Advance Auto Parts Inc DEF 14A, filed Apr 7, 2023

Advance Auto Parts Inc (AAP)

DEF 14A 2023-04-07

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Added on June 12, 2026

About this DEF 14A

Advance Auto Parts Inc filed this DEF 14A on April 7, 2023.

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o			Preliminary Proxy Statement

o			Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(5)(2))

x			Definitive Proxy Statement

o			Definitive Additional Materials

o			Soliciting Material Pursuant to §240.14a-12


		Board Recommendation
1	Election of the nine nominees named in the Proxy Statement to the Board of Directors to serve until the 2024 annual meeting of stockholders	FOR each director nominee
2	Vote to approve the Company's 2023 Omnibus Incentive Compensation Plan	FOR
3	Vote to approve the Company's 2023 Employee Stock Purchase Plan	FOR
4	Advisory vote to approve the compensation of the Company’s named executive officers	FOR
5	Advisory vote to approve the frequency of voting on the compensation of the Company's named executive officers	for ONE YEAR
6	Ratification of the appointment by the Audit Committee of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2023	FOR
7	Consideration of and vote upon a stockholder proposal, if properly presented at our Annual Meeting, regarding requiring an independent Board chair	AGAINST
8	Action upon such other matters, if any, as may properly come before the meeting


Proposal 1						Board Recommendation
Election of the nine nominees named in the Proxy Statement to the Board of Directors ("Board") to serve until the 2024 annual meeting of stockholders						The Board recommends a vote FOR each director nominee See page 1


Proposal 2						Board Recommendation
Vote to approve the Company's 2023 Omnibus Incentive Compensation Plan						The Board recommends a vote FOR this Proposal See page 15


Proposal 3						Board Recommendation
Vote to approve the Company's 2023 Employee Stock Purchase Plan						The Board recommends a vote FOR this Proposal See page 25



INTERNET www.proxyvote.com	TOLL FREE TELEPHONE 1-800-690-6903	MAIL Complete and sign your proxy card


8 of 9 are independent						4 of 9 are diverse with respect to gender (3) or race/ethnicity (2)


Outreach We value dialogue with our stockholders and regularly conduct stockholder governance outreach. Feedback from stockholders is shared with the Board and applicable Committees periodically.
Participants Outreach discussions with our stockholders generally include our Chief Executive Officer (“CEO”) and management representatives from Investor Relations, Human Resources and the office of the General Counsel and Corporate Secretary.
Topics discussed This year, discussions with stockholders primarily focused on Environmental, Social and Governance (“ESG”) issues and actions, including our Corporate Sustainability and Social Report, diversity, equity and inclusion and environmental sustainability, executive compensation matters, Board composition, recent Company performance and Company strategy and execution.


Proposal 4						Board Recommendation
Advisory vote to approve the compensation of the Company’s named executive officers.						The Board recommends a vote FOR this Proposal See page 29


Proposal 5						Board Recommendation
Advisory vote to approve the frequency of voting on the compensation of the Company's named executive officers						The Board recommends a vote FOR "ONE YEAR" for this Proposal See page 55


Proposal 6						Board Recommendation
Ratification of the appointment by the Audit Committee of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2023						The Board recommends a vote FOR this Proposal See page 56


Proposal 7						Board Recommendation
Consideration of and vote upon a stockholder proposal, if properly presented at the Annual Meeting, regarding amending proxy access rights to remove the shareholder aggregation limit						The Board recommends a vote AGAINST this Proposal See page 58


Proposal No. 1 Election of Directors	1	Compensation Committee Report	39
Nominees for Election to Our Board	2	Compensation Program Risk Assessment	40
Corporate Governance	7	Additional Information Regarding Executive Compensation	41
Overview	7	Summary Compensation Table	41
Board Composition and Refreshment	7	Grants of Plan-Based Awards in 2022	42
Nominations for Directors	7	Outstanding Equity Awards at 2022 Fiscal Year End	43
Board Independence and Structure	8	Option Exercises and Stock Vested in 2022	44
Board's Role in Risk Oversight	10	Non-Qualified Deferred Compensation for 2022	44
Board Evaluation	10	Potential Payments Upon Termination of Employment or Change in Control	45
Stockholder and Interested Party Communications with our Board	10	CEO Pay Ratio	47
Code of Ethics and Business Conduct	11	Pay Versus Performance	47
Code of Ethics for Finance Professionals	11	Information Concerning our Executive Officers	50
Related Party Transactions	11	Security Ownership of Certain Beneficial Owners and Management	52
Succession Planning	12	Stock Ownership Guidelines for Directors and Executive Officers	53
Director Compensation	13	Delinquent Section 16(a) Reports	54
2022 Director Summary Compensation	13	Equity Compensation Plan Information	54
Directors' Outstanding Equity Awards at 2022 Fiscal-Year End	14	Proposal No. 5 Stockholder Advisory Vote on the Frequency of Stockholder Advisory Votes on the Compensation of the Company's Named Executive Officers	55
Proposal No. 2 Vote to Approve the 2023 Omnibus Incentive Compensation Plan	15	Proposal No. 6 Ratification of Appointment of Deloitte & Touche LLP as our Independent Registered Public Accounting Firm for 2023	56
Proposal No. 3 Vote to Approve the 2023 Employee Stock Purchase Plan	25	2022 and 2021 Audit Fees	56
Proposal No. 4 Stockholder Advisory Vote to Approve the Compensation of the Company's Named Executive Officers	29	Audit Committee Report	57
Compensation Discussion and Analysis	30	Proposal No. 7 Stockholder Proposal Entitled "Independent Board Chair"	58
Executive Summary	30	Board of Directors' Statement in Opposition to Proposal No. 7	59
Compensation Governance	31	Other Matters	60
Framework for Executive Compensation	33	Appendix A - 2023 Omnibus Incentive Compensation Plan	A-1
Other Compensation and Benefit Programs	37	Appendix B - 2023 Employee Stock Purchase Plan	B-1


Age: 62 Director Since: August 2020 Committee: Audit; Nominating and Corporate Governance Other Current Public Company Boards: SM Energy Company Vesuvius plc			Key Experience and Skills With an accomplished career in the automotive industry, including several leadership roles in both corporate and academic settings, Ms. Bailo brings a unique and valuable point of view to our Board. She also has significant experience in the environmental sustainability space and brings a differentiated perspective on ESG matters to our Board. She has been designated by the Board as an audit committee financial expert consistent with SEC regulations. Professional Experience Ms. Bailo is currently the President and Chief Executive Officer of ECOS Consulting, LLC, an energy efficiency solutions provider, a position she has held since 2014. Ms. Bailo also served as the President and Chief Executive Officer of The Center for Automotive Research, an independent, non-profit research organization that engages with leaders in the global automotive industry to support technology advancements and improve the competitiveness of the U.S. automotive industry, from October 2017 to September 2022. Previously, Ms. Bailo served as Assistant Vice President, Mobility Research and Business Development of The Ohio State University, a public research university, from 2015 to October 2017. Prior to 2015, Ms. Bailo held various leadership roles with Nissan Motor Co. Ltd., a multinational automobile manufacturer, and began her career with General Motors Company, a multinational vehicle and financial services corporation. Ms. Bailo has served on the board of directors for SM Energy Company, a company engaged in hydrocarbon exploration, since October 2018, and on the board of directors for Vesuvius plc, an international ceramics company, since February 2023.


Age: 67 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.


Age: 52 Director Since: August 2020 Committee: Audit Other Current Public Company Boards: None			Key Experience and Skills Mr. Valdez's executive experience provides the Board with valuable insights in a key component of the Company's continued transformation. In particular, Mr. Valdez's deep experience with supply chain throughout its growth at Amazon and his leadership of global supply chain and logistics for Target provide highly relevant subject matter expertise. Additionally, the Board believes that Mr. Valdez brings important diversity of thought and experience to the Board that is particularly relevant to retailers serving a broad array of consumers. Professional Experience Mr. Valdez served as Executive Vice President, Chief Supply Chain & Logistics Officer of Target Corporation, a retail corporation, from March 2016 to September 2022, where he led all functions of Target’s global supply chain and logistics network. He currently serves as a consultant for Target Corporation. Mr. Valdez has spent his career building supply chain and fulfillment networks across Asia, Europe and North and South America. Prior to his time at Target Corporation, Mr. Valdez spent 17 years in a variety of leadership roles with Amazon.com Inc., an online retailer, including Vice President, Operations, International Expansion, Vice President, Worldwide Transportation, and Vice President, Operations, Amazon.co.uk Ltd.


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


4 new directors have joined our Board in the past 3 years						3.4 years average tenure of our director nominees


Members:	Primary Responsibilities
John F. Ferraro (Chair) Carla J. Bailo Joan M. Hilson Arthur L. Valdez Jr. Meetings in 2022: 7	•	monitors the integrity of our financial statements, reporting processes, internal controls and legal and regulatory compliance;
	•	appoints, determines the compensation of, evaluates and, when appropriate, replaces our independent registered public accounting firm;
	•	pre-approves all audit and permitted non-audit services to be performed by our independent registered public accounting firm;
	•	monitors the qualifications and independence and oversees performance of our independent registered public accounting firm;
	•	reviews and makes recommendations to the Board regarding our financial policies, including investment guidelines, deployment of capital and short term and long term financing; and
	•	reviews with management the implementation and effectiveness of the Company’s compliance programs, discusses guidelines and policies with respect to risk assessment and risk management and oversees our internal audit function.


Age: 64 Director Since: April 2016 Committee: None Other Current Public Company Boards: Tapestry, Inc.			Key Experience and Skills Mr. Greco has served as our President and Chief Executive Officer and a member of our Board since 2016. Previously, Mr. Greco was the Chief Executive Officer of Frito-Lay North America, where he worked to grow revenue and increase profits, providing him with important experience in the consumer retail industry. Mr. Greco brings to the Board significant experience and leadership in the areas of corporate strategy, marketing, supply chain and logistics. Professional Experience Mr. Greco became our President and Chief Executive Officer in August 2016, having served as Chief Executive Officer since April 2016. From September 2014 until April 2016, Mr. Greco served as Chief Executive Officer, Frito-Lay North America, a unit of PepsiCo, Inc. (“PepsiCo”), a leading global food and beverage company. As Chief Executive Officer, Frito-Lay North America, Mr. Greco was responsible for overseeing PepsiCo’s snack and convenient foods business in the U.S. and Canada. Mr. Greco previously served as Executive Vice President, PepsiCo and President, Frito-Lay North America from September 2011 until September 2014 and as Executive Vice President and Chief Commercial Officer for Pepsi Beverages Company from 2009 to September 2011. Mr. Greco joined PepsiCo in Canada in 1986 and served in a variety of leadership positions, including Region Vice President, Midwest; President, Frito-Lay Canada; Senior Vice President, Sales, Frito-Lay North America; President, Global Sales, PepsiCo; and Executive Vice President, Sales, North America Beverages. Before joining PepsiCo, Mr. Greco worked at The Proctor & Gamble Company, a consumer packaged goods company. He has served as a director of Tapestry, Inc., an American multinational luxury fashion holding company, since December 2020.


Age: 63 Director Since: March 2022 Committees: Audit 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 strong experience with 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. 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).


Age: 55 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 nearly 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, where he has had substantial experience with launching initiatives to drive traffic, brand affinity and loyalty. 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.


Age: 61 Director Since: November 2015 Committee: None Other Current Public Company Boards: Darden Restaurants, Inc.			Key Experience and Skills Mr. Lee’s 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. Professional Experience Mr. Lee currently serves as the Chairman, and from January 2021 through May 2022, served as the 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. Previously, Mr. Lee served as Darden’s President and Chief Executive Officer from February 2015 to January 2021, 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 has served as a member of the Darden Board of Directors since February 2015.


Age: 68 Director Since: May 2018 Committee: Compensation; Nominating and Corporate Governance Other Current Public Company Boards: The Brink's Company			Key Experience and Skills Mr. Pertz has led several global companies as Chief Executive Officer over the past 20 years and throughout his career has guided multinational organizations through both operational turnaround and growth acceleration. Mr. Pertz’s leadership positions have honed his operational expertise in branch and route-based logistics, business-to-business services, channel and brand marketing and growth through acquisition. Professional Experience Mr. Pertz is the Executive Chairman of The Brink’s Company (“Brink’s”), the world’s largest cash management company including cash-in-transit, ATM services, international transportation of valuables, cash management and payment services, since May 2022. Previously, Mr. Pertz served as President and Chief Executive Officer of Brink’s from June 2016 through May 2022. Prior to joining Brink’s, Mr. Pertz was the President and Chief Executive Officer of Recall Holdings Limited (“Recall”), a global provider of digital and physical information management and security services, from 2013 to 2016. Prior to joining Recall, Mr. Pertz served as a partner with Bolder Capital, LLC, a private equity firm specializing in acquisitions and investments in middle market companies and as a partner with One Equity Partners, the private equity arm of JPMorgan Chase & Co. He also served as Chief Executive Officer and on the Board of Directors of IMC Global, the predecessor company to The Mosaic Company, Culligan Water Technologies and Clipper Windpower, and as a Group Executive and Corporate Vice President at Danaher Corporation. Mr. Pertz has served as a member of Brink’s Board of Directors since June 2016 and in the past has served on the board of directors of numerous other public companies, including Recall, Nalco Holdings, The Mosaic Company and Bowater.


Age: 49 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 Circle Internet Financial, LLC, a global internet finance firm since January 2022. From November 2020 until January 2022, she served as Chief Marketing Officer of Novi, a division of Meta (formerly known as Facebook), 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.


Members:	Primary Responsibilities
Jeffrey J. Jones II (Chair) Douglas A. Pertz Sherice R. Torres Nigel Travis Meetings in 2022: 6	•	reviews and approves our executive compensation philosophy;
	•	annually reviews and approves corporate goals and objectives relevant to the compensation of the CEO and evaluates the CEO’s performance in light of these goals;
	•	determines and approves the compensation of our executive officers;
	•	oversees our incentive and equity based compensation plans, reviews and approves our peer companies and data sources for purposes of evaluating our compensation competitiveness and establishing the appropriate competitive positioning of the levels and mix of compensation elements;
	•	oversees development and implementation of the succession plans for executive management (other than the CEO), including identifying successors and reporting annually to the Board;
	•	oversees the Company’s executive compensation recovery (“clawback”) policy; and
	•	recommends to the Board compensation guidelines for determining the form and amount of compensation for outside directors.


Members:	Primary Responsibilities
Nigel Travis (Chair) Carla J. Bailo Jeffrey J. Jones II Douglas A. Pertz Meetings in 2022: 4	•	assists the Board in identifying, evaluating and recommending candidates for election to the Board;
	•	establishes procedures and provides oversight for evaluating the Board and management;
	•	oversees development and implementation of the CEO succession plan, including identifying the CEO's successor and reporting annually to the Board;
	•	develops, recommends and reassesses our corporate governance guidelines;
	•	reviews and recommends retirement and other policies for directors and recommends to the Board whether to accept or reject a director's resignation;
	•	reviews the development and communication of our ESG programs;
	•	evaluates the size, structure and composition of the Board and its committees; and
	•	establishes procedures for stockholders to recommend candidates for nomination as directors and to send communications to the Board.


Name	Fees Earned or Paid in Cash(a)		Stock Awards(b)		Total
Carla J. Bailo	$	100,000	$	165,000	$	265,000
John F. Ferraro	125,000		165,000		290,000
Joan M. Hilson	115,833		190,833		306,667
Jeffrey J. Jones II	120,000		165,000		285,000
Eugene I. Lee, Jr.	300,000		165,000		465,000
Douglas A. Pertz	100,000		165,000		265,000
Nigel Travis	115,000		165,000		280,000
Sherice R. Torres	100,000		165,000		265,000
Arthur L. Valdez Jr.	100,000		165,000		265,000


Name						Outstanding Deferred Stock Units (#)
Carla J. Bailo						2,902
John F. Ferraro						12,182
Joan M. Hilson						1,007
Jeffrey J. Jones II						4,917
Eugene I. Lee, Jr						15,160
Douglas A. Pertz						6,573
Sherice R. Torres						1,329
Nigel Travis						5,982
Arthur L. Valdez Jr.						2,502


	As of March 17, 2023 (unless otherwise noted)
Stock options outstanding under the Prior Plan	348,853
Weighted-average exercise price of outstanding stock options	$	167.49
Weighted-average remaining term of outstanding stock options (years)	9.07
Total full-value awards (restricted stock/units granted) outstanding under the Prior Plan (1)	798,140
Remaining shares available for grant under the Prior Plan (2)	3,844,652
Basic common shares outstanding as of the record date	59,433,703


Element	2022		2021		2020		Three-Year Average
Stock Options granted	114,000		124,000		0		79,333
Restricted/Deferred Stock Units granted	218,000		256,000		355,000		276,333
Performance Stock Units earned (1)	78,000		68,000		8,000		51,333
Market-Based Stock Units earned (1)	22,000		28,000		19,000		23,000
Total Stock Options and Full Value Awards granted or earned	432,000		476,000		382,000		430,000
Weighted Average Basic Number of Shares of Common Stock Outstanding	60,351,000		64,028,000		68,748,000		64,375,667
Burn Rate (Stock Options and Restricted Stock Units granted and Performance/Marked-based Stock Units earned)	0.72	%	0.74	%	0.56	%	0.67	%


Element			2022 Payout (% of target)
Base Pay			n/a (fixed)
STI			38%
LTI			123%


Metric	Weight	Component Payout	Total STI Payout
Comparable Store Sales	1/3	45%	38%
Adjusted Operating Income	1/3	71%
Free Cash Flow	1/3	0%


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


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


NEO	2021 Base Salary	2022 Base Salary	Change (%)	Principal Rationale
Thomas R. Greco	$1,100,000	$1,250,000	13.6%	•Strong multi-year performance, including development and execution of a new strategic plan that resulted in record results in 2021 •Maturity in role, including that Mr. Greco’s salary had not been adjusted since joining the Company in 2016 •Competitiveness and retention; following the adjustment, Mr. Greco’s base salary is within 10% of the median base salary among our peer group
Jeffrey W. Shepherd	$725,000	$762,000	5.1%	•Performance exceeded individual objectives for 2021; market competitiveness
Robert B. Cushing	$625,000	$645,000	3.2%	•Performance exceeded individual objectives for 2021
Herman L. Word, Jr.	n/a	$575,000	n/a	•Promotion to executive officer role mid-2022; market competitiveness
Reuben E. Slone	$650,000	$650,000	0.0%	•Performance met individual objectives for 2021


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.
Adjusted Operating Income			Adjusted 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.


	Comparable Store Sales	Adjusted Operating Income	Free Cash Flows
2021 Actual Results	10.7%	$1,051.4 million	$822.6 million


2022 STI Target	2.0%	$1,156.0 million	$775.0 million
Rationale	Unique drivers contributed to exceptionally strong 2021 performance. Targeted level contemplated meaningful growth following a record year and reflected anticipated macroeconomic volatility, including potential for acceleration of inflation and derivative impact on core customers	Business plan built to deliver higher operating income year over year	Unique drivers contributed to exceptionally strong topline performance in 2021. Targeted level represents a strong level of cash flow, though lower than 2021 due to contemplated higher operating costs associated with anticipated inflation and planned investments in strategic initiatives to drive long-term growth and profitability.