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•	Dividend Principle: Target payout of approximately 55% of earnings per share (calculated on prior year earnings per share), with a goal of increasing the dividend every year

•	Return on Invested Capital Principle: Maintain high return on invested capital, benchmarking all uses of excess liquidity against value created for shareholders through share repurchases

•	Share Repurchase Principle: After meeting the needs of the business, use excess liquidity to repurchase shares, as long as it is value creating

*

ROIC is defined as net operating profit after tax, a non-GAAP financial measure, for the most recent twelve-month period, divided by the average of beginning and ending long-term debt (including current installments) and equity for the most recent twelve-month period. For a reconciliation of net operating profit after tax to net earnings, the most comparable GAAP financial measure, and our calculation of ROIC, see “Non-GAAP Financial Measures” on page 24 of our 2018 Form 10-K.

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•	Returned value to shareholders during Fiscal 2018 through $4.7 billion in dividends and $10.0 billion in share repurchases

•

Increased ROIC from 34.2% to 44.8%. ROIC is defined as net operating profit after tax, a non-GAAP financial measure, for the most recent twelve-month period, divided by the average of beginning and ending long-term debt (including current installments) and equity for the most recent twelve-month period. For a reconciliation of net operating profit after tax to net earnings, the most comparable GAAP financial measure, and our calculation of ROIC, see “Non-GAAP Financial Measures” on page 24 of the 2018 Form 10-K.

•	A significant portion of our NEOs’ target compensation is linked to Company performance:

•	100% of NEO annual cash incentive compensation and 80% of NEO annual equity compensation are tied to Company performance against pre-established, specific, measurable financial performance goals

•	Annual compensation risk assessment

•	Compensation recoupment policy applicable to all executive officers and clawback provisions in all equity awards

•	Anti-hedging policy applicable to all associates, officers, and directors

•	Stock ownership and retention guidelines for executive officers

•	No change in control agreements

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ü	Annual election of directors

ü	Majority voting standard in director elections

ü	Shareholder ability to act by written consent and call special meetings

ü	Shareholder right of proxy access

ü	Independent Lead Director

ü	Over 90% of directors and all Board committee members are independent

ü	Independent directors meet without management

ü	Director mandatory retirement age (age 72)

ü	Annual Board strategy session and review of the Company’s strategic plan

ü	Director overboarding policy

ü	No shareholder rights plan, also referred to as a “poison pill”

ü	Director store walk policy

ü	Board education and orientation program

ü	Management succession policy set forth in Corporate Governance Guidelines

ü	Annual Board and committee self evaluations, including individual director interviews

•	Providing enhanced disclosure of our Company’s diversity by providing statistics about the ethnic and gender diversity of our U.S. workforce on our website at http://ir.homedepot.com/esg-investors.

•	Amending our By-Laws to reduce the percentage of outstanding shares required to call a special meeting of shareholders from 25% to 15%.

•	Updating our executive compensation clawback policy to specifically address conduct that causes significant reputational harm to the Company.

•	Updating our Investor Relations website to provide a page dedicated to disclosure of environmental, social, and governance matters, to better enable our investors to access key information about oversight and management of these areas.

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•	Chairs Board meetings when the Chairman is not present, including presiding at executive sessions of the Board (without management present) at every regularly scheduled Board meeting;

•	Works with management to determine the information and materials provided to Board members;

•	Approves Board meeting agendas, schedules and other information provided to the Board;

•	Consults regularly with the Chairman on other matters that are pertinent to the Board and the Company;

•	Has the authority to call meetings of the independent directors;

•	Is available for communication and consultation with major shareholders upon request;

•	Serves as liaison between the Chairman and the independent directors; and

•	Conducts annual interviews of each independent director as part of the annual evaluation process.

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•	The LDC Committee oversees risks related to human capital management, including matters relating to associate compensation and benefits, associate engagement and training, and diversity and inclusion. The LDC Committee was directly engaged in overseeing the disclosure of additional workforce diversity statistics in late 2018.

•	The Audit Committee oversees our responsible sourcing program and related supply chain risks.

•

The NCG Committee has primary responsibility for oversight of ESG matters generally. This oversight includes reviewing and making recommendations to the Board regarding our environmental, social and governance practices as well as corporate political activity and payments to trade associations. The NCG Committee receives regular reports on ESG engagements with shareholders and related investor feedback, as well as information on recent developments with respect to ESG matters.

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•	Each year, the full Board receives a report on our sustainability strategy and activities, including a discussion of our ESG communications and our annual Responsibility Report. Our annual Responsibility Report describes our progress and initiatives regarding corporate social responsibility and sustainability, and is available on our website at https://corporate.homedepot.com/responsibility.

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•	Providing enhanced diversity disclosure on our website showing statistics reflecting the ethnic and gender diversity of our U.S. workforce.

•	Amending our By-Laws to reduce the percentage of outstanding shares required to call a special meeting of shareholders from 25% to 15%.

•	Updating our executive compensation clawback policy to specifically include conduct that causes significant reputational harm to the Company.

•	Updating our Investor Relations website to provide a page dedicated to disclosure of ESG matters to better enable our investors to access key information about oversight and management of these areas

•	Right to call a special meeting of shareholders. Following our expanded ESG shareholder engagement program in 2018, we amended our By-Laws in early 2019 to reduce the threshold for calling a special meeting to holders of 15% or more of our common stock, from the prior 25%.

•	Right to act by majority written consent in lieu of a meeting.

•

A “proxy access” right. This right permits a shareholder, or group of up to 20 shareholders, owning at least 3% of the Company’s outstanding common stock continuously for at least three years to nominate and include in the Company’s proxy materials director nominees constituting up to the greater of two individuals or 20% of the Board, provided that the shareholders and the nominees satisfy the requirements specified in the Company’s By-Laws.

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•	Mr. Arpey served as a director of S.C. Johnson & Son, Inc., from which we purchased cleaning supply merchandise.

•	Mr. Boyd served as Chairman of Booking Holdings Inc., from which we purchased travel-related services, and as a director of CLEAR, LLC, from which we purchased travel-related services.

•

Mr. Brenneman served as Executive Chairman of CCMP Capital Advisors, LLC, which manages funds that have or had an equity interest in (1) The Hillman Companies, Inc. (“Hillman”), from which we purchased fasteners and other small hardware items; (2) Cabela’s Inc., from which we purchased outdoor goods; and (3) Shoes for Crews, from which we purchased footwear. In Fiscal 2018, the Company was one of Hillman’s largest customers. Mr. Brenneman does not serve as a director or officer of any of these portfolio companies.

•

Mr. Brown served as Managing Director and Chief Operating Officer of General Atlantic LLC, which manages funds that have or had an equity interest in (1) Absolute Barbeque, from which we purchased food items; (2) Adyen B.V., from which we purchased payment services; (3) Airbnb, Inc., from which we purchased lodging services; (4) BuzzFeed, Inc., from which we purchased media services; (5) Flipp Corporation, from which we purchased digital retail services; (6) Mi9 Retail, Inc., from which we purchased software; (7) Mu Sigma Inc., from which we purchased data analytics consulting services; (8) Slack Technologies, from which we purchased collaboration technology services; (9) Snap, Inc., from which we purchased media services; (10) Torchy’s Tacos, from which we purchased food items; (11) Tory Burch, LLC, from which we purchased associate recognition gifts; (12) Typeform S.L., from which we purchased data collection software services; and (13) Uber Technologies, Inc., from which we purchased transportation services. Mr. Brown does not serve as a director or officer of any of these portfolio companies.

•	Mr. Carey served as Chief Executive Officer of PepsiCo North America, from which we purchased food and beverage products.

•	Ms. Foulkes served as Chief Executive Officer and a member of the board of directors of Hudson’s Bay Company, from which we purchased associate gifts and apparel.

•	Ms. Gooden served as a director of Automatic Data Processing, Inc., from which we purchased payroll and tax services; and as a director of General Motors Company, from which we purchased automobiles and related services.

•	Mr. Hewett served as Non-Executive Chairman of DiversiTech Corporation, from which we purchased heating, ventilating, air conditioning, refrigeration and other related merchandise, and as a director of Wells Fargo & Company, from which we obtained banking and financial services.

•	Mr. Kadre served as a director of Republic Services, Inc., from which we purchased waste management services.

•	Ms. Linnartz served as Executive Vice President and Global Chief Commercial Officer of Marriott International, Inc., from which we purchased lodging and event-related services.

•	Mr. Vadon served as a director of Qurate Retail, Inc., from which we purchased digital goods and services, and as a director of New Engen, Inc. from which we purchased digital marketing services.

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•	A recommendation that identifies the candidate and provides contact information for that candidate;

•	The written consent of the candidate to serve as a director of the Company, if elected; and

•	Documentation establishing that the shareholder making the recommendation meets the ownership requirements set forth above.

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•	Demonstrate integrity, accountability, informed judgment, financial literacy, creativity and vision;

•	Be prepared to represent the best interests of all Company shareholders and not just one particular constituency;

•	Demonstrate a record of professional accomplishment in his or her chosen field; and

•	Be prepared and able to participate fully in Board activities, including membership on at least two committees.

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•	Reviewed and discussed the audited consolidated financial statements with the Company’s management and discussed with KPMG LLP, independent registered public accounting firm for the Company, the matters required to be discussed by Public Company Accounting Oversight Board Auditing Standard No. 1301, Communications with Audit Committees;

•	Received from KPMG the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding KPMG’s independence, discussed with KPMG its independence, and concluded that KPMG is independent from the Company and its management;

•	After review and discussions with management and KPMG, recommended to the Board that the audited consolidated financial statements for the Company be included in the Company’s Annual Report on Form 10-K for Fiscal 2018 for filing with the SEC; and

•	Reviewed and discussed the fees billed to the Company by KPMG for audit, audit-related, tax and all other services provided during Fiscal 2018, which are set forth below under “Independent Registered Public Accounting Firm’s Fees,” and determined that the provision of non-audit services is compatible with KPMG’s independence.

•	J. Frank Brown, Chair

•	Ari Bousbib

•	Linda R. Gooden

•	Wayne M. Hewett

•	Manuel Kadre

•	Mark Vadon

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ü	Approximately 88.4% of the Fiscal 2018 target compensation for our CEO and approximately 80.0% of the Fiscal 2018 target compensation for our other NEOs was variable and paid based upon attainment of our pre-determined corporate performance objectives or the performance of our common stock.

ü	For Fiscal 2018, approximately 65% of our CEO’s target compensation and approximately 58% of the target compensation of our other NEOs was equity-based and paid in a mix of performance shares, performance-based restricted stock, and options.

ü	Our NEOs do not receive tax reimbursements (also known as “gross-ups”), supplemental executive retirement plans, defined benefit pension plans, guaranteed salary increases or guaranteed bonuses and have limited perquisites.

ü	We employ a number of mechanisms to mitigate the chance of our compensation programs encouraging excessive risk taking, including an annual review and risk assessment of all elements of compensation by the LDC Committee, a compensation recoupment policy, stock ownership guidelines, and an anti-hedging policy.

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•

We maintain a diversity microsite on The Home Depot careers website, available at careers.homedepot.com > Culture > Diversity, which provides potential candidates with a unique perspective into our diverse and inclusive culture and workforce. In addition, we use an employment marketing strategy that enables us to source and recruit diverse associates through such avenues as national and local career fairs, social media, and multilingual ads and flyers.

•	We partner with several diverse local and national organizations, such as Catalyst, the National Association for the Advancement of Colored People (NAACP), National Urban League, Hispanic Association on Corporate Responsibility and the National Association of Chinese Americans, to promote community involvement and both attract and develop diverse talent.

•	Our internal communication strategy includes diversity and inclusion messaging focused on increasing cultural awareness and reiterating the importance of diversity and inclusion as core values. This includes focused communications in our stores and featured articles on our internal website showcasing associate accomplishments and opportunities for growth and development.

•

We engage our associates through our seven Associate Resource Groups (“ARGs”), which are comprised of associates with an interest in the following dimensions of diversity: African-American, Disabled, Hispanic/Latino, LGBT (Lesbian, Gay, Bisexual and Transgender), Military, Pan-Asian and Women. Our ARGs are committed to supporting the Company’s business objectives and driving associate engagement through professional development, cultural awareness and community outreach.

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•	In addition to diversity and inclusion training for all leaders, we develop our leaders’ capabilities through our Leaders Inclusion Network. This program builds on our Women in Leadership efforts with a gender-balanced approach to promote inclusion and empower leaders to champion diverse talent. In 2018, we also launched unconscious bias training for all officers.

•	Our LDC Committee, which oversees our diversity and inclusion efforts, is committed to promoting diversity throughout the Company. The LDC Committee reviews our diversity and inclusion strategy and initiatives on at least an annual basis.

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•	Include annual quantitative metrics regarding the number of supplier audits conducted by the Company which evaluated whether prison labor is present in the supply chain, as well as the summary of those results.

•	Evaluate any risks to finances, operations, and reputation related to prison labor in the Home Depot supply chain.

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•	Craig A. Menear, Chairman, CEO and President;

•	Carol B. Tomé, CFO and Executive Vice President – Corporate Services;

•	Mark Q. Holifield, Executive Vice President – Supply Chain and Product Development;

•	Edward P. Decker, Executive Vice President – Merchandising; and

•	Matthew A. Carey, Executive Vice President and Chief Information Officer.

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•	Connect Associates to Customer Needs

•	Interconnected Experience: Store to Online, Online to Store

•	Connect Products and Services to Customer Needs

•	Connect Product to Shelf, Site and Customer

•	Innovate Our Business Model and Value Chain

•	Increased net sales by 7.2% to $108.2 billion;

•	Increased operating income by 5.8% to $15.5 billion;

•	Increased net earnings by 28.9% to $11.1 billion and diluted earnings per share by 33.5% to $9.73;

•	Generated $13.0 billion in operating cash flow; and

•	Increased ROIC from 34.2% to 44.8%.

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ü	100% of annual incentive compensation under our Fiscal 2018 MIP was tied to performance against pre-established, specific, measurable financial performance goals.

ü	One half of the annual Fiscal 2018 equity grant was in the form of a three-year performance share award with payout contingent on achieving pre-established average ROIC and operating profit targets over the three-year performance period.

ü	Our performance-based restricted stock awards, which comprised 30% of the annual Fiscal 2018 equity grant, were forfeitable if Fiscal 2018 operating profit had been less than 90% of the MIP target. Dividends on performance-based restricted stock grants are accrued and not paid out to executive officers unless and until the performance goal is met.

ü	Our equity awards have longer vesting periods than many of our peers, with the performance-based restricted stock and stock options vesting over five years and the performance shares cliff vesting after three years (subject to achievement of performance goals), which better aligns executive officers’ interests with the interests of our shareholders in the long-term performance of the Company.

ü	Approximately 88.4% of our CEO’s total target compensation was tied to the achievement of corporate performance objectives and/or share price performance.

ü	We do not provide tax reimbursements, also known as “gross-ups,” to executive officers; we have limited perquisites; and we do not have any supplemental executive retirement plans, defined benefit pension plans, guaranteed salary increases or guaranteed bonuses.

ü	We prohibit all associates, officers and directors from entering into hedging or monetization transactions designed to limit the financial risk of owning Company stock.

•	The LDC Committee approved salary increases for the NEOs based on its assessment of individual performance and other factors, as discussed in more detail below;

•	Our MIP paid out slightly below the target performance level, reflecting sales performance above target, but operating profit and inventory turns below target;

•	The performance condition on the performance-based restricted stock granted in Fiscal 2018 was satisfied, although the shares still remain subject to service-based vesting requirements; and

•	The NEOs earned approximately 150.1% of their 2016-2018 performance share award because we achieved average ROIC and operating profit over the three-year performance period of 34.8% and $14.49 billion, respectively, reflecting performance in excess of the target level for each metric.

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(1)	Based on fiscal 2017 revenue as reported in SEC filings.

(2)

Excludes Bank of America Corporation, Berkshire Hathaway Inc., Citigroup Inc., Fannie Mae, Freddie Mac, JP Morgan Chase & Co., and Wells Fargo & Company. Alphabet Inc. and Amazon.com, Inc. were also excluded due to the atypical compensation structures of their founder/CEOs. Albertsons Companies, Inc., Dell Technologies and State Farm were excluded because they are private companies and did not disclose executive compensation data.

ü	Management and the LDC Committee, with the advice of the independent compensation consultant, regularly review our executive compensation programs, with a focus on both their efficacy in driving quality performance and how the programs will be viewed by the investment community and other external constituencies.

ü	The LDC Committee and, for the CEO, the independent members of the Board, provide effective oversight in setting goals and monitoring attainment of those goals.

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ü	Robust internal controls are in place to ensure compensation plans are operated as designed and approved.

ü	Compensation programs and pay amounts at multiple levels are routinely analyzed against market data by the LDC Committee and management to ensure compensation is appropriate to the market.

ü	Bonus, incentive and equity awards to executive officers are subject to a recoupment policy, as described below on page 43, to discourage manipulation of incentive program elements.

ü	Stock ownership guidelines are in place to further align the interests of shareholders and executive officers, as described below beginning on page 43.

ü	Performance and payment time horizons are appropriate, and they are not overweight in short-term incentives.

ü	The relationship between the incremental achievement levels and corresponding payouts in our incentive plans is appropriate, and all incentives, other than equity incentives that are tied to growth in our share price, have payout caps.

ü	Programs employ a reasonable mix of performance metrics and are not overly concentrated on a single metric. Although the operating profit metric is used in more than one incentive, it is a key corporate goal, and the risk of overweighting it is mitigated by using it across different time horizons.

ü	Criteria for payments are closely aligned with our strategic initiatives, our financial plan and shareholder interests.

ü	Payout curves are reasonable and do not contain steep “cliffs” that might encourage unreasonable short-term business decisions to achieve payment thresholds.

ü	Equity for senior officers is paid in a mix of performance shares, performance-based restricted stock, and stock options; other associates receive equity in the form of service-based restricted stock.

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•	The Deferred Compensation Plan For Officers (solely funded by the individuals who participate in the plan); and

•	The Restoration Plan, which provides a Company matching contribution equal to 3.5% of the amount of salary and annual cash incentive earned by a management-level associate in excess of the IRS annual compensation limit for tax-qualified plans, payable in shares of common stock of the Company upon retirement or other employment termination.

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(1)

Amount of salary actually received in any year may differ from the annual base salary amount due to the timing of payroll periods and the timing of changes in base salary, which typically occur in April or following a mid-year promotion. In addition, Fiscal 2018 contained 53 weeks, compared to 52 weeks in Fiscal 2017 and Fiscal 2016, so Fiscal 2018 salary amounts include one additional week of pay.

(2)

Amounts set forth in the Stock Awards and Option Awards columns represent the aggregate grant date fair value of awards granted in Fiscal 2018, Fiscal 2017 and Fiscal 2016 computed in accordance with FASB ASC Topic 718. The assumptions made in the valuation of the option awards are set forth in Note 8 to the Company’s consolidated financial statements included in the Company’s 2018 Form 10-K. The valuation of performance-based restricted stock and performance share awards and of share equivalents granted under the Restoration Plan is based on the closing stock price on the grant date.

(3)

Amounts reflect the grant date fair value of performance share and performance-based restricted stock awards granted to the NEOs during Fiscal 2018, Fiscal 2017 and Fiscal 2016, plus the value of share equivalents under the Restoration Plan in Fiscal 2018 and Fiscal 2017, as set forth in the table below. Fiscal 2018 Restoration Plan contributions reflect contributions for two plan years, since the January 31, 2018 and January 31, 2019 allocation dates both fell within Fiscal 2018. No contributions to the Restoration Plan are shown for Fiscal 2016 because the January 31, 2017 allocation date fell within Fiscal 2017.

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(4)

Incremental cost of perquisites is based on actual cost to the Company. The incremental cost of personal use of Company aircraft is based on the average direct cost of use per hour, which includes fuel, maintenance, crew travel and lodging expense, landing and parking fees, and engine restoration cost. Any applicable deadhead flights are allocated to the NEOs. No incremental cost for personal use of the Company aircraft was attributed to an NEO where the plane was already traveling to the destination for business reasons. Since our aircraft are used primarily for business travel, we do not include the fixed costs that do not change based on usage, such as crew salaries, depreciation, hangar rent and insurance. In addition to the incremental cost of personal aircraft use reported in the All Other Compensation column and in footnote 5 below, we also impute taxable income to the NEOs for any personal aircraft use in accordance with Internal Revenue Service regulations. We do not provide tax reimbursements, or “gross-ups,” on these amounts to executive officers.

(5)	The following identifies the perquisites and other compensation for Fiscal 2018 that are required to be quantified by SEC rules. In addition to personal aircraft use, the Company made matching contributions to charitable organizations on behalf of the NEOs, as shown below.

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(1)	All awards were granted under the Omnibus Plan other than MIP awards.

(2)

The Fiscal 2018 MIP was based on achievement of pre-established performance goals as described in the Compensation Discussion and Analysis. The amount in the “Threshold” column for the 2018 MIP reflects the minimum possible payout based upon assumed achievement of the threshold performance levels as discussed below under “Terms of Plan-Based Awards Granted to the NEOs for Fiscal 2018—Fiscal 2018 MIP.”

(3)	Annual equity awards under the Omnibus Plan were approved at the February 22, 2018 meeting of the LDC Committee (or by the independent Board members for the CEO) but were effective as of March 21, 2018. See discussion under “Equity Grant Procedures” on page 44 in the Compensation Discussion and Analysis above.

(4)

Amounts represent the grant date fair value of awards granted in Fiscal 2018 computed in accordance with FASB ASC Topic 718. The assumptions made in the valuation of the option awards are set forth in Note 8 to the Company’s consolidated financial statements as filed with the SEC in the 2018 Form 10-K. The valuation of restricted stock and performance share awards is based on the closing stock price on the grant date.

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(1)	Unexercisable stock options outstanding as of the end of Fiscal 2018 for each NEO vest as follows:

(2)	Restricted stock outstanding as of the end of Fiscal 2018 for each NEO vests as follows:

(3)

The NEOs’ performance share awards are earned upon the completion of the three-year performance periods ending February 3, 2019, February 2, 2020, and January 31, 2021, based on achievement of pre-established average ROIC and operating profit goals, as described above in the Compensation Discussion and Analysis under “Long-Term Incentives—Performance Shares” on page 41 and under “Terms of Plan-Based Awards Granted to NEOs for Fiscal 2018—Performance Shares” on page 50. The awards are paid out following certification by the LDC Committee of the achievement of the goals after completion of the applicable performance period. For the Fiscal 2016-2018 award, the shares reported are the actual amount earned based on the performance level met as of February 3, 2019, as certified by the LDC Committee on February 27, 2019, and include dividend equivalents accrued on the award. For the Fiscal 2017-2019 award and the Fiscal 2018-2020 award, the reported number of shares includes dividend equivalents accrued through February 3, 2019 and assumes achievement of the maximum level of performance for the Fiscal 2017-2019 award and the threshold level of performance for the Fiscal 2018-2020 award, in accordance with SEC requirements. The reported value of the performance share awards is based on the closing stock price on February 1, 2019, the last trading day of Fiscal 2018.

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(1)	Includes 6,740 shares withheld to pay taxes on restricted stock grants that became non-forfeitable on February 22, 2018. The remaining shares under these grants continue to be restricted until the time-based vesting dates are reached.

(2)	Includes 3,439 shares withheld to pay taxes on a restricted stock grant that became non-forfeitable on February 22, 2018. The remaining shares under this grant continue to be restricted until the time-based vesting dates are reached.

(3)	Includes 1,893 shares withheld to pay taxes on a restricted stock grant that became non-forfeitable on February 22, 2018. The remaining shares under this grant continue to be restricted until the time-based vesting dates are reached.

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(1)	Executive contributions represent deferral of base salary and incentive awards under the MIP during Fiscal 2018, which amounts are also disclosed in the Fiscal 2018 Salary column and the Fiscal 2017 Non-Equity Incentive Plan Compensation column of the Summary Compensation Table. The Restoration Plan is non-elective, and the participants cannot make contributions to it.

(2)

All Company contributions to the Restoration Plan are included as compensation in the Stock Awards column of the Summary Compensation Table. Fiscal 2018 Restoration Plan contributions reflect contributions for two plan years, since the January 31, 2018 and January 31, 2019 allocation dates both fell within Fiscal 2018.The Company does not make contributions to the Deferred Compensation Plan For Officers.

(3)	Deferred Compensation Plan For Officers earnings represent notional returns on participant-selected investments. Restoration Plan earnings represent the change in the value of the underlying Company stock during Fiscal 2018 plus dividends that are credited at the same rate, and at the same time, that dividends are paid to all shareholders.

(4)

For the Restoration Plan, amounts in the aggregate balance for Mr. Menear, Ms. Tomé, Mr. Holifield, Mr. Decker and Mr. Carey of $514,881, $933,435, $132,795, $47,811 and $280,113, respectively, were previously reported in the Summary Compensation Table. For the Deferred Compensation Plan For Officers, $3,301,723 of the aggregate balance amount for Mr. Menear was previously reported in the Summary Compensation Table.

(5)

The Restoration Plan, an unfunded, nonqualified deferred compensation plan, provides management-level associates with a benefit equal to the matching contributions that they would have received under the Company’s FutureBuilder 401(k) Plan if certain Internal Revenue Code limitations were not in place. On January 31 of each year, the plan makes an allocation to participant accounts in an amount equal to the participant’s eligible earnings (generally, salary plus annual cash incentive award) during the prior calendar year minus the Internal Revenue Code limit for tax-qualified plans ($275,000 for 2018) multiplied by the current Company match level of 3.5%. This amount is then converted to units representing shares of the Company’s common stock. Stock units credited to a participant’s account are also credited with dividend equivalents at the same time, and in the same amount, as dividends are paid to shareholders. Participant account balances vest at the same time their account in the Company’s tax-qualified FutureBuilder 401(k) Plan vests, which provides for 100% cliff vesting after three years of service. A participant’s vested account balance is payable in shares of common stock on retirement or other employment termination. In-service withdrawals are not permitted.

(6)

The Deferred Compensation Plan For Officers is an unfunded, nonqualified deferred compensation plan that allows officers to defer payment of up to 50% of base salary and up to 100% of annual incentive compensation until retirement or other employment termination. The Company makes no contributions to the Deferred Compensation Plan For Officers. Participants may also elect an in-service distribution during a designated calendar year or over a period of not more than ten years, or upon a change in control of the Company. Commencing at retirement after age 60 or one year thereafter, payment is made, at the participant’s election, in a single sum or equal annual installment payments over a period of not more than ten years, provided that distribution in a single sum is automatically made on termination for reasons other than retirement or disability. Participants direct the manner in which their account balances are deemed invested among an array of investment funds, and notional earnings are credited to participant accounts based on fund returns. Accounts are 100% vested at all times.

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(1)	Value reflects outstanding shares of restricted stock granted prior to Fiscal 2013, multiplied by a closing stock price of $184.37 on February 1, 2019.

(2)	Value reflects outstanding shares of restricted stock granted in Fiscal 2013 through Fiscal 2018, multiplied by a closing stock price of $184.37 on February 1, 2019, and the intrinsic value as of February 1, 2019 of outstanding unvested stock options granted in Fiscal 2013 through Fiscal 2018, using the closing stock price of $184.37 on February 1, 2019.

(3)

Value reflects the following: (a) for the Fiscal 2017-2019 performance share award, (i) shares that would have been earned based on 110.4% actual performance at the end of Fiscal 2018 multiplied by a ratio of 735 days in the performance period through February 3, 2019 to 1,099 total days in the performance period, plus (ii) target performance shares multiplied by the ratio of 364 days remaining in the performance period after February 3, 2019 to 1,099 total days in the performance period; and (b) for the Fiscal 2018-2020 performance share award, (i) shares that would have been earned based on 54.8% actual performance at the end of Fiscal 2018 multiplied by a ratio of 371 days in the performance period through February 3, 2019 to 1,099 total days in the performance period, plus (ii) target performance shares multiplied by the ratio of 728 days remaining in the performance period after February 3, 2019 to 1,099 total days in the performance period. In each case, the number of performance shares obtained is multiplied by a closing stock price of $184.37 on February 1, 2019 to determine the value as of the end of Fiscal 2018. Amounts include dividend equivalents accrued through the end of Fiscal 2018 converted into additional performance shares. Amounts do not include the value of the Fiscal 2016-2018 award because it was earned as of February 3, 2019, the last day of the performance period, and would be received regardless of whether there was a change in control.

(4)	Upon termination without cause or for good reason, Ms. Tomé would also be entitled to salary continuation benefits in the amount of $2,280,000 as described in the preceding table.

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(1)	Value reflects outstanding restricted stock at the end of Fiscal 2018, multiplied by a closing stock price of $184.37 on February 1, 2019, and outstanding unvested stock options based on the intrinsic value as of February 3, 2019, using the closing stock price of $184.37 on February 1, 2019.

(2)

Value reflects the following: (a) for the Fiscal 2017-2019 performance share award, the shares that would have been earned based on 110.4% actual performance at the end of Fiscal 2018; and (b) for the Fiscal 2018-2020 performance share award, the shares that would have been earned based on 54.8% actual performance at the end of Fiscal 2018. The number of performance shares obtained is multiplied by a closing stock price of $184.37 on February 1, 2019 to determine the value as of the end of Fiscal 2018. Amounts include dividend equivalents accrued through the end of Fiscal 2018 converted into additional performance shares. Amounts do not include the value of the Fiscal 2016-2018 award because it was earned as of February 3, 2019, the last day of the performance period, and would be received regardless of the individual’s death or disability.

(3)

Value reflects the following: (a) for the Fiscal 2017-2019 performance share award, the prorated portion of shares that would have been earned based on 110.4% actual performance at the end of Fiscal 2018 multiplied by a ratio of 735 days in the performance period through February 3, 2019 to 1,099 total days in the performance period; and (b) for the Fiscal 2018-2020 performance share award, the prorated portion of shares that would have been earned based on 54.8% actual performance at the end of Fiscal 2018 multiplied by a ratio of 371 days in the performance period through February 3, 2019 to 1,099 total days in the performance period. The number of performance shares obtained is multiplied by a closing stock price of $184.37 on February 1, 2019 to determine the value as of the end of Fiscal 2018. Amounts include dividend equivalents accrued through the end of Fiscal 2018 converted into additional performance shares. Amounts do not include the value of the Fiscal 2016-2018 award because it was earned as of February 3, 2019, the last day of the performance period, and would be received regardless of the individual’s death or disability.

(4)	Value reflects a $400,000 death benefit, which is only paid out upon death, not disability.

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(1)

Value reflects restricted stock grants that have the retirement eligibility provision described above and that are outstanding at the end of Fiscal 2018, multiplied by a closing stock price of $184.37 on February 1, 2019, and unvested stock options that have the retirement eligibility provision, based on the intrinsic value as of February 3, 2019, using the closing stock price of $184.37 on February 1, 2019. The restricted stock grants would remain non-transferable, and the stock options would remain non-exercisable, until the time-based vesting dates.

(2)

Value reflects the following: (a) for the Fiscal 2017-2019 performance share award, the shares that would have been earned based on 110.4% actual performance at the end of Fiscal 2018; and (b) for the Fiscal 2018-2020 performance share award, the shares that would have been earned based on 54.8% actual performance at the end of Fiscal 2018. The number of performance shares obtained is multiplied by a closing stock price of $184.37 on February 1, 2019 to determine the value as of the end of Fiscal 2018. Amounts include dividend equivalents accrued through the end of Fiscal 2018 converted into additional performance shares. Amounts do not include the value of the Fiscal 2016-2018 award because it was earned as of February 3, 2019, the last day of the performance period, and would be received regardless of the individual’s retirement.

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•	The annual total compensation of our median-paid associate, other than our CEO, was $23,389. Our median-paid associate for Fiscal 2018 was an hourly employee in the U.S.

•	The annual total compensation of our CEO, as reported in the Summary Compensation Table on page 46, was $11,366,662.

•	Based on this information, for Fiscal 2018 the ratio of the annual total compensation of our CEO to the annual total compensation of our median-paid associate was 486 to 1.

•	We determined our median-paid associate as of December 31, 2018, which is within the last three months of Fiscal 2018, as required by the pay ratio rule.

•	We excluded, under the de minimis exception to the pay ratio rule, all of our associates in each of Mexico (approximately 15,970), China (approximately 212), India (approximately 12), Vietnam (approximately 6), Italy (1), Poland (1), and Turkey (1), which in total are approximately 16,203 associates out of a total of approximately 413,400 associates, or 3.9%.

•

To identify our median-paid associate, we used payroll data consisting of salary, wages, overtime wages, bonuses, commissions, employer matching contributions to our FutureBuilder 401(k) plan, vesting of equity awards and any similar payroll items for all of our associates included in the calculation. We annualized pay for newly hired associates and associates on leave. We pay our Canadian associates in Canadian Dollars. For the purposes of this calculation, their pay was converted into U.S. Dollars using the rate in effect on December 31, 2018.

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(1)	These plans are the 1997 Plan, the Omnibus Plan, the ESPP and the Directors Plan. The Directors Plan allows the Company’s outside directors to elect to defer their cash retainers and meeting fees for deferred stock units payable in shares of the Company’s common stock on termination of Board service. Meeting fees were eliminated for meetings held after August 16, 2007.

(2)

Includes an aggregate of 6,379,684 stock options under the Omnibus Plan, 5,371 deferred shares or deferred stock units under the 1997 Plan, 668,768 deferred shares or deferred stock units under the Omnibus Plan, 501,948 performance shares under the Omnibus Plan and 90,067 deferred stock units credited to participant accounts under the Directors Plan. Does not include 8,832 outstanding restricted shares granted under the 1997 Plan and 3,507,513 outstanding restricted shares granted under the Omnibus Plan.

(3)	Weighted-average exercise price of outstanding options; excludes deferred shares, deferred stock units, deferred stock rights, performance shares and shares of restricted stock under the 1997 and Omnibus Plans, deferred stock units under the Directors Plan and rights to purchase shares under the ESPP.

(4)	Represents 126,745,271 shares under the Omnibus Plan, 19,221,236 shares under the ESPP (see Note 8 to the Company’s consolidated financial statements included in the 2018 Form 10-K and Exhibit 10.11 to the 2018 Form 10-K) and 1,986,279 shares under the Directors Plan.

(5)	These plans are the Company’s Non-U.S. ESPP (see Note 8 to the Company’s consolidated financial statements in the 2018 Form 10-K and Exhibit 10.11 to the 2018 Form 10-K) and the Restoration Plan (see Note 9 to the Company’s consolidated financial statements in the Company’s 2018 Form 10-K and Exhibits 10.7 and 10.8 to the 2018 Form 10-K).

(6)	Represents deferred stock units under the Restoration Plan referred to in footnote 5.

(7)	Outstanding equity consists solely of rights to purchase shares under the Non-U.S. ESPP and deferred stock units granted under the Restoration Plan; therefore, there is no weighted-average exercise price.

(8)	Represents shares available under the Non-U.S. ESPP.

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•	$230,000 in the form of deferred shares granted under the Omnibus Plan; and

•	$50,000 in the form of cash or deferred stock units under the Directors Plan, at the election of the director.

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(1)	Ms. Katen stepped down from the Board upon the expiration of her term at the 2018 annual meeting on May 17, 2018.

(2)

Fees earned or paid in cash vary because, in addition to the $50,000 annual retainer, they include retainers for Chair and Lead Director positions. Messrs. Bousbib, Boyd, Brenneman, Brown, Carey, Codina, Hewett, Kadre, and Vadon, Ms. Foulkes and Ms. Linnartz deferred 100% of their annual cash Board retainers under the Directors Plan, which retainers were converted into stock units that are payable in shares of Company common stock following termination of Board service. Messrs. Bousbib, Brown, Carey and Codina also deferred 100% of their committee Chair retainers, and Mr. Brenneman deferred 100% of his Lead Director retainer. Dividend equivalents are credited on stock units in the Directors Plan at the same rate, and at the same time, that dividends are paid to shareholders.

(3)

Amounts set forth in the Stock Awards column represent the aggregate grant date fair value of awards granted in Fiscal 2018 computed in accordance with FASB ASC Topic 718. The grant date fair value of the deferred share award granted during Fiscal 2018 is set forth in the following table, computed in accordance with FASB ASC Topic 718 based on the closing stock price on the grant date. There were no deferred share forfeitures by the directors during Fiscal 2018.

(4)	Amounts reported reflect matching charitable contributions.

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(5)	As of the end of Fiscal 2018, our non-employee directors who served during Fiscal 2018 held the following outstanding equity:

(a)	Equity in in the table above for Ms. Katen reflects deferred shares that will be distributed to Ms. Katen on the first anniversary of her departure from the Board. Because Ms. Katen has not been a director since May 17, 2018, she is no longer required to report ownership of Company equity that she owns.

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•	Albert P. Carey, Chair

•	Armando Codina

•	Linda R. Gooden

•	Wayne M. Hewett

•	Stephanie C. Linnartz

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(1)

Represents the number of shares beneficially owned, which includes equivalent shares credited under our FutureBuilder 401(k) Plan and restricted stock granted under the Omnibus Plan and the 1997 Plan. In addition, these amounts include shares subject to options exercisable within 60 days of March 8, 2019 as follows: Craig A. Menear – 693,637; Matthew A. Carey – 177,059; Edward P. Decker – 221,450; Mark Q. Holifield – 64,678; Carol B. Tomé – 399,544; and directors and executive officers as a group (22 people) – 1,766,214. Amounts in this column do not include shares to be received upon settlement of deferred stock units or deferred shares more than 60 days after March 8, 2019, which shares are reflected in the Deferred Shares/Stock Units column of the table. The deferred stock units and deferred shares have no voting rights. Our Securities Laws Policy requires directors and executive officers to pre-clear any pledge of shares of our common stock as security for any indebtedness (including any margin loans), and none of our directors or executive officers has any such pledged shares. Consistent with our anti-hedging policy, described more fully on page 44 of the Compensation Discussion and Analysis, none of our directors or executive officers has entered into any hedging transactions with regard to his or her ownership of our common stock.

(2)	This amount includes 65 shares held by Brothers Brook LLC, of which Mr. Boyd is the Managing Director.

(3)	This amount includes 16,877 shares held by a family member.

(4)	This amount includes 13,731 shares held by a family trust.

(5)	This amount includes the shares reflected in footnotes 2-4 above, 5,295 shares held in a charitable trust, and 60 shares held by a spouse.

(6)	These amounts reflect deferred shares and deferred stock units granted under the Omnibus Plan, deferred stock units granted under the Directors Plan, and stock units granted under the Restoration Plan. None of these amounts are included in the Percent of Class calculation.

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(1)	Beneficial ownership information is based on information contained in a Schedule 13G/A filed with the SEC on February 12, 2019. The Vanguard Group, Inc. reported that it has sole dispositive power as to 81,726,121 of these shares, shared dispositive power as to 1,655,484 of these shares, sole voting power as to 1,402,795 of these shares and shared voting power as to 278,959 of these shares.

(2)	Beneficial ownership information is based on information contained in a Schedule 13G/A filed with the SEC on February 4, 2019. BlackRock, Inc. reported that it has sole dispositive power as to all of these shares and sole voting power as to 59,108,642 of these shares.

(3)	Beneficial ownership information is based on information contained in a Schedule 13G/A filed with the SEC on February 14, 2019 by Capital World Investors (“Capital World”), a division of Capital Research and Management Company. Capital World reported that it has sole dispositive power as to all of these shares and sole voting power as to 57,150,013 of these shares.

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•	Election to the Board of 12 nominees to serve until the 2020 Annual Meeting of Shareholders;

•	Ratification of the appointment of KPMG as the independent registered public accounting firm of the Company for Fiscal 2019;

•	The advisory Say-on-Pay vote;

•	The three shareholder proposals described in this Proxy Statement; and

•	Any other business properly brought before the Meeting.

•	Valid picture identification; and

•	An admission ticket if your shares are registered in your name or a legal proxy from the bank or broker that is the record owner of your shares.

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•	Over the Internet, at www.proxyvote.com, by following the instructions on the Notice of Internet Availability of Proxy Materials or proxy card;

•	By telephone, by dialing 1-800-690-6903; or

•	By completing, dating, signing and returning a proxy card by mail.

•	Signing another proxy card with a later date and delivering it to us before the Meeting;

•	Voting again over the Internet or by telephone prior to 11:59 p.m., Eastern Time, on May 22, 2019;

•	Voting at the Meeting before the polls close if you are a registered shareholder or have obtained a legal proxy from your bank or broker; or

•	Notifying the Company’s Corporate Secretary in writing before the Meeting that you revoke your proxy.

•	“For” the election of all of the 12 named director nominees;

•	“For” the ratification of the appointment of KPMG;

•	“For” the advisory Say-on-Pay vote;

•	“Against” each shareholder proposal; and

•	On any other matters properly brought before the Meeting, in accordance with the best judgment of the named proxies.

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•

Election of Directors: Each director nominee receiving a majority of votes cast will be elected as a director. If any incumbent director nominee does not receive a majority of votes cast, under Delaware law he or she would continue to serve on the Board until a successor is elected. However, our By-Laws provide that any incumbent director who fails to receive a majority of votes cast must promptly tender his or her resignation to the Board for consideration. The NCG Committee will then recommend to the Board whether to accept or reject the resignation or to take any other action. The Board will act on that recommendation and publicly disclose its decision within 90 days following certification of election results. The director who tenders his or her resignation will not participate in the NCG Committee’s recommendation or in the Board’s decision.

•	Say-on-Pay: While this proposal is advisory in nature and not binding on the Company, our LDC Committee and Board will consider the voting results in formulating future executive compensation policy.

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•	If you are a registered shareholder, by writing to Broadridge Investor Communication Solutions, Inc., Householding Department, 51 Mercedes Way, Edgewood, NY 11717 or by calling 1-866-540-7095; or

•	If you are a beneficial owner, by contacting your broker, dealer, bank, voting trustee or other nominee.

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