executive officer. 2023 Director Summary Compensation Information provided in the following table reflects the compensation delivered to our non-management directors for 2023:

  27. Director Compensation

    | Name | Fees Earned or Paid in Cash(a) | Stock Awards(b) | Total | | Carla J. Bailo | $130,000 | $165,000 | $295,000 | | John F. Ferraro | 155,000 | 165,000 | 320,000 | | Joan M. Hilson | 117,500 | 165,000 | 282,500 | | Jeffrey J. Jones II | 180,000 | 165,000 | 345,000 | | Eugene I. Lee, Jr. | 300,000 | 3,540,000 | 3,840,000 | | Douglas A. Pertz | 117,500 | 165,000 | 282,500 | | Sherice R. Torres | 100,000 | 165,000 | 265,000 | | Arthur L. Valdez Jr. | 100,000 | 165,000 | 265,000 |

  28. Director Compensation

    (a)Includes earned or deferred board and chair retainers for 2023. Each of Messrs. Seboldt, Smith and Windom were appointed to the Board in March 2024 and received no compensation during 2023. (b)Represents the grant date fair value of DSUs granted during 2023. The grant date fair value is calculated in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification Topic 718 ("ASC Topic 718") based on the closing price of the Company’s stock on the date of grant. For additional information regarding the valuation assumptions of these awards, refer to Note 15 of the Company’s consolidated financial statements in the 2023 Form 10-K filed with the SEC on March 12, 2024. These amounts reflect the aggregate grant date fair value. Mr. Lee received compensation for three quarters of service as Interim Executive Chair of the Board as described in the text above. Directors’ Outstanding Equity Awards at 2023 Fiscal-Year End The following table provides information about the equity awards outstanding as of the end of our last fiscal year for our non-management directors who served during fiscal 2023.

  29. Director Compensation

    | Name | Outstanding Deferred Stock Units (#) | | Carla J. Bailo | 5,066 | | John F. Ferraro | 16,412 | | Joan M. Hilson | 3,525 | | Jeffrey J. Jones II | 7,555 | | Eugene I. Lee, Jr | 66,040 | | Douglas A. Pertz | 9,796 | | Sherice R. Torres | 3,859 | | Arthur L. Valdez Jr. | 5,066 |

  30. Overview of Business Performance and 2023 Compensation

    Overview of Business Performance and 2023 Compensation In 2023, we did not achieve several of our operational objectives and saw significant deterioration of our share price. We acted with a sense of urgency to stabilize the business and position the Company to return to profitable growth, but our full year financial results were well below our expectations. The amount of compensation realized by our executives heavily depends on our performance. Based on our 2023 performance, executive officers are receiving no payout from the short-term incentive compensation plan for 2023. Based on relative Total Shareholder Return performance from 2021 – 2023, performance shares did not vest in March 2024. Our long-term incentive structure also issues to our executives time-based restricted stock, which has significantly declined in value, and stock options, for which all exercise prices are currently significantly below market value.

  31. Historical Short-Term Incentive Program Payouts*

    Historical Short-Term Incentive Program Payouts*

  32. Historical Long-Term Incentive Program Payouts

    Historical Long-Term Incentive Program Payouts

  33. Chief Executive Officer

    | | 2022 | 2023 | Rationale | | Target Level: | $6,500,000 | $3,000,000 | Lower target level chosen in consideration of expected retirement | | Vehicle Mix: | 50% PSUs; 25% RSUs; 25% options | 100% PSUs | Align focus to key metric of operating income (to be achieved while still in role); settle in shares to further align interests with shareholders | | Metrics: | Three Year Relative Total Shareholder Return | One Year Operating Income* | |

  34. Chief Executive Officer

    *The vesting schedule was the latter of the end of the one-year performance period or a transition period following Mr. Greco's retirement. The target levels of the PSU award were aligned to those of the 2023 STI program, further outlined below, and since the threshold level was not achieved, no shares settled to Mr. Greco from this award. Upon the appointment of a new CEO in September 2023, Mr. Greco stepped down from the President and CEO role but remained an employee of the Company serving in an advisory capacity throughout 2023. In September 2023, Shane M. O’Kelly joined the Company as President and Chief Executive Officer. The elements of Mr. O’Kelly’s 2023 compensation are described below:

  35. Chief Executive Officer

    | Component | Description | Rationale | | Base Salary | $1,125,000 | Market competitiveness | | 2023 STI program | Not eligible to participate until 2024 | Joined substantially into the performance period | | 2023 LTI program | | | | One-time cash bonuses* | •$1,000,000 upon hire •$500,000 on or prior to March 15, 2024 •$500,000 upon relocation to Raleigh, North Carolina no later than September 15, 2024 | Designed to replace compensation foregone at Mr. O’Kelly’s prior employer and incentivize prompt relocation to the Company’s headquarters in Raleigh, North Carolina | | One-time equity grants | •78,982 RSUs •150,000 stock options (each vesting ratably over three years, subject to continued employment) | RSUs to replace the value of awards forfeited by Mr. O’Kelly for leaving his prior employer and create strong initial alignment with shareholders. Options granted in lieu of a 2023 LTI grant to provide a pro-rata, long-term incentive award for the portion of 2023 during which Mr. O’Kelly served as President and CEO; since he joined substantially into the performance period, the Committee determined stock options (which have no value unless stock price increases) were more appropriate than the standard vehicle mix for LTI. | | Other compensation* | Relocation and commuting benefits until Mr. O’Kelly relocates to Raleigh, North Carolina (see “—Summary Compensation Table) | Accommodate an appropriate transition time from Mr. O’Kelly’s prior place of residence |

  36. Chief Financial Officer

    Chief Financial Officer In August 2023, Jeffrey W. Shepherd, the Company’s former Executive Vice President, Chief Financial Officer separated from the Company. Such separation triggered termination without cause payment pursuant to his employment agreement with the Company. See “—Summary Compensation Table” and “—Termination and Change of Control Table” for additional information about amounts paid pursuant to Mr. Shepherd’s employment agreement. In August 2023, Anthony A. Iskander became the Interim Chief Financial Officer, Senior Vice President, Finance and Treasurer. Compensatory decisions associated with Mr. Iskander’s assignment and service as Interim Chief Financial Officer are described below:

  37. Chief Financial Officer

    | Component | Description | Rationale | | Base Salary | $675,000 | Market competitiveness | | 2023 STI program | Not eligible to participate until 2024 | Joined substantially into the performance period | | 2023 LTI program | | | | One-time cash bonuses* | $750,000 | Designed to replace compensation foregone at Mr. Grimsland’s prior employer | | One-time equity grants | •$1,600,000 RSUs •$400,000 stock options (each vesting ratably over three years, subject to continued employment) | To replace the value of awards forfeited by Mr. Grimsland for leaving his prior employer and create strong initial alignment with shareholders. |

  38. Other Leadership Changes

    Other Leadership Changes In April 2023, the Company and Robert B. Cushing, Executive Vice President, Professional, agreed to reassign portions of his responsibilities to other executives to further streamline field operations and support long-term succession planning. The transfer of such responsibilities contributed to certain compensatory decisions for other executive officers as further described in “—Components of Compensation.” In November 2023, the Company reorganized parts of the executive leadership team and transitioned responsibilities for marketing, merchandising and e-commerce to other leaders, triggering separation without cause payment under the employment agreement with Jason B. McDonell, then Executive Vice President, Merchandising, Marketing and e-Commerce. See “—Summary Compensation Table” and “—Termination and Change of Control Table” for additional information about amounts paid pursuant to Mr. McDonell’s employment agreement. Components of Compensation Principles. Base salary is an integral part of our executive compensation program designed to provide a competitive, fixed rate of compensation. Base salary is paid in cash administered based on our regular payroll practices. Methodology. The key factors considered when determining an executive’s base salary are the scope and complexity of the role, competitiveness with the market, individual contributions to business outcomes and talent retention. 2023 Decisions & Rationale. The table below shows and explains the annual adjustments made to base salaries for our NEOs for 2023:

  39. Short-Term Incentive Compensation

    Short-Term Incentive Compensation Principles. We provide opportunity to earn STI to link pay to performance by aligning the achievement of short-term operational objectives of our business to annual compensation and provide competitive overall compensation. We tie performance measures for our STI program closely to key targeted deliverables of our annual operating plan. STI is paid annually in cash based on achievement of the pre-determined metrics. 2023 Design & Methodology. While the overall design of our STI program for 2023 was largely unchanged from 2022, we updated one of the metrics used in the program, updated the structure of the payout curves and adjusted the DEI modifier. Overall Program Design. The program consists of three equally weighted pre-established financial metrics coupled with an individual modifier ranging from +/- 5 percentage points for performance against pre-established DEI goals. Following discussion with F.W. Cook and management, the Compensation Committee determined that the financial metrics in the program continued to be the most appropriate measures of achievement of our operational goals for 2023. However, consistent with the Company’s decision to stop reporting non-GAAP financial measures in February 2023, the Compensation Committee replaced “Adjusted Operating Income” with “Operating Income” calculated in accordance with U.S. generally accepted accounting principles. The Compensation Committee also determined that for 2023, a narrower range of individual modification was appropriate considering the more advanced maturity of DEI initiatives at the Company. Additionally, for 2023, the modifier would only apply if threshold performance for all three financial metrics was achieved.

  40. Short-Term Incentive Compensation

    | Metric | Rationale | | Comparable Store Sales | As an aftermarket automotive retailer, a key measure of our performance is how much revenue our stores generate on a comparable, year-over-year basis. One of our key long-term strategic initiatives is to improve sales and profitability per store, and focusing annually on delivering positive comparable store sales is an important contributor to that initiative. | | Operating Income | Operating income is a key profitability measure for our business. Through this metric, we seek to incentivize and reward short-term performance that contributes to long-term, sustainable improvements in the profitability of our business. | | Free Cash Flow | An important pillar of our long-term strategy is to return cash to our stockholders. Our ability to do so depends on our generation of free cash flow, and we include free cash flow as an STI metric to measure and reward this key component of our strategy on an annual basis. |

  41. Short-Term Incentive Compensation

    Determination of Targets. In general, we seek to align STI target levels to the targeted performance reflected in our annual operating plan. We believe this methodology focuses our team, including our executive officers, on delivering the goals of our annual operating plan and directly aligns their short-term, at-risk compensation to the performance of our business objectives. Using the target achievement levels as an anchor, the Compensation Committee then set maximum achievement levels as stretch goals that would require exceptional performance to payout and threshold achievement levels that would still encourage strong execution but would appropriately reflect risks to full achievement of 2023 operating targets. In 2023, the Compensation Committee decided to adopt a payout curve that would minimize payout variability around the target performance level, aligning payouts above target to exceptionally exceeding prior year performance. For all metrics, threshold payout required greater than prior year performance. The below further outlines specific considerations with respect to our 2023 annual operating plan targets, which equated target performance levels for our STI metrics.

  42. Short-Term Incentive Compensation

    | | Comparable Store Sales | Operating Income | Free Cash Flow | | 2022 Actual Results | 0.3% | $714.2 million | $298.2 million | | 2023 STI Target | 2.5% | $923.0 million | $400.0 million | | Rationale | 2022 performance delivered incremental growth from exceptionally strong prior year performance. 2023 targeted level contemplated return to stronger year over year sales growth following targeted actions to improve availability and drive topline sales performance. | Business plan built to deliver higher operating income year over year. | Business plan contemplated impact of investments in strategic initiatives and targeted stronger levels of cash flow than prior year |

  43. Short-Term Incentive Compensation

    Mr. O’Kelly was not eligible for 2023 STI compensation but will have an STI target value of 150% of his base salary for 2024. Target STI compensation for each of our other NEOs was 85% of base salary, other than for Mr. Greco, who had a target of 150% of his base salary, and Mr. Iskander, who had a target of 65% of base salary given his position as Senior Vice President. These levels were determined in consideration of the scope and complexity of the role, market data versus the Company peer group and individual contributions to business outcomes.

  44. 2023 Potential v. Actual STI Payouts

    2023 Potential v. Actual STI Payouts

  45. 2023 Potential v. Actual STI Payouts

    | Metric | Weight | Threshold (35% Payout) | Low (90% Payout) | Target (100% Payout) | High (110% Payout) | Maximum (200% Payout) | Payout | | (0.3)% | | | | | | | | | Comparable Store Sales | 1/3 | 0.0% | 1.0% | 2.5% | 4.0% | 5.5% | 0% | | $114.4 | | | | | | | | | Operating Income | 1/3 | $812 | $877 | $923 | $969 | $1,087 | 0% | | $43.7 | | | | | | | | | Free Cash Flow | 1/3 | $300 | $340 | $400 | $460 | $560 | 0% |

  46. 2023 Potential v. Actual STI Payouts

    DEI Modifier. Each NEO had pre-established DEI goals among their individual objectives established at the start of the year. For 2023, the categories of goals applicable to each NEO remained unchanged. Each executive had six DEI goals as follows:

  47. 2023 Potential v. Actual STI Payouts

    | Representation Goals (4) | Inclusion Goals (2) | | People of color – percentage of employees (1) across NEO’s function and (2) at management levels in NEO’s function | Participation in team member networks and events designed to promote and develop an inclusive culture | | Women – percentage of employees (1) across NEO’s function and (2) at management levels in NEO’s function | Percentage of employees across NEO’s function and at management levels in NEO’s function involved in a team member network |

  48. 2023 Potential v. Actual STI Payouts

    Representation goals for 2023 were determined in consideration of the Company’s stated long-term DEI goal of increasing representation, including leadership representation, of women and people of color by 25% by 2026. Inclusion goals for 2023 were determined in consideration of building on strong performance from 2022. At the end of the performance period, management evaluated the degree of achievement across the six DEI goals for each executive officer. Since threshold performance was not achieved for each of the financial metrics, management did not recommend, and the Compensation Committee did not approve, any DEI modifiers for STI payouts.

  49. Long-Term Incentive Compensation

    Long-Term Incentive Compensation Principles. LTI is intended to align the interests of our leadership, including our executive officers, with those of our shareholders. It is an important part of providing competitive overall compensation to our executives, promotes retention and helps balance focus between the shorter-term execution of operational priorities with longer-term objectives. 2023 Design & Methodology. The design of our LTI program for 2023 was unchanged from 2022. Overall Program Design. LTI is awarded to executives annually with a three-year performance/vesting period, with the target value awarded divided as shown below and vesting generally subject to continued employment. 50% of our annual LTI awards to executives are issued in PSUs, whose value depends not only on the Company’s absolute TSR, but also on achievement against the long-term performance measure.

  50. Long-Term Incentive Compensation

    | % of Target Award | Vehicle | Vesting | Rationale | | 50% | PSUs | If at all, at the end of a three-year performance period based on RTSR against the other companies in the S&P 500 | Align a substantial portion of executive compensation entirely dependent upon delivery of sustainable, long-term total shareholder return | | 25% | RSUs | Ratably over three years | Further align the interests of our executives with those of our stockholders and retain key talent | | 25% | Stock options | Ratably over three years, with a 10-year term | Make a portion of executive compensation entirely contingent upon stock price appreciation and promote retention (while options provide a significant source of potential long-term value to individuals, vested options are generally cancelled 90 days following cessation of employment) |

  51. Long-Term Incentive Compensation

    Determination of Targets. In determining the target performance level for the PSU component of our LTI in 2023, the Compensation Committee determined that target payout should only be achieved for above-median RTSR achievement versus companies in the S&P 500. It determined that maximum payout should only be achieved for extraordinary results delivering top quintile RTSR over the performance period, which it believed to be a significant stretch goal. The level for threshold payout was established such that the award would only pay out with significant improvement from RTSR performance for the prior three-year performance period. Importantly, even if RTSR exceeds the 55th percentile, payout will be capped at 100% of target in the event absolute total shareholder return is negative for the performance period.

  52. Long-Term Incentive Compensation

    | | Prior Period Performance | Threshold (35% payout) | Target (100% payout) | Maximum (200% payout) | | Three-year RTSR against the S&P 500 | 7th %ile | 35th %ile | 55th %ile | 80th %ile |

  53. Long-Term Incentive Compensation

    Each executive officers’ annual grant is made at a target value that depends on the scope and complexity of the role, market data and individual contributions to business outcomes. In consideration of the announcement of Mr. Greco’s intended retirement in 2023, the Compensation Committee increased the target LTI value for several executive officers to further incentivize executive officers’ focus on and commitment to the Company’s long-term performance while further retaining key executives during the Chief Executive Officer transition. The Compensation Committee made the following determinations with respect to target LTI value for our NEOs:

  54. Long-Term Incentive Compensation

    | NEO | 2022 Target LTI | 2023 Target LTI | Change (%) | Principal Rationale | | Shane M. O’Kelly | N/A | N/A | N/A | Mid-year hire; in lieu of a regular 2023 LTI award, Mr. O’Kelly received a sign-on equity award of 150,000 stock options | | Thomas R. Greco | $6,500,000 | $3,000,000 | (53.9)% | Reduced size of target award in anticipation of cessation of service; provide meaningful incentive during Mr. Greco’s last year of service to focus on and deliver against a financial measure that will align with the long-term success of the organization | | Ryan M. Grimsland | N/A | N/A | N/A | Near year-end hire | | Anthony A. Iskander | N/A | $950,000 * | N/A | See explanation below | | Jeffrey W. Shepherd | $1,600,000 | $1,900,000 | 18.8% | Promote retention during Chief Executive Officer transition | | Herman L. Word, Jr. | $800,000 | $1,150,000 | 43.8% | Adjustment to $900,000 on account of increased responsibilities and market competitiveness; further adjusted to promote retention during the Chief Executive Officer transition | | Tammy M. Finley | $750,000 | $1,100,000 | 46.7% | Adjustment to $850,000 on account of market competitiveness; further adjusted to promote retention during the Chief Executive Officer transition | | Stephen J. Szilagyi | N/A | $800,000 | N/A | New hire; based on market competitiveness | | Robert B. Cushing | $1,000,000 | $1,000,000 | 0.0% | No adjustment given planned realignment of certain responsibilities to streamline field operations and support long-term succession planning | | Jason B. McDonell | $900,000 | $1,250,000 | 38.9% | Adjustment to $1,000,000 on account of increased responsibilities and market competitiveness; further adjusted to promote retention during the Chief Executive Officer transition |

  55. Long-Term Incentive Compensation

    * Mr. Iskander became an executive officer on August 18, 2023. 2023 Target LTI represents annual award made for his prior, non-executive position, a one-time retention award granted to promote retention during the Chief Executive Officer transition and a one-time award granted in connection with his role assignment to Interim Chief Financial Officer. The amount granted in connection with this assignment represented the approximate average of the 25th percentile and 50th percentile of annual LTI levels for Chief Financial Officer based on the Company’s peer group, less what Mr. Iskander had received to-date in LTI, prorated for six months of service. Although neither received a regular annual LTI award for 2023, Mr. O’Kelly’s target LTI value for 2024 will be $6,500,000 and Mr. Grimsland’s target LTI value for 2024 will be $1,600,000.

  56. 2023 Potential v. Actual LTI Payout

    2023 Potential v. Actual LTI Payout Our awards to executive officers made in 2021 depended solely on relative total shareholder return against companies in the S&P 500. Our relative TSR for the 2021-2023 performance period ranked below the threshold, and therefore no shares vested for the 2021 – 2023 performance period. The following depicts potential v. actual results achieved.

  57. 2023 Potential v. Actual LTI Payout

    | Metric | Weight | Threshold (35% payout) | Target (100% payout) | Maximum (200% payout) | Payout | | 7th percentile | | | | | | | RTSR | 1/3 | 35th percentile | 55th percentile | 80th percentile | 0% |

  58. 2023 Potential v. Actual LTI Payout

    Other Compensation and Pay Practices

  59. Employment Agreements

    Employment Agreements We have employment agreements with each of our executive officers that outline the terms of their employment with us. Each employment agreement describes the base salary, STI and LTI opportunities of the executive. Each agreement is for a one-year term and automatically renews for successive one-year periods unless 90 days advance notice is provided. Our employment agreements include confidentiality, non-competition and non-solicitation obligations for our executive officers. The agreements also outline the compensation to which they are entitled in the event of death, disability, termination by the Company for Due Cause, termination by the Company other than for Due Cause, resignation by the executive for Good Reason, resignation by the executive without Good Reason and termination following a change in control. These terms are more fully described in “—Potential Payments Upon Termination or Change in Control Table.” We believe these various compensatory arrangements in the event of an executive’s severance are important to enabling attraction and retention of key executive talent and promote focus on achievement of long-term strategic objectives.

  60. Granting of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information

    Granting of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information We do not grant stock options or similar awards in anticipation of the release of material nonpublic information that is likely to result in changes to the price of our common stock, such as a significant positive or negative earnings announcement, and do not time the public release of such information based on stock option grant dates. Our annual grants of stock options are awarded on a predetermined date during an “open trading window.” The only grant of stock options or similar awards outside of this annual cycle has been to Mr. O’Kelly in connection with his hire, and such award was also made on a predetermined date during an “open trading window.” During the last completed fiscal year, we have not awarded options to any named executive officer during the period beginning four business days before and ending one business day after the filing of a period report on Form 10-Q or Form 10-K or the filing or furnishing of a current report on Form 8-K, and we have not timed the disclosure of material nonpublic information for the purpose of affecting the value of executive compensation. Compensation Governance

  61. Roles and Responsibilities

    | Management | •Develop business plans and strategy, which are then integrated into incentive plan design and used to establish performance goals | | | •CEO: determine other executive officers' objectives and review their performance | | | •Make recommendations with respect to executive officer compensation, incentive plan design and performance measures | | Stockholders | •Vote annually on our executive compensation framework and practices | | | •Provide feedback to management on executive compensation through shareholder outreach | | F.W. Cook | •Provide independent, expert advice regarding executive compensation matters directly to the Compensation Committee | | | •Analyze and make recommendations regarding the Company's peer group | | | •Provide competitive market data | | | •Assist with design of incentive plans and evaluation of pay practices, including associated risks | | | •Provide updates on regulatory matters related to executive compensation | | Compensation Committee | •Determine compensation for executive officers | | | •Review and approve the Company's peer group used for executive compensation matters | | | •Approve executive officer employment, severance and/or change in control agreements | | | •Review, recommend to the Board and administer incentive plans applicable to executives | | | •Approve and oversee implementation of compensatory policies applicable to executive officers, such as the Incentive Clawback Policy and Stock Ownership Guidelines | | | •Make recommendations to the Board with respect to non-employee director compensation | | Full Board of Directors | •Determine annual CEO objectives and annually review CEO performance | | | •Approve any incentive plans applicable to executive officers | | | •Approve all non-employee director compensation | | | •Receive regular reports from the Compensation Committee and share perspective where applicable |

  62. Role of Peer Group and Benchmarking

    Role of Peer Group and Benchmarking We use a group of similarly situated peer companies to help us evaluate the competitiveness of our executives’ compensation. On the whole, we aim to provide our executives with total target compensation that approximates the median among our peers, being mindful of the importance of competitiveness of pay and retention of talent. We do not target any particular benchmark level for any aspect of executive compensation, but rather seek to provide our executives with compensation that is well-balanced between long-term and short-term components. We also use our peer group to evaluate the market competitiveness of our incentive plans, broader pay practices and non-employee director compensation. We select approximately 15 to 20 U.S.-based public companies in our and similar industries based on objective criteria, including net revenues (approximately one-third to three times our revenue), number of employees (approximately one-third to three times our employee population), market capitalization (approximately one-fourth to four and a half times our 12-month average market capitalization) and business similarity with respect to products, customers and/or operations, seeking a balanced representation of company size and endeavoring to promote year-over-year continuity where reasonable. We review our peer group annually. For 2023 our peer group consisted of the following:

  63. Role of Peer Group and Benchmarking

    | Academy Sports & Outdoor, Inc. | Dollar Tree, Inc. | Tractor Supply Company | | AutoZone, Inc. | Fastenal Company | Ulta Beauty, Inc. | | Bath & Body Works, Inc. | Genuine Parts Company | W.W. Grainger, Inc. | | CarMax, Inc. | LKQ Corporation | WESCO International, Inc. | | Dick’s Sporting Goods, Inc. | O’Reilly Automotive, Inc. | Williams-Sonoma Inc. | | Dollar General Corporation | Office Depot, Inc. | |

  64. Role of Peer Group and Benchmarking

    In August 2023, we reviewed our peer group again and our Compensation Committee, with advice of F.W. Cook, determined that the peer group was still appropriate and no further changes were needed.

  65. Important Pay Practices

    Important Pay Practices No Single-Trigger Vesting for Change in Control. We do not have any single trigger acceleration arrangement in the event of a change in control for any of our executive officers. Incentive Compensation Clawback Policy. We maintain a policy that requires repayment of incentive compensation, including, among other types of compensation, short-term incentive cash compensation and performance-based equity awards, received by executives in the event of an accounting restatement in accordance with the listing standards of the New York Stock Exchange. Stock Ownership Guidelines. To further align the interests of our officers and directors with those of our stockholders, all of our executive officers and directors are required to hold a certain value of our stock. All shares of common stock beneficially owned by the individual, as well as outstanding but unvested time-based restricted stock units, count towards the required thresholds; we do not consider the value of outstanding but unvested performance-based restricted stock units, vested or unvested stock options or any other type of derivative equity when determining whether an individual satisfies the ownership guidelines.

  66. Compensation Program Risk Assessment

    Compensation Program Risk Assessment We assess our executive and broad-based compensation and benefits programs to determine whether the programs' provisions and operation create undesired or unintentional material risk. The risk assessment process includes a review of our compensation program policies and practices, such as our performance-based executive compensation programs and stock ownership guidelines, to ensure that the interests of our executives are aligned with those of our stockholders by encouraging long-term superior performance without encouraging excessive or unnecessary risk-taking. We take into consideration compensation terms and practices, such as performance-based vesting of a substantial portion of our executives' long-term incentive compensation, to drive long-term decision making and mitigate adverse risk taking that may occur due to year-over-year performance measurements, and rewards growth over the long term. We regularly review and audit our bonus plans to ensure short-term incentives are appropriately linked to business outcomes, and such reviews are shared with the Compensation Committee. We have reviewed all of our compensation programs and found none that would be reasonably likely to have a material adverse effect on the Company. Our performance based executive compensation program, as described more fully in CD&A, coupled with our stock ownership guidelines, aligns the interests of our executives with stockholders by encouraging long-term superior performance without encouraging excessive or unnecessary risk taking. We believe that our long standing compensation philosophy discussed in CD&A is a key component of our history of consistent growth, which demonstrates an alignment of the interests of participants and stockholders and rewards each with increased value over the long term. As illustrated in CD&A, the compensation of our executives is primarily based on performance over a long-term period. We believe the performance based vesting of a substantial portion of our executives' long-term incentive compensation drives long-term decision making, mitigates adverse risk taking that may occur due to year-over-year performance measurements, and rewards growth over the long term. The Compensation Committee, with the guidance and assistance of its independent compensation consultant, reviews and approves compensation components for all named executive officers and other executive officers. Annual incentives are reviewed each year and payments are subject to Compensation Committee discretion. The bonus plans for other associates are linked to financial, customer or operating measures. All associates, including officers, and our directors are subject to our Insider Trading Policy, which prohibits hedging existing ownership positions in the Company's securities, short selling the Company's stock, purchasing or selling derivative securities, and, unless certain stringent requirements are met, pledging Company stock.

  67. Executive Compensation

    | | | | Bonus | Stock Awards | Option Awards | Non-Equity Incentive Plan Compensation | All Other Compensation | | | Name and Principal Position | | Salary | | (a) (b) | (c) | | (d) | Total | | | Year | ($) | ($) | ($) | ($) | ($) | ($) | ($) | | Shane M. O'Kelly | 2023 | $302,885 | $1,000,000 | $4,593,593 | $3,523,500 | $— | $19,108 | $9,439,086 | | President, Chief Executive Officer (from Sept. 11, 2023) | | | | | | | | | | Thomas R. Greco | 2023 | 1,125,000 | — | 3,000,021 | — | — | 14,023 | 4,139,044 | | Former President and Chief Executive Officer (through Sept. 10, 2023) | 2022 | 1,121,155 | — | 4,875,008 | 1,625,014 | 749,756 | 14,015 | 8,384,948 | | | 2021 | 1,100,008 | — | 4,500,044 | 1,499,981 | 2,940,300 | 11,938 | 10,052,271 | | Ryan P. Grimsland | 2023 | 38,942 | 750,000 | 1,600,030 | 400,004 | — | 42 | 2,789,018 | | Executive Vice President, Chief Financial Officer (from Nov. 27, 2023) | | | | | | | | | | Anthony A. Iskander | 2023 | 371,913 | — | 900,064 | 50,027 | — | 4,384 | 1,326,388 | | Interim Chief Financial Officer (from Aug. 18, 2023, through Nov. 26, 2023), Senior Vice President, Finance and Treasurer | | | | | | | | | | Jeffrey W. Shepherd | 2023 | 512,885 | — | 1,424,946 | 475,083 | — | 1,413,918 | 3,826,832 | | Former Executive Vice President, Chief Financial Officer (until Aug. 18, 2023) | 2022 | 756,308 | — | 1,199,889 | 400,154 | 248,911 | 5,684 | 2,610,946 | | | 2021 | 667,740 | — | 749,949 | 250,060 | 1,214,013 | 5,690 | 2,887,452 | | Herman L. Word, Jr. | 2023 | 595,192 | — | 862,535 | 287,498 | — | 10,925 | 1,756,150 | | Executive Vice President, U.S. Stores and Independents | 2022 | 465,193 | — | 799,986 | 100,079 | 408,525 | 7,213 | 1,780,995 | | Tammy M. Finley | 2023 | 515,192 | — | 824,969 | 275,044 | — | 14,034 | 1,629,239 | | Executive Vice President, General Counsel and Corporate Secretary | | | | | | | | | | Stephen J. Szilagyi | 2023 | 518,269 | — | 599,977 | 200,039 | — | 19,306 | 1,337,591 | | Executive Vice President, Supply Chain | | | | | | | | | | Robert B. Cushing | 2023 | 645,000 | — | 749,972 | 250,030 | — | 12,880 | 1,657,881 | | Executive Vice President, Professional | 2022 | 641,923 | — | 750,033 | 249,981 | 260,035 | 12,875 | 1,914,847 | | | 2021 | 621,027 | — | 925,253 | 224,908 | 1,046,563 | 12,253 | 2,830,004 | | Jason B. McDonell | 2023 | 599,038 | — | 937,532 | 312,476 | — | 1,136,378 | 2,985,424 | | Former Executive Vice President, Merchandising, Marketing and e-Commerce (until Dec. 1, 2023) | 2022 | 571,154 | — | 674,988 | 225,043 | 190,270 | 21,743 | 1,683,199 | | | 2021 | 526,967 | — | 737,690 | 212,497 | 930,325 | 12,412 | 2,419,891 |

  68. Pay Versus Performance Table

    Pay Versus Performance Table

  69. Pay Versus Performance Table

    | Year | SCT Total for CEO (1) | SCT Total for Former CEO (1) | CAP to Current CEO (2) | CAP to Former CEO (2) | Average SCT Total for Other NEOs (1) | Average CAP to Other NEOs (2) | Value of Initial Fixed $100 Investment Based on: | | GAAP Net Income ($m) | Company Selected Measure | | | | | | | | | | Total Share-holder Return | Peer Group Total Share-holder Return (3) | | Comp. Store Sales Growth | GAAP Operating Income ($m) | | 2023 | $9,439,086 | $4,139,044 | $9,853,745 | $(3,934,421) | $2,163,565 | $875,625 | $41.73 | $162.36 | $30 | (0.3)% | $114 | | 2022 | – | $8,384,948 | – | $(7,267,775) | $2,008,124 | $(169,402) | $98.46 | $114.02 | $502 | 0.3% | $754 | | 2021 | – | $10,052,271 | – | $24,632,043 | $2,684,996 | $4,775,021 | $155.06 | $173.50 | $616 | 10.7% | $902 | | 2020 | – | $8,056,454 | – | $7,289,919 | $1,975,014 | $2,044,128 | $100.25 | $145.42 | $493 | 2.4% | $750 |

  70. Pay Versus Performance Table

    (1) 2023 CEOs are Shane O’Kelly (current) and Thomas R. Greco (former); other NEOs are Ryan P. Grimsland, Anthony A. Iskander, Jeffrey W. Shepherd, Herman L. Word, Jr., Tammy M. Finley, Stephen Szilagyi, Robert B. Cushing, and Jason B. McDonell; 2022 CEO is Thomas R. Greco; other NEOs are Jeffrey W. Shepherd, Robert B. Cushing, Herman Word and Reuben E. Slone; 2021 CEO is Thomas R. Greco; other NEOs are Jeffrey W. Shepherd, Robert B. Cushing, Reuben E. Slone, and Jason B. McDonell; 2020 CEO is Thomas R. Greco; other NEOs are Jeffrey W. Shepherd, Robert B. Cushing, Michael T. Broderick, and Reuben E. Slone. (2) The dollar amounts reported represent CAP, as computed in accordance with SEC rules. The dollar amounts do not reflect the actual amount of compensation earned by or paid during the applicable year. In accordance with SEC rules, the following adjustments were made to SCT total compensation to determine the CAP values: Reconciliation of SCT to CAP for CEO:

  71. Pay Versus Performance Table

    | | Fiscal Year 2023 | | | Fiscal Year 2022 | | Fiscal Year 2021 | | Fiscal Year 2020 | | | | CEO (O’Kelly) | CEO (Greco) | Avg. Other NEOs | CEO (Greco) | Avg. Other NEOs | CEO (Greco) | Avg. Other NEOs | CEO (Greco) | Avg. Other NEOs | | SCT Total | $9,439,086 | $4,139,044 | $2,163,565 | $8,384,948 | $2,008,124 | $10,052,271 | $2,684,996 | $8,056,454 | $1,975,014 | | Minus SCT Equity | $8,117,093 | $3,000,021 | $1,268,778 | $6,500,022 | $1,087,542 | $6,000,025 | $987,593 | $5,559,210 | $922,388 | | Plus End of Year Fair Value of Equity Granted During FY Outstanding and Unvested at End of Year | $8,530,502 | – | $517,216 | $3,443,902 | $635,235 | $10,501,631 | $1,685,480 | $8,192,754 | $1,359,352 | | Plus (Minus) Change in Fair Value from End of Prior Year to End of Year of Awards Granted in Any Prior Fiscal Year Outstanding and Unvested at End of Year | – | $(4,557,437) | $(328,064) | $(10,813,511) | $(1,485,175) | $10,287,185 | $1,381,805 | $(2,693,536) | $(313,257) | | Plus (Minus) Change in Fair Value from End of Prior Year to Vesting Date of Awards Granted in Any Prior Fiscal Year that Vested During the Fiscal Year | – | $(516,006) | $(65,622) | $(1,783,092) | $(240,045) | $(209,019) | $10,333 | $(706,543) | $(54,593) | | Minus Fair Value at End of Prior Year of Awards Granted in Prior Year that were Forfeited During the Fiscal Year | – | – | $142,692 | – | – | – | – | – | – | | Compensation Actually Paid | $9,853,745 | $(3,934,421) | $875,625 | $(7,267,775) | $(169,402) | $24,632,043 | $4,775,021 | $7,289,919 | $2,044,128 |

  72. Pay Versus Performance Table

    EOY = End of Year; BOY = Beginning of Year, SCT = Summary Compensation Table, CAP = Compensation Actually Paid The fair value of option awards was determined using a Black-Scholes option-pricing model. The fair value of RSUs used to calculate CAP was based on the Company's closing stock price on each valuation date, including accrued dividend equivalent units. The fair value of PSUs used to calculate CAP assumes estimated performance results as of the end of each reporting year for financial metrics (average annual comparable store sales growth and return on invested capital, which were performance measures in our 2018, 2019, 2020, and 2021 PSU awards) and a Monte Carlo simulation valuation model for market metrics (which were relative TSR vs. a peer group for the 2018, 2019, and 2020 PSUs and relative TSR vs. the constituents of the S&P 500 for the 2021, 2022, and 2023 PSUs), in accordance with FASB ASC 718. Fair values include accrued dividend equivalent units. (3) Reflects total shareholder return indexed to $100 for the S&P 500 Retailing Index, which is an industry line peer group reported in the performance graph included in the Company’s 2023 Annual Report on Form 10-K.