| OUR NAMED EXECUTIVE OFFICERS36 ![[MISSING IMAGE: tm207868d1-sm_starpn.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm207868d1-sm_starpn.jpg) investors.macysinc.com
COMPENSATION DISCUSSION & ANALYSIS
Overview of 2019 Business North Star Strategy. The North Star Strategy was implemented in 2017 to focus on key growth areas, embrace customer centricity and optimize value in our real estate portfolio. In 2019, our NEOs continued execution of the North Star Strategy, including the launch of a comprehensive productivity plan and the execution of five strategic initiatives underlying components of the strategy. Highlights of these strategic initiatives include: •
Growth150: Expanded the Growth50 to the Growth150 with the addition of 100 locations in 2019. These additional 100 locations received the store improvement initiatives executed at the Growth50 locations (the “Growth treatment”), such as facility upgrades, merchandising strategies and localized marketing. The Growth150 stores comprise approximately 50% of Macy’s 2019 store sales. Comparable store sales of the original Growth50 outperformed the Macy’s store fleet by approximately 3 percentage points in 2019. •
Backstage: Expanded Backstage, Macy’s off-price offering, to another 50 locations within existing Macy’s locations in 2019. Backstage locations open for more than 12 months continued to achieve mid-single digit comparable sales growth and have improved gross margin and inventory turn. •
Vendor Direct: Grew the vendor direct program (merchandise purchased from our websites and digital applications and shipped directly to customers from the vendor) into additional brands and assortments. In 2019, the vendor direct program reached a milestone by offering more than 1 million SKUs, many through 1,000 new vendors. This drove a nearly 60% increase in vendor direct sales, which now comprise more than 13% of Macy’s brand digital sales. •
Mobile: Improved omnichannel experience for customers through the enhancement of application features such as My Wallet (online order pick-up identification, payment and Star Rewards loyalty features), My Store (access to in-store offers, store maps and product locator features) and My Stylist (connects customers with in-store fashion consultants). We saw a greater than 55% increase in sales on the application with nearly triple-digit growth in downloads and significant increases in monthly active users. The mobile application now contributes approximately 20% of Macy’s brand digital sales. •
Destination Businesses: Invested in “destination businesses,” six areas of the business that account for nearly 40% of total Macy’s sales: dresses, fine jewelry, big ticket, men’s tailored, women’s shoes and beauty. We have disproportionately invested in these categories to drive growth through great product, top-performing colleagues, improved environment and enhanced marketing. All six are high-AUR (average unit retail) and high-margin businesses and continue to outperform the balance of the businesses on market share, return on investment and profitability. Macy’s captures approximately 9% of the market in these businesses. Bloomingdale’s experienced strong sales performance in its stores and growth in both digital and Bloomingdale’s The Outlet stores. In 2019 we opened a new Bloomingdale’s in Norwalk, Connecticut and two new Bloomingdale’s The Outlet locations. Bluemercury, our luxury beauty products and spa retailer, continued its growth during the year. The brand opened nine stores and launched its first loyalty program, Bluerewards. Operating Performance Key financial results for fiscal 2019: | | 1.6% | | | | decrease in net sales for 2019 to $24.56 billion
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| | ![[MISSING IMAGE: ph_jeffgennette-gys.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/ph_jeffgennette-gys.jpg) | | 0.7% | | | Jeff Gennette | | | Chief Executive Officer | | | | decrease in comparable sales on an owned plus licensed basis
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![[MISSING IMAGE: ph_paulaprice.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/ph_paulaprice.jpg) | | 30.4% | | | Paula A. Price | | | Chief Financial Officer | | | | | | | | Karen M. Hoguet | | | Former Chief Financial Officer | | | | | | | | Harry A. Lawton III | | | President | | | | | | | | Elisa D. Garcia | | | Chief Legal Officer | | | | | | | | Danielle L. Kirgan | | | Chief Human Resources Officer | | | | decrease in adjusted diluted earnings per share to $2.91
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| | $525M | | | | in debt we voluntarily repurchased
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•
Net sales for 2019 were $24.56 billion, a decrease of 0.7% on an owned-plus-licensed comparable basis 52 ![[MISSING IMAGE: ico_macystar-pms.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/ico_macystar-pms.jpg) investors.macysinc.com
COMPENSATION OF THE NAMED EXECUTIVES FOR 2018
•
Asset sale gains in 2019 were $162 million, $227 million lower than last year •
Earnings before interest and taxes (EBIT) for 2019 totaled $943 million, which was $756 million Macy’s, Inc. 2020 Notice of Meeting and Proxy Statement 37
COMPENSATION DISCUSSION & ANALYSIS
lower than last year due to lower gross margin from higher delivery expense and promotional markdowns, lower asset sales gains and higher one-time costs •
Cash flow from operating activities was $1.608 billion for 2019, down $127 million from last year •
We used excess cash in 2019 to voluntarily repurchase $525 million of debt in a tender offer transaction Net sales decreased 1.6% compared to 2018 and comparable sales were down 0.7% on an owned plus licensed basis. Net income attributable to Macy’s shareholders was $564 million, a decrease of $544 million from $1,108 million in 2018. Earnings before interest, taxes, depreciation and amortization excluding restructuring, impairment, store closing and other costs and settlement charges (“Adjusted EBITDA”) was $2,336 million, compared to $2,877 million in 2018. The above performance is reflected in lower payouts to NEOs under the annual incentive plan of approximately 41.6% of target incentive opportunities for 2019, compared to total payouts of 166.8% of target for 2018. Change in sales on an owned plus licensed basis, EBIT, Adjusted EBITDA and Adjusted Diluted Earnings per Share are non-GAAP financial measures. Reconciliations to the most directly comparable GAAP measures are provided in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Important Information Regarding Non-GAAP Financial Measures” on page 30 of Macy’s Annual Report on Form 10-K. Announcement of Polaris Strategy At our Investor Day in February 2020, we announced the Polaris strategy, a three-year (2020 – 2022) plan designed to stabilize profitability and position the Company for sustainable, profitable growth. The strategy continues our focus on cost reduction and reinvestment and introduces new initiatives that address aspects of the business under our control as well as external factors such as the changing retail environment. The five major components of the Polaris strategy are: •
Strengthen Customer Relationships: Build customer lifetime value, expand Star Rewards loyalty program with the launch of Loyalty 3.0 in early February and accelerate personalization and monetization. •
Curate Quality Fashion: Establish ourselves as the best destination for the best brands, drive disciplined merchandise category roles and balance our sales and margins. •
Accelerate Digital Growth: Enhance the digital experience across the Macy’s website and app, grow omni-channel customer base and improve profitability. •
Optimize the Store Portfolio: Continue the Growth treatment for stores in the best malls, expand off-mall profitably, and test and prove a retail ecosystem model with a mix of Macy’s store formats within a geographic market. •
Reset Cost Base: Right-size the organization and expense base, improve working capital and balance top-line and bottom-line growth. COVID-19 As previously announced, in response to the widespread coronavirus (COVID-19) outbreak, we have temporarily closed all of our stores, including all Macy’s, Bloomingdale’s, Bluemercury, Macy’s Backstage, Bloomingdales the Outlet and Market by Macy’s stores, and have taken other actions to mitigate the financial impact of the pandemic on our operations, including but not limited to suspending our quarterly dividend, deferring capital spending and drawing down on our credit facility. On March 30, 2020, we announced that, beginning April 1, 2020, we will be putting the majority of our workforce on furlough and all employees at the director-level and above who are not furloughed, including our NEOs, will have a pay reduction and our Chief Executive Officer and the Board of Directors will receive no cash compensation. EXECUTIVE COMPENSATION HIGHLIGHTS Our Compensation Program Objectives Our compensation program objectives are to provide competitive and reasonable compensation opportunities, focus on results and strategic objectives, foster a pay-for-performance culture, and attract and retain key executives. Balancing these key objectives helps ensure accountability to our shareholders. For a discussion of our short and long-term incentive program see pages 43 and 45. For a discussion of our broader Colleague Compensation Philosophy see page 52. 38 investors.macysinc.com
COMPENSATION DISCUSSION & ANALYSIS
Shareholder Support for our Compensation Program | | We value the opinions shareholders express by their votes and dialog regarding our executive compensation program. | | | | | | | At our 2019 annual meeting, shareholders representing 90.5% of votes cast approved our “say-on-pay” proposal in support of our executive compensation program. This was the 8th consecutive year of shareholder support in excess of 90%. The following table summarizes the compensationCMD Committee considered these results to represent general support of the individuals that served as our principalnamed executive officer and principal financial officer during fiscal 2018 and our three other most highly-compensated executive officers who were serving as executive officers at the end of fiscal 2018, collectively referred to as the “Named Executives” or the “NEOs.”compensation program. | |
2019 Compensation Program In support of our program objectives, the CMD Committee made the following decisions about the 2019 compensation program: •
No changes to base salaries, target pay opportunities in the incentive plans or the equity mix •
Implemented a 200% maximum incentive opportunity in the annual incentive plan and the long-term performance plan to align with typical market practice and provide a reward for significant overperformance •
Modified the design for the relative TSR goal in the long-term performance plan to include shareholder-friendly provisions and more closely align the intended value of the award with the accounting cost, including implementation of: ◦
Negative TSR Cap: If Macy’s absolute TSR over performance period is negative, any payout earned is capped at target ◦
Maximum Value Cap: Regardless of Macy’s performance relative to peers or stock price growth, the maximum payout amount for the relative TSR metric is 400% of the target grant value Our executive officers can directly influence overall performance. Thus, the largest portion of our NEOs’ compensation is variable, at-risk pay aligned with the Company’s strategic plan. Based on a combination of annual performance-based incentive awards and long-term performance-based equity incentive awards, 88% of our CEO’s fiscal 2019 target total direct compensation, and 77% (on average) of our other NEOs’ fiscal 2019 target total direct compensation, was delivered through variable incentives. Payout under these variable incentives is tied to a variety of metrics including changes in stock price and predetermined performance objectives (financial and strategic). Equity compensation represents the largest element of pay for our NEOs. Macy’s, Inc. 2020 Notice of Meeting and Proxy Statement 39
COMPENSATION DISCUSSION & ANALYSIS
2019 TARGETED PAY MIX | | 2018 SUMMARY COMPENSATION TABLE![[MISSING IMAGE: tm207868d1-pc_ceopn.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm207868d1-pc_ceopn.jpg) | | Name and
Principal Position | | | | Year | | | | Salary
($) | | | | Bonus
($) | | | | Stock
Awards(1)
($) | | | | Option
Awards(2)
($) | | | | Non-Equity
Incentive Plan
Compensation
($) | | | | Changes in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings(3)
($) | | | | All Other
Compensation(4)
($) | | | | Total
($) | | | | Jeff Gennette
Chief Executive Officer | | | | | | 2018 | | | | | | | 1,291,667 | | | | | | | 0 | | | | | | | 4,694,492 | | | | | | | 2,899,994 | | | | | | | 3,687,200 | | | | | | | 58,489 | | | | | | | 101,849 | | | | | | | 12,733,691 | | | | | | | 2017 | | | | | | | 1,208,333 | | | | | | | 0 | | | | | | | 3,927,685 | | | | | | | 2,599,996 | | | | | | | 2,997,100 | | | | | | | 328,121 | | | | | | | 27,020 | | | | | | | 11,088,255 | | | | | | | 2016 | | | | | | | 1,000,000 | | | | | | | 0 | | | | | | | 1,631,000 | | | | | | | 1,079,996 | | | | | | | 170,200 | | | | | | | 264,058 | | | | | | | 17,000 | | | | | | | 4,162,254 | | | | | Paula A. Price
Chief Financial Officer | | | | | | 2018 | | | | | | | 433,125 | | | | | | | 300,000 | | | | | | | 1,137,825 | | | | | | | 837,381 | | | | | | | 749,400 | | | | | | | 0 | | | | | | | 188,531 | | | | | | | 3,646,262 | | | | | Karen M. Hoguet
Former Chief
Financial Officer | | | | | | 2018 | | | | | | | 900,000 | | | | | | | 500,000 | | | | | | | 1,499,983 | | | | | | | 0 | | | | | | | 1,126,200 | | | | | | | 859,810 | | | | | | | 64,824 | | | | | | | 4,950,817 | | | | | | | 2017 | | | | | | | 900,000 | | | | | | | 0 | | | | | | | 1,862,093 | | | | | | | 565,999 | | | | | | | 952,100 | | | | | | | 350,086 | | | | | | | 31,675 | | | | | | | 4,661,953 | | | | | | | 2016 | | | | | | | 900,000 | | | | | | | 0 | | | | | | | 854,779 | | | | | | | 565,993 | | | | | | | 92,300 | | | | | | | 309,039 | | | | | | | 31,500 | | | | | | | 2,753,611 | | | | | Harry A. Lawton III
President | | | | | | 2018 | | | | | | | 1,000,000 | | | | | | | | | | | | | | 2,590,038 | | | | | | | 1,599,998 | | | | | | | 2,085,500 | | | | | | | 0 | | | | | | | 8,750 | | | | | | | 7,284,286 | | | | | | | 2017 | | | | | | | 397,727 | | | | | | | 5,500,000 | | | | | | | 6,613,645 | | | | | | | 3,999,997 | | | | | | | 734,600 | | | | | | | 0 | | | | | | | 1,415,526 | | | | | | | 18,363,495 | | | | | Elisa D. Garcia
Chief Legal Officer | | | | | | 2018 | | | | | | | 745,833 | | | | | | | 0 | | | | | | | 777,018 | | | | | | | 479,994 | | | | | | | 938,500 | | | | | | | 0 | | | | | | | 52,876 | | | | | | | 2,994,221 | | | | | | | 2017 | | | | | | | 725,000 | | | | | | | 0 | | | | | | | 725,109 | | | | | | | 479,997 | | | | | | | 767,000 | | | | | | | 0 | | | | | | | 6,344 | | | | | | | 2,703,450 | | | | | | | 2016 | | | | | | �� | 291,099 | | | | | | | 1,612,800 | | | | | | | 749,997 | | | | | | | 749,994 | | | | | | | 31,000 | | | | | | | 0 | | | | | | | 430.899 | | | | | | | 3,865,789 | | | | | Danielle L. Kirgan Chief Human
Resources Officer | | | | | | 2018 | | | | | | | 750,000 | | | | | | | 0 | | | | | | | 777,018 | | | | | | | 479,994 | | | | | | | 938,500 | | | | | | | 0 | | | | | | | 199,471 | | | | | | | 3,144,983 | | | | | | | 2017 | | | | | | | 205,729 | | | | | | | 500,000 | | | | | | | 0 | | | | | | | 499,997 | | | | | | | 198,400 | | | | | | | 0 | | | | | | | 228,104 | | | | | | | 1,632,230 | | |
| | | (1)![[MISSING IMAGE: tm207868d1-pc_neopn.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm207868d1-pc_neopn.jpg) The amounts in this column for fiscal 2018 include
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Example of pay for performance: •
Based on levels of achievement against pre-determined 2019 goals for Sales, EBIT and Strategic Initiatives, we approved annual incentive award payments for 2019 performance of 41.6% of the target incentive opportunities to NEOs. •
Based on levels of achievement of pre-determined goals for average EBITDA margin, average ROIC, and relative TSR over the three-year (fiscal 2017 – 2019) performance period, we made payouts of performance-based restricted stock units of 76.96% of target incentive opportunities for NEOs. This was the first payout under our long-term incentive performance share plan since fiscal 2015. No payouts were made for 2018, 2017 or 2016 because our average EBITDA margin, ROIC and relative TSR over three-year performance periods (fiscal 2016 – 2018, fiscal 2015 – 2017 and fiscal 2014 – 2016, respectively) were below threshold performance levels. See pages 43 – 47 for information on payouts under our annual incentive and long-term performance plans. See “Non-GAAP Metrics” on page 53 for information on non-GAAP financial measures used in our incentive plans. CEO Compensation and Pay for Performance Alignment Mr. Gennette’s total target direct compensation was unchanged in 2019. The CMD Committee and the Board approved a 2019 compensation package for Mr. Gennette of $10,760,000, comprised of •
base salary of $1,300,000 •
target annual incentive opportunity of 170% of base salary; and •
target long-term equity incentive opportunity of $7,250,000. In determining Mr. Gennette’s compensation, the CMD Committee considered several factors including market position and tenure in role, individual performance, Company results and pay mix. Mr. Gennette’s 2019 target total direct compensation opportunity was positioned near the median of the peer group, with cash compensation near the 25th percentile and long-term incentives near median. Mr. Gennette was appointed CEO in 2017. The following shows Mr. Gennette’s realized versus target pay for the performance periods ending with fiscal 2019 and 2018 and demonstrates the variable nature of our executive compensation program and the degree to which earned pay varies with performance. 40 investors.macysinc.com
COMPENSATION DISCUSSION & ANALYSIS
CEO Realized Pay for 2019 and 2018 | | 2019 | | | | Target | | | | Earned/Paid | | | | Difference | | | | Base Salary | | | | | $ | 1,300,000 | | | | | | $ | 1,300,000 | | | | | | $ | 0 | | | | | 2019 Annual Incentive | | | | | $ | 2,210,000 | | | | | | $ | 919,800 | | | | | | $ | (1,290,200) | | | | | 2017 – 2019 Performance RSUs(1) | | | | | $ | 3,900,000 | | | | | | $ | 1,409,617 | | | | | | $ | (2,490,383) | | | | | Stock Options(2) | | | | | $ | 2,600,000 | | | | | | $ | 0 | | | | | | $ | (2,600,000) | | | | | Total | | | | | $ | 10,010,000 | | | | | | $ | 3,629,417 | | | | | | $ | (6,380,583) | | | | | | | | | 36% of Target Earned | |
(1)
Does not include $271,387 in dividend equivalents on earned Performance RSUs accrued during the three-year performance period. (2)
With the performance restricted stock units awarded in 2017, Mr. Gennette also received a stock option grant with a grant date fair value of $2,600,000. Mr. Gennette has realized no value from this award and it is currently underwater (exercise price of $28.17). | | 2018 | | | | Target | | | | Earned/Paid | | | | Difference | | | | Base Salary | | | | | $ | 1,300,000 | | | | | | $ | 1,300,000 | | | | | | $ | 0 | | | | | 2018 Annual Incentive | | | | | $ | 2,210,000 | | | | | | $ | 3,687,200 | | | | | | $ | 1,477,200 | | | | | 2016 – 2018 Performance RSUs | | | | | $ | 1,620,000 | | | | | | $ | 0 | | | | | | $ | (1,620,000) | | | | | Stock Options(1) | | | | | $ | 1,080,000 | | | | | | $ | 0 | | | | | | $ | (1,080,000) | | | | | Total | | | | | $ | 6,210,000 | | | | | | $ | 4,987,200 | | | | | | $ | (1,222,800) | | | | | | | | | 80% of Target Earned | |
(1)
With the performance restricted stock units awarded in 2016, Mr. Gennette also received a stock option grant with a grant date fair value of $1,080,000. Mr. Gennette has realized no value from this award and it is currently underwater (exercise price of $43.42). Macy’s, Inc. 2020 Notice of Meeting and Proxy Statement 41
COMPENSATION DISCUSSION & ANALYSIS
Executive Compensation Governance | | | We align executive compensation with the interests of our shareholders | | | | | | | | •
| | | Focus on performance-based compensation | | | | | | | | •
| | | Align compensation with performance | | | | | | | | •
| | | Conduct an annual risk assessment of executive compensation program | | | | | | | | •
| | | Maintain robust stock ownership guidelines for executive officers | | | | |
| | | Our executive compensation program is designed to encourage balanced decision making and to avoid
excessive risk taking | | | | | | | | •
| | | Use multiple performance objectives for both annual and long-term incentive plans | | | | | | | | •
| | | Measure performance against both annual and multi-year periods | | | | | | | | •
| | | Set performance goals at levels high enough to encourage strong performance, but within reasonably attainable parameters to discourage excessive risk taking | | | | | | | | •
| | | Cap performance-based compensation payouts | | | | |
| | | We adhere to executive compensation best practices | | | | | | | | •
| | | Provide modest perquisites with reasonable business rationale | | | | | | | | •
| | | Conduct annual say-on-pay vote | | | | | | | | •
| | | Constitute the CMD Committee with only independent directors | | | | | | | | •
| | | Include a relative-to-peer TSR metric for performance-based restricted stock units awarded | | | | | | | | •
| | | Provide for recoupment of cash and equity incentive compensation in fiscal 2018 determinedcertain circumstances | | | | | | | | •
| | | Prohibit hedging and pledging transactions by usingdirectors and executive officers | | | | | | | | •
| | | Utilize a weighted average grant date pricecompensation consultant independent of management | | | | | | | | •
| | | Provide a reasonable post-employment change-in-control plan | | | | | | | | •
| | | Equity awards are subject to “double-trigger” vesting in the event of a change-in-control | | | | |
![[MISSING IMAGE: tm207868d1-icon_watdontbw.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm207868d1-icon_watdontbw.jpg) | | | | | | | | | | | | | | •
| | | Do not provide excise tax gross-ups upon a change in control | | | N/A | | | | | •
| | | Do not provide individual employment contracts | | | N/A | | | | | •
| | | Do not reprice or buyout for the commoncash underwater stock of approximately $32.16 per share, assuming the “target” number of unitsoptions without shareholder approval | | | | | | | | •
| | | Do not provide individual change-in-control agreements | | | | |
42 investors.macysinc.com
COMPENSATION DISCUSSION & ANALYSIS
THE KEY ELEMENTS OF EXECUTIVE COMPENSATION The compensation program for our NEOs consists primarily of the four components outlined below: | | Element | | | | Purpose | | | | Base Salary | | | | Market-driven base-line compensation is earned. Assuming the “maximum” number of units is earned, the grant date fair value amounts for the performance-based restricted stock units would be $7,041,738 for Mr. Gennette, $3,885,057 for Mr. Lawtontargeted at a level necessary to attract and $1,165,527 for Ms. Garciaretain high-quality talent. Amount recognizes differences in positions and Ms. Kirgan. The amount for Ms. Price includes the grant date fair value forresponsibilities, experience and individual long-term performance. | | | | Annual Incentive Awards | | | | Cash awards that vary based on performance align compensation with business strategy and time-based restricted stock units awarded upon hire in fiscal 2018. Assuming the “maximum” number of units is earned, the grant date fair value amounts for the performance-based restricted stock units for Ms. Price would be $1,223,813 using a weighted average grant date price for the common stock of approximately $40.69. The fair value of Ms. Price’s time-based restricted stock units was determined by using a discounted grant date closingoperating performance over short-term (annual) financial and strategic targets. | | | | Long-Term Incentive Awards | | | | Equity awards that vary based on stock price appreciation and financial performance support our longer-term financial goals and stock price growth, as well as retention and succession planning. | | | | Benefits | | | | NEOs are eligible for the common stock of $33.54 per share. See footnote (4)group life, health, savings and other benefits available generally to the 2018 Grants of Plan-Based Awards table.
(2)
The amounts in this column reflect the grant date value of stock options determined using the Black-Scholes option pricing model in accordance with ASC Topic 718. See footnote (4)all salaried employees and limited executive benefits to the 2018 Grants of Plan-Based Awards table for the assumptions used in making this determination.fulfill business purposes.
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Base Salary We provide base salaries to our NEOs to deliver a fixed component of compensation that reflects the scope and complexity of each NEO’s role. Base salaries are intended to aid in the Company’s ability to attract and retain critical executive officers and are reviewed against comparable positions within the identified compensation peer group. The CMD Committee, with input from FW Cook, made no changes to base salaries for the NEOs in 2019. Base salaries in effect at the end of 2019 are shown below.
(3)
We did not pay above-market interest under our executive deferred compensation plan in 2018, therefore, the amounts reflected in this column relate to pension benefits only. The amounts reflected for fiscal 2018 in this column represent the change in the actuarial present value of accumulated pension benefits under our cash balance pension plan (CAPP) and supplementary executive retirement plan (SERP) in fiscal 2018. The assumptions used in determining the present value of benefits are the same assumptions used for financial reporting purposes. The present value of benefits was determined using a PBO effective discount rate of 4.03% for the CAPP and 4.10% for the SERP. For the CAPP, base mortality rates are determined using the RP-2014 Blue Collar mortality table adjusted to back out estimated mortality improvements from 2006 to the measurement date using MP-2014, and then projected forward to the measurement date using MP-2018. For the SERP, base mortality rates are determined using the RP-2014 White Collar mortality table adjusted to back out estimated mortality improvements from 2006 to the measurement date using MP-2014, and then projected forward to the measurement date using MP-2018. Mortality is projected generationally from the measurement date using scale MP-2018 for both the CAPP and SERP. Scale MP-2018 defines how future mortality improvements are incorporated into the projected mortality table and is based on a blend of Social Security experience and the long-term assumption for mortality improvement rates by the Society of Actuaries’ Retirement Plans Experience Committee. The assumed retirement age used for these calculations was the normal retirement age of 65, as defined by the plans, and each Named Executive was assumed to retire at the normal retirement age.
Changes to 2019 Base Salary | | Name | | | | FY 2019 Salary
(000s) | | | | FY 2018 Salary
(000s) | | | | % Increase | | | | Gennette | | | | | $ | 1,300 | | | | | | $ | 1,300 | | | | | | | 0% | | | | | Price | | | | | $ | 770 | | | | | | $ | 770 | | | | | | | 0% | | | | | Garcia | | | | | $ | 750 | | | | | | $ | 750 | | | | | | | 0% | | | | | Harper | | | | | $ | 725 | | | | | | $ | 725 | | | | | | | 0% | | | | | Kirgan | | | | | $ | 750 | | | | | | $ | 750 | | | | | | | 0% | | | | | Lawton(1) | | | | | $ | 1,000 | | | | | | $ | 1,000 | | | | | | | 0% | | |
(1)
Mr. Lawton served as President until December 2019. Annual Incentive The NEOs participate in the Senior Executive Incentive Compensation Plan (Incentive Plan). The Incentive Plan aligns executive compensation with our business strategy and operating performance objectives and is designed to motivate executives to meet or exceed annual corporate financial and strategic goals. Annual Incentive Opportunity as Percent of Base Salary. Targeted annual incentive award opportunities are expressed as a percent of year-end base salary. Actual awards may range from 0% to 340% of base salary, depending upon actual performance relative to the pre-determined goals, as shown in the chart below (and on such alternative or additional factors as the CMD Committee deems appropriate). Macy’s, Inc. 2020 Notice of Meeting and Proxy Statement 43
COMPENSATION DISCUSSION & ANALYSIS
| | | | | | Annual Incentive as a % of Base Salary | | | | Position | | | | Threshold
(25% of Target) | | | | Target | | | | Outstanding
(200% of Target) | | | | Chief Executive Officer | | | | | | 42.5% | | | | | | | 170% | | | | | | | 340% | | | | | Former President | | | | | | 31.25% | | | | | | | 125% | | | | | | | 250% | | | | | Chief Financial Officer | | | | | | 25% | | | | | | | 100% | | | | | | | 200% | | | | | Other NEOs | | | | | | 18.75% | | | | | | | 75% | | | | | | | 150% | | |
Performance Measures and Weightings. Performance measures are weighted 40% Sales, 35% Adjusted EBIT and 25% Strategic Initiatives. Payout for each metric ranges from 25% of target at threshold to 200% at outstanding. Reasons for Selecting These Metrics •
Sales — measures growth and provides opportunities for the achievement of various other financial measures, including EBIT. •
EBIT — focuses management on pursuing and executing strategies to improve the profitability of the business. •
Strategic Initiatives — aligns management with our business strategies to drive future growth and shareholder value and support the North Star Strategy. The CMD Committee selected the levels of Sales, EBIT and the strategic initiatives listed below for purposes of the target annual incentive opportunity for NEOs in 2019. For 2019 we eliminated the Cash Flow metric (10% weight in 2018) in the Incentive Plan and increased the Sales metric from 25% to 40% to reflect alignment with growth-oriented business strategies. | | | | | | | | | | | | | Performance Range
($ in millions) | | | | Performance Metric | | | | Weight | | | | Threshold | | | | Target | | | | Outstanding | | | | Sales | | | | | | 40% | | | | | 97% of Target | | | | $26,286.2 | | | | 103% of Target | | | | EBIT | | | | | | 35% | | | | | 90% of Target | | | | $1,608.2 | | | | 110% of Target | | | | Strategic Initiatives | | | | | | | | | | | | | | | | | | | | | | | Macy’s, Inc.Destination Businesses
Achieve 2019 Noticesales plan(1)
| | | | | | 5% | | | | | | | | | * | | | | | | | | Growth Stores
Achieve 2019 sales plan(2) | | | | | | 5% | | | | | | | | | * | | | | | | | | Backstage
Achieve 2019 sales plan(3) | | | | | | 5% | | | | | 97% of Target | | | | Target | | | | 103% of Target | | | | Mobile
Achieve 2019 sales plan(4) | | | | | | 5% | | | | | | | | | * | | | | | | | | Vendor Direct Fulfillment
Achieve 2019 sales plan(5) | | | | | | 5% | | | | | | | | | * | | | | | |
*
Performance range is 97% to 103% for all Strategic Initiatives (1)
Aggregate sales of six businesses: Big Ticket, Fine Jewelry, Beauty, Women’s Shoes, Men’s Tailored Clothing and Dresses (2)
Sales of Growth 100 + Growth 50 stores (3)
Aggregate sales for existing locations (4)
Mobile app demand sales (5)
All vendor direct fulfillment sales
Straight-line interpolation will apply to performance levels between the ones shown 44 investors.macysinc.com
COMPENSATION DISCUSSION & ANALYSIS
Fiscal 2019 Annual Incentive Awards. Context for 2019 Goal Setting. Continuing positive, profitable growth was a significant goal in the design of our annual incentive plan for 2019. Performance metrics and targets reflect this goal and were rigorously set. •
2019 Sales target was set 1.6% above 2018 actual results despite a forecasted macro-economic (retail) growth slowdown. •
2019 Sales target also included improvement in our sales relative to the overall market for our categories of business. For the past three years, Macy’s year-over-year sales change has trailed the market by approximately 4 percentage points on average. Our 2019 sales target incorporated an improvement in that spread of approximately 160 basis points. •
2019 EBIT target was planned down $269 million to reflect lower expected asset sales gains year-over-year, investments in technology and logistics and delivery cost pressures (from digital growth) on gross margin. Excluding the impact of gains on asset sales, 2019 EBIT target was planned $169 million below 2018 actual results. •
Strategic Initiatives sales targets for 2019 were each set above 2018 actual performance. The performance goals for strategic initiatives are measured on a quantitative basis. The goals were determined by the CMD Committee to be rigorous, given the retail environment, but achievable in order to drive performance. This balance of rigor and achievability is demonstrated in the payout for the strategic initiatives at 117.5% of target, indicating overall achievement of the goals at above the target level. We omit target and actual performance levels of strategic initiatives because the information is confidential and the disclosure of which would result in competitive harm. We believe our approach to goal setting provides participants with a reasonable opportunity to achieve the goals, thus supporting engagement and retention objectives essential to motivate employees. | | | | | | | | | | | | | ($ in millions) | | | | 2019 Performance
($ in millions) | | | | Performance Metric | | | | Weight | | | | 2018 Actual | | | | 2019 target | | | | Results | | | | Achievement
Level | | | | Weighted
% of
Payout | | | | Sales ($) | | | | | | 40% | | | | | $25,868.6 | | | | | $ | 26,286.2 | | | | | $25,556.6 | | | | Between Threshold
and Target | | | | | | 12.24% | | | | | EBIT ($) | | | | | | 35% | | | | | $1,887.2 | | | | | $ | 1,608.2 | | | | | $1,355.5 | | | | Below Threshold | | | | | | 0.0% | | | | | Strategic Initiatives | | | | | | 25% | | | | | 132% of Target | | | | | | | | | | | 117.5% of Target | | | | Between Target and Outstanding | | | | | | 29.38% | | | | | •
Destination Businesses | | | | | | | | | | | | | | | | | | | | | | | | | | 0.7% Below Target | | | | | | | | | | | •
Growth Stores | | | | | | | | | | | | | | | | | | | | | | | | | | 2.7% Below Target | | | | | | | | | | | •
Backstage | | | | | | | | | | | | | | | | | | | | | | | | | | 1.1% Below Target | | | | | | | | | | | •
Mobile | | | | | | | | | | | | | | | | | | | | | | | | | | 4.3% Above Target | | | | | | | | | | | •
Vendor Direct Fulfillment | | | | | | | | | | | | | | | | | | | | | | | | | | 15.8% Above Target | | | | | | | | | | | Total Earned | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 41.62% | | | | | Total Target Opportunity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 100% | | |
Long-Term Equity Compensation Annual equity compensation awards to the NEOs in fiscal 2019 consisted of performance-based restricted stock units and stock options. The long-term incentive program is designed to align the interests of the Company and our executives with those of our shareholders. How Awards are Determined. The CMD Committee, in consultation with FW Cook established a target dollar amount for total long-term compensation for each NEO for the performance period beginning with fiscal 2019. Target amounts were allocated: •
60% in performance-based restricted stock units that generally vest after a three-year performance Macy’s, Inc. 2020 Notice of Meeting and Proxy Statement 45
COMPENSATION DISCUSSION & ANALYSIS
period based upon the achievement of pre-determined financial performance and relative TSR goals •
40% in stock options that generally vest ratably over a four-year period and have value only if our stock price increases over the grant price of the options Performance-Based Restricted Stock Units. The CMD Committee determines the number of performance-based restricted stock units required to deliver the targeted award value (60% of fiscal 2019 long-term incentive award opportunity) by dividing the targeted award dollar value by the closing price of Macy’s common stock on the grant date. Performance Metrics. Awards granted in fiscal 2019 may pay out from 0% to 200% of the target award opportunity based on our performance against average Comparable Sales Growth, average ROIC, and relative TSR objectives over the three-year performance period (fiscal 2019 – 2021) as follows: | | Performance Level | | | | Comparable Sales Growth
(37.5%) weight) | | | | ROIC
(37.5% weight) | | | | Relative TSR
(25.0% weight) | | | | 3-Year
Average | | | | Vesting % | | | | 3-Year
Average | | | | Vesting % | | | | 3-Year TSR
vs. Peer | | | | Vesting % | | | | Outstanding | | | | ≥5.0% | | | | | | 200% | | | | | | | ≥21.6% | | | | | | | 200% | | | | | | | ≥90.0% | | | | | | | 200% | | | | | Target | | | | 2.3% | | | | | | 100% | | | | | | | 19.1% | | | | | | | 100% | | | | | | | 50.0% | | | | | | | 100% | | | | | Threshold | | | | -1.5% | | | | | | 25% | | | | | | | 15.9% | | | | | | | 25% | | | | | | | 30.0% | | | | | | | 25% | | | | | Below Threshold | | | | <-1.5% | | | | | | 0% | | | | | | | <15.9% | | | | | | | 0% | | | | | | | <30.0% | | | | | | | 0% | | | | |
*
Straight-line interpolation will apply to performance levels between the ones shown Reasons for Selecting These Metrics. These performance metrics are closely monitored by investors and are key drivers of long-term sustainable shareholder value. The average Comparable Sales Growth and average ROIC metrics complement the Sales and EBIT measures used in the annual incentive plan by focusing executives on efficient use of assets and profitable growth. •
Comparable Sales Growth is intended to support our multi-channel sales growth objectives. •
ROIC is a measure of investment productivity and the efficiency in which assets are employed in the business. It is an important measure of our overall long-term performance and is why we include it in our long-term incentive plan versus our annual incentive plan. •
Relative TSR measures the creation of shareholder value over a multi-year period relative to peers. This metric is viewed as an executive compensation “best practice” by many proxy advisory firms and corporate governance experts. For 2019 we measured TSR against the 14-company peer group we use for comparative data to assess the competitiveness of our compensation and program design. Stock Options. The CMD Committee determines the number of stock options awarded (40% of fiscal 2019 long-term incentive award opportunity) by dividing the targeted award dollar value by the Black-Scholes value of a stock option on the grant date. Stock options are granted with an exercise price equal to the closing price of Macy’s common stock on the date of the grant, and generally vest 25% on each of the four anniversaries following the grant date. Awards Granted in 2019. The number of stock options and target number of performance-based restricted stock units granted to the NEOs are shown in the 2019 Grants of Plan-Based Awards table on page 59. Awards Earned in 2019. The three-year (fiscal 2017 – 2019) performance period for performance-based restricted stock units granted in fiscal 2017 concluded as of the end of fiscal 2019. The CMD Committee determined the number of performance-based restricted stock units that would be paid based on our average EBITDA margin, average ROIC and relative TSR performance objectives over the three-year performance period, as follows: | | | | | | | | | | | | | 3-Year Average | | | | | | | | | | | | | | | | | | Metrics | | | | Weight | | | | Threshold | | | | Target | | | | Outstanding | | | | Actual | | | | Vesting % | | | | EBITDA Margin | | | | | | 50% | | | | | | | 11.2% | | | | | | | 11.9% | | | | | | | 12.2% | | | | | | | 11.5% | | | | | | | 71.4% | | | | | ROIC | | | | | | 30% | | | | | | | 17.2% | | | | | | | 18.8% | | | | | | | 19.2% | | | | | | | 19.1% | | | | | | | 137.5% | | | | | Relative TSR | | | | | | 20% | | | | | | | 35.0% | | | | | | | 50.0% | | | | | | | 75.0% | | | | | | | 32.9% | | | | | | | 0.0% | | |
*
Straight-line interpolation will apply to performance levels between the ones shown 46 investors.macysinc.com
COMPENSATION DISCUSSION & ANALYSIS
For the three-year (fiscal 2017 – 2019) performance period, our average EBITDA margin was 96.6% of target, average ROIC was 101.6% of target and relative TSR was below the threshold performance level. As a result, the NEOs earned 76.96% of the target number of performance-based restricted stock units granted in March 2017. Retirement and Deferred Compensation Plans. NEOs participate in our broad-based 401(k) retirement investment plan. NEOs also participate in a non-qualified deferred compensation plan with features like the 401(k) plan. Prior to 2014, executives were provided with a supplementary executive retirement plan and a cash balance pension plan. These two defined benefit plans were discontinued in December 2013 and NEOs no longer accrue benefits under the plans. See page 65 for more information on these plans. Perquisites. We provide business club memberships and, for our CEO, a car and driver for security reasons and limited personal use of company aircraft. See page 58 for more information. Severance and Change-in-Control. We maintain executive severance plans and a change-in-control plan covering our NEOs. Our deferred compensation programs provide for accelerated benefits in the event of a change-in-control. All equity awards granted since 2010 are subject to “double-trigger” vesting in the event of a change-in-control. See pages 68 – 75 for more information. HOW WE DETERMINE EXECUTIVE COMPENSATION We use a collaborative process in making executive compensation decisions. | | Responsible Party | | | | | | Primary Roles and Proxy Statement Responsibilities | |
| | CMD Committee | | | | | | 53•
COMPENSATION OF THE NAMED EXECUTIVES FOR 2018
(4)
Included in “All Other Compensation”Administers executive compensation program for fiscal 2018 are Company benefit plan contributions and the incremental cost to Macy’s of the following perquisites made available to the Named Executives:
| | Name | | | | Aircraft
Usage(a)
($) | | | | Tax
Reimbursement(b)
($) | | | | Car
Programs(c)
($) | | | | DCP
Matching
Contribution(d)
($) | | | | 401(k)
Matching
Contribution
($) | | | | Other(e)
($) | | | | Total
($) | | | | Gennette | | | | | | 71,204 | | | | | | | 726 | | | | | | | 5,419 | | | | | | | 14,875 | | | | | | | 9,625 | | | | | | | 0 | | | | | | | 101,849 | | | | | Price | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 188,531 | | | | | | | 188,531 | | | | | Hoguet | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 55,199 | | | | | | | 9,625 | | | | | | | 0 | | | | | | | 64,824 | | | | | Lawton | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 8,750 | | | | | | | 0 | | | | | | | 8,750 | | | | | Garcia | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 43,251 | | | | | | | 9,625 | | | | | | | 0 | | | | | | | 52,876 | | | | | Kirgan | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 4,375 | | | | | | | 195,096 | | | | | | | 199,471 | | |
(a)
Mr. Gennette is the only Named Executive who is permitted to make personal use of company aircraft. The amount shown for aircraft usage is calculated based on the cost of fuel and other variable costs associated with the particular personal flights. Spouse and/or other guests may accompany Mr. Gennette on some flights. There are no additional incremental costs associated with their travel on those flights. Mr. Gennette is required to reimburse the Company to the extent that the calculated incremental costs associated with his personal usage of Company aircraft exceed $75,000 in the aggregate. For purposes of calculating the incremental costs associated with personal usage of Company aircraft:senior executives
•
Flights were deemed business or personal based on the purpose of the flight.Oversees annual incentive and long-term incentive plans, as well as benefit plans and policies
•
If a trip was deemed personal, ferry flights, if any, were included as personal.Ensures appropriate succession plans in place for CEO and other key executive positions
•
If a trip included bothEmphasizes pay-for-performance linkage of executive compensation program and ensures programs are competitive
•
When making executive compensation program decisions, considers: –
our compensation philosophy –
our financial, operating and total shareholder return performance –
general compensation policies and practices for our employees –
practices and executive compensation levels within peer companies | |
Macy’s, Inc. 2020 Notice of Meeting and Proxy Statement 47
COMPENSATION DISCUSSION & ANALYSIS
| | Compensation Consultant
(FW Cook from 2008 through October 2019, Semler Brossy since November 2019) | | | | | | •
Attends CMD Committee meetings at request of Committee, meets with Committee in executive session without management, and communicates with Committee chair regarding emerging issues and other matters •
Reviews and provides advice relating to: –
design of annual and long-term incentive plans, including degree to which incentive plans support business strategies and personal destinations, we included as personal the excess, if any,balance risk-taking with potential reward –
setting performance metrics –
peer group pay and performance comparisons –
competitiveness of the aggregate expenseskey executives’ compensation –
changes to NEOs’ compensation levels –
design of other compensation and benefits programs –
preparation of public filings related to executive compensation, including CD&A and accompanying tables and footnotes | |
| | Management (CEO and Human Resources Executives) | | | | | | •
CMD Committee seeks input from CEO and human resources, legal and finance executives to develop design, operation, objectives, values and goals of various compensation components •
Human resources department uses various survey firms and data sources to provide calculations, comparator group and general market data used by management in compensation-related analyses •
At beginning of each fiscal year, CEO meets with direct reports, including other NEOs, to set individual performance objectives for the trip over the costsyear which includes achieving key financial and business goals. Following fiscal year end, CEO reviews performance of flyingeach direct report against Company and individual performance objectives and individual’s contribution to and from the originating airport to the business destination or destinations.performance (b)•
The amount shown includes reimbursement payments to Mr. Gennette for calendar year 2018 for imputed income associated with travel by Mr. GennetteCEO takes active part in CMD Committee discussions of compensation involving direct reports, provides input on individual performance and spouse/guestsrecommendations on some of his flights on company aircraft that were deemed personal for tax reporting purposes, but which the Company determined had a business purpose.compensation opportunities
(c)•
The amount shown reflects the costs relating to personal use by Mr. GennetteHuman resources executives, with assistance of a dedicated carFW Cook/Semler Brossy, provide CMD Committee with data, analyses and driver that the Company makes available to himannual information in considering CEO compensation recommendations for safety reasons pursuant to the recommendation of a third-party security study. The incremental cost calculation for personal use of the car and driver includes driver overtime, fuel, tolls, driver public transportation and rental car use, maintenance and other incidental costs incurred in connection with such personal use.direct reports.
(d)•
The amounts shown reflect Company matching contributions on salary and/Mr. Gennette did not participate in portions of CMD Committee or annual incentive awards deferred under the Company’s Deferred Compensation Plan (DCP). Such deferred amounts are matched in the same manner and at comparable rates as under the Company’s 401(k) Plan.Board meetings during which his compensation was discussed.
(e)
| |
Independent Compensation Consultant FW Cook served as the independent compensation consultant to the CMD Committee from 2008 through October 2019. In November 2019, following an extensive search process, the CMD Committee selected and engaged Semler Brossy Consulting Group, LLC (“Semler Brossy”) as the CMD Committee’s new independent compensation consultant. Semler Brossy reviewed the design and operation of the Company’s incentive compensation plans and made recommendations regarding our executive compensation program for 2020. FW Cook and Semler Brossy provide no services to the Company other than those provided directly to, or on behalf of, the CMD Committee, and to, or on behalf of, the NCG Committee with respect to director compensation. The CMD Committee has assessed the independence of FW Cook and Semler Brossy pursuant to the NYSE listing standards and SEC rules and is not aware of any conflict of interest raised by FW Cook’s or Semler Brossy’s work that would prevent FW Cook or Semler Brossy from providing independent advice to the CMD Committee. Includes payments to Ms. Price of $188,531 and Ms. Kirgan of $195,096 in relocation expenses.
48 investors.macysinc.com
COMPENSATION DISCUSSION & ANALYSIS
HOW WE SET EXECUTIVE COMPENSATION Review Process The CMD Committee annually reviews NEO base salaries, annual incentive award payments and equity awards at its March meeting. At that time, financial and other performance results for the prior fiscal year are available and individual and Company performance against applicable targets are measured. Peer group data is one of several factors considered in determining compensation levels and packages for NEOs and actual positioning of targeted compensation may be above or below the median based on the executive’s experience, unique skill set, scope of responsibilities, supply and demand of critical talent in the market, tenure and other factors. The NEOs’ fiscal 2019 target total direct compensation (base salary, target annual incentive and grant date value of long-term incentive awards) fell within a median range of the peer group practice. Actual total direct compensation realized will vary from targeted compensation based upon the level of achievement of short- and long-term operating performance objectives, stock price performance and the Company’s total shareholder return relative to peer companies. The CMD Committee also reviews the compensation of other key senior executives to ensure the compensation of the NEOs is internally consistent and equitable. | | The target total direct
compensation for
Mr. Gennette was set
at approximately the
43rd percentile of the
peer group. | | | | | |
Peer Group. The CMD Committee references comparative compensation data of a peer group of publicly-traded retail companies to inform itself of the competitiveness of compensation and program design and believes the data provides important context for compensation decisions. The CMD Committee recognizes that due to factors unique to Macy’s, including business model and strategies, scope and complexity of jobs, and specific talent needs, as well as executive changes within the peer group, there is an imperfect comparability of NEO positions among companies. Thus, the CMD Committee does not rely on strict benchmarking or target any specific position for compensation components based on peer group data. We also use the peer group for the TSR measure in our long-term incentive plan. In October 2018 we made changes to our peer group for 2019 compensation to align the group with our business strategies and the size of our organization. The revised group consists of 14 companies with Macy’s revenues positioned between the median and 75th percentile and market capitalization near the 40th percentile (see chart below). The revised peer group includes 10 of the previous 12 peers and adds Best Buy, Dollar Tree, Hudson’s Bay and Lowe’s Companies. Sears Holdings was deleted from the previous peer group due to filing for bankruptcy in 2018 and Walmart was deleted due to its larger size. Macy’s, Inc. 2020 Notice of Meeting and Proxy Statement 49
COMPENSATION DISCUSSION & ANALYSIS
In August 2019*, we ranked between the median and 75th percentile of the peer group in revenue and between the 25th percentile and median in market capitalization. | | ($) in millions | | | | Revenue(1) | | | | Net
Income(1) | | | | Market
Capitalization(2) | | | | Total
Assets(3) | | | | Number of
Employees(4) | | | | 75th Percentile | | | | | $ | 35,441 | | | | | | $ | 1,573 | | | | | | $ | 33,490 | | | | | | $ | 18,153 | | | | | | | 170,325 | | | | | Median | | | | | | 16,123 | | | | | | | 712 | | | | | | | 7,458 | | | | | | | 13,271 | | | | | | | 110,000 | | | | | 25th Percentile | | | | | | 12,237 | | | | | | | 140 | | | | | | | 2,924 | | | | | | | 9,121 | | | | | | | 75,275 | | | | | Macy’s | | | | | $ | 25,717 | | | | | | $ | 1,105 | | | | | | $ | 6,628 | | | | | | $ | 21,296 | | | | | | | 130,000 | | | | | Macy’s Percentile Rank | | | | | | 70% | | | | | | | 62% | | | | | | | 38% | | | | | | | 82% | | | | | | | 63% | | | | |
*
Date of peer group review by FW Cook Data Source: Standard & Poor’s Capital IQ (1)
Most recently reported four quarters (2)
As of June 30, 2019 (3)
Most recently reported quarter (4)
Most recently reported fiscal year Factors Used to Select Peer Group* *
Factors and peer group are reviewed annually. We also perform a “peer of peers” analysis to identify companies that Macy’s peers identify as peers, review the companies selected in proxy advisory firms’ peer groups, and companies that use Macy’s as a compensation peer. We review our peer group annually. Incentive Plan Design Review As part of its annual compensation planning process, the CMD Committee asks its compensation consultant to review the design of our annual and long-term incentive programs. FW Cook noted that over the past three years we have modified the annual and long-term incentive plan design in response to retail industry volatility and for stronger alignment with the Company’s evolving business strategy, and that our incentive plan design continues to fall within the range of peer group practice with appropriate differentiation to support Company-specific objectives and a strong performance orientation. FW Cook also noted the challenges presented by an uncertain economic environment, retail industry transformation, tempering growth expectations, talent retention and performance motivation factors on compensation planning for 2020. EXECUTIVE COMPENSATION GOVERNANCE Clawback Policy The CMD Committee has the discretion to require a participant in the annual Incentive Plan or in the long-term incentive compensation program to repay income derived from the annual incentive, performance-based restricted stock units or stock options in the event of a restatement of our financial results. This repayment would occur within three years after any such payment to correct a material error is determined by the CMD Committee to be the result of executive fraud or intentional misconduct. Stock Ownership Guidelines Our Board has established stock ownership guidelines for certain corporate officers of Macy’s, including the NEOs. 50 investors.macysinc.com
COMPENSATION DISCUSSION & ANALYSIS
| | Position | | | | Ownership Guideline | | | | Chief Executive Officer and Chairman of the Board | | | | • • • • • • | | | | 6x base salary | | | | Chief Financial Officer, Chief Operations Officer and Chief Transformation Officer | | | | • • • | | | | 3x
base salary | | | | Chief Legal Officer | | | | • • | | | | 2x base salary | |
Shares counted toward the ownership requirement:(1) •
Macy’s stock beneficially owned (directly or indirectly) by the executive or owned jointly with any immediate family member of the executive •
Any stock credits or other stock units credited to an executive’s account through deferrals under our deferred compensation program or otherwise •
Time-based restricted stock or restricted stock units granted to executives, whether or not vested •
The executive’s proportionate share of the Macy’s stock fund under our 401(k) Plan Macy’s common stock subject to unvested or unexercised stock options, and performance-based restricted stock or stock units during the performance period, do not count toward the ownership requirement. Directors, executive officers and participants in our long-term incentive plan are prohibited from engaging in transactions designed to hedge against the economic risks associated with an investment in our common stock or pledging our common stock in lending transactions. Set forth below is Macy’s Hedging/Pledging policy. Macy’s, Inc. considers it inappropriate for any Director, executive officer or participant in the Company’s long-term incentive plan to engage in any transaction in which they may profit from short-term speculative swings in the value of Macy’s securities or pledge Macy’s stock in lending transactions. Therefore, as a matter of Company policy, these individuals may not engage in (1) the purchase or sale of “put” and “call” options (publicly available rights to sell or buy Macy’s securities within a certain period of time at a specified price or the like); (2) “short sales” (selling borrowed securities which the seller hopes can be purchased at a lower price in the future); (3) “short selling against the box” (selling owned, but not delivered securities); (4) the purchase of financial instruments (including prepaid variable forward contracts, equity swaps, collars, and exchange funds), or transactions, that hedge or offset, or are designed to hedge or offset, any decrease in the market value of Macy’s securities granted to the individual as compensation or held, directly or indirectly, by the individual; (5) and pledging Macy’s securities as collateral for a loan, including, without limitation, in a margin account. Furthermore, Section 16(c) of the Securities Exchange Act of 1934 prohibits short sales and short sales against the box of Macy’s securities by the Company’s directors and executive officers. The prohibitions in this paragraph do not apply to the exercise of stock options granted as part of a Company incentive plan. The CMD Committee generally approves annual equity-based grants at its annual March meeting, normally scheduled at least two years in advance. The March meeting occurs after financial results are available — at least three weeks after we release our fiscal year-end earnings. The CMD Committee may approve equity-based grants on other dates in special circumstances, such as to newly-hired executives or to executives promoted into positions eligible for such grants, or to retain executives important to the success of the Company. In general, Section 162(m) of the Internal Revenue Code of 1986, as amended, places a limit of $1 million on the amount of compensation that we may deduct in any one year with respect to certain of our executive officers (and, beginning in 2018, certain former executive officers). Historically, compensation that qualified as “performance- based compensation” could be excluded from this $1 million limit. This exception has been repealed, effective for taxable years beginning after December 31, 2017, except for certain compensation arrangements in place as of November 2, 2017 for which transition relief is available. Prior to 2018, the CMD Committee sought from time to time to qualify certain compensation awards for the performance-based exception. We continue to evaluate the (1)
The Company first enacted stock ownership guidelines in 2006. Executives are expected to comply with the current guidelines by the first business day in May following the five-year anniversary the executive first becomes covered under his/her current or new ownership guideline, or if newly hired or promoted, eligible to receive a payout of performance-based restricted stock and/or units under our long-term incentive plan. Executives who are below their ownership guideline at their guideline requirement date must retain 50% of all shares acquired on vesting or exercise of equity awards (net of exercise costs and taxes) until the guideline is met to be in compliance with the stock ownership policy. Stock ownership is measured as of the first business day in May of each fiscal year. As of the most recent measurement date, each NEO was in compliance with the retention or ownership requirements of the stock ownership policy. Macy’s, Inc. 2020 Notice of Meeting and Proxy Statement 51
COMPENSATION DISCUSSION & ANALYSIS
impact of the revisions to Section 162(m) for their potential impact on the Company. Regardless of that impact, the CMD Committee will continue to design and maintain executive compensation arrangements that we believe will attract and retain the executive talent we need to compete successfully, even if in certain cases such compensation is not deductible for federal income tax purposes. Because of the uncertainties associated with the application and interpretation of Section 162(m) and the regulations issued thereunder, there can be no assurance that compensation intended to satisfy the requirements for deductibility under Section 162(m), as in effect prior to 2018, will in fact be deductible. We record salaries and performance-based cash compensation incentives in our financial statements as expenses in the amount paid, or to be paid, to the NEOs. Accounting rules also require us to record an expense in our financial statements for equity-based awards, even though equity awards are not paid as cash to employees. We expense all equity-based awards in accordance with ASC Topic 718. In evaluating the design of our variable incentive plans, the CMD Committee considers the accounting costs attributable to alternative approaches to ensure that financial efficiency is maximized. OUR COLLEAGUE COMPENSATION PHILOSOPHY Macy’s colleague compensation philosophy and practices are integral to our objective of being an employer of choice in every location we do business, with competitive pay and benefits in a caring and service-oriented work environment. Compensation is scaled to job position, responsibilities, experience and performance, with incentive opportunities that allow all employees to share in the success of the Company. Pay-for-Performance. We seek to align pay and performance. Because senior executives can directly influence our overall performance, a majority of their annual targeted total direct compensation is variable at-risk pay tied to financial performance, corporate objectives and both absolute and relative stock price performance in the form of annual cash and long-term equity incentive award opportunities. Pay-for-performance extends beyond senior executives to align broad groups of our employees with the interests of shareholders. For example: •
Employees through the director level participate in an annual cash incentive plan; a portion of the incentive is based on the achievement of the same financial and strategic performance metrics as our senior executive Incentive Plan and a portion is based on individual performance results •
In 2018, we implemented the Path to Growth quarterly incentive program for all employees who do not participate in the annual cash incentive plan; the program provides these employees the opportunity to earn bonuses when corporate performance goals are met; Path to Growth bonus payouts totaled approximately $17.3 million for fiscal 2019 and 64% of all stores achieved performance levels that resulted in payments to our store employees at least once during fiscal 2019. •
Store managers and above are eligible for grants of equity under our core management equity program •
In 2019, we provided approximately 950 equity grants to employees to align their pay with senior executives and our shareholders •
Sales associates in certain merchandise areas are eligible for commissions or special bonuses for performance Pay Levels. The CMD Committee sets appropriate pay levels for senior executives. Management deploys that philosophy throughout the Company in determining pay amounts. The CMD Committee is provided compensation information for individuals and employee groups beyond executive officers to inform the Committee of company compensation practices and executive pay levels and receives regular reports on the Path to Growth incentive program. The CMD Committee also approves annual incentive awards to bonus-eligible non-executive officers. We try to balance internal and external pay fairness. We use market surveys to determine the external competitiveness of our compensation levels and we utilize pay ranges to help ensure internal pay fairness. We assess internal pay levels based on the relative internal value of each job or job classification, a process that considers direct job duties, responsibilities, skills, experience and education, required leadership expectations, organizational needs, talent sector, variance to external job titles and other factors. We feel internal pay fairness is more than numerical relationships between the pay of individual employees or employee classifications. Work and Career Opportunities. Macy’s believes compensation is an important part, but not the only element, of job satisfaction. Macy’s offers a wide variety of 52 investors.macysinc.com
COMPENSATION DISCUSSION & ANALYSIS
retail employment opportunities to build a career or to earn extra money. We offer merchandise discounts and flexible, predictable schedules for part-time store associates, internships for college students and full-time employment in the retail business for graduates through our Executive Development Program. We offer exciting career opportunities in creative, marketing, technology, merchandising, store operations, accounting/finance, human resources, legal, communications/media and real estate at our major corporate work centers in Atlanta, Cincinnati and New York, as well as employment opportunities at our stores, distribution centers and call centers across the United States. Macy’s reports its financial performance in accordance with generally accepted accounting principles (GAAP). However, management believe that certain non-GAAP financial measures provide users of the company’s financial information with additional useful information in evaluating operating performance and we have included certain non-GAAP measures as performance metrics in our incentive plans. We use 1) Sales and Adjusted Earnings Before Interest and Taxes (EBIT) as performance metrics in our annual incentive plan and 2) Comparable Sales Growth, Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) as a percent of net sales (internal owned sales), and Return on Invested Capital (ROIC) as performance metrics in our three-year performance share plan. Sales, Adjusted EBIT and Adjusted EBITDA exclude impairment, restructuring, store closing and other costs. Changes in comparable sales is calculated on an owned plus licensed basis and includes sales of departments licensed to third parties which are not included in comparable sales calculated in conformity with GAAP (on an owned basis). ROIC is defined as adjusted EBITDA, excluding benefit plan income, net and lease expense, as a percent to average invested capital. Reconciliations to the most directly comparable GAAP measures for Changes in Comparable Sales, Adjusted EBIT, Adjusted EBITDA as a Percent to Net Sales and ROIC and other information concerning non-GAAP financial measures are provided on page 30 in Macy’s Annual Report on Form 10-K under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Important Information Regarding Non-GAAP Financial Measures.” FORWARD-LOOKING STATEMENTS All statements in this proxy statement that are not statements of historical fact are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of Macy’s management and are subject to significant risks and uncertainties. Actual results could differ materially from those expressed in or implied by the forward-looking statements contained in this proxy statement because of a variety of factors, including the effects of the weather, natural disasters, and health pandemics, including the novel coronavirus (COVID-19) on customer demand, our supply chain as well as our consolidated results of operation, financial position and cash flows; possible invalidity of the underlying beliefs and assumptions; Macy’s ability to successfully implement its Polaris strategy, including the ability to realize the anticipated benefits within the expected timeframe or at all; the success of Macy’s operational decisions, such as product sourcing, merchandise mix and pricing, and marketing, and strategic initiatives, such as Growth stores, Backstage on-mall off-price business, and vendor direct expansion; general consumer-spending levels, including the impact of changes in economic conditions, consumer disposable income levels, consumer confidence levels, the availability, cost and level of consumer debt, and the costs of basic necessities and other goods; competitive pressures from department and specialty stores, general merchandise stores, manufacturers’ outlets, off-price and discount stores, and all other retail channels, including the Internet, catalogs and television; Macy’s ability to remain competitive and relevant as consumers’ shopping behaviors migrate to other shopping channels and to maintain its brand and reputation; possible systems failures and/or security breaches, including any security breach that results in the theft, transfer or unauthorized disclosure of customer, employee or company information, or the failure to comply with various laws applicable to Macy’s in the event of such a breach; the cost of employee benefits as well as attracting and retaining quality employees; transactions and strategy involving Macy’s real estate portfolio; the seasonal nature of Macy’s business; conditions to, or changes in the timing of, proposed transactions, and changes in expected synergies, cost savings and non-recurring charges; the potential for the incurrence of charges in connection with the impairment of intangible assets, including goodwill; possible changes or developments in social, economic, business, industry, market, legal, and regulatory circumstances and conditions; possible actions taken or omitted to be taken by third parties, including customers, suppliers, business partners, competitors and legislative, regulatory, judicial and other governmental authorities and officials; changes in relationships with vendors and other product and service providers; currency, interest and exchange rates and other capital market, economic and geo-political conditions; Macy’s, Inc. 2020 Notice of Meeting and Proxy Statement 53
COMPENSATION DISCUSSION & ANALYSIS
unstable political conditions, civil unrest, terrorist activities and armed conflicts; the possible inability of Macy’s manufacturers or transporters to deliver products in a timely manner or meet Macy’s quality standards; Macy’s reliance on foreign sources of production, including risks related to the disruption of imports by labor disputes, regional and global health pandemics, and regional political and economic conditions; duties, taxes, other charges and quotas on imports; and other factors identified in documents filed by Macy’s with the Securities and Exchange Commission. Macy’s disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. 54 investors.macysinc.com
COMPENSATION OF THE NAMED EXECUTIVES FOR 2019 OUR NAMED EXECUTIVE OFFICERS | | | | | JEFF GENNETTE 58 Chairman of the Board
since January 2018
and Chief Executive Officer
since March 2017 | | | Years with Macy’s: 36 See Mr. Gennette’s biography on page 8 of this proxy statement | |
| | | | | PAULA A. PRICE 58 Chief Financial Officer
since July 2018 | | | Years with Macy’s: 1 PRIOR CAREER HIGHLIGHTS Harvard Business School •
Senior Lecturer, Accounting Ahold USA •
EVP, Chief Financial Officer CVS Caremark Corporation •
SVP, Controller and Chief Accounting Officer JPMorgan Chase •
SVP, CFO Institutional Trust Services Prudential Financial •
General Manager, Retirement Services | | | Diageo •
Divisional CFO, UK Kraft Foods •
Director, Financial Planning & Analysis EDUCATION •
Certified Public Accountant •
M.B.A., with specialization in Finance and Strategy, University of Chicago Booth School •
B.S., Accounting, DePaul University | |
| | | | | ELISA D. GARCIA 62 Chief Legal Officer
since September 2016 | | | Years with Macy’s: 3 PRIOR CAREER HIGHLIGHTS Office Depot •
Chief Legal Officer •
EVP, General Counsel and Secretary Domino’s Pizza •
EVP, General Counsel and Secretary Philip Morris International •
Regional Counsel, Latin America | | | GAF Corporation •
Corporate Counsel Willkie Farr & Gallagher LLP •
Corporate Finance Associate EDUCATION •
J.D., St. John’s University School of Law •
Bachelor’s and Master’s degrees, State University of New York at Stony Brook | |
Macy’s, Inc. 2020 Notice of Meeting and Proxy Statement 55
COMPENSATION OF THE NAMED EXECUTIVES FOR 2019
| | | | | JOHN HARPER 60 Chief Operations Officer
since January 2020 | | | Years with Macy’s: 35 PRIOR CAREER HIGHLIGHTS Macy’s Inc. •
Chief Stores Officer •
Various roles throughout the Company and its predecessor companies, including vice chairman of Macy’s Midwest and chairman of Hecht’s | | | EDUCATION •
B.A., Communications and Political Science, University of Pittsburgh •
MBA, Finance and Accounting, University of Pittsburgh | |
| | | | | DANIELLE L. KIRGAN 44 54Chief Transformation Officer investors.macysinc.comsince February 2020 | | | Years with Macy’s: 2
PRIOR CAREER HIGHLIGHTS American Airlines •
SVP, People Darden Restaurants •
Chief Human Resources Officer ConAgra Foods •
VP, Human Resources | | | W.W. Grainger •
Director, Human Resources TeleTech Holdings •
Director, Human Resources EDUCATION •
B.A., Business Administration, Illinois State University | |
| | | | | HARRY L. LAWTON III 46 COMPENSATION OF THE NAMED EXECUTIVES FOR 2018
Former President
(September 2017 to
December 2019) | | |
| | | | |
56 investors.macysinc.com
COMPENSATION OF THE NAMED EXECUTIVES FOR 2019
The following table summarizes the compensation of the individuals that served as our principal executive officer and principal financial officer during fiscal 2019, our three other most highly-compensated executive officers who were serving as executive officers at the end of fiscal 2019, and one former executive officer, collectively referred to as the “Named Executives” or the “NEOs.” 2019 SUMMARY COMPENSATION TABLE | | Name and
Principal Position | | | | Year | | | | Salary
($) | | | | Bonus
($) | | | | Stock
Awards(1)
($) | | | | Option
Awards(2)
($) | | | | Non-Equity
Incentive
Plan
Compensation
($) | | | | Changes in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings(3)
($) | | | | All Other
Compensation(4)
($) | | | | Total
($) | | | | | | Jeff Gennette
Chief Executive Officer | | | | | | 2019 | | | | | | | 1,300,000 | | | | | | | 0 | | | | | | | 4,409,720 | | | | | | | 2,899,998 | | | | | | | 919,800 | | | | | | | 677,088 | | | | | | | 102,214 | | | | | | | 10,308,820 | | | | | | | | | | | 2018 | | | | | | | 1,291,667 | | | | | | | 0 | | | | | | | 4,694,492 | | | | | | | 2,899,994 | | | | | | | 3,687,200 | | | | | | | 58,489 | | | | | | | 101,849 | | | | | | | 12,733,691 | | | | | | | | | 2017 | | | | | | | 1,208,333 | | | | | | | 0 | | | | | | | 3,927,685 | | | | | | | 2,599,996 | | | | | | | 2,997,100 | | | | | | | 328,121 | | | | | | | 27,020 | | | | | | | 11,088,255 | | | | | | | Paula A. Price
Chief Financial Officer | | | | | | 2019 | | | | | | | 770,000 | | | | | | | 0 | | | | | | | 860,639 | | | | | | | 565,996 | | | | | | | 320,500 | | | | | | | 0 | | | | | | | 514,769 | | | | | | | 3,031,904 | | | | | | | | | 2018 | | | | | | | 433,125 | | | | | | | 300,000 | | | | | | | 1,137,825 | | | | | | | 837,381 | | | | | | | 749,400 | | | | | | | 0 | | | | | | | 188,531 | | | | | | | 3,646,262 | | | | | | | Elisa D. Garcia
Chief Legal Officer | | | | | | 2019 | | | | | | | 750,000 | | | | | | | 0 | | | | | | | 729,874 | | | | | | | 479,999 | | | | | | | 234,100 | | | | | | | 0 | | | | | | | 20,943 | | | | | | | 2,214,916 | | | | | | | | | 2018 | | | | | | | 745,833 | | | | | | | 0 | | | | | | | 777,018 | | | | | | | 479,994 | | | | | | | 938,500 | | | | | | | 0 | | | | | | | 52,876 | | | | | | | 2,994,221 | | | | | | | | | 2017 | | | | | | | 725,000 | | | | | | | 0 | | | | | | | 725,109 | | | | | | | 479,997 | | | | | | | 767,000 | | | | | | | 0 | | | | | | | 6,344 | | | | | | | 2,703,450 | | | | | | | John T. Harper
Chief Operations Officer | | | | | | 2019 | | | | | | | 725,000 | | | | | | | 500,000(5) | | | | | | | 777,989 | | | | | | | 199,997 | | | | | | | 239,200 | | | | | | | 875,817 | | | | | | | 46,036 | | | | | | | 3,364,039 | | | | | | | Danielle L. Kirgan
Chief Transformation Officer | | | | | | 2019 | | | | | | | 750,000 | | | | | | | 0 | | | | | | | 729,874 | | | | | | | 479,999 | | | | | | | 234,100 | | | | | | | 0 | | | | | | | 59,098 | | | | | | | 2,253,071 | | | | | | | | | 2018 | | | | | | | 750,000 | | | | | | | 0 | | | | | | | 777,018 | | | | | | | 479,994 | | | | | | | 938,500 | | | | | | | 0 | | | | | | | 199,471 | | | | | | | 3,144,983 | | | | | | | | | 2017 | | | | | | | 205,729 | | | | | | | 500,000 | | | | | | | 0 | | | | | | | 499,997 | | | | | | | 198,400 | | | | | | | 0 | | | | | | | 228,104 | | | | | | | 1,632,230 | | | | | | | Harry A. Lawton III
Former President | | | | | | 2019 | | | | | | | 937,500 | | | | | | | 0 | | | | | | | 2,432,955 | | | | | | | 1,600,000 | | | | | | | | | | | | | | 0 | | | | | | | 52,740 | | | | | | | 5,023,195 | | | | | | | | | 2018 | | | | | | | 1,000,000 | | | | | | | 0 | | | | | | | 2,590,038 | | | | | | | 1,599,998 | | | | | | | 2,085,500 | | | | | | | 0 | | | | | | | 8,750 | | | | | | | 7,284,286 | | | | | | | | | 2017 | | | | | | | 397,727 | | | | | | | 5,500,000 | | | | | | | 6,613,645 | | | | | | | 3,999,997 | | | | | | | 734,600 | | | | | | | 0 | | | | | | | 1,415,526 | | | | | | | 18,363,495 | | | | |
(1)
The amounts in this column for fiscal 2019 include the grant date fair value for performance-based restricted stock units awarded in fiscal 2019 determined by using a weighted average grant date price for the common stock of approximately $24.36 per share, assuming the “target” number of units is earned. Assuming the “maximum” number of units is earned, the grant date fair value amounts for the performance-based restricted stock units would be $8,819,440 for Mr. Gennette, $1,721,278 for Ms. Price, $4,865,910 for Mr. Lawton, $1,459,748 for Ms. Garcia and Ms. Kirgan and $1,216,440 for Mr. Harper. The amount for Mr. Harper includes the grant date fair value of $169,769 for time-based restricted stock units awarded as part of his core grant in fiscal 2019. (2)
The amounts in this column reflect the grant date value of stock options determined using the Black-Scholes option pricing model in accordance with ASC Topic 718. See footnote (4) to the 2019 Grants of Plan-Based Awards table for the assumptions used in making this determination. (3)
We did not pay above-market interest under our executive deferred compensation plan in 2019, therefore, the amounts reflected in this column relate to pension benefits only. The amounts reflected for fiscal 2019 in this column represent the change in the actuarial present value of accumulated pension benefits under our cash balance pension plan (CAPP) and supplementary executive retirement plan (SERP) in fiscal 2019. No Named Executive accrues additional benefits under the CAPP or SERP because benefits are frozen. The assumptions used in determining the present value of benefits are the same assumptions used for financial reporting purposes. The present value of benefits was determined using a PBO effective discount rate of 2.83% for the CAPP and 2.89% for the SERP. For both the CAPP and SERP, base mortality rates are Pri-2012 White Collar mortality table projected to 2016 using MP-2018 and then projected forward to the measurement date using MP-2019. Mortality is projected generationally from the measurement date using scale MP-2019 for both the CAPP and SERP. Scale MP-2019 defines how future mortality improvements are incorporated into the projected mortality table and is based on a blend of Social Security experience and the long-term assumption for mortality improvement rates by the Society of Actuaries’ Retirement Plans Experience Committee. The assumed retirement age used for these calculations was the normal retirement age of 65, as defined by the plans, and each Named Executive was assumed to retire at the normal retirement age. Because pension benefits are frozen, year-over-year changes in pension value are generally driven by changes in valuation assumptions as well as aging toward assumed retirement age. For 2019, the change in pension value for the applicable Named Executives was higher than 2018 primarily as a result of the decrease in the discount rate assumption from 4.10% to 2.89%. Macy’s, Inc. 2020 Notice of Meeting and Proxy Statement 57
COMPENSATION OF THE NAMED EXECUTIVES FOR 2019
(4)
Included in “All Other Compensation” for fiscal 2019 are Company benefit plan contributions and the incremental cost to Macy’s of the following perquisites made available to the Named Executives: | | Name | | | | Aircraft
Usage(a)
($) | | | | Car
Programs(b)
($) | | | | DCP
Matching
Contribution(c)
($) | | | | 401(k)
Matching
Contribution
($) | | | | Other(d) | | | | Total
($) | | | | Gennette | | | | | | 68,847 | | | | | | | 8,367 | | | | | | | 15,200 | | | | | | | 9,800 | | | | | | | 0 | | | | | | | 102,214 | | | | | Price | | | | | | 0 | | | | | | | 0 | | | | | | | 1,429 | | | | | | | 9,800 | | | | | | | 503,540 | | | | | | | 514,769 | | | | | Garcia | | | | | | 0 | | | | | | | 0 | | | | | | | 11,143 | | | | | | | 9,800 | | | | | | | 0 | | | | | | | 20,943 | | | | | Harper | | | | | | 0 | | | | | | | 0 | | | | | | | 36,236 | | | | | | | 9,800 | | | | | | | 0 | | | | | | | 46,036 | | | | | Kirgan | | | | | | 0 | | | | | | | 0 | | | | | | | 49,298 | | | | | | | 9,800 | | | | | | | 0 | | | | | | | 59,098 | | | | | Lawton | | | | | | 0 | | | | | | | 0 | | | | | | | 42,940 | | | | | | | 9,800 | | | | | | | 0 | | | | | | | 52,740 | | | | |
(a)
Mr. Gennette is the only Named Executive who is permitted to make personal use of company aircraft. The amount shown for aircraft usage is calculated based on the cost of fuel and other variable costs associated with the particular personal flights. Spouse and/or other guests may accompany Mr. Gennette on some flights. There are no additional incremental costs associated with their travel on those flights. Mr. Gennette is required to reimburse the Company to the extent that the calculated incremental costs associated with his personal usage of Company aircraft exceed $75,000 in the aggregate. For purposes of calculating the incremental costs associated with personal usage of Company aircraft: •
Flights were deemed business or personal based on the purpose of the flight. •
If a trip was deemed personal, ferry flights, if any, were included as personal. •
If a trip included both business and personal destinations, we included as personal the excess, if any, of the aggregate expenses for the trip over the costs of flying to and from the originating airport to the business destination or destinations. (b)
The amount shown reflects the costs relating to personal use by Mr. Gennette of a dedicated car and driver that the Company makes available to him for safety reasons pursuant to the recommendation of a third-party security study. The incremental cost calculation for personal use of the car and driver includes driver overtime, fuel, tolls, driver public transportation and rental car use, maintenance and other incidental costs incurred in connection with such personal use. (c)
The amounts shown reflect Company matching contributions on salary and/or annual incentive awards deferred under the Company’s Deferred Compensation Plan (DCP). Such deferred amounts are matched in the same manner and at comparable rates as under the Company’s 401(k) Plan. (d)
Includes amounts paid in relocation ($256,804) and tax gross ups ($246,736). (5)
As previously reported in the Form 8-K filed February 4, 2020, Mr. Harper received a sign-on cash payment of $500,000 payable upon appointment to Chief Operations Officer on January 29, 2020, subject to a 2-year repayment agreement. 58 investors.macysinc.com
COMPENSATION OF THE NAMED EXECUTIVES FOR 2019
PLAN-BASED AWARDS The following table sets forth certain information regarding the annual incentive plan and other equity awards granted during fiscal 20182019 to each of the Named Executives. 20182019 Grants of Plan-Based Awards
| | Name | | | | Award Type | | | | Grant
Date | | | | Estimated Possible Payouts Under
Non-Equity Incentive Plan Awards | | | | Estimated Future Payouts
Under Equity Incentive Plan Awards | | | | All Other
Stock Awards:
Number of
Shares
of Stock
or Units (#) | | | | All Other
Option Awards:
Number of
Securities
Underlying
Options (#)(3) | | | | Exercise
or Base
Price of
Option
Awards ($/Sh) | | | | Grant Date
Fair Value
Of Stock
and Option
Awards ($)(4) | | | | | | | | | | | | | | | | | Estimated Possible Payouts
Under Non-Equity Incentive
Plan Awards(1) | | | | Estimated Future
Payouts Under Equity
Incentive Plan Awards(2) | | | | All Other
Stock
Awards:
Number
of
Shares of
Stock or
Units
(#) | | | | All Other
Option
Awards;
Number of
Securities
Underlying
Options
(#)(3) | | | | Exercise
or Base
Price of
Option
Awards
($/Sh) | | | | Grant
Date
Fair
Value
of Stock
and
Option
Awards
($)(4) | | | | Threshold
($) | | | | Target
($) | | | | Maximum
($)(1) | | | | Threshold
(#) | | | | Target
(#)(2) | | | | Maximum
(#) | | | Name | | | | Award Type | | | | Grant
Date | | | | Threshold
($) | | | | Target
($) | | | | Maximum
($) | | | | Threshold
(#) | | | | Target
(#) | | | | Maximum
(#) | | | | | Gennette | | | | Annual Incentive | | | | n/a | | | | | | 541,450 | | | | | | | 2,210,000 | | | | | | | 5,138,250 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Gennette | | | | Annual Incentive | | | | | | n/a | | | | | | | 552,500 | | | | | | | 2,210,000 | | | | | | | 4,420,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | PRSUs | | | | 4/6/2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 145,973 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4,694,492 | | | | PRSUs | | | | | | 3/21/2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 181,023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4,409,720 | | | | | Stock Options | | | | 4/6/2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 386,151 | | | | | | | 29.80 | | | | | | | 2,899,994 | | | | Stock Options | | | | | | 3/21/2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 564,202 | | | | | | | 24.03 | | | | | | | 2,899,998 | | | | | Price | | | | Annual Incentive | | | | n/a | | | | | | 188,650 | | | | | | | 770,000 | | | | | | | 1,790,250 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Price | | | | Annual Incentive | | | | | | n/a | | | | | | | 192,500 | | | | | | | 770,000 | | | | | | | 1,540,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | PRSUs | | | | 7/9/2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 20,051 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 815,875 | | | | PRSUs | | | | | | 3/21/2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 35,330 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 860,639 | | | | | Stock Options | | | | 7/9/2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 48,400 | | | | | | | 36.46 | | | | | | | 487,388 | | | | Stock Options | | | | | | 3/21/2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 110,116 | | | | | | | 24.03 | | | | | | | 565,996 | | | | | Stock Option | | | | 7/9/2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 34,756 | | | | | | | 36.46 | | | | | | | 349,993 | | | Garcia | | | | Annual Incentive | | | | | | n/a | | | | | | | 140,625 | | | | | | | 562,500 | | | | | | | 1,125,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | RSUs | | | | 7/9/2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 9,599 | | | | | | | | | | | | | | | | | | | | | 321,950 | | | | PRSUs | | | | | | 3/21/2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 29,962 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 729,874 | | | | | Hoguet | | | | Annual Incentive | | | | n/a | | | | | | 165,375 | | | | | | | 675,000 | | | | | | | 1,569,375 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Stock Options | | | | | | 3/21/2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 93,385 | | | | | | | 24.03 | | | | | | | 479,999 | | | | | RSUs | | | | 4/6/2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 50,355 | | | | | | | | | | | | | | | | | | | | | 1,499,983 | | | Harper | | | | Annual Incentive | | | | | | n/a | | | | | | | 135,938 | | | | | | | 543,750 | | | | | | | 1,087,500 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Lawton | | | | Annual Incentive | | | | n/a | | | | | | 306,250 | | | | | | | 1,250,000 | | | | | | | 2,906,250 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | PRSUs | | | | | | 3/21/2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 24,968 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 608,220 | | | | | PRSUs | | | | 4/6/2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 80,536 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,590,038 | | | | Stock Options | | | | | | 3/21/2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 38,910 | | | | | | | 24.03 | | | | | | | 199,997 | | | | | Stock Options | | | | 4/6/2018 | | | | | | | | | | | �� | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 213,049 | | | | | | | 29.80 | | | | | | | 1,599,998 | | | | RSUs | | | | | | 3/21/2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 8,322 | | | | | | | | | | | | | | | | | | | | | 169,769 | | | | | Garcia | | | | Annual Incentive | | | | n/a | | | | | | 137,813 | | | | | | | 562,500 | | | | | | | 1,307,813 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Kirgan | | | | Annual Incentive | | | | | | n/a | | | | | | | 140,625 | | | | | | | 562,500 | | | | | | | 1,125,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | PRSUs | | | | 4/6/2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 24,161 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 777,018 | | | | PRSUs | | | | | | 3/21/2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 29,962 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 729,874 | | | | | Stock Options | | | | 4/6/2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 63,914 | | | | | | | 29.80 | | | | | | | 479,994 | | | | Stock Options | | | | | | 3/21/2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 93,385 | | | | | | | 24.03 | | | | | | | 479,999 | | | | | Kirgan | | | | Annual Incentive | | | | n/a | | | | | | 137,813 | | | | | | | 562,500 | | | | | | | 1,307,813 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Lawton | | | | Annual Incentive | | | | | | n/a | | | | | | | 312,500 | | | | | | | 1,250,000 | | | | | | | 2,500,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | PRSUs | | | | 4/6/2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 24,161 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 777,018 | | | | PRSUs | | | | | | 3/21/2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 99,875 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,432,955 | | | | | Stock Options | | | | 4/6/2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 63,914 | | | | | | | 29.80 | | | | | | | 479,994 | | | | Stock Options | | | | | | 3/21/2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 311,284 | | | | | | | 24.03 | | | | | | | 1,600,000 | | |
(1)
The Named Executives are eligible for an annual cash incentive award under our Incentive Plan, which is deemed a “non-equity incentive plan” under SEC rules. The plan provides that the Named Executives are eligible for an annual incentive award only if EBIT is positive. EBIT is defined to exclude the effects of asset impairments, restructurings, acquisitions, divestitures, other unusual or infrequently occurring items, store closing costs, unplanned material tax law changes and/or assessments and the cumulative effect of tax or accounting changes, as determined in accordance with generally accepted accounting principles, as applicable. Under the Incentive Plan, the maximum award a Named Executive may receive for fiscal 20182019 is the Incentive Plan’s per-person maximum of $7 million. The CMD Committee may exercise negative discretion to reduce the maximum awards based on the annual incentive award opportunity established for each Named Executive under the Incentive Plan. For a more detailed discussion of the Incentive Plan, see the “Annual Incentive” discussion in “Compensation Discussion & Analysis –— The Key Elements of Executive Compensation.” (2)
The Named Executives except Ms. Price, received a grant of performance-based restricted stock units (PRSUs) on March 23, 2018.21, 2019. The PRSUs vest over a three-year performance period covering fiscal years 2018-2020.2019-2021. The number of PRSUs earned may range from 0% to 150%200% of the Target award opportunity based on performance against average Comparable Sales Growth, average ROIC and relative TSR objectives. PRSUs that are earned will be paid out as shares of Macy’s common stock. Dividends, if any, paid on the Company’s common stock will be credited to the Named Executives’ PRSU accounts as additional restricted stock units and will be paid out as shares of Macy’s common stock at the end of the three-year performance period to the extent the underlying PRSUs to which the dividends relate are earned. See the “Performance-Based Restricted Stock Units” discussion in “Compensation Discussion & Analysis –— The Key Elements of Executive Compensation –— Long-Term Equity Compensation” and the “Restricted Stock and Restricted Stock Units” discussion in the narrative below. Ms. Price received a new hire grant of PRSUs, time-based restricted stock units (TRSUs) and stock options on July 9, 2018. The TRSUs and stock options vest 33.3% on each of the first three anniversaries of the grant date. (3)
The numbers reflected in this column represent the number of stock options granted to the Named Executives in fiscal 2018.2019.
Macy’s, Inc. 2019 Notice of Meeting and Proxy Statement 55
COMPENSATION OF THE NAMED EXECUTIVES FOR 2018
(4)
Stock options excluding the new hire grants to Ms. Price, were valued as of the grant date using the Black-Scholes option pricing model in accordance with ASC Topic 718, using the below assumptions. Ms. Price received a new hire grant of stock options on July 9, 2018, as described in footnote 2 above. Ms. Prices’ stock options were valued using a Black-Scholes value of $10.07. | | | | | 4/6/18
Grant | | | Dividend yield: | | | | 5.07% | | | Expected volatility: | | | | 41.09% | | | Risk-free interest rate: | | | | 2.62% | | | Expected life: | | | | 5.6 | | | Black-Scholes value: | | | | $7.51 | |
Macy’s, Inc. 2020 Notice of Meeting and Proxy Statement 59
COMPENSATION OF THE NAMED EXECUTIVES FOR 2019
| | | | | | 3/21/19
Grant | | | | Dividend yield: | | | | | | 6.28% | | | | | Expected volatility: | | | | | | 40.601% | | | | | Risk-free interest rate: | | | | | | 2.365% | | | | | Expected life: | | | | | | 5.45 | | | | | Black-Scholes value: | | | | | $ | 5.14 | | | | |
PRSUs excluding the grant to Ms. Price, were valued by using a weighted average grant date price for our common stock of approximately $32.16$24.36 per share, assuming the “target” number of units is earned. The weighted average grant date price was calculated as follows: (i) $29.80$24.03 per share for the portion of the grant subject to average Comparable Sales Growth and average ROIC performance metrics, by using the grant date closing price for the common stock, and (ii) $36.87$25.37 per share for the portion of the grant subject to a relative TSR metric, by using a Monte Carlo simulation analysis to estimate TSR ranking of the Company among a 12-company14-company executive compensation peer group over the remaining performance period. Ms. Price’s PRSUs were valued by using a weighted average grant date price for our common stock of approximately $40.69 per share, assuming the “target” number of units is earned. The weighted average grant date price was calculated as follows: (i) $36.46 per share for the portion of the grant subject to average Comparable Sales Growth and average ROIC performance metrics, by using the grant date closing price for the common stock, and (ii) $49.17 per share for the portion of the grant subject to a relative TSR metric, by using a Monte Carlo simulation analysis to estimate TSR ranking of the Company among a 12-Company executive compensation peer group over the remaining performance period. Ms. Price’s TRSUsMr. Harper’s RSUs were valued using a discounted grant date closing price for the common stock of $33.54 per share and Ms. Hoguet’s TRSUs were valued using the grant date closing price for the common stock of $29.80$20.40 per share. Stock Options. Prior to May 18, 2018, stock options were granted under the Amended and Restated 2009 Omnibus Incentive Compensation Plan (2009 Omnibus Plan), which was approved by Macy’s shareholders. After shareholders approved the 2018 Equity and Incentive Compensation Plan (2018 Equity Plan), stock options may no longer be granted under the 2009 Omnibus Plan. Under the 2018 Equity Plan, the exercise price of stock options may not be less than the closing price of Macy’s common stock on the NYSE on the grant date. Stock options vest over time, typically in 25% installments on the first four anniversaries of the grant date, and have 10-year terms. Our plans do not provide for the granting of “reload” options and prohibit the repricing of previously granted options. In the event of an executive’s permanent and total disability, unvested stock options immediately vest and remain exercisable until the end of their term. Upon death, unvested stock options immediately vest and remain exercisable for three years or the end of their term, and at retirement, unvested stock options may continue to vest in accordance with their original vesting schedule and remain exercisable until the end of their term, in either case subject to the terms and conditions of the individual grant and satisfaction of certain age and years of service requirements. Stock options granted in fiscal 2010 and beyond become immediately exercisable in full in the event of termination of employment by the Company without “cause” or by the optionee for “good reason” (as defined in the terms and conditions of the grant) within a specified period of time following a change in control. Restricted Stock and Restricted Stock Units. The CMD Committee grants shares of restricted stock or restricted stock units, referred to as RSUs, from time to time for retention and performance reasons. RSUs represent the right to receive a payment upon or after vesting equal to the market value per share of Macy’s common stock as of the grant date, the vesting date or such other date as determined by the CMD Committee on the date the RSUs are granted. Since May 15, 2009, all restricted stock and RSUs were granted under the 2009 Omnibus Plan, and after May 18, 2018 are granted under the 2018 Equity Plan. Restricted stock and RSU grants can be either time-based or performance-based. Restricted stock or RSUs will generally be forfeited if the executive’s employment ends prior to the vesting date. Time-based restricted stock and/or RSUs may vest 100% on the third anniversary of the grant date or in installments over a number of years following the first anniversary of the grant date, may not fully vest in less than three years, do not earn dividends and are subject to “double-trigger” vesting in the event of a change in control. Performance-based restricted stock or PRSUs are subject to forfeiture if performance criteria applicable to the shares or units are not satisfied or if the executive’s employment with the Company ends prior to the vesting date (with limited exceptions for involuntary termination without cause), and may not fully vest in less than one year.. Depending upon satisfaction of the performance criteria, shares and/or units may vest up to 100% on the first anniversary of the grant date or in installments over a number of years following the first anniversary of the grant date. Shares and/or units are forfeited to the extent performance criteria are not satisfied. 56 investors.macysinc.com
COMPENSATION OF THE NAMED EXECUTIVES FOR 2018
Fiscal 2017 Performance-Based RSU Grant
The performance-based RSUs, referred to as PRSUs, granted to the Named Executives in fiscal 2017 that are earned at the end of the three-year (fiscal 2017-2019) performance period are expected to be paid in shares of Macy’s common stock within 21∕2 months following the end of the performance period. Subject to achievement of a minimum cumulative EBITDA of $8.5 billion over the three-year performance period, the number of PRSUs that a Named Executive will earn at the end of the performance period may vary from 0% to 150% of the target award based upon our three-year performance relative to average EBITDA margin, average ROIC and relative TSR goals shown below.
| | | | | | EBITDA Margin
(50% weight)* | | | | ROIC
(30% weight)* | | | | Relative TSR
(20% weight)* | | | | Performance Level* | | | | 3 Year
Average | | | | Vesting
% | | | | 3-Year
Average | | | | Vesting
% | | | | 3-Year TSR
vs. Peers | | | | Vesting
% | | | | Outstanding | | | | | | ≥12.2% | | | | | | | 150% | | | | | | | ≥19.2% | | | | | | | 150% | | | | | | | ≥75.0% | | | | | | | 150% | | | | | Target | | | | | | 11.9% | | | | | | | 100% | | | | | | | 18.8% | | | | | | | 100% | | | | | | | 50.0% | | | | | | | 100% | | | | | Threshold | | | | | | 11.2% | | | | | | | 50% | | | | | | | 17.2% | | | | | | | 50% | | | | | | | 35.0% | | | | | | | 50% | | | | | Below Threshold | | | | | | <11.2% | | | | | | | 0% | | | | | | | <17.2% | | | | | | | 0% | | | | | | | <35% | | | | | | | 0% | | |
*
Straight-line interpolation will apply to performance levels between the ones shown.
Fiscal 2018 Performance-Based RSU Grant The PRSUs granted to the Named Executives in fiscal 2018 that are earned at the end of the three-year (fiscal 2018-2020)2018 – 2020) performance period are expected to be paid in shares of Macy’s common stock within 21∕2 months following the end of the performance period. The number of PRSUs that a Named Executive will earn at the end of this performance period may vary from 0% to 150% of the target the target award, based upon our three-year performance relative to average Comparable Sales Growth, average ROIC and relative TSR goals. See the “Performance-Based Restricted Stock Units” discussion in “Compensation Discussion & Analysis –— The Key Elements of Executive Compensation –— Long-Term Equity Compensation.”
60 investors.macysinc.com
COMPENSATION OF THE NAMED EXECUTIVES FOR 2019
Fiscal 2019 Performance-Based RSU Grant The PRSUs granted to the Named Executives in fiscal 2019 that are earned at the end of the three-year (fiscal 2019 – 2021) performance period are expected to be paid in shares of Macy’s common stock within 21∕2 months following the end of the performance period. The number of PRSUs that a Named Executive will earn at the end of this performance period may vary from 0% to 200% of the target award, based upon our three-year performance relative to average Comparable Sales Growth and Average ROIC and relative TSR goals. See the “Performance-Based Restricted Stock Units” discussion in “Compensation Discussion & Analysis — The Key Elements of Executive Compensation — Long Term Equity Compensation.” General Terms of the Performance-Based RSU Grants For purposes of all PRSU grants, Comparable Sales Growth, EBITDA, EBITDA margin, ROIC and TSR are defined as follows: •
Comparable Sales Growth represents the period-to-period percentage change in net owned plus licensed sales from stores in operation throughout the year presented and the immediately preceding year and all online sales, as externally reported. Stores impacted by a natural disaster or that undergo significant expansion or shrinkage remain in the comparable sales calculation unless the store is closed for a significant period of time. •
ROIC is defined as EBITDAR divided by Total Average Gross Investment. EBITDAR is equal to the sum of EBITDA* plus net rent expense (rent expense as reported in our audited financial statements less the deferred rent amortization related to contributions received from landlords). Total Average Gross Investment is equal to the sum of gross property, plant and equipment, capitalized value of non-capitalized leases, working capital — which includes receivables, merchandise inventories, prepaid expenses and other current assets — offset by merchandise accounts payable and accounts payable and accrued liabilities, and other assets (each as reported in our audited or unaudited financial statements). *
EBITDA is defined as earnings before interest, taxes, depreciation and amortization, which is equal to the sum of operating income and depreciation and amortization as reported in our audited financial statements, adjusted to eliminate the effects of asset impairments, restructurings, acquisitions, divestitures, other unusual or infrequently occurring items, store closing costs, unplanned material tax law changes and/or assessments and the cumulative effect of tax or accounting changes, as determined in accordance with generally accepted accounting principles, as applicable. •
EBITDA margin is defined as EBITDA divided by Net Sales (with net sales being adjusted to exclude
certain items that are included in externally reported sales under GAAP, including licensed department income, shipping and handling fees and sales to third party retailers, and to account for unplanned store closings).
•
ROIC is defined as EBITDAR divided by Total Average Gross Investment. EBITDAR is equal to the sum of EBITDA plus net rent expense (rent expense as reported in our audited financial statements less the deferred rent amortization related to contributions received from landlords). Total Average Gross Investment is equal to the sum of gross property, plant and equipment, capitalized value of non-capitalized leases, working capital – which includes receivables, merchandise inventories, prepaid expenses and other current assets – offset by merchandise accounts payable and accounts payable and accrued liabilities, and other assets (each as reported in our audited or unaudited financial statements).
•
TSR is defined as the change in the value of our common stock over the three-year performance period, taking into account both stock price appreciationchange and the reinvestment of dividends. The beginning and ending stock prices will be calculated based on a 20-day average stock price. Relative
Macy’s, Inc. 2019 Notice of Meeting and Proxy Statement 57
COMPENSATION OF THE NAMED EXECUTIVES FOR 2018
TSR is the percentile rank of our TSR compared to the TSR of our executive compensation peer group over the performance period. Dividends, if any, paid on our common stock will be credited to the Named Executives’ PRSU accounts as additional units and will be paid out as shares of common stock only to the extent the underlying PRSUs are earned. In the event of a change in control of the Company, the PRSUs will be converted to time-based RSUs vesting on the third anniversary of the grant date. If the change in control occurs prior to the 24-month anniversary of the start of the performance period, the conversion will be based on the target award opportunity. If the change in control occurs after such 24-month anniversary, the conversion will be based on performance through the date of the change in control. Unvested time-based restricted shares will vest if the Named Executive is terminated by the Company or the continuing entity without “cause” (as defined in our Change-in-Control Plan) or if the Named Executive voluntarily terminates employment for “good reason” (as defined in our Change-in-Control Plan) within the 24-month period following the change in control, or if the continuing entity does not assume or replace the awards. Restrictive Covenants. Under our long-term incentive program, executives desiring to take advantage of retirement vesting or continued vesting following involuntary termination provisions in stock option and RSU award terms and conditions must comply with non-compete, non-solicitation and non-disclosure covenants. These provisions provide that awards may be forfeited if 1) within two yearsone year following retirement or one year following involuntary termination, the Named Executive renders personal services to a competitor, 2) within two years following retirement or involuntary termination, the Named Executive solicits or entices an employee to resign from the Company, or 3) at any time following retirement or involuntary termination, the Named Executive discloses confidential information to a third party. Macy’s, Inc. 2020 Notice of Meeting and Proxy Statement 61
COMPENSATION OF THE NAMED EXECUTIVES FOR 2019
Outstanding Equity Awards The following table sets forth certain information regarding the total number and aggregate value of options and units held by each of the Named Executives at February 2, 2019. 1, 2020. The dollar amount shown for units is calculated by multiplying the number of units by the closing price of Macy’s common stock ($25.73)15.95) on the last trading day of fiscal 2018.2019. 58 investors.macysinc.com
COMPENSATION OF THE NAMED EXECUTIVES FOR 2018
20182019 Outstanding Equity Awards at Fiscal Year-End
| | | | | | Option Awards | | | | Stock Awards | | | | | | Option Awards | | | | Stock Awards | | | | Name | | | | Grant Date | | | | Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable(1) | | | | Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable(1) | | | | Option
Exercise
Price ($) | | | | Option
Expiration
Date | | | | Number
of Shares
or Units
of Stock
that Have
Not
Vested (#) | | | | Market
Value of
Shares or
Units of
Stock that
Have Not
Vested ($) | | | | Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights that
Have Not
Vested (#) | | | | Equity
Incentive
Plan Awards:
Market or
Payout
Value of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested ($) | | Name | | | | Grant Date | | | | Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable(1) | | | | Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable(1) | | | | Option
Exercise
Price
($) | | | | Option
Expiration
Date | | | | Number of
Shares or
Units
of Stock
that Have
Not
Vested
(#) | | | | Market
Value of
Shares or
Units of
Stock
that
Have
Not
Vested
($) | | | | Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares, Units
or Other
Rights that
Have Not
Vested
(#) | | | | Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units
or Other
Rights
That
Have Not
Vested
($) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Gennette | | | | | | 3/23/2012 | | | | | | | 43,371 | | | | | | | 0 | | | | | | | 39.84 | | | | | | | 3/23/2022 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Gennette | | | | 3/23/2012 | | | | | | 43,371 | | | | | | | 0 | | | | | | | 39.84 | | | | | | | 3/23/2022 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3/19/2013 | | | | | | | 43,621 | | | | | | | 0 | | | | | | | 41.67 | | | | | | | 3/19/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3/19/2013 | | | | | | 43,621 | | | | | | | 0 | | | | | | | 41.67 | | | | | | | 3/19/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3/28/2014 | | | | | | | 37,755 | | | | | | | 0 | | | | | | | 58.92 | | | | | | | 3/28/2024 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3/28/2014 | | | | | | 37,755 | | | | | | | 0 | | | | | | | 58.92 | | | | | | | 3/28/2024 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3/27/2015 | | | | | | | 51,973 | | | | | | | 0 | | | | | | | 63.65 | | | | | | | 3/27/2025 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3/27/2015 | | | | | | 39,980 | | | | | | | 12,993 | | | | | | | 63.65 | | | | | | | 3/27/2025 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3/23/2016 | | | | | | | 65,747 | | | | | | | 21,915 | | | | | | | 43.42 | | | | | | | 3/23/2026 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3/23/2016 | | | | | | 43,831 | | | | | | | 43,831 | | | | | | | 43.42 | | | | | | | 3/23/2026 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3/24/2017 | | | | | | | 198,473 | | | | | | | 198,473 | | | | | | | 28.17 | | | | | | | 3/24/2027 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3/24/2017 | | | | | | 99,237 | | | | | | | 294,709 | | | | | | | 28.17 | | | | | | | 3/24/2027 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4/6/2018 | | | | | | | 96,537 | | | | | | | 289,614 | | | | | | | 29.80 | | | | | | | 4/6/2028 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4/6/2018 | | | | | | 0 | | | | | | | 386,151 | | | | | | | 29.80 | | | | | | | 4/6/2028 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3/21/2019 | | | | | | | 0 | | | | | | | 564,202 | | | | | | | 24.03 | | | | | | | 3/21/2029 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 138,445(2) | | | | | | | 3,562,190 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 145,973(2) | | | | | | | 2,328,269 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 145,973(3) | | | | | | | 3,755,885 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 181,023(3) | | | | | | | 2,887,317 | | | | | Price | | | | 7/9/2018 | | | | | | 0 | | | | | | | 34,756 | | | | | | | 36.46 | | | | | | | 7/9/2028 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Price | | | | | | 7/9/2018 | | | | | | | 11,585 | | | | | | | 23,171 | | | | | | | 36.46 | | | | | | | 7/9/2028 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 7/9/2018 | | | | | | 0 | | | | | | | 48,400 | | | | | | | 36.46 | | | | | | | 7/9/2028 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 7/9/2018 | | | | | | | 12,100 | | | | | | | 36,300 | | | | | | | 36.46 | | | | | | | 7/9/2028 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 20,051(3) | | | | | | | 515,912 | | | | | | 3/21/2019 | | | | | | | 0 | | | | | | | 110,116 | | | | | | | 24.03 | | | | | | | 3/21/2029 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 7/9/2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 9,599(4) | | | | | | | 246,982 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 20,051(2) | | | | | | | 319,813 | | | | | Hoguet | | | | 3/25/2011 | | | | | | 74,438 | | | | | | | 0 | | | | | | | 23.43 | | | | | | | 3/25/2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 35,330(3) | | | | | | | 563,514 | | | | | | | | | 3/23/2012 | | | | | | 43,371 | | | | | | | 0 | | | | | | | 39.84 | | | | | | | 3/23/2022 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 7/9/2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6,400(4) | | | | | | | 102,080 | | | | | | | | | | | | | | | | | | | | | | | 3/19/2013 | | | | | | 43,621 | | | | | | | 0 | | | | | | | 41.67 | | | | | | | 3/19/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Garcia | | | | | | 9/20/2016 | | | | | | | 63,703 | | | | | | | 21,234 | | | | | | | 34.96 | | | | | | | 9/20/2026 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3/28/2014 | | | | | | 27,792 | | | | | | | 0 | | | | | | | 58.92 | | | | | | | 3/28/2024 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3/24/2017 | | | | | | | 36,641 | | | | | | | 36,641 | | | | | | | 28.17 | | | | | | | 3/24/2027 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3/27/2015 | | | | | | 20,428 | | | | | | | 6,809 | | | | | | | 63.65 | | | | | | | 3/27/2025 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4/6/2018 | | | | | | | 15,978 | | | | | | | 47,936 | | | | | | | 29.80 | | | | | | | 4/6/2028 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3/23/2016 | | | | | | 22,971 | | | | | | | 22,970 | | | | | | | 43.42 | | | | | | | 3/23/2026 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3/21/2019 | | | | | | | 0 | | | | | | | 93,385 | | | | | | | 24.03 | | | | | | | 3/21/2029 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3/24/2017 | | | | | | 21,603 | | | | | | | 64,809 | | | | | | | 28.17 | | | | | | | 3/24/2027 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 24,161(2) | | | | | | | 385,368 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 30,138(2) | | | | | | | 775,451 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 29,962(3) | | | | | | | 477,894 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 35,498(3) | | | | | | | 913,364 | | | | | | | | | | 4/6/2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ��� | | | | | 50,335(5) | | | | | | | 1,295,120 | | | | | | | | | | | | | | | | | | | | Lawton | | | | 9/8/2017 | | | | | | 118,979 | | | | | | | 637,958 | | | | | | | 21.32 | | | | | | | 9/8/2027 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4/6/2018 | | | | | | 0 | | | | | | | 213,049 | | | | | | | 29.80 | | | | | | | 4/6/2028 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 9/8/2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 109,444(6) | | | | | | | 2,815,994 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 140,712(7) | | | | | | | 3,620,520 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 80,536(3) | | | | | | | 2,072,191 | | | | | | Garcia | | | | 9/20/2016 | | | | | | 42,469 | | | | | | | 42,468 | | | | | | | 34.96 | | | | | | | 9/20/2026 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3/24/2017 | | | | | | 18,321 | | | | | | | 54,961 | | | | | | | 28.17 | | | | | | | 3/24/2027 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4/6/2018 | | | | | | 0 | | | | | | | 63,914 | | | | | | | 28.90 | | | | | | | 4/6/2028 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 25,559(2) | | | | | | | 657,633 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 24,161(3) | | | | | | | 621,663 | | | | | | | | | | 9/20/2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 10,726(8) | | | | | | | 275,980 | | | | | | | | | | | | | | | | | | | | Kirgan | | | | 11/13/2017 | | | | | | 34,916 | | | | | | | 104,748 | | | | | | | 19.33 | | | | | | | 11/13/2027 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4/6/2018 | | | | | | 0 | | | | | | | 63,914 | | | | | | | 29.80 | | | | | | | 4/6/2028 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 24,161(3) | | | | | | | 621,663 | | | | | | |
Macy’s, Inc. 2019 Notice of Meeting and Proxy Statement 5962 investors.macysinc.com
COMPENSATION OF THE NAMED EXECUTIVES FOR 20182019
| | | | | | Option Awards | | | | Stock Awards | | | | Name | | | | Grant Date | | | | Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable(1) | | | | Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable(1) | | | | Option
Exercise
Price
($) | | | | Option
Expiration
Date | | | | Number of
Shares or
Units
of Stock
that Have
Not
Vested
(#) | | | | Market
Value of
Shares or
Units of
Stock
that
Have
Not
Vested
($) | | | | Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares, Units
or Other
Rights that
Have Not
Vested
(#) | | | | Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units
or Other
Rights
That
Have Not
Vested
($) | | | | Harper | | | | | | 3/23/2012 | | | | | | | 6,137 | | | | | | | 0 | | | | | | | 39.84 | | | | | | | 3/23/2022 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3/19/2013 | | | | | | | 12,345 | | | | | | | 0 | | | | | | | 41.67 | | | | | | | 3/19/2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3/28/2014 | | | | | | | 15,731 | | | | | | | 0 | | | | | | | 58.92 | | | | | | | 3/28/2024 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3/27/2015 | | | | | | | 15,399 | | | | | | | 0 | | | | | | | 63.65 | | | | | | | 3/27/2025 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3/23/2016 | | | | | | | 19,481 | | | | | | | 6,493 | | | | | | | 43.42 | | | | | | | 3/23/2026 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3/24/2017 | | | | | | | 24,427 | | | | | | | 24,427 | | | | | | | 28.17 | | | | | | | 3/24/2027 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3/23/2018 | | | | | | | 7,645 | | | | | | | 22,936 | | | | | | | 27.21 | | | | | | | 3/23/2028 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3/21/2019 | | | | | | | 0 | | | | | | | 38,910 | | | | | | | 24.03 | | | | | | | 3/21/2029 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 22,050(2) | | | | | | | 351,698 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 24,968(3) | | | | | | | 398,240 | | | | | | | | | | | 3/23/2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 27,563(4) | | | | | | | 439,630 | | | | | | | | | | | | | | | | | | | | | | | | | 3/23/2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 5,513(4) | | | | | | | 87,932 | | | | | | | | | | | | | | | | | | | | | | | | | 3/21/2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 8,322(4) | | | | | | | 132,736 | | | | | | | | | | | | | | | | | | | Kirgan | | | | | | 11/13/2017 | | | | | | | 69,832 | | | | | | | 69,832 | | | | | | | 19.33 | | | | | | | 11/13/2027 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4/6/2018 | | | | | | | 15,978 | | | | | | | 47,936 | | | | | | | 29.80 | | | | | | | 4/6/2028 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3/21/2019 | | | | | | | 0 | | | | | | | 93,385 | | | | | | | 24.03 | | | | | | | 3/21/2029 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 24,161(2) | | | | | | | 385,368 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 29,962(3) | | | | | | | 477,894 | | | | | Lawton | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1)
Options vest/vested as follows: | | Grant Date | | | | Vesting Schedule | | | 3/21/2008 | | | | 25% on each of 3/21/09, 3/21/10, 3/21/11 and 3/21/12 | | | 3/20/2009 | | | | 25% on each of 3/20/10, 3/20/11, 3/20/12 and 3/20/13 | | | 3/19/2010 | | | | 25% on each of 3/19/11, 3/19/12, 3/19/13 and 3/19/14 | | | 3/25/2011 | | | | 25% on each of 3/25/12, 3/25/13, 3/25/14 and 3/25/15 | | | | 3/23/2012 | | | | 25% on each of 3/23/13, 3/23/14, 3/23/15 and 3/23/16 | | | | 3/19/2013 | | | | 25% on each of 3/19/14, 3/19/15, 3/19/16 and 3/19/17 | | | | 3/28/2014 | | | | 25% on each of 3/28/15, 3/28/16, 3/28/17 and 3/28/18 | | | | 3/27/2015 | | | | 25% on each of 3/27/16, 3/27/17, 3/27/18 and 3/27/19 | | | | 3/23/2016 | | | | 25% on each of 3/23/17, 3/23/18, 3/23/19 and 3/23/20 | | | | 9/20/2016 | | | | 25% on each of 9/20/17, 9/20/18, 9/20/19 and 9/20/20 | | | | 3/24/2017 | | | | 25% on each of 3/24/18, 3/24/19, 3/24/20 and 3/24/21 | | | | 9/8/11/13/2017 | | | | 50%25% on each of 9/8/11/13/18, 11/13/19, 11/13/20 and 9/8/11/13/21 | | | | 3/23/2018 | | | | 25% on each of 3/23/19, 3/23/20, 3/23/21 and 3/23/22 | | | | 4/6/2018 | | | | 25% on each of 4/6/19, 4/6/20, 4/6/21 and 4/6/22 | | | | 4/6/7/9/2018 | | | | 1/3 on each of 4/6/7/9/19, 4/6/7/9/20 and 4/6/7/9/21 | | | | 7/9/2018 | | | | 25% on each of 7/9/19, 7/9/20, 7/9/21 and 7/9/22 | | | | 3/21/2019 | | | | 25% on each of 3/21/20, 3/21/21, 3/21/22 and 3/21/23 | |
Macy’s, Inc. 2020 Notice of Meeting and Proxy Statement 63
COMPENSATION OF THE NAMED EXECUTIVES FOR 2019
(2)
Target number of PRSUs that vest following conclusion of the three-year (fiscal 2018 — 2020) performance period, subject to satisfaction of performance criteria. See "Plan-Based Awards — Fiscal 2018 Performance-Based RSU Grant" and the "Performance-Based Restricted Stock Units" discussion in "Compensation Discussion & Analysis — Long-Term Equity Compensation." (3)
Target number of PRSUs that vest following conclusion of the three-year (fiscal 2019 — 2021) performance period, subject to satisfaction of performance criteria. See "Plan-Based Awards — Fiscal 2019 Performance-Based RSU Grant" and the "Performance-Based Restricted Stock Units" discussion in "Compensation Discussion & Analysis — Long-Term Equity Compensation." (4)
RSUs vest/vested as follows: | | Grant Date | | | | Vesting Schedule | | | | 3/23/2018 | | | | 50% on each of 3/23/20 and 3/23/21 | | | | 3/23/2018 | | | | 25% on each of 3/23/19, 3/23/20, 3/23/21 and 3/23/22 | | | | 7/9/2018 | | | | 1/3 on each of 7/9/19, 7/9/20 and 7/9/21 | | | | 3/21/2019 | | | | 25% on each of the 3/21/20, 3/21/21, 3/21/22 and 3/21/23 | |
(2)
Target number of PRSUs that vest following conclusion of the three-year (fiscal 2017 – 2019) performance period, subject to satisfaction of performance criteria. See “Plan-Based Awards – Fiscal 2017 Performance-Based RSU Grant.”
(3)
Maximum number of PRSUs that vest following conclusion of the three-year (fiscal 2018 – 2020) performance period, subject to satisfaction of performance criteria. (Disclosure based on maximum because fiscal 2018 performance exceeded target.) See “Plan-Based Awards – Fiscal 2018 Performance-Based RSU Grant” and the “Performance-Based Restricted Stock Units” discussion in “Compensation Discussion & Analysis – Long-Term Equity Compensation.”
(4)
TRSUs that vest 1/3 on each of July 9, 2019, July 9, 2010 and July 9, 2021.
(5)
TRSUs that vest 1/3 on each of April 6, 2019, April 6, 2020 and April 6, 2021.
(6)
TRSUs that vest 50% on each of September 8, 2019 and September 8, 2020.
(7)
Target number of PRSUs that vest following conclusion of the performance period (7/30/17 – end of fiscal 2019), subject to satisfaction of performance criteria. See “Plan-Based Awards – Fiscal 2017 Performance-Based RSU Grant.”
(8)
TRSUs that vest September 20, 2019.
60 investors.macysinc.com
COMPENSATION OF THE NAMED EXECUTIVES FOR 2018
The following table sets forth certain information regarding the value realized by each of the Named Executives during fiscal 20182019 upon the exercise of stock options and the vesting of restricted stock units. 20182019 Option Exercises and Stock Vested
| | | | | | Option Awards | | | | Stock Awards | | | | | | Option Awards | | | | Stock Awards | | | | Name | | | | Number of Shares
Acquired on Exercise
(#) | | | | Value Realized
on Exercise(1)
($) | | | | Number of Shares
Acquired on Vesting(2)
(#) | | | | Value Realized
on Vesting
($) | | Name | | | | Number of Shares
Acquired on Exercise
(#) | | | | Value Realized
on Exercise
($) | | | | Number of Shares
Acquired on Vesting(1)
(#) | | | | Value Realized
on Vesting(2)
($) | | | | Gennette | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | Gennette | | | | | | 0 | | | | | | | 0 | | | | | | | 106,547 | | | | | | | 1,409,617 | | | | | Price | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | Price | | | | | | 0 | | | | | | | 0 | | | | | | | 3,199 | | | | | | | 67,915 | | | | | Hoguet | | | | | | 67,515 | | | | | | | 306,597 | | | | | | | 0 | | | | | | | 0 | | | Garcia | | | | | | 0 | | | | | | | 0 | | | | | | | 30,396 | | | | | | | 425,522 | | | | | Lawton | | | | | | 200,000 | | | | | | | 2,354,089 | | | | | | | 54,721 | | | | | | | 1,972,692 | | | Harper | | | | | | 0 | | | | | | | 0 | | | | ��� | | | 25,889 | | | | | | | 440,336 | | | | | Garcia | | | | | | 0 | | | | | | | 0 | | | | | | | 10,727 | | | | | | | 384,563 | | | Kirgan | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Kirgan | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | Lawton | | | | | | 0 | | | | | | | 0 | | | | | | | 54,722 | | | | | | | 842,172 | | | | | | |
(1)
The amounts “realized” from option exercises reflectnumber of shares includes RSUs that vested on July 9, 2019 for Ms. Price, September 20, 2019 for Ms. Garcia, March 23, 2019 and June 6, 2019 for Mr. Harper and September 8, 2019 for Mr. Lawton and PRSUs that were earned as of the appreciationend of the fiscal 2017-2019 performance period, as follows: | | | | | | RSU | | | | PRSU | | | | Genette | | | | | | 0 | | | | | | | 106,547 | | | | | Price | | | | | | 3,199 | | | | | | | 0 | | | | | Garcia | | | | | | 10,726 | | | | | | | 19,670 | | | | | Harper | | | | | | 12,776 | | | | | | | 13,113 | | | | | Kirgan | | | | | | 0 | | | | | | | 0 | | | | | Lawton | | | | | | 54,722 | | | | | | | 0 | | |
The Named Executives received the following shares of Macy’s common stock with respect to dividend equivalents accrued on the earned PRSUs during the three-year (fiscal 2017-2019) performance period: Mr. Gennette – 20,513 shares, Ms. Garcia – 3,783 shares and Mr. Harper – 2,519 shares. (2)
The value of the stock awards are calculated based on the closing price on the date of exercise (based on(i) the excessrestrictions lapsed for RSUs or (ii) the related performance results were certified for PRSUs, and not as of the fair market value ofdate the shares over the exercise price). Because the Named Executives may keep the shares they acquire upon the exercise of the option (or sell them at different prices), these amounts do not necessarily reflect cash actually realized upon exercise.awards were granted. (2)
No shares were earned and therefore forfeited under the fiscal 2016 – 2018 performance plan.
64 investors.macysinc.com
COMPENSATION OF THE NAMED EXECUTIVES FOR 2019
POST RETIREMENT COMPENSATION Retirement Plans Our Retirement Program consists of defined benefit plans and a defined contribution plan. Defined Contribution Plan. The Retirement Program includes the Macy’s 401(k) Retirement Investment Plan (401(k) Plan), a defined contribution plan. As of January 1, 2019,2020, approximately 103,451103,942 active employees, including the Named Executives, participated in the 401(k) Plan. The 401(k) Plan permits executives to contribute up to 50% of eligible compensation each year (up to maximum amounts established from time to time by the Internal Revenue Code). We match participant contributions up to 1% of eligible compensation at 100%, and contributions from 2% to 6% of eligible compensation at 50%. A participant who contributes 6% of eligible compensation is therefore entitled to a matching contribution equal to 3.5%. An executive may choose any of several investment funds for investment of the executive’s balances, and may change those elections daily. Benefits may be paid out at termination of employment. Executives may borrow portions of their investment balances while employed. Company contributions to the Named Executives under the 401(k) Plan are reported in the “All Other Compensation” column of the 20182019 Summary Compensation Table. Prior to adoption of the 401(k) Plan, we provided retirement benefits to employees through defined contribution profit sharing plans. An employee’s accumulated retirement profit sharing interests in the profit sharing plans (Prior Plan Credits) which accrued prior to adoption of the 401(k) Plan continue to be maintained and invested as a part of the 401(k) Plan until retirement, at which time they are distributed. Defined Benefit Plans. Through fiscal 2013, we provided the Macy’s, Inc. Cash Account Pension Plan (a cash balance plan referred to as CAPP) and the Macy’s, Inc. Supplementary Executive Retirement Plan (SERP), two defined benefit plans covering thecertain Named Executives. No Named Executive currently accrues a benefit under the CAPP or the SERP because we discontinued future pension service credits in those plans effective as of December 31, 2013. Benefits previously accrued are payable following termination of employment, subject to the terms of the applicable plan. CAPP benefits earned through December 31, 2013 will be held in a trust on behalf of participants and interest credits will continue to be allocated to participants. For the SERP, we determined a gross monthly benefit (payable at age 65) for each participant as of December 31, 2013 (January 31, 2014 with respect to the May Supplementary Retirement component of the SERP).
Macy’s, Inc. 2019 Notice of Meeting and Proxy Statement 61
COMPENSATION OF THE NAMED EXECUTIVES FOR 2018
The following table shows the actuarial present value of each of the Named Executive’s accumulated benefit under the CAPP and the SERP. We determined the present value using the same assumptions used for financial reporting purposes –— a unit credit cost method, a PBO effective discount interest rate of 4.27%2.83% for the CAPP and 4.34%2.89% for the SERP, and a normal retirement age of 65 (as defined by the plans). 20182019 Pension Benefits
| | Name | | | | Plan Name | | | | Number of Years
Credit Service(1)
(#) | | | | Present Value of
Accumulated
Benefit
($) | | | | Payments During
Last Fiscal
Year
($) | | Name | | | | Plan Name | | | | Number of Years
Credit Service(1)
(#) | | | | Present Value of
Accumulated
Benefit
($) | | | | Payments During
Last Fiscal Year
($) | | | | Gennette | | | | | | CAPP | | | | | | | 30 | | | | | | | 463,7590 | | | | | | | 0 | | | Gennette | | | | | | CAPP | | | | | | | 30 | | | | | | | 527,505 | | | | | | | 0 | | | | | | | SERP | | | | | | | 30 | | | | | | | 4,722,101 | | | | | | | 0 | | | | | | SERP | | | | | | | 30 | | | | | | | 5,335,443 | | | | | | | 0 | | | | | Price | | | | | | CAPP | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | Price | | | | | | CAPP | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | SERP | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | SERP | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Hoguet | | | | | | CAPP | | | | | | | 31 | | | | | | | 519,781 | | | | | | | 0 | | | Garcia | | | | | | CAPP | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | SERP | | | | | | | 30 | | | | | | | 7,097,948 | | | | | | | 0 | | | | | | SERP | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Lawton | | | | | | CAPP | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | Harper | | | | | | CAPP | | | | | | | 28 | | | | | | | 861,257 | | | | | | | 0 | | | | | | | SERP | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | SERP | | | | | | | 28 | | | | | | | 4,744,269 | | | | | | | 0 | | | | | Garcia | | | | | | CAPP | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | Kirgan | | | | | | CAPP | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | SERP | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | SERP | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Kirgan | | | | | | CAPP | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | Lawton | | | | | | CAPP | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | SERP | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | SERP | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | |
(1)
The SERP uses a maximum of 30 years of service for calculating SERP benefits (25 years for the May Supplementary Retirement component of the SERP). The number of years of credited service shown for the CAPP is as of December 31, 2013, the date participants ceased accruing additional service credits. Macy’s, Inc. 2020 Notice of Meeting and Proxy Statement 65
COMPENSATION OF THE NAMED EXECUTIVES FOR 2019
CAPP. As of January 1, 2019,2020, approximately 40,95033,700 active employees, including thecertain Named Executives, participated in the CAPP. Under the CAPP, a participant retiring at a normal retirement age is eligible to receive the amount credited to his or her pension account or monthly benefit payments determined actuarially based on the amount credited to his or her pension account. Amounts credited to a participant’s account consist of: •
an opening cash balance for participants in the plan at December 31, 1996, equal to the lump sum present value, using stated actuarial assumptions, of the participant’s accrued normal retirement benefit earned at December 31, 1996, under the applicable predecessor pension plan; •
pay credits (credited annually, a percentage of eligible compensation generally based on length of service); and •
interest credits (credited quarterly, based on the 30-Year Treasury Bond rate for the November prior to each calendar year, with a guaranteed minimum rate of 5.0% annually). In addition, if a participant had attained age 55 and completed 10 or more years of vesting service by December 31, 2001, the pension benefit payable in an annuity form, other than a single life annuity, will not be less than that which would have been payable from the predecessor pension plan under which such participant was covered on December 31, 1996 had that predecessor plan continued. Approximately 11,1208,990 of these active employees participate in the May Retirement Plan component of the CAPP. These participants have their accrued benefit determined under a “career average” pension formula. SERP. All benefits under the SERP are payable out of our general corporate assets. The SERP provides retirement benefits to eligible executives based on all eligible compensation, including compensation in excess of Internal Revenue Code maximums, as well as on amounts deferred under our Executive Deferred Compensation Plan, in each case employing a formula based on the participant’s years of vesting service and final average compensation, taking into consideration the participant’s balance in the CAPP, Prior Plan Credits and Social Security benefits. As of January 1, 2019,2020, approximately 11090 executives were eligible to receive benefits under the SERP. Approximately 12 of these executives participate in the May Retirement Plan component of the CAPP and have their supplementary retirement benefit determined under a different formula that uses different offsets. We have reserved the right to suspend or terminate supplemental payments as to any category of employee or former employee, or to modify or terminate any other element of the Retirement Program, in accordance with applicable law. 62 investors.macysinc.com
COMPENSATION OF THE NAMED EXECUTIVES FOR 2018
Non-qualifiedNonqualified Deferred Compensation Plans
Through fiscal 2013, we provided the opportunity for executives to defer compensation through the Executive Deferred Compensation Plan (EDCP). Under the EDCP, eligible executives could elect to defer a portion of their compensation each year as either stock credits or cash credits. Stock credit accounts reflect common stock equivalents and dividend equivalents. Common stock equivalents are the number of full shares of Macy’s common stock for each calendar quarter that could be purchased based on the dollars deferred. Dividend equivalents are determined by multiplying the dividends payable on a share of common stock during such calendar quarter by the number of stock equivalents in the participant’s stock credit account at the beginning of each quarter, less the number of shares distributable or withdrawn during such quarter. Total value of the stock credits is determined at the end of each quarter based on the closing price of our common stock as of the last day of the quarter. Cash credit accounts reflect dollars deferred plus interest equivalents determined by applying to 100% of such participant’s cash credits at the beginning of each quarter, less amounts distributable or withdrawn during such quarter, an interest rate equal to one to one quarter of the interest rate payable on U.S. five-year Treasury Notes as of the last day of each quarter. Deferred compensation distributions generally begin in the fiscal year following the fiscal year in which termination of employment occurs.
On January 1, 2014 we introduced the Macy’s, Inc. Deferred Compensation Plan (DCP), a new non-qualified deferred compensation plan with features similar to the 401(k) Plan. The DCP replaced the EDCP. Amounts that participants deferred under the EDCP continue to earn dividend and/or interest equivalents, but participants may no longer defer compensation under that plan. Eligible participants in the DCP may defer compensation earned in excess of IRS compensation limits and select from among several reference investment funds where deferred compensation may be invested. We will match deferrals at a rate similar to the 401(k) Plan. Accounts will be credited with earnings (losses) based on the performance of the applicable reference investment funds selected by the participants. 66 investors.macysinc.com
COMPENSATION OF THE NAMED EXECUTIVES FOR 2019
2019 Nonqualified Deferred Compensation | | Name | | | | Plan
Name | | | | Executive
Contributions
in Last FY(1)
($) | | | | Registrant
Contributions
in Last FY(2)
($) | | | | Aggregate
Earnings in Last
FY(3)
($) | | | | Aggregate
Withdrawals/
Distributions
($) | | | | Aggregate
Balance at
Last FYE(4)
($) | | Name | | | | Plan
Name | | | | Executive
Contributions
in Last FY(1)
($) | | | | Registrant
Contributions
in Last FY(2)
($) | | | | Aggregate
Earnings in
Last FY(3)
($) | | | | Aggregate
Withdrawals/
Distributions
($) | | | | Aggregate
Balance at
Last FYE(4)
($) | | | | Gennette | | | | EDCP | | | | | | 0 | | | | | | | 0 | | | | | | | 1,421 | | | | | | | 0 | | | | | | | 27,550 | | | Gennette | | | | EDCP | | | | | | 0 | | | | | | | 0 | | | | | | | -6,880 | | | | | | | 0 | | | | | | | 31,441 | | | | | DCP | | | | | | 0 | | | | | | | 9,354 | | | | | | | -1,080 | | | | | | | 0 | | | | | | | 167,830 | | | | DCP | | | | | | 0 | | | | | | | 15,200 | | | | | | | 22,495 | | | | | | | 0 | | | | | | | 175,987 | | | | | Price | | | | EDCP | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | Price | | | | EDCP | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | DCP | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | DCP | | | | | | 0 | | | | | | | 1,429 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Hoguet | | | | EDCP | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | Garcia | | | | EDCP | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | DCP | | | | | | 90,126 | | | | | | | 25,280 | | | | | | | 6,038 | | | | | | | 0 | | | | | | | 349,282 | | | | DCP | | | | | | 5,000 | | | | | | | 11,143 | | | | | | | 17,771 | | | | | | | 0 | | | | | | | 73,138 | | | | | Lawton | | | | EDCP | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | Harper | | | | EDCP | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | DCP | | | | | | 5,000 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | DCP | | | | | | 50,750 | | | | | | | 36,236 | | | | | | | 69,006 | | | | | | | 0 | | | | | | | 402,943 | | | | | Garcia | | | | EDCP | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | Kirgan | | | | EDCP | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | DCP | | | | | | 68,333 | | | | | | | 0 | | | | | | | 94 | | | | | | | 0 | | | | | | | 6,041 | | | | DCP | | | | | | 658,825 | | | | | | | 49,298 | | | | | | | 43,759 | | | | | | | 0 | | | | | | | 0 | | | | | Kirgan | | | | EDCP | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | Lawton | | | | EDCP | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | DCP | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | DCP | | | | | | 51,250 | | | | | | | 42,940 | | | | | | | 6,870 | | | | | | | 0 | | | | | | | 5,091 | | |
(1)
The amounts in this column associated with the DCP are reported as compensation for fiscal 20182019 in the “Salary” and/or “Non-Equity Incentive Plan Compensation” columns of the 20182019 Summary Compensation Table. (2)
The amounts in this column associated with the DCP represent Company matching contributions and are included in the 20182019 Summary Compensation Table under the “All Other Compensation” column for fiscal 2018.2019. These amounts will be credited to the participants’ accounts in March 2019.fiscal 2020. (3)
The amounts in this column represent deemed investment earnings or losses from voluntary deferrals and Company contributions, as applicable. These amounts are not included in the 20182019 Summary Compensation Table because the plans do not provide for above-market or preferential earnings. (4)
A portion of the compensation deferred by Mr. Gennette under the EDCP is deferred as stock credits and a portion is deferred as cash credits. The portion of the aggregate balance that is attributable to his contributions under the EDCP was deferred in years prior to those reported in the 20182019 Summary Compensation Table. The aggregate balance reflected in this column attributable to the DCP for each of the Named Executives with the exception of amounts reflected in the “Executive Contributions in last FY”, “Registrant Contributions in last FY”, and “Aggregate Earnings in last FY” columns, if any, have been reported in the Company’s Summary Compensation Table for prior years. Macy’s, Inc. 20192020 Notice of Meeting and Proxy Statement 6367
COMPENSATION OF THE NAMED EXECUTIVES FOR 2018
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL Termination Payments under Senior Executive Severance Plan Senior Executive Severance Plan. Effective April 1, 2018, we adopted the Senior Executive Severance Plan (SESP) and transitioned the Named Executives and other senior executives to the new severance plan.SESP. The SESP replaced the Executive Severance Plan (ESP). To participate in the SESP, a Named Executive or other eligible senior executive must execute a noncompetition, nonsolicitation and trade secrets and confidential information agreement. Pursuant to the noncompetition, nonsolicitation and trade secrets and confidential information agreement, the executive agrees, among other things, not to engage in specified activities in competition with the Company following termination of employment. The non-competition period extends for a period of one year if the executive voluntarily terminates employment or is involuntarily terminated by the Company for cause (as defined in the SESP). Under the SESP, Mr. Gennette’s severance payment is equal to 36 months of base salary and non-competition period is two years, and the other Named Executives are entitled to a 24 months base salary severance payment with a one-year non-competition period that is not waivable and applies regardless of the reason for termination. In the event of involuntary termination not for cause, severance benefits also include a lump sum payment equal to 12 times the employer portion of monthly health care premiums and continued vesting of equity during the non-competition time period. The only NEO not covered by the SESP is Ms. Hoguet. Executive Severance Plan. In 2009, we adopted the Executive Severance Plan (ESP). The ESP replaced individual employment agreements with the Named Executives.
To be eligible to participate in the ESP, generally a person must be an employee of the Company or one of its subsidiaries, divisions or controlled affiliates with a position at, equivalent to or above General Merchandise Manager or Senior Vice President and must sign a non-compete, non-solicitation and confidential information agreement. Under the ESP, Ms. Hoguet was entitled to receive a lump sum severance payment equal to 24 months base salary upon an involuntary termination of her employment by the Company for reasons other than for cause (as defined in the ESP).
Effective April 1, 2018, the ESP was frozen and no additional participants are eligible for coverage.
Termination Payments under Change-in-Control Plan In 2009, we adopted a Change-in-Control Plan (CIC Plan) covering, among other participants, each of the Named Executives. The CIC Plan replaced our individual change-in-control agreements, which expired as of November 1, 2009. Under the CIC Plan, each of the Named Executives could be entitled to certain severance benefits following a change in control of Macy’s. If, within the two years following a change in control, the Named Executive is terminated for any reason, other than death, permanent and total disability or for cause, or if the Named Executive terminates his or her employment for “good reason,” then the Named Executive is entitled to: •
a cash severance payment (generally paid in the form of a lump sum) equal to two times the sum of: •
his or her base pay (at the higher of the rate in effect at the change in control or at termination) and •
the average annual incentive award (if any) received for the three full fiscal years preceding the change in control •
a lump sum payment of an annual incentive award for the year of termination, at target, prorated to the
date of termination (this feature applies to all executives in the Incentive Plan) •
release of any restrictions on restricted stock or restricted stock units, including performance-based awards upon termination following the change in control •
acceleration of any unvested stock options upon termination following the change in control •
a lump sum payment of all deferred compensation (this feature applies to all participants in the deferred compensation plans) •
payment of all retirement, supplementary retirement and 401(k) benefits upon termination or retirement in accordance with any previously selected distribution schedule (this feature applies to all participants in the retirement, supplementary retirement and 401(k) plans), and
•
a retiree discount for life if at least 55 years of age with 15 years of vesting service at termination (this feature applies generally to all associates). If the Named Executive does not engage in specified activities in competition with the Company during the first year following termination, he or she is entitled to an
64 investors.macysinc.com
COMPENSATION OF THE NAMED EXECUTIVES FOR 2018
additional “non-competition” severance benefit at the end of the one-year period in a lump sum payment equal to one times (i) his or her base pay (at the higher of the rate in effect at the change in control or at termination), and (ii) the average annual incentive award (if any) received for the three full fiscal years preceding the change in control. All the above severance benefits would be paid to the executive in accordance with, and at times permitted by, Section 409A of the Internal Revenue Code. A “change in control” occurs in any of the following events: •
a person becomes the beneficial owner of securities representing 30% or more of our combined voting power •
individuals who, on the effective date of the CIC Plan, constitute our directors or whose election as a director after the effective date was approved by at least two-thirds of the directors as of the effective date cease for any reason to constitute at least a majority of the Board •
consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all our assets and, as a result of or immediately following such merger, consolidation, reorganization, sale or transfer, less than a majority 68 investors.macysinc.com
of the voting power of the other corporation immediately after the transaction is held in the aggregate by the holders of the voting stock of Macy’s immediately prior to the transaction, or
•
shareholders approve a complete liquidation or dissolution of the Company “Good reason” under the CIC Plan means: •
a material diminution in the executive’s base compensation •
a material diminution in the executive’s authority, duties or responsibilities •
a material change in the geographic location at which the executive must perform services to the Company, or •
any other action or inaction that constitutes a material breach by the Company of an agreement under which the executive provides services The cash severance benefit payable under the CIC Plan is reduced by all amounts actually paid by the Company to the executive pursuant to any other employment or severance agreement or plan to which the executive and Macy’s are parties or in which the executive is a participant. In addition, the severance benefits under the CIC Plan are subject to reduction in certain circumstances if the excise tax imposed under 280G of the Internal Revenue Code would reduce the net after-tax amount received by the executive. The following tables summarize the amounts payable to the Named Executives upon termination under certain circumstances, assuming that: 1) the executive’s employment terminated February 2, 2019,1, 2020, 2) the executive’s salary continues as it existed at February 2, 2019,1, 2020, 3) the CIC Plan applies and 4) the stock price for our common stock is $25.73$15.95 per share (the closing price for Macy’s stock on February 1, 2019,January 31, 2020, the last business day of fiscal 2018)2019). Macy’s, Inc. 20192020 Notice of Meeting and Proxy Statement 6569
COMPENSATION OF THE NAMED EXECUTIVES FOR 2018
Payments and Benefits upon Termination as of the End of Fiscal 20182019 ($) | | Gennette | | | | Voluntary | | | | Involuntary
Without
Cause | | | | Involuntary
With
Cause | | | | Involuntary
After
Change in
Control | | | | Death | | | | Disability | | Gennette | | | | Voluntary | | | | Involuntary
Without
Cause | | | | Involuntary
With
Cause | | | | Involuntary
After
Change in
Control | | | | Death | | | | Disability | | | | Severance and accelerated benefits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Severance and accelerated benefits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | SESP Cash Severance Benefit: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | SESP Cash Severance Benefit: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary (3x) | | | | | | 0 | | | | | | | 3,900,000 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | Salary (3x) | | | | | | 0 | | | | | | | 3,900,000 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | 12 month health care coverage (lump sum) | | | | | | 0 | | | | | | | 10,784 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | 12 month health care coverage (lump sum) | | | | | | 0 | | | | | | | 12,973 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Cash severance benefit: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cash severance benefit: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary (2x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 2,600,000 | | | | | | | 0 | | | | | | | 0 | | | Salary (2x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 2,600,000 | | | | | | | 0 | | | | | | | 0 | | | | | 3-Year Average Bonus (2x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 4,569,667 | | | | | | | 0 | | | | | | | 0 | | | 3-Year Average Bonus (2x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 5,069,400 | | | | | | | 0 | | | | | | | 0 | | | | | Non-Compete Pay Following CIC: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Non-Compete Pay Following CIC: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary (1x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 1,300,000 | | | | | | | 0 | | | | | | | 0 | | | Salary (1x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 1,300,000 | | | | | | | 0 | | | | | | | 0 | | | | | 3-year Average Bonus (1x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 2,284,833 | | | | | | | 0 | | | | | | | 0 | | | 3-year Average Bonus (1x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 2,534,700 | | | | | | | 0 | | | | | | | 0 | | | | | Equity based incentive awards | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Equity based incentive awards | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Vesting of unvested stock options | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | Vesting of unvested stock options | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Vesting of Time Based RSUs | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | Vesting of Time Based RSUs | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Vesting of Performance Based RSUs: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Vesting of Performance Based RSUs: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2017 – 2019 LTI Plan | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 3,562,190 | | | | | | | 2,374,793 | | | | | | | 2,374,793 | | | 2018 – 2020 LTI Plan | | | | | | 0 | | | | | | | 2,328,269 | | | | | | | 0 | | | | | | | 2,328,269 | | | | | | | 1,552,180 | | | | | | | 1,552,180 | | | | | 2018 – 2020 LTI Plan | | | | | | 0 | | | | | | | 2,503,924 | | | | | | | 0 | | | | | | | 3,755,885 | | | | | | | 1,251,962 | | | | | | | 1,251,962 | | | 2019 – 2021 LTI Plan | | | | | | 0 | | | | | | | 2,887,317 | | | | | | | 0 | | | | | | | 2,887,317 | | | | | | | 962,439 | | | | | | | 962,439 | | | | | Total of severance and accelerated benefits: | | | | | | 0 | | | | | | | 6,414,708 | | | | | | | 0 | | | | | | | 18,072,575 | | | | | | | 3,626,755 | | | | | | | 3,626,755 | | | Total of severance and accelerated benefits: | | | | | | 0 | | | | | | | 9,128,559 | | | | | | | 0 | | | | | | | 16,719,686 | | | | | | | 2,514,619 | | | | | | | 2,514,619 | | | | | Previous vested equity and benefits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Previous vested equity and benefits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Previously vested stock options | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | Previously vested stock options | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Non-equity based incentive award (2018 annual incentive) | | | | | | 0 | | | | | | | 3,687,200 | | | | | | | 0 | | | | | | | 3,687,200 | | | | | | | 3,687,200 | | | | | | | 3,687,200 | | | Non-equity based incentive award (2019 annual incentive) | | | | | | 0 | | | | | | | 919,800 | | | | | | | 0 | | | | | | | 919,800 | | | | | | | 919,800 | | | | | | | 919,800 | | | | | Vested CAPP benefit | | | | | | 432,794 | | | | | | | 432,794 | | | | | | | 432,794 | | | | | | | 432,794 | | | | | | | 432,794 | | | | | | | 432,794 | | | Vested CAPP benefit | | | | | | 454,434 | | | | | | | 454,434 | | | | | | | 454,434 | | | | | | | 454,434 | | | | | | | 454,434 | | | | | | | 454,434 | | | | | Vested 401(k) Plan balance | | | | | | 796,272 | | | | | | | 796,272 | | | | | | | 796,272 | | | | | | | 796,272 | | | | | | | 796,272 | | | | | | | 796,272 | | | Vested 401(k) Plan balance | | | | | | 911,684 | | | | | | | 911,684 | | | | | | | 911,684 | | | | | | | 911,684 | | | | | | | 911,684 | | | | | | | 911,684 | | | | | Vested SERP benefit | | | | | | 5,099,971 | | | | | | | 5,099,971 | | | | | | | 5,099,971 | | | | | | | 5,099,971 | | | | | | | 5,099,971 | | | | | | | 5,099,971 | | | Vested SERP benefit | | | | | | 5,515,021 | | | | | | | 5,515,021 | | | | | | | 5,515,021 | | | | | | | 5,515,021 | | | | | | | 5,515,021 | | | | | | | 5,515,021 | | | | | Post-retirement medical/life benefits | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | Post-retirement medical/life benefits | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Deferred compensation balance previously vested | | | | | | 176,104 | | | | | | | 176,104 | | | | | | | 176,104 | | | | | | | 176,104 | | | | | | | 176,104 | | | | | | | 176,104 | | | Deferred compensation balance previously vested | | | | | | 213,357 | | | | | | | 213,357 | | | | | | | 213,357 | | | | | | | 213,357 | | | | | | | 213,357 | | | | | | | 213,357 | | | | | Total of previously vested equity and benefits: | | | | | | 6,505,141 | | | | | | | 10,192,341 | | | | | | | 6,505,141 | | | | | | | 10,192,341 | | | | | | | 10,192,341 | | | | | | | 10,192,341 | | | Total of previously vested equity and benefits: | | | | | | 7,094,496 | | | | | | | 8,014,296 | | | | | | | 7,094,496 | | | | | | | 8,014,296 | | | | | | | 8,014,296 | | | | | | | 8,014,296 | | | | | Full “Walk-Away” Value: | | | | | | 6,505,141 | | | | | | | 16,607,049 | | | | | | | 6,505,141 | | | | | | | 28,264,916 | | | | | | | 13,819,096 | | | | | | | 13,819,096 | | | Full “Walk-Away” Value: | | | | | | 7,094,496 | | | | | | | 17,142,855 | | | | | | | 7,094,496 | | | | | | | 24,733,982 | | | | | | | 10,528,915 | | | | | | | 10,528,915 | | | | | | |
6670 investors.macysinc.com
COMPENSATION OF THE NAMED EXECUTIVES FOR 2018
| | Price | | | | Voluntary | | | | Involuntary
Without
Cause | | | | Involuntary
With
Cause | | | | Involuntary
After
Change in
Control | | | | Death | | | | Disability | | Price | | | | Voluntary | | | | Involuntary
Without
Cause | | | | Involuntary
With
Cause | | | | Involuntary
After
Change in
Control | | | | Death | | | | Disability | | | | Severance and accelerated benefits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Severance and accelerated benefits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | SESP Cash Severance Benefit: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | SESP Cash Severance Benefit: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary (2x) | | | | | | 0 | | | | | | | 1,540,000 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | Salary (2x) | | | | | | 0 | | | | | | | 1,540,000 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | 12 month health care coverage (lump sum) | | | | | | 0 | | | | | | | 10,784 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | 12 month health care coverage (lump sum) | | | | | | 0 | | | | | | | 12,973 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Cash severance benefit: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cash severance benefit: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary (2x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 1,540,000 | | | | | | | 0 | | | | | | | 0 | | | Salary (2x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 1,540,000 | | | | | | | 0 | | | | | | | 0 | | | | | Target Bonus (2x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 1,540,000 | | | | | | | 0 | | | | | | | 0 | | | Target Bonus (2x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 1,540,000 | | | | | | | 0 | | | | | | | 0 | | | | | Non-Compete Pay Following CIC: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Non-Compete Pay Following CIC: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary (1x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 770,000 | | | | | | | 0 | | | | | | | 0 | | | Salary (1x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 770,000 | | | | | | | 0 | | | | | | | 0 | | | | | Target Bonus (1x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 770,000 | | | | | | | 0 | | | | | | | 0 | | | Target Bonus (1x) | | | | | | 0 | | | ��� | | | | 0 | | | | | | | 0 | | | | | | | 770,000 | | | | | | | 0 | | | | | | | 0 | | | | | Equity based incentive awards | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Equity based incentive awards | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Vesting of unvested stock options | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | Vesting of unvested stock options | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Vesting of Time Based RSUs | | | | | | 0 | | | | | | | 82,327 | | | | | | | 0 | | | | | | | 246,982 | | | | | | | 246,982 | | | | | | | 246,982 | | | Vesting of Time Based RSUs | | | | | | 0 | | | | | | | 34,027 | | | | | | | 0 | | | | | | | 102,080 | | | | | | | 102,080 | | | | | | | 102,080 | | | | | Vesting of Performance Based RSUs: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Vesting of Performance Based RSUs: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2018 – 2020 LTI Plan | | | | | | 0 | | | | | | | 343,941 | | | | | | | 0 | | | | | | | 515,912 | | | | | | | 171,971 | | | | | | | 171,971 | | | 2018 – 2020 LTI Plan | | | | | | 0 | | | | | | | 319,813 | | | | | | | 0 | | | | | | | 319,813 | | | | | | | 168,790 | | | | | | | 168,790 | | | | | Total of severance and accelerated benefits: | | | | | | 0 | | | | | | | 1,977,052 | | | | | | | 0 | | | | | | | 5,382,895 | | | | | | | 418,953 | | | | | | | 418,953 | | | 2019 – 2021 LTI Plan | | | | | | 0 | | | | | | | 375,676 | | | | | | | 0 | | | | | | | 563,514 | | | | | | | 187,838 | | | | | | | 187,838 | | | | | Previous vested equity and benefits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total of severance and accelerated
benefits: | | | | | | 0 | | | | | | | 2,282,489 | | | | | | | 0 | | | | | | | 5,605,407 | | | | | | | 458,708 | | | | | | | 458,708 | | | | | Previously vested stock options | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | Previous vested equity and benefits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Non-equity based incentive award (2018 annual incentive) | | | | | | 0 | | | | | | | 749,400 | | | | | | | 0 | | | | | | | 749,400 | | | | | | | 749,400 | | | | | | | 749,400 | | | Previously vested stock options | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Vested CAPP benefit | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | Non-equity based incentive award (2019 annual incentive) | | | | | | 0 | | | | | | | 320,500 | | | | | | | 0 | | | | | | | 320,500 | | | | | | | 320,500 | | | | | | | 320,500 | | | | | Vested 401(k) Plan balance | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | Vested CAPP benefit | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Vested SERP benefit | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | Vested 401(k) Plan balance | | | | | | 35,666 | | | | | | | 35,666 | | | | | | | 35,666 | | | | | | | 35,666 | | | | | | | 35,666 | | | | | | | 35,666 | | | | | Post-retirement medical/life benefits | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | Vested SERP benefit | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Deferred compensation balance previously vested | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | Post-retirement medical/life benefits | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Total of previously vested equity and benefits: | | | | | | 0 | | | | | | | 749,400 | | | | | | | 0 | | | | | | | 749,400 | | | | | | | 749,400 | | | | | | | 749,400 | | | Deferred compensation balance previously vested | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Full “Walk-Away” Value: | | | | | | 0 | | | | | | | 2,726,452 | | | | | | | 0 | | | | | | | 6,132,295 | | | | | | | 1,168,353 | | | | | | | 1,168,353 | | | Total of previously vested equity and benefits: | | | | | | 35,666 | | | | | | | 356,166 | | | | | | | 35,666 | | | | | | | 356,166 | | | | | | | 356,166 | | | | | | | 356,166 | | | | | | Full “Walk-Away” Value: | | | | | | 35,666 | | | | | | | 2,638,655 | | | | | | | 35,666 | | | | | | | 5,961,573 | | | | | | | 814,874 | | | | | | | 814,874 | | | | | | |
Macy’s, Inc. 20192020 Notice of Meeting and Proxy Statement 6771
| | Garcia | | | | Voluntary | | | | Involuntary
Without
Cause | | | | Involuntary
With
Cause | | | | Involuntary
After
Change in
Control | | | | Death | | | | Disability | | | | Severance and accelerated benefits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | SESP Cash Severance Benefit: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary (2x) | | | | | | 0 | | | | | | | 1,500,000 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | 12 month health care coverage (lump sum) | | | | | | 0 | | | | | | | 12,973 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Cash severance benefit: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary (2x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 1,500,000 | | | | | | | 0 | | | | | | | 0 | | | | | 3-Year Average Bonus (2x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 1,293,067 | | | | | | | 0 | | | | | | | 0 | | | | | Non-Compete Pay Following CIC: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary (1x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 750,000 | | | | | | | 0 | | | | | | | 0 | | | | | 3-Year Average Bonus (1x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 646,533 | | | | | | | 0 | | | | | | | 0 | | | | | Equity based incentive awards | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Vesting of unvested stock options | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Vesting of Time Based RSUs | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Vesting of Performance Based RSUs: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2018 – 2020 LTI Plan | | | | | | 0 | | | | | | | 385,368 | | | | | | | 0 | | | | | | | 385,368 | | | | | | | 256,912 | | | | | | | 256,912 | | | | | 2019 – 2021 LTI Plan | | | | | | 0 | | | | | | | 318,596 | | | | | | | 0 | | | | | | | 477,894 | | | | | | | 159,298 | | | | | | | 159,298 | | | | | Total of severance and accelerated
benefits: | | | | | | 0 | | | | | | | 2,216,937 | | | | | | | 0 | | | | | | | 5,052,862 | | | | | | | 416,210 | | | | | | | 416,210 | | | | | Previous vested equity and benefits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Previously vested stock options | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Non-equity based incentive award (2019 annual incentive) | | | | | | 0 | | | | | | | 234,100 | | | | | | | 0 | | | | | | | 234,100 | | | | | | | 234,100 | | | | | | | 234,100 | | | | | Vested CAPP benefit | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Vested 401(k) Plan balance | | | | | | 106,928 | | | | | | | 106,928 | | | | | | | 106,928 | | | | | | | 106,928 | | | | | | | 106,928 | | | | | | | 106,928 | | | | | Vested SERP benefit | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Post-retirement medical/life benefits | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Deferred compensation balance previously vested | | | | | | 139,160 | | | | | | | 139,160 | | | | | | | 139,160 | | | | | | | 139,160 | | | | | | | 139,160 | | | | | | | 139,160 | | | | | Total of previously vested equity and benefits: | | | | | | 246,088 | | | | | | | 480,188 | | | | | | | 246,088 | | | | | | | 480,188 | | | | | | | 480,188 | | | | | | | 480,188 | | | | | Full “Walk-Away” Value: | | | | | | 246,088 | | | | | | | 2,697,125 | | | | | | | 246,088 | | | | | | | 5,533,050 | | | | | | | 896,398 | | | | | | | 896,398 | | |
72 investors.macysinc.com
| | Harper | | | | Voluntary | | | | Involuntary
Without
Cause | | | | Involuntary
With
Cause | | | | Involuntary
After
Change in
Control | | | | Death | | | | Disability | | | | Severance and accelerated benefits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | SESP Cash Severance Benefit: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary (2x) | | | | | | 0 | | | | | | | 1,450,000 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | 12 month health care coverage (lump sum) | | | | | | 0 | | | | | | | 9,724 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Cash severance benefit: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary (2x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 1,450,000 | | | | | | | 0 | | | | | | | 0 | | | | | 3-Year Average Bonus (2x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 693,000 | | | | | | | 0 | | | | | | | 0 | | | | | Non-Compete Pay Following CIC: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary (1x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 725,000 | | | | | | | 0 | | | | | | | 0 | | | | | 3-Year Average Bonus (1x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 346,500 | | | | | | | 0 | | | | | | | 0 | | | | | Equity based incentive awards | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Vesting of unvested stock options | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Vesting of Time Based RSUs | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 660,298 | | | | | | | 660,298 | | | | | | | 660,298 | | | | | Vesting of Performance Based RSUs: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2018 – 2020 LTI Plan | | | | | | 0 | | | | | | | 351,698 | | | | | | | 0 | | | | | | | 351,698 | | | | | | | 234,465 | | | | | | | 234,465 | | | | | 2019 – 2021 LTI Plan | | | | | | 0 | | | | | | | 265,493 | | | | | | | 0 | | | | | | | 398,240 | | | | | | | 132,747 | | | | | | | 132,747 | | | | | Total of severance and accelerated
benefits: | | | | | | 0 | | | | | | | 1,811,421 | | | | | | | 0 | | | | | | | 4,624,735 | | | | | | | 1,027,510 | | | | | | | 1,027,510 | | | | | Previous vested equity and benefits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Previously vested stock options | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Non-equity based incentive award (2019 annual
incentive) | | | | | | 0 | | | | | | | 239,200 | | | | | | | 0 | | | | | | | 239,200 | | | | | | | 239,200 | | | | | | | 239,200 | | | | | Vested CAPP benefit | | | | | | 793,094 | | | | | | | 793,094 | | | | | | | 793,094 | | | | | | | 793,094 | | | | | | | 793,094 | | | | | | | 793,094 | | | | | Vested 401(k) Plan balance | | | | | | 1,078,880 | | | | | | | 1,078,880 | | | | | | | 1,078,880 | | | | | | | 1,078,880 | | | | | | | 1,078,880 | | | | | | | 1,078,880 | | | | | Vested SERP benefit | | | | | | 4,418,708 | | | | | | | 4,418,708 | | | | | | | 4,418,708 | | | | | | | 4,418,708 | | | | | | | 4,418,708 | | | | | | | 4,418,708 | | | | | Post-retirement medical/life benefits | | | | | | 1,484,010 | | | | | | | 1,484,010 | | | | | | | 1,484,010 | | | | | | | 1,484,010 | | | | | | | 1,484,010 | | | | | | | 1,484,010 | | | | | Deferred compensation balance previously vested | | | | | | 561,909 | | | | | | | 561,909 | | | | | | | 561,909 | | | | | | | 561,909 | | | | | | | 561,909 | | | | | | | 561,909 | | | | | Total of previously vested equity and benefits: | | | | | | 8,336,601 | | | | | | | 8,575,801 | | | | | | | 8,336,601 | | | | | | | 8,575,801 | | | | | | | 8,575,801 | | | | | | | 8,575,801 | | | | | Full “Walk-Away” Value: | | | | | | 8,336,601 | | | | | | | 10,387,222 | | | | | | | 8,336,601 | | | | | | | 13,200,536 | | | | | | | 9,603,311 | | | | | | | 9,603,311 | | | | |
Macy’s, Inc. 2020 Notice of Meeting and Proxy Statement 73
| | Kirgan | | | | Voluntary | | | | Involuntary
Without
Cause | | | | Involuntary
With
Cause | | | | Involuntary
After
Change in
Control | | | | Death | | | | Disability | | | | Severance and accelerated benefits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | SESP Cash Severance Benefit: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary (2x) | | | | | | 0 | | | | | | | 1,500,000 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | 12 month health care coverage (lump sum) | | | | | | 0 | | | | | | | 12,973 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Cash severance benefit: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary (2x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 1,500,000 | | | | | | | 0 | | | | | | | 0 | | | | | Target Bonus (2x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 1,125,000 | | | | | | | 0 | | | | | | | 0 | | | | | Non-Compete Pay Following CIC: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary (1x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 750,000 | | | | | | | 0 | | | | | | | 0 | | | | | Target Bonus (1x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 562,500 | | | | | | | 0 | | | | | | | 0 | | | | | Equity based incentive awards | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Vesting of unvested stock options | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Vesting of Time Based RSUs | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Vesting of Performance Based RSUs: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2018 – 2020 LTI Plan | | | | | | 0 | | | | | | | 385,368 | | | | | | | 0 | | | | | | | 385,368 | | | | | | | 256,912 | | | | | | | 256,912 | | | | | 2019 – 2021 LTI Plan | | | | | | 0 | | | | | | | 318,596 | | | | | | | 0 | | | | | | | 477,894 | | | | | | | 159,298 | | | | | | | 159,298 | | | | | Total of severance and accelerated
benefits: | | | | | | 0 | | | | | | | 2,216,937 | | | | | | | 0 | | | | | | | 4,800,762 | | | | | | | 416,210 | | | | | | | 416,210 | | | | | Previous vested equity and benefits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Previously vested stock options | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Non-equity based incentive award (2019 annual
incentive) | | | | | | 0 | | | | | | | 234,100 | | | | | | | 0 | | | | | | | 234,100 | | | | | | | 234,100 | | | | | | | 234,100 | | | | | Vested CAPP benefit | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Vested 401(k) Plan balance | | | | | | 49,850 | | | | | | | 49,850 | | | | | | | 49,850 | | | | | | | 49,850 | | | | | | | 49,850 | | | | | | | 49,850 | | | | | Vested SERP benefit | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Post-retirement medical/life benefits | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Deferred compensation balance previously vested | | | | | | 702,584 | | | | | | | 702,584 | | | | | | | 702,584 | | | | | | | 702,584 | | | | | | | 702,584 | | | | | | | 702,584 | | | | | Total of previously vested equity and benefits: | | | | | | 752,434 | | | | | | | 986,534 | | | | | | | 752,434 | | | | | | | 986,534 | | | | | | | 986,534 | | | | | | | 986,534 | | | | | Full “Walk-Away” Value: | | | | | | 752,434 | | | | | | | 3,203,471 | | | | | | | 752,434 | | | | | | | 5,787,296 | | | | | | | 1,402,744 | | | | | | | 1,402,744 | | | | |
74 investors.macysinc.com
| | HoguetLawton | | | | Voluntary | | | | Severance and accelerated benefits | | | | | | | | | | | SESP Cash Severance Benefit: | | | | | | | | | | | Salary (2x) | | | | | | 0 | | | | | 12 month health care coverage (lump sum) | | | | | | 0 | | | | | Cash severance benefit: | | | | | | | | | | | Salary (2x) | | | | | | 0 | | | | | 3-Year AverageTarget Bonus (2x) | | | | | | 0 | | | | | Non-Compete Pay Following CIC: | | | | | | | | | | | Salary (1x) | | | | | | 0 | | | | | 3-Year AverageTarget Bonus (1x) | | | | | | 0 | | | | Additional Excess EXP Cash Severance Benefits (2x) | | | | | | 0 | | | | Retention Bonus | | | | | | 500,000 | | | | | Equity based incentive awards | | | | | | | | | | | Vesting of unvested stock options | | | | | | 0 | | | | | Vesting of Time Based RSUs | | | | | | 1,295,1200 | | | | | Vesting of Performance Based RSUs: | | | | | | | | | | | 20172018 – 20192020 LTI Plan | | | | | | 1,688,8140 | | | | | 2019 – 2021 LTI Plan | | | | | | 0 | | | | | Total of severance and accelerated benefits: | | | | | | 3,483,9340 | | | | | Previous vested equity and benefits | | | | | | | | | | | Previously vested stock options | | | | | | 171,2070 | | | | | Non-equity based incentive award (2018(2019 annual incentive) | | | | | | 1,126,2000 | | | | | Vested CAPP benefit | | | | | | 501,7870 | | | | | Vested 401(k) Plan balance | | | | | | 1,235,71951,534 | | | | | Vested SERP benefit | | | | | | 7,092,4890 | | | | | Post-retirement medical/life benefits | | | | | | 172,2320 | | | | | Deferred compensation balance previously vested | | | | | | 470,72663,211 | | | | | Total of previously vested equity and benefits: | | | | | | 10,770,360114,745 | | | | | Full “Walk-Away” Value: | | | | | | 14,254,294114,745 | | | | |
68 investors.macysinc.com
COMPENSATION OF THE NAMED EXECUTIVES FOR 2018
| | Lawton | | | | Voluntary | | | | Involuntary
Without
Cause | | | | Involuntary
With
Cause | | | | Involuntary
After
Change in
Control | | | | Death | | | | Disability | | | | Severance and accelerated benefits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | SESP Cash Severance Benefit: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary (2x) | | | | | | 0 | | | | | | | 2,000,000 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | 12 month health care coverage (lump sum) | | | | | | 0 | | | | | | | 10,784 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Cash severance benefit: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary (2x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 2,000,000 | | | | | | | 0 | | | | | | | 0 | | | | | Target Bonus (2x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 2,500,000 | | | | | | | 0 | | | | | | | 0 | | | | | Non-Compete Pay Following CIC: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary (1x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 1,000,000 | | | | | | | 0 | | | | | | | 0 | | | | | Target Bonus (1x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 1,250,000 | | | | | | | 0 | | | | | | | 0 | | | | | Equity based incentive awards | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Vesting of unvested stock options | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 2,813,395 | | | | | | | 2,813,395 | | | | | | | 2,813,395 | | | | | Vesting of Time Based RSUs | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 2,815,994 | | | | | | | 2,815,994 | | | | | | | 2,815,994 | | | | | Vesting of Performance Based RSUs: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2017 – 2019 LTI Plan | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 3,620,520 | | | | | | | 2,413,680 | | | | | | | 2,413,680 | | | | | 2018 – 2020 LTI Plan | | | | | | 0 | | | | | | | 1,381,461 | | | | | | | 0 | | | | | | | 2,072,191 | | | | | | | 690,730 | | | | | | | 690,730 | | | | | Total of severance and accelerated benefits: | | | | | | 0 | | | | | | | 3,392,245 | | | | | | | 0 | | | | | | | 18,072,100 | | | | | | | 8,733,799 | | | | | | | 8,733,799 | | | | | Previous vested equity and benefits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Previously vested stock options | | | | | | 524,697 | | | | | | | 524,697 | | | | | | | 0 | | | | | | | 524,697 | | | | | | | 524,697 | | | | | | | 524,697 | | | | | Non-equity based incentive award (2018 annual incentive) | | | | | | 0 | | | | | | | 2,085,500 | | | | | | | 0 | | | | | | | 2,085,500 | | | | | | | 2,085,500 | | | | | | | 2,085,500 | | | | | Vested CAPP benefit | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Vested 401(k) Plan balance | | | | | | 22,630 | | | | | | | 22,630 | | | | | | | 22,630 | | | | | | | 22,630 | | | | | | | 22,630 | | | | | | | 22,630 | | | | | Vested SERP benefit | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Post-retirement medical/life benefits | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Deferred compensation balance previously vested | | | | | | 5,096 | | | | | | | 5,096 | | | | | | | 5,096 | | | | | | | 5,096 | | | | | | | 5,096 | | | | | | | 5,096 | | | | | Total of previously vested equity and benefits: | | | | | | 552,423 | | | | | | | 2,637,923 | | | | | | | 27,726 | | | | | | | 2,637,923 | | | | | | | 2,637,923 | | | | | | | 2,637,923 | | | | | Full “Walk-Away” Value: | | | | | | 552,423 | | | | | | | 6,030,168 | | | | | | | 27,726 | | | | | | | 20,710,023 | | | | | | | 11,371,722 | | | | | | | 11,371,722 | | |
Macy’s, Inc. 2019 Notice of Meeting and Proxy Statement 69
COMPENSATION OF THE NAMED EXECUTIVES FOR 2018
| | Garcia | | | | Voluntary | | | | Involuntary
Without
Cause | | | | Involuntary
With
Cause | | | | Involuntary
After
Change in
Control | | | | Death | | | | Disability | | | | Severance and accelerated benefits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | SESP Cash Severance Benefit: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary (2x) | | | | | | 0 | | | | | | | 1,500,000 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | 12 month health care coverage (lump sum) | | | | | | 0 | | | | | | | 12,268 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Cash severance benefit: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary (2x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 1,500,000 | | | | | | | 0 | | | | | | | 0 | | | | | Target Bonus (2x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 1,125,000 | | | | | | | 0 | | | | | | | 0 | | | | | Non-Compete Pay Following CIC: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary (1x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 750,000 | | | | | | | 0 | | | | | | | 0 | | | | | 3-Year Average Bonus (1x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 578,833 | | | | | | | 0 | | | | | | | 0 | | | | | Equity based incentive awards | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Vesting of unvested stock options | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Vesting of Time Based RSUs | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 275,980 | | | | | | | 275,980 | | | | | | | 275,980 | | | | | Vesting of Performance Based RSUs: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2017 – 2019 LTI Plan | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 657,633 | | | | | | | 438,422 | | | | | | | 438,422 | | | | | 2018 – 2020 LTI Plan | | | | | | 0 | | | | | | | 414,442 | | | | | | | 0 | | | | | | | 621,663 | | | | | | | 207,221 | | | | | | | 207,221 | | | | | Total of severance and accelerated benefits: | | | | | | 0 | | | | | | | 1,926,710 | | | | | | | 0 | | | | | | | 5,509,109 | | | | | | | 921,623 | | | | | | | 921,623 | | | | | Previous vested equity and benefits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Previously vested stock options | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Non-equity based incentive award (2018 annual incentive) | | | | | | 0 | | | | | | | 938,500 | | | | | | | 0 | | | | | | | 938,500 | | | | | | | 938,500 | | | | | | | 938,500 | | | | | Vested CAPP benefit | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Vested 401(k) Plan balance | | | | | | 59,921 | | | | | | | 59,921 | | | | | | | 59,921 | | | | | | | 59,921 | | | | | | | 59,921 | | | | | | | 59,921 | | | | | Vested SERP benefit | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Post-retirement medical/life benefits | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Deferred compensation balance previously vested | | | | | | 73,224 | | | | | | | 73,224 | | | | | | | 73,224 | | | | | | | 73,224 | | | | | | | 73,224 | | | | | | | 73,224 | | | | | Total of previously vested equity and benefits: | | | | | | 133,145 | | | | | | | 1,071,645 | | | | | | | 133,145 | | | | | | | 1,071,645 | | | | | | | 1,071,645 | | | | | | | 1,071,645 | | | | | Full “Walk-Away” Value: | | | | | | 133,145 | | | | | | | 2,998,355 | | | | | | | 133,145 | | | | | | | 6,580,754 | | | | | | | 1,993,268 | | | | | | | 1,993,268 | | |
70 investors.macysinc.com
COMPENSATION OF THE NAMED EXECUTIVES FOR 2018
| | Kirgan | | | | Voluntary | | | | Involuntary
Without
Cause | | | | Involuntary
With
Cause | | | | Involuntary
After
Change in
Control | | | | Death | | | | Disability | | | | Severance and accelerated benefits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | SESP Cash Severance Benefit: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary (2x) | | | | | | 0 | | | | | | | 1,500,000 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | 12 month health care coverage (lump sum) | | | | | | 0 | | | | | | | 12,268 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Cash severance benefit: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary (2x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 1,500,000 | | | | | | | 0 | | | | | | | 0 | | | | | Target Bonus (2x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 1,125,000 | | | | | | | 0 | | | | | | | 0 | | | | | Non-Compete Pay Following CIC: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Salary (1x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 750,000 | | | | | | | 0 | | | | | | | 0 | | | | | Target Bonus (1x) | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 562,500 | | | | | | | 0 | | | | | | | 0 | | | | | Equity based incentive awards | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Vesting of unvested stock options | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 670,387 | | | | | | | 670,387 | | | | | | | 670,387 | | | | | Vesting of Time Based RSUs | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Vesting of Performance Based RSUs: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2017 – 2019 LTI Plan | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | 2018 – 2020 LTI Plan | | | | | | 0 | | | | | | | 414,442 | | | | | | | 0 | | | | | | | 621,663 | | | | | | | 207,221 | | | | | | | 207,221 | | | | | Total of severance and accelerated benefits: | | | | | | 0 | | | | | | | 1,926,710 | | | | | | | 0 | | | | | | | 5,229,550 | | | | | | | 877,608 | | | | | | | 877,608 | | | | | Previous vested equity and benefits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Previously vested stock options | | | | | | 223,462 | | | | | | | 223,462 | | | | | | | 0 | | | | | | | 223,462 | | | | | | | 223,462 | | | | | | | 223,462 | | | | | Non-equity based incentive award (2018 annual incentive) | | | | | | 0 | | | | | | | 938,500 | | | | | | | 0 | | | | | | | 938,500 | | | | | | | 938,500 | | | | | | | 938,500 | | | | | Vested CAPP benefit | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Vested 401(k) Plan balance | | | | | | 25,192 | | | | | | | 25,192 | | | | | | | 25,192 | | | | | | | 25,192 | | | | | | | 25,192 | | | | | | | 25,192 | | | | | Vested SERP benefit | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Post-retirement medical/life benefits | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Deferred compensation balance previously vested | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Total of previously vested equity and benefits: | | | | | | 248,654 | | | | | | | 1,187,154 | | | | | | | 25,192 | | | | | | | 1,187,154 | | | | | | | 1,187,154 | | | | | | | 1,187,154 | | | | | Full “Walk-Away” Value: | | | | | | 248,654 | | | | | | | 3,113,864 | | | | | | | 25,192 | | | | | | | 6,416,704 | | | | | | | 2,064,763 | | | | | | | 2,064,763 | | |
Macy’s, Inc. 2019 Notice of Meeting and Proxy Statement 71
COMPENSATION OF THE NAMED EXECUTIVES FOR 2018
Our CEO had annual total earned compensation for fiscal 20182019 of $12,733,691.$10,308,820. The median annual total compensation of all our employees other than our CEO for fiscal 20182019 was $21,885.$22,353. Based on this information, we estimate that the ratio of our CEO’s annual total earned compensation to that of our median employee for fiscal 20182019 was 582461 to 1. We calculated annual total compensation of the median employee and our CEO in the same manner as for our Named Executives in the 20182019 Summary Compensation Table. WeAs permitted by SEC rules, we used an employee with the same compensation as the median employee identified last year in our pay ratio calculation this year because we believe there has been no change in our employee population or employee compensation arrangements that would result in a significant change to our pay ratio disclosure.
Last year, we identified the median employee using 2018 Form W-2 compensation (or gross wage amount for employees with no Form W-2) for individuals employed by us on February 2, 2019, the last day of our fiscal year, whether employed on a full-time, part-time, seasonal or temporary basis. We annualized the compensation of full-time and part-time employees employed for less than the full fiscal year based on the amount of Form W-2 compensation (or gross wages if no W-2) annualized proportionally based on days active, but did not make full-time equivalent adjustments. Macy’s median employee was identified to be a part-time hourly store associate. For 2017 we identified our median employee as of the first day of our 4th fiscal quarter. We chose the earlier identification date last year to avoid issues associated with a human capital management system conversion at year-end. We also did not annualize compensation last year for any individuals employed for less than the full fiscal year.
In identifying the median employee last year, we excluded all employees located outside the United States (a “non-U.S. employee”) under the de minimis exemption of the pay ratio rule which permits exclusion if a company’s non-U.S. employees account for 5% or less of total employees. The jurisdictions and approximate number of employees excluded were Hong Kong (94), India (43), Italy (6), Korea (38), Singapore (31), and Taiwan (57). As of February 2, 2019, we had 142,950 employees, comprised of 142,681 U.S. employees and 269 non-U.S. employees. Macy’s, Inc. 2020 Notice of Meeting and Proxy Statement 75
Of our 142,681 U.S. employees 66,190, or 46%, were part-time or seasonal employees, and were included in the group used to identify the median employee. Like other large retailers, a sizable portion of our workforce is employed on a part-time or seasonal basis. SEC rules allow companies to use various methodologies, estimates and assumptions in identifying the median employee and calculating annual total compensation. As a result, our pay ratio may not be comparable to the CEO pay ratios reported by other companies. 7276 investors.macysinc.com
ITEM 4. SHAREHOLDER PROPOSAL RE: “POLITICAL DISCLOSURE”
The following shareholder proposal will be voted on at the 2019 Annual Meeting only if properly presented by or on behalf of the shareholder proponent.
The Board of Directors has recommended a vote AGAINST the proposal for the reasons set forth below the proposal.
Shareholder Proposal on Political Disclosure
Mercy Investment Services, Inc. (“Mercy”), 2039 North Geyer Road, St. Louis, MO 63131-3332, who holds, as of November 29, 2018, 3,260 shares of Macy’s, Inc. common stock, is the proponent of the shareholder proposal. The proposal and supporting statement submitted by the proponent are set forth below.
“Resolved, that the shareholders of Macy’s, Inc. (“Macy’s” or “Company”) hereby request that the Company provide a report, updated semiannually, disclosing the Company’s:
1.
Policies and procedures for making, with corporate funds or assets, contributions and expenditures (direct or indirect) to (a) participate or intervene in any campaign on behalf of (or in opposition to) any candidate for public office, or (b) influence the
public, or any segment thereof, with respect to an election or referendum.
2.
Monetary and non-monetary contributions and expenditures (direct or indirect) used in the manner described in section 1 above, including:
a.
The identity of the recipient as well as the amount paid to each; and
b.
The title(s) of the person(s) in the Company responsible for decision-making.
The report shall be presented to the board of directors or relevant board committee and posted on the Company’s website within 12 months from the date of the annual meeting. This proposal does not encompass lobbying spending.
As long-term shareholders of Macy’s, we support transparency and accountability in corporate electoral spending. This includes any activity considered intervention in a political campaign under the Internal Revenue Code, such as direct and indirect contributions to political candidates, parties, or organizations, and independent expenditures or electioneering communications on behalf of federal, state, or local candidates.
Disclosure is in the best interest of the company and its shareholders. The Supreme Court recognized this in its 2010 Citizens United decision, which said, “[D]isclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.”
Publicly available records show Macy’s has contributed at least $420,000 in corporate funds since the 2010 election cycle (CQMoneyLine: http://moneyline.cq.com; National Institute on Money in State Politics: http://www.followthemoney.org).
However, relying on publicly available data does not provide a complete picture of the Company’s electoral spending. For example, the Company’s payments to trade associations that may be used for election-related activities are undisclosed and unknown. This proposal asks the Company to disclose all of its electoral spending, including payments to trade associations and other tax-exempt organizations, which may be used for electoral purposes. This would bring our Company in line with a growing number of leading companies, including Walgreens Boots Alliance Inc. and The Williams Companies Inc., which present this information on their websites.
The Company’s Board and shareholders need comprehensive disclosure to fully evaluate the use of corporate assets in elections. We urge your support for this critical governance reform.”
Macy’s, Inc. 2019 Notice of Meeting and Proxy Statement 73
ITEM 4. SHAREHOLDER PROPOSAL RE: “POLITICAL DISCLOSURE”
Board of Directors’ Statement in Opposition to Shareholder Proposal
The Board of Directors carefully considered this proposal and concluded that its adoption is not necessary and would not be in our shareholders’ best interest for the reasons outlined below.
Participation is Important in the Political Process. Macy’s philosophy and practices on political activity and contribution reflect our strong history of and commitment to giving back to the communities where our customers and colleagues live and work. We promote positive community involvement and encourage our employees to participate in community activities. As a good corporate citizen, we take seriously our responsibility and opportunity to assist policy-makers as they consider public policy questions that could affect our company, employees and customers.
Our Government Affairs Policies. We maintain Government Affairs Policies that set forth our corporate policy on political contributions and procedures intended
to assure legal compliance, proper tax and accounting treatment and reporting required by campaign finance laws. The policy requires us, in making any political contribution, to consider a candidate’s or committee’s 1) public integrity, 2) record on retail and business issues, 3) demonstrated willingness to support the retail position, 4) positions on non-retail issues that might reflect poorly on Macy’s objectives, interests or values and 5) representation of a geographic area where Macy’s has a business presence, among other factors. Political contributions must be made in strict compliance with all applicable laws and cannot be given on a quid pro quo basis. All political contributions made by Macy’s are reviewed and approved by our Law Department.
Amount of Political Contributions are Not Significant. Macy’s political contributions are not significant for a company our size. For the 2017 – 2018 election cycle, Macy’s direct political contributions were:
| | | | | | 2017 | | | | 2018 | | | | Contributions to candidates from corporate funds | | | | | $ | 36,500 | | | | | | $ | 10,500 | | | | | Contributions to candidates from the Macy’s Retail Issues Fund (a separate segregated fund) | | | | | | 0 | | | | | | | 2,000 | | | | | Contributions to political action committees and issue coalitions from corporate funds | | | | | | 144,800 | | | | | | | 184,500 | | | | | | | | | | $ | 181,300 | | | | | | $ | 197,000 | | |
The annual amount of these contributions is approximately 0.001% of Macy’s total assets at fiscal 2018 year-end, and 0.017% of net income and 0.0007% of net sales for fiscal 2018.
Government Regulatory and Disclosure Requirements. Because political contribution of all types must comply with extensive regulatory and public disclosure requirements, a system of reporting and accountability for our political contributions already exists and public information is available to address the concerns cited in this proposal.
Federal law currently prohibits corporations like Macy’s from contributing to candidates for federal office, national party committees, federal accounts of state parties and most types of political action committees (PACs). Accordingly, Macy’s does not make such contributions.
State and local political contribution rules vary widely and must be examined on a case-by-case basis when considering making a corporate or PAC donation to any state or local candidate, party committee, ballot initiative committee or other type of state or local political committee. In accordance with applicable state law, any such contribution is required to be disclosed either by the recipient or by the donor. Our state and local contributions are therefore publicly available.
Trade Associations. We participate in certain industry trade and similar organizations with purposes that include advocacy and education on legislation that affect the retail industry. We exercise no control over these organizations, which may choose to exercise their right to engage in political activity. We are only one of many members of these organizations, and so disclosure of our contributions to these organizations would be of little value.
74 investors.macysinc.com
ITEM 4. SHAREHOLDER PROPOSAL RE: “POLITICAL DISCLOSURE”
Disclosing Our Political Contributions May Outsize Our Community Support. Macy’s is proud to be an integral part of the local communities we serve as an employer, a hub for both connection and commerce, and as a socially responsible corporate citizen. We raised and donated $52 million to non-profit organizations in 2018 and our colleagues contributed 133,000 hours of
community service and volunteerism in 2018. American politics and political campaigns are an extremely divisive topic and the proposal’s required political disclosures may overshadow our community contributions and support by focusing on an economically insignificant but potentially charged topic.
| | | | | THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE AGAINST THE ADOPTION OF THE SHAREHOLDER PROPOSAL.
| | |
Macy’s, Inc. 2019 Notice of Meeting and Proxy Statement 75
ITEM 5. SHAREHOLDER PROPOSAL RE: “RECRUITMENT AND FORCED LABOR”
ITEM 5. SHAREHOLDER PROPOSAL RE: “RECRUITMENT AND FORCED LABOR”
The following shareholder proposal will be voted on at the 2019 Annual Meeting only if properly presented by or on behalf of one of the shareholder proponents.
The Board of Directors has recommended a vote AGAINST the proposal for the reasons set forth below the proposal.
Shareholder Proposal on Recruitment and Forced Labor
The Priests of the Sacred Heart (“Priests”), 7373 S. Highway 100, P.O. Box 289, Hales Corners, WI 53130-0289, who holds, as of December 4, 2018, 892 shares of Macy’s, Inc. common stock, is a proponent and lead filer of the shareholder proposal. Additional co-filer proponents (and shares of Macy’s, Inc. common stock owned as of December 4, 2018) include Daughters of Charity, Inc., 2039 No. Geyer Rd., St. Louis, MO 63131 (93 shares); School Sisters of Notre Dame, 13105 Watertown Plank Road, Elm Grove, WI 53122-2291 (170 shares); Friends Fiduciary Corporation, 1650 Arch Street, Suite 1904, Philadelphia, PA 19103 (more than 8,500 shares); and The Sisters of St. Francis of Philadelphia, 609 South Convent Road, Aston, PA 19014-1207 (94 shares). The proposal and supporting statement submitted by the proponents are set forth below.
“WHEREAS, recent global estimates found that 16 million people are trapped in conditions of forced labor in extended private sector supply chains, generating over $150 billion in profits for illegal labor recruiters and employers though underpayment of wages. Of these workers, over 70% are in debt bondage and forced to work in industries such as manufacturing. Migrant workers globally are prime targets for exploitation, including discrimination, retaliation, debt bondage, illegal deductions from wages and confiscated or restricted access to personal documents, limiting workers’ freedom of movement leading to forced labor and human trafficking.
Corporations have a responsibility to respect human rights within company-owned operations and through business relationships. This expectation is delineated in the United Nations Guiding Principles on Business and Human Rights and the OECD Due Diligence Guidance for Responsible Supply Chains in the Garment and Footwear Sector. Societal expectations have increased requiring companies to conduct human rights due diligence, informed by the core international human rights instruments, to assess, identify, prevent and mitigate adverse human rights impacts. Regulatory requirements in the State of California, the United Kingdom, Australia and France require companies to report on their actions to eradicate human trafficking and slavery. Any company directly or indirectly employing migrant workers must have a policy that assesses
if workers are being recruited into debt bondage, forced labor and, ultimately, slavery.
The 2018 Corporate Human Rights Benchmark gives Macy’s, Inc. (Macy’s) an overall score of 4.1 out of 100. This compares poorly with scores from peer companies Marks & Spencer (70), Gap (52), and Hennes & Mauritz (50). Macy’s Vendor & Supplier Code of Conduct does prohibit the use of forced labor, slavery and human trafficking in the company’s supply chains and the company has posted a report on its website in accordance with the California Transparency Supply Chains Act (SB 657). However, Macy’s has no formal commitment to respect human rights or remedy adverse impacts; no clear evidence of Board commitment, management incentives, or engagement with stakeholders; does not disclose whether it embeds respect for human rights in company culture and management systems, conducts human rights risks assessments, or implements processes to ensure no child or forced labor, freedom of association and collective bargaining, and payment of a living wage.
Given the company’s lack of risk mitigation and disclosure, investors have insufficient information to gauge how well the company is addressing this serious risk to the company and to workers.
RESOLVED, that shareholders request the Board of Directors of Macy’s to report, at reasonable cost and omitting proprietary information, on the Company’s process for identifying and analyzing potential and actual human rights risks of operations and its supply chain by December 2019.
SUPPORTING STATEMENT: In developing the report, the Company could consider:
•
Human rights principles used to frame the assessment;
•
Frequency of assessment;
•
Methodology used to track and measure performance on forced labor risks; and
•
How the results of the assessment are incorporated into company policies and decision-making.”
76 investors.macysinc.com
ITEM 5. SHAREHOLDER PROPOSAL RE: “RECRUITMENT AND FORCED LABOR”
Board of Directors’ Statement in Opposition to Shareholder Proposal
The Board of Directors carefully considered this proposal and concluded that its adoption is not necessary because we have corporate policies addressing human rights risks of operations and in our supply chain and would not be in our shareholders’ best interest for the reasons outlined below.
Ensuring Wellbeing of All People is a Core Principle. Macy’s commitment to human rights is embedded in our corporate values inherent in being a consumer-focused organization. We believe that all people matter. We show our commitment to human rights through multiple corporate policies incorporating standards of conduct, audits and due diligence assessments, processes for assessing risk and addressing violations, as well as training. Our corporate policies are carried out by senior management with oversight by our Board of Directors.
Corporate Policies Addressing Human Rights. We agree with the principles on which this proposal is based and have already taken steps that address the concerns expressed. We have policies and procedures to identify, analyze and mitigate human rights risks of operations and in our supply chain. Our corporate policies addressing human rights include, among others:
•
Vendor Code of Conduct. Since 1995, Macy’s, Inc. has required its Macy’s private label vendors to comply with our Vendor and Supplier Code of Conduct that sets clear, stringent standards and requirements for suppliers doing business with Macy’s, Inc. The Vendor Code is designed to help protect workers both in this county and abroad, and requires compliance with child, forced labor, wage and hour, and unsafe working condition standards. Between 2013 and 2017 we terminated our business relationships with 78 factories for non-compliance with the Vendor Code.
•
Human Trafficking. In accordance with the California Transparency Supply Chains Act, Macy’s and Bloomingdale’s efforts to address human trafficking and slavery in the direct supply chain, which includes both private and national brands, include:
•
Verification – Macy’s supply and legal executives meet both annually and as needed to assess the risk of human trafficking and slavery in our supply chains and whether our policies and procedures appropriately address those risks.
•
Audits – Independent third-party monitors conduct annual compliance audits of our private brand suppliers to identify possible areas of non-compliance with our Vendor and Supplier Code of Conduct or potential risks in our private brands supply chain, while contractually holding
our national brand suppliers to the same level of due diligence. We investigate any reports alleging human trafficking and slavery in the supply chain and action is taken against any supplier for non-compliance. From 2011 – 2013 over 70 factories were terminated for non-compliance with the Vendor Code. Results and learnings of audits are incorporated into company policies and decision-making.
•
Certification – Suppliers confirm their agreement to comply with the Vendor Code, which incorporates local laws and is based on international standards such as International Labor Organization (ILO) and United Nations (UN) regulations, when accepting each purchase order.
•
Training – Human trafficking is addressed annually in Code of Conduct or General Legal Compliance training provided to supervisory and selected administrative personnel within the general employee population. Employees responsible for supply-chain decisions for private brands receive more detailed training on identifying and addressing human trafficking and slavery in our supply chain.
•
Labor Practices. Macy’s does business only with manufacturers and suppliers that share our commitment to fair labor practices, including adherence to laws that protect workers and their salaries. We require all vendors to acknowledge our policy requiring full compliance with all laws in the manufacture of products carried in Macy’s stores. We routinely inspect factories for contract compliance as well as compliance with laws and regulations dealing with child or forced labor and unsafe working conditions.
•
High Risk Violations. Macy’s Merchandising Group considers certain violations of the Vendor Code of Conduct to be extremely problematic and deemed “high risk” violations, including child or forced labor, freedom of movement, slavery or human trafficking, physical abuse, homeworkers and attempted bribery or kickback. A “high risk” violation of the Vendor Code of Conduct can result in the facility or supplier being placed under immediate review directed by senior management. Confirmed high-risk violations result in immediate suspension of future orders and possible deletion from supplier database. During 2013-2017, 84 factories fell under the category of High Risk – 6 were allowed to remain active pending corrective action and 78 were terminated.
Macy’s, Inc. 2019 Notice of Meeting and Proxy Statement 77
ITEM 5. SHAREHOLDER PROPOSAL RE: “RECRUITMENT AND FORCED LABOR”
•
Fine Jewelry and Cotton. Macy’s does not knowingly purchase any diamonds, gemstones, precious metals, pearls or other fine jewelry product used to fund illegal, violent, inhumane or terrorist activity and informs its vendors of this policy. Macy’s Merchandising Group bans the use of cotton sourced from Uzbekistan and Turkmenistan in its private label products due to use of forced and child labor.
Macy’s human rights policies are described in our corporate social responsibility report available on our website.
The Board of Directors believes our corporate policies clearly describe our process for identifying and analyzing human rights risks of operations and in our supply chain, and include the items indicated in the proposal that the company could consider in developing the report, rendering the proposal duplicative and unnecessary.
| | | | | THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE AGAINST THE ADOPTION OF THE SHAREHOLDER PROPOSAL.
| | |
78 investors.macysinc.com
Certain Beneficial Owners. The following table sets forth information as to the beneficial ownership of each person known to Macy’s to own more than 5% of Macy’s
outstanding common stock as of March 21, 2019 based on ownership reports filed by such persons with the SEC prior to that date.
| | Name and Address | | | | Date of Most Recent
Schedule 13G Filing | | | | Number of
Shares | | | | Percent of
Class | | | | The Vanguard Group(1)
100 Vanguard Blvd.
Malvern, PA 19355 | | | | February 12, 2019 | | | | | | 37,098,267 | | | | | | | 12.0% | | | | | BlackRock, Inc.(2)
55 East 52nd Street
New York, NY 10055 | | | | February 6, 2019 | | | | | | 29,952,622 | | | | | | | 9.7% | | | | | AQR Capital Management, LLC and
AQR Capital Management Holdings, LLC(3)
Two Greenwich Plaza
Greenwich, CT 06830 | | | | February 14, 2019 | | | | | | 17,214,592 | | | | | | | 5.6% | | | | | State Street Corporation(4)
One Lincoln Street
Boston, MA 02111 | | | | February 14, 2019 | | | | | | 15,621,016 | | | | | | | 5.1% | | |
(1)
Based on a Schedule 13G/A filed with the SEC by The Vanguard Group (Vanguard) on February 12, 2019. The Schedule 13G/A reports that, as of December 31, 2018, Vanguard had sole voting power over 361,554 shares, shared voting power over 78,437 shares, sole dispositive power over 36,672,085 shares and shared dispositive power over 426,182 shares of Macy’s common stock. The Schedule 13G/A also reports that Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of Vanguard, is the beneficial owner of 262,277 of the shares as a result of its serving as investment manager of collective trust accounts, and Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of Vanguard, is the beneficial owner of 259,290 of the shares as a result of its serving as investment manager of Australian investment offerings.
(2)
Based on a Schedule 13G/A filed with the SEC by BlackRock, Inc. (Blackrock) on February 6, 2019. The Schedule 13G/A reports that, as of December 31, 2018, BlackRock had sole voting power over 26,705,124 shares and sole dispositive power over 29,952,622 shares of Macy’s common stock.
(3)
Based on a Schedule 13G filing with the SEC by AQR Capital Management, LLC (AQR) and AQR Capital Management Holdings, LLC (AQR Holdings) on February 14, 2019. The Schedule 13G reports that, as of December 31, 2018, AQR and AQR Holdings had shared voting power and shared dispositive power over 17,214,592 shares of Macy’s common stock.
(4)
Based on a Schedule 13G filing with the SEC by State Street Corporation (State Street) on February 14, 2019. The Schedule 13G reports that, as of December 31, 2018, State Street had shared voting power over 13,867,706 shares and shared dispositive power over 15,617,518 shares of Macy’s common stock.
Stock Ownership of Directors and Executive Officers. The following table sets forth the shares of Macy’s common stock beneficially owned (or deemed to be beneficially owned pursuant to SEC rules), as of March 21, 2019 by each director who is not an employee
of Macy’s, by each executive named in the 2018 Summary Compensation Table, and by our directors and executive officers as a group. The business address of each of the individuals named in the table is 7 West Seventh Street, Cincinnati, Ohio 45202.
| | | | | | Number of Shares | | | | | | | | Name | | | | (1) | | | | (2) | | | | Percent of Class | | | | David P. Abney | | | | | | 0 | | | | | | | 0 | | | | | * | | | | Francis S. Blake | | | | | | 0 | | | | | | | 0 | | | | | * | | | | John A. Bryant | | | | | | 9,825 | | | | | | | 0 | | | | | * | | | | Deirdre P. Connelly | | | | | | 17,092 | | | | | | | 10,000 | | | | | * | | | | Leslie D. Hale | | | | | | 0 | | | | | | | 0 | | | | | * | | | | William H. Lenehan | | | | | | 11,214 | | | | | | | 0 | | | | | * | | | | Sara Levinson | | | | | | 0 | | | | | | | 0 | | | | | * | | | | Joyce M. Roché | | | | | | 13,647 | | | | | | | 10,000 | | | | | * | | | | Paul C. Varga | | | | | | 850 | | | | | | | 0 | | | | | * | | | | Marna C. Whittington | | | | | | 44,834 | | | | | | | 0 | | | | | * | | | | Jeff Gennette | | | | | | 640,500 | | | | | | | 537,479 | | | | | * | | | | Paula A. Price | | | | | | 0 | | | | | | | 0 | | | | | * | | | | Karen M. Hoguet | | | | | | 502,772 | | | | | | | 294,122 | | | | | * | | | | Harry A. Lawton III | | | | | | 198,280 | | | | | | | 172,242 | | | | | * | | | | Elisa D. Garcia | | | | | | 101,189 | | | | | | | 95,090 | | | | | * | | | | Danielle L. Kirgan | | | | | | 50,895 | | | | | | | 50,895 | | | | | * | | | | All directors and executive officers as a group (16 persons)(3) | | | | | | 1,682,030 | | | | | | | 1,260,089 | | | | | * | |
*
Less than 1%.
Macy’s, Inc. 2019 Notice of Meeting and Proxy Statement 79
STOCK OWNERSHIP Certain Beneficial Owners The following table sets forth information as to the beneficial ownership of each person known to Macy’s to own more than 5% of Macy’s outstanding common stock as of March 19, 2020 based on ownership reports filed by such persons with the SEC prior to that date. | | Name and Address | | | | Date of Most Recent
Schedule 13G Filing | | | | Number of
Shares | | | | Percent of
Class* | | | | The Vanguard Group(1)
100 Vanguard Blvd.
Malvern, PA 19355 | | | | February 12, 2020 | | | | | | 34,581,610 | | | | | | | 11.17% | | | | | BlackRock, Inc.(2)
55 East 52nd Street
New York, NY 10055 | | | | February 5, 2020 | | | | | | 28,870,763 | | | | | | | 9.32% | | | | | Yacktman Asset Management LP(3)
6300 Bridgepoint Parkway
Building One, Suite 500
Austin, TX 78730 | | | | February 6, 2020 | | | | | | 24,445,989 | | | | | | | 7.89% | | | | | American International Group, Inc.(4)
175 Water Street
New York, NY 10038 | | | | February 14, 2020 | | | | | | 18,910,959 | | | | | | | 6.1% | | |
*
Based on 309,670,337 shares of Macy’s common stock outstanding as of March 19, 2020. (1)
Based on a Schedule 13G/A filed with the SEC by The Vanguard Group (Vanguard) on February 12, 2020. The Schedule 13G/A reports that, as of December 31, 2019, Vanguard had sole voting power over 396,630 shares, shared voting power over 67,461 shares, sole dispositive power over 34,159,419 shares and shared dispositive power over 422,191 shares of Macy’s common stock. The Schedule 13G/A also reports that Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of Vanguard, is the beneficial owner of 349,968 of the shares as a result of its serving as investment manager of collective trust accounts, and Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of Vanguard, is the beneficial owner of 114,123 of the shares as a result of its serving as investment manager of Australian investment offerings. (2)
Based on a Schedule 13G/A filed with the SEC by BlackRock, Inc. (Blackrock) on February 5, 2020. The Schedule 13G/A reports that, as of December 31, 2019, BlackRock had sole voting power over 26,208,870 shares and sole dispositive power over 28,870,763 shares of Macy’s common stock. (3)
Based on a Schedule 13G filed with the SEC by Yacktman Asset Management LP (Yacktman) on February 6, 2020. The Schedule 13G reports that, as of December 31, 2019, Yacktman had sole voting power and sole dispositive power over 24,445,989 shares of Macy’s common stock. (4)
Based on a Schedule 13G filed with the SEC on February 14, 2020 jointly by American International Group, Inc., SAFG Retirement Services, Inc., AIG Life Holdings, Inc., AGC Life Insurance Company, American General Life Insurance Company, SunAmerica Asset Management, LLC and The Variable Annuity Life Insurance Company. The Schedule 13G reports that, as of December 31, 2019, American International Group, Inc., SAFG Retirement Services, Inc., AIG Life Holdings, Inc. and AGC Life Insurance Company have shared voting and dispositive power with respect to 18,910,959 shares, American General Life Insurance Company and SunAmerica Asset Management, LLC have shared voting and dispositive power with respect to 18,008,198 shares and The Variable Annuity Life Insurance Company has shared voting and dispositive power with respect to 902,761 shares of Macy’s common stock. Stock Ownership of Directors and Executive Officers The following table sets forth the shares of Macy’s common stock beneficially owned (or deemed to be beneficially owned pursuant to SEC rules), as of March 19, 2020 by each director who is not an employee of Macy’s, by each executive named in the 2019 Summary Compensation Table, and by our directors and executive officers as a group. The business address of each of the individuals named in the table is 151 West 34th Street, New York, New York 10001. Macy’s, Inc. 2020 Notice of Meeting and Proxy Statement 77
| | | | | | Number of Shares | | | | | | | | | | | Name | | | | (1) | | | | (2) | | | | Percent of Class(3) | | | | David P. Abney | | | | | | 0 | | | | | | | 0 | | | | | | | * | | | | | Francis S. Blake | | | | | | 10,000 | | | | | | | 0 | | | | | | | * | | | | | Torrence N. Boone | | | | | | 0 | | | | | | | 0 | | | | | | | * | | | | | John A. Bryant | | | | | | 9,825 | | | | | | | 0 | | | | | | | * | | | | | Deirdre P. Connelly | | | | | | 10,842 | | | | | | | 0 | | | | | | | * | | | | | Leslie D. Hale | | | | | | 0 | | | | | | | 0 | | | | | | | * | | | | | William H. Lenehan | | | | | | 11,214 | | | | | | | 0 | | | | | | | * | | | | | Sara Levinson | | | | | | 0 | | | | | | | 0 | | | | | | | * | | | | | Joyce M. Roché | | | | | | 4,647 | | | | | | | 0 | | | | | | | * | | | | | Paul C. Varga | | | | | | 850 | | | | | | | 0 | | | | | | | * | | | | | Marna C. Whittington | | | | | | 44,834 | | | | | | | 0 | | | | | | | * | | | | | Jeff Gennette | | | | | | 1,069,224 | | | | | | | 896,219 | | | | | | | * | | | | | Paula A. Price | | | | | | 53,255 | | | | | | | 51,215 | | | | | | | * | | | | | Elisa D. Garcia | | | | | | 200,569 | | | | | | | 173,970 | | | | | | | * | | | | | John T. Harper | | | | | | 158,233 | | | | | | | 136,463 | | | | | | | * | | | | | Danielle L. Kirgan | | | | | | 125,317 | | | | | | | 125,317 | | | | | | | * | | | | | Harry A. Lawton, III | | | | | | 0 | | | | | | | 0 | | | | | | | * | | | | | All Directors and Executive Officers as a group (18 individuals) | | | | | | 1,790,364 | | | | | | | 1,473,898 | | | | | | | * | | |
*
Less than 1%. (1)
Aggregate number of shares of Macy’s common stock currently held or which may be acquired within 60 days after March 21, 201919, 2020 through the exercise of options or the vesting of restricted stock units granted under the 2018 Equity Plan or the 2009 Omnibus Plan, or the 1994 Stock Plan. (2)
Number of shares of Macy’s common stock which may be acquired within 60 days after March 21, 201919, 2020 through the exercise of options or the vesting of restricted stock units granted under the 2018 Equity Plan and the 2009 Omnibus Plan and the 1994 Stock Plan. (3)
Includes Ms. Hoguet who was not servingBased on 309,670,337 shares of Macy’s common stock outstanding as an executive officer at the end of fiscal 2018.March 19, 2020.
The foregoing table does not reflect stock credits issued under the Executive Deferred Compensation Plan or the Director Deferred Compensation Plan. The Executive Deferred Compensation Plan has not been approved by shareholders. Pursuant to the Executive Deferred Compensation Plan and the Director Deferred Compensation Plan, eligible executives and Non-Employee Directors, respectively, may elect to receive a portion of their cash compensation in the form of stock credits. Each stock credit entitles the holder to receive one share of Macy’s common stock upon termination of employment or service with Macy’s. Payments include dividend equivalents on the stock credits. Securities Authorized for Issuance Under Equity Compensation Plans.Plans The following table presents certain aggregate information, as of February 2, 2019,1, 2020, with respect to the 2018 Equity Plan and the 2009 Omnibus Plan and the 1994 Stock Plan (included on the line captioned “Equity compensation plans approved by security holders”).
| | Plan Category | | | | Number of Securities
to be issued upon
exercise of
outstanding options,
warrants and rights (a)
(thousands) | | | | Weighted average
exercise price of
outstanding
options, warrants
and rights ($) (b) | | | | Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))(c)
(thousands) | | Plan Category | | | | Number of Securities
to be issued upon
exercise of
outstanding options,
warrants and rights(a)
(thousands) | | | | Weighted average
exercise price of
outstanding
options, warrants
and rights ($)(b) | | | | Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))(c)
(thousands) | | | | Equity compensation plans approved by security holders | | | | | | 18,893 | | | | | | | 39.73 | | | | | | | 19,604 | | | Equity compensation plans approved by security holders | | | | | | 18,512 | | | | | | | 39.77 | | | | | | | 16,848 | | | | | Equity compensation plans not approved by security holders | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | Equity compensation plans not approved by security holders | | | | | | 0 | | | | | | | 0 | | | | | | | 0 | | | | | Total | | | | | | 18,893 | | | | | | | 39.73 | | | | | | | 19,604 | | | Total | | | | | | 18,512 | | | | | | | 39.77 | | | | | | | 16,848 | | | | | | |
8078 investors.macysinc.com
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers and persons who beneficially own more than 10% of our common stock to file with the SEC reports of ownership and changes in ownership of common stock. These persons are required to furnish the Company with copies of all Section 16(a) reports they file.
To our knowledge, based solely on a review of the reports furnished to the Company and written representations signed by all directors and executive
officers that no other reports were required for fiscal 2018, all reports required by Section 16(a) of the Exchange Act to be filed by directors, executive officers and beneficial owners of more than 10% of our common stock were timely filed.
POLICY ON RELATED PERSON TRANSACTIONS The Board of Directors has adopted a written policy for approval of transactions in which 1) Macy’s was or is to be a participant, 2) the amount involved exceeds $120,000 and 3) any Director,director, director nominee, executive officer or 5% or greater shareholder (or any immediate family member)member of the foregoing persons) has a direct or indirect material interest (“Related(Related Person Transaction”)Transaction). This policy is available on our website at www.macysinc.com/investors/
corporate-governance/governance-documents. The policy includes a list of categories of transactions identified by the Board as having no significant potential for actual or apparent conflict of interest or improper benefit that are not subject to review by the NCG Committee, such as ordinary course transactions with other entities and charitable contributions not exceeding certain dollar thresholds. DirectorsPursuant to the policy, executive officers, directors, director nominees, and 5% shareholders are required to notify the Company’s general counsel or his/her designee as soon as reasonably practicable about any plan or proposal to engage in or continue any transaction that could be a Related Person Transaction, whether or not the individual believes that his or her interest in the transaction is material. In
addition, directors and executive officers annually complete a Directors’ and Officers’ Questionnaire designed to identify Related Person Transactions and conflicts of interest. We also inquire about the nature and extent of business we conduct with companies for whom these individuals serve as directors or executive officers. See “Further Information Concerning the Board of Directors –— Director Independence.” Our chief legal officergeneral counsel reviews any identified transactions. If determined that the Directordirector or executive officer has a direct or indirect material interest in a transaction, our chief legal officergeneral counsel brings the matter to the attention of the NCG Committee for further review. Based on records available to us, there were no Related Person Transactions in fiscal 2018.2019. Our Non-Employee Director Code of Business Conduct and Ethics and our Code of Conduct require all employees, including our officers and Non-Employee Directors, to avoid situations that may impact their ability to carry out their duties in an independent and objective fashion, including by having a financial interest in suppliers. Circumstances that may compromise their ability to perform independently must be disclosed to the chief legal officer or in the case of the Named Executives and the Non-Employee Directors, to the chair of the NCG Committee. Macy’s, Inc. 20192020 Notice of Meeting and Proxy Statement 8179
ANNUAL MEETING AND VOTING INFORMATION VIRTUAL ANNUAL MEETING Why the Annual Meeting is Being Webcast. The annual meeting is being held on a virtual-only basis to enable participation by a broader number of shareholders, particularly in view of increasing travel and group event restrictions relating to the spread of COVID-19. We believe that hosting a virtual meeting under the current environment will facilitate shareholder attendance and participation by enabling shareholders to participate from any location around the world and improves our ability to communicate more effectively with our shareholders. We have designed the virtual meeting to provide substantially the same opportunities to participate as you would have at an in-person meeting. How to Access the Audio Webcast. The live audio webcast of the annual meeting will begin promptly at 11:00 a.m., Eastern Time, on Friday, May 15, 2020. Online access to the audio webcast will open approximately 15 minutes prior to the start of the meeting to allow time for you to log in and test the computer audio system. To attend the virtual annual meeting, log in at www.virtualshareholdermeeting.com/m2020. You will need your 16-digit control number shown on the Notice of Internet Availability of Proxy Materials or proxy card or voting instruction form you received in the mail. If you do not have a control number, please contact your bank, broker or other nominee as soon as possible so you can be provided with a control number and gain access to the meeting. How to Participate and Ask Questions at the Annual Meeting. To submit a question at the annual meeting, you will need your 16-digit control number shown on the Notice of Internet Availability of Proxy Materials or proxy card or voting instruction form you received in the mail. You may log in 15 minutes before the start of the annual meeting and submit questions online. You also will be able to submit questions during the annual meeting. All appropriate questions asked during the annual meeting will be read and addressed during the meeting. If You Have Technical or Other “IT” Problems. We have provided a toll-free technical support “help line” that can be accessed by any shareholder who is having challenges logging into or participating in the virtual annual meeting. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support line number that will be posted on the Virtual Shareholder Meeting login page. The record date for the annual meeting is March 21, 2019.19, 2020. If you were a shareholder of record of Macy’s common stock at the close of business on the record date, you are entitled to one vote for each share owned listed in the notice of meeting. As of the record date, 308,263,708309,670,337 shares of Macy’s common stock were outstanding, excluding shares held in treasury. CONFIDENTIAL SHAREHOLDER VOTING POLICY
Our Board has adopted a policy under which all voting materials that identify the votes of specific shareholders will be kept confidential and will not be disclosed to our officers, directors, employees or third parties except in the following circumstances:
•
if required by law;
•
to persons engaged in receiving, counting, tabulating or solicitating proxies who have agreed to maintain shareholder confidentiality as provided in the policy;
•
in instances shareholders write comments on their proxy cards or otherwise consent to disclosure of their vote to Macy’s management;
•
in a proxy contest or a solicitation of proxies in opposition to the voting recommendations of the Board of Directors;
•
in respect of a shareholder proposal that the NCG Committee, after allowing the proponent an opportunity to present its views, determines is not in the best interests of Macy’s and its shareholders; and
•
if representatives of Macy’s determine in good faith that a bona fide dispute exists as to the authenticity or tabulation of voting materials.
The policy will apply to the annual meeting.
Under our By-Laws, a majority of the votes that can be cast must be present in person or by proxy to hold the annual meeting. Abstentions and shares represented by “broker non-votes,” as described below, will be
counted as present and entitled to vote for purposes of determining the presence of a quorum. If there is not a quorum, we may adjourn the meeting to a subsequent date to solicit additional votes for obtaining a quorum.
VOTE REQUIRED FOR EACH PROPOSAL AND BOARD RECOMMENDATION
| Voting Item | | | | Voting Standard | | | | Treatment of Abstentions and Broker
Non-Votes | | | | Board
Recommendations | | | Election of directors | | | | Majority of votes cast | | | | Not counted as votes cast and therefore no effect | | | | ✔
FOR each nominee
| | | Ratification of the appointment of KPMG LLP | | | | Majority of votes cast | | | | Abstentions not counted as votes cast and therefore no effect; broker discretionary voting allowed | | | | ✔
FOR
| | | Approval of named executive officer compensation | | | | Majority of votes cast | | | | Not counted as votes cast and therefore no effect | | | | ✔
FOR
| | | Shareholder proposal on political disclosure | | | | Majority of votes cast | | | | Abstentions counted as votes cast and have effect of a vote against the proposal; broker non-votes not counted as votes cast and therefore no effect | | | | ✘
AGAINST
| | | Shareholder proposal on recruitment and forced labor | | | | Majority of votes cast | | | | Abstentions counted as votes cast and have effect of a vote against the proposal; broker non-votes not counted as votes cast and therefore no effect | | | | ✘
AGAINST
| |
All shares of our common stock represented at the annual meeting by proxies properly submitted prior to or at the meeting will be voted in accordance with the instructions on the proxies, unless such proxies
previously have been revoked. If no instructions are indicated, the shares will be voted in accordance with the Board’s recommendation.
82 investors.macysinc.com
ANNUAL MEETING AND VOTING INFORMATION MAJORITY VOTE STANDARD FOR DIRECTOR ELECTIONVIRTUAL ANNUAL MEETING
Any incumbent nominee for director who receivesWhy the Annual Meeting is Being Webcast. The annual meeting is being held on a greatervirtual-only basis to enable participation by a broader number of votes cast “against” than votes cast “for” will continue to serve on the Board as a holdover director pursuant to Delaware law, but, pursuant to our director resignation policy, must tender his or her resignation for consideration by the NCG Committee. The NCG Committee will promptly consider the
resignationshareholders, particularly in view of increasing travel and recommendgroup event restrictions relating to the Boardspread of COVID-19. We believe that hosting a virtual meeting under the actioncurrent environment will facilitate shareholder attendance and participation by enabling shareholders to be taken.participate from any location around the world and improves our ability to communicate more effectively with our shareholders. We have designed the virtual meeting to provide substantially the same opportunities to participate as you would have at an in-person meeting.
How to Access the Audio Webcast. The Board will publicly disclose its decision within 90 days after certificationlive audio webcast of the election results. Any director who tenders his or her resignation pursuant to this policy will not participate in the NCG Committee’s recommendation or the Board’s consideration regarding whether to accept the tendered resignation.
“Broker non-votes” are shares held by a broker, bank or other nominee that are represented at the meeting, but the beneficial owner has not instructed the broker,
bank or nominee how to vote the shares on a particular proposal, and the broker, bank or nominee does not have discretionary voting power on the proposal.
Methods of Voting Your Proxy
Registered Shareholders. You may vote in person at the annual meeting or by proxy. We recommend that you vote by proxy even if you plan to attend the annual meeting. You have three options for voting by proxy:
| Over the Internet at www.proxyvote.com
| | | Internet
You can vote over the Internet at the Web address shown on your Notice Regarding the Availability of Proxy Materials or your proxy card, if you received a proxy card, until 11:59 p.m., Eastern Time, on May 16, 2019. Internet voting is available 24 hours a day, seven days a week. When you vote over the Internet, you should not return your proxy card. | | | By telephone at
1 (800)-690-6903
| | | Telephone
You can vote by telephone by calling 1-800-690-6903 until 11:59 p.m., Eastern Time, on May 16, 2019. Telephone voting is available 24 hours a day, seven days a week. Easy-to-follow voice prompts allow you to vote your shares and confirm that your instructions have been properly recorded. When you vote by telephone, you should not return your proxy card. | | | By mailing your
completed proxy to
Macy’s, Inc.
c/o Broadridge,
51 Mercedes Way,
Edgewood, NY 11717
| | | Mail
If you received a proxy card, you can vote by mail by signing, dating and mailing your proxy card in the postage-paid envelope included with this proxy statement. Your proxy card must be received prior to 11:59 p.m., Eastern Time, on May 16, 2019.
| |
Voting Shares Held in Street Name. A number of banks and brokerage firms participate in a program that permits shareholders whose shares are held in street name to direct their vote over the Internet or by telephone. If your bank or brokerage firm gives you this opportunity, the voting instructions from your bank or brokerage firm that accompany this proxy statement will tell you how to use the Internet or telephone to direct the vote of shares held in your account. Votes directed over the Internet or by telephone through such a program must be received bybegin promptly at 11:59 p.m.00 a.m., Eastern Time, on Thursday,Friday, May 16, 2019. Requesting a proxy15, 2020. Online access to the audio webcast will open approximately 15 minutes prior to the above deadlinestart of the meeting to allow time for you to log in and test the computer audio system.
To attend the virtual annual meeting, log in at www.virtualshareholdermeeting.com/m2020. You will automatically cancel anyneed your 16-digit control number shown on the Notice of Internet Availability of Proxy Materials or proxy card or voting directions previously given over the Internet or by telephone with respect to your shares. Directinginstruction form you received in the voting of your shares willmail. If you do not affect your right to vote in person if you decide to attend the meeting; however, you must first obtainhave a signed and properly executed proxy fromcontrol number, please contact your bank, broker or other nominee to vote your shares held in street name at the meeting. Without your instructions, your broker or brokerage firm is permitted to use its discretionas soon as possible so you can be provided with a control number and vote your shares on certain routine matters (such as Item 2), but is not permittedgain access to use discretion and vote your uninstructed shares on non-routine matters (such as Items 1, 3, 4 and 5). Therefore, we encourage you to give voting instructions to your broker or brokerage firm on all matters being considered at the meeting.
Voting Shares HeldHow to Participate and Ask Questions at the Annual Meeting. To submit a question at the annual meeting, you will need your 16-digit control number shown on the Notice of Internet Availability of Proxy Materials or proxy card or voting instruction form you received in 401(k) Plan.the mail. You may log in 15 minutes before the start of the annual meeting and submit questions online. You also will be able to submit questions during the annual meeting. All appropriate questions asked during the annual meeting will be read and addressed during the meeting.
If You Have Technical or Other “IT” Problems. We have provided a toll-free technical support “help line” that can be accessed by any shareholder who is having challenges logging into or participating in the virtual annual meeting. If you participate in our 401(k) Retirement Investment Plan, youencounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support line number that will receive a voting instruction card forbe posted on the Macy’s common stockVirtual Shareholder Meeting login page. The record date for the annual meeting is March 19, 2020. If you were a shareholder of record of Macy’s common stock at the close of business on the record date, you are entitled to one vote for each share owned on each matter listed in the notice of meeting. As of the record date, 309,670,337 shares of Macy’s common stock were outstanding, excluding shares held in treasury. Macy’s, Inc. 2019 Notice of Meeting and Proxy Statement 83
ANNUAL MEETING AND VOTING INFORMATION VIRTUAL ANNUAL MEETING Why the Annual Meeting is Being Webcast. The annual meeting is being held on a virtual-only basis to enable participation by a broader number of shareholders, particularly in view of increasing travel and group event restrictions relating to the spread of COVID-19. We believe that hosting a virtual meeting under the current environment will facilitate shareholder attendance and participation by enabling shareholders to participate from any location around the world and improves our ability to communicate more effectively with our shareholders. We have designed the virtual meeting to provide substantially the same opportunities to participate as you would have at an in-person meeting. How to Access the Audio Webcast. The live audio webcast of the annual meeting will begin promptly at 11:00 a.m., Eastern Time, on Friday, May 15, 2020. Online access to the audio webcast will open approximately 15 minutes prior to the start of the meeting to allow time for you to log in and test the computer audio system. To attend the virtual annual meeting, log in at www.virtualshareholdermeeting.com/m2020. You will need your 16-digit control number shown on the Notice of Internet Availability of Proxy Materials or proxy card or voting instruction form you received in the mail. If you do not have a control number, please contact your bank, broker or other nominee as soon as possible so you can be provided with a control number and gain access to the meeting. How to Participate and Ask Questions at the Annual Meeting. To submit a question at the annual meeting, you will need your 16-digit control number shown on the Notice of Internet Availability of Proxy Materials or proxy card or voting instruction form you received in the mail. You may log in 15 minutes before the start of the annual meeting and submit questions online. You also will be able to submit questions during the annual meeting. All appropriate questions asked during the annual meeting will be read and addressed during the meeting. If You Have Technical or Other “IT” Problems. We have provided a toll-free technical support “help line” that can be accessed by any shareholder who is having challenges logging into or participating in the virtual annual meeting. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support line number that will be posted on the Virtual Shareholder Meeting login page. The record date for the annual meeting is March 19, 2020. If you were a shareholder of record of Macy’s common stock at the close of business on the record date, you are entitled to one vote for each share owned on each matter listed in the notice of meeting. As of the record date, 309,670,337 shares of Macy’s common stock were outstanding, excluding shares held in treasury. CONFIDENTIAL SHAREHOLDER VOTING POLICY Our Board has adopted a policy under which all voting materials that identify the votes of specific shareholders will be kept confidential and will not be disclosed to our officers, directors, employees or third parties except in the following circumstances: •
if required by law; •
to persons engaged in receiving, counting, tabulating or solicitating proxies who have agreed to maintain shareholder confidentiality as provided in the policy; •
in instances shareholders write comments on their proxy cards or otherwise consent to disclosure of their vote to Macy’s management; •
in a proxy contest or a solicitation of proxies in opposition to the voting recommendations of the Board of Directors; •
in respect of a shareholder proposal that the NCG Committee, after allowing the proponent an opportunity to present its views, determines is not in the best interests of Macy’s and its shareholders; and •
if representatives of Macy’s determine in good faith that a bona fide dispute exists as to the authenticity or tabulation of voting materials. The policy will apply to the annual meeting. 80 investors.macysinc.com
ANNUAL MEETING AND VOTING INFORMATION
Under our By-Laws, a majority of the shares of common stock issued and outstanding and entitled to vote must be present in person (virtually) or by proxy to transact business at the annual meeting. Abstentions and shares represented by “broker non-votes,” as described below, will be counted as present and entitled to vote for purposes of determining the presence of a quorum. If there is not a quorum, we may adjourn the meeting to a subsequent date, until a quorum is present. VOTE REQUIRED FOR EACH PROPOSAL AND BOARD RECOMMENDATION | | Voting Item | | | | Voting Standard | | | | Treatment of Abstentions and
Broker Non-Votes | | | | Board
Recommendations | | | | Election of directors | | | | Majority of votes cast | | | | Not counted as votes cast and therefore no effect | | | | ✔ FOR each nominee | | | | Ratification of the appointment of KPMG LLP | | | | Majority of votes cast | | | | Abstentions not counted as votes cast and therefore no effect; broker discretionary voting allowed | | | | ✔ FOR | | | | Approval of named executive officer compensation | | | | Majority of votes cast | | | | Not counted as votes cast and therefore no effect | | | | ✔ FOR | |
All shares of our common stock represented at the annual meeting by proxies properly submitted prior to or at the meeting will be voted in accordance with the instructions on the proxies, unless such proxies previously have been revoked. If no instructions are indicated, the shares will be voted in accordance with the Board’s recommendation. MAJORITY VOTE STANDARD FOR DIRECTOR ELECTION Any incumbent nominee for director who receives a greater number of votes cast “against” than votes cast “for” will continue to serve on the Board as a holdover director pursuant to Delaware law, but, pursuant to our director resignation policy, must tender his or her resignation for consideration by the NCG Committee. The NCG Committee will promptly consider the resignation and recommend to the Board the action to be taken. The Board will publicly disclose its decision within 90 days after certification of the election results. Any director who tenders his or her resignation pursuant to this policy will not participate in the NCG Committee’s recommendation or the Board’s consideration regarding whether to accept the tendered resignation. “Broker non-votes” are shares held by a broker, bank or other nominee that are represented at the meeting, but the beneficial owner has not instructed the broker, bank or nominee how to vote the shares on a particular proposal, and the broker, bank or nominee does not have discretionary voting power on the proposal. METHODS OF VOTING YOUR PROXY Registered Shareholders. You may vote during the virtual annual meeting at www.virtualshareholdermeeting.com/m2020 or prior to the annual meeting by proxy. We recommend that you vote by proxy even if you plan to attend the virtual annual meeting. You have several options for voting prior to or during the annual meeting: | | | | | | Over the Internet during the Annual Meeting at www.virtualshare
holdermeeting.com/
m2020 | |
| | | | | | | | by telephone 24/7 at 1 (800) 690-6903
| |
| | | | | | | | over the Internet 24/7 at www.proxyvote.com
| |
| | | | | | | | by mailing your completed proxy to:
Macy’s, Inc.
c/o Broadridge
51 Mercedes Way
Edgewood, NY 11717 | |
| | | | | | | | by scanning the QR code with your mobile device
| |
Macy’s, Inc. 2020 Notice of Meeting and Proxy Statement 81
ANNUAL MEETING AND VOTING INFORMATION
Voting Shares Held in Street Name. A number of banks and brokerage firms participate in a program that permits shareholders whose shares are held in street name to direct their vote over the Internet or by telephone. If your bank or brokerage firm gives you this opportunity, the voting instructions from your bank or brokerage firm that accompany this proxy statement will tell you how to use the Internet or telephone to direct the vote of shares held in your account. Votes directed over the Internet or by telephone through such a program must be received by 11:59 p.m., Eastern Time, on Thursday, May 14, 2020. Requesting a proxy prior to the above deadline will automatically cancel any voting directions previously given over the Internet or by telephone with respect to your shares. Directing the voting of your shares will not affect your right to vote online during the annual meeting if you decide to attend the meeting; however, you must first follow the instructions from your bank, broker or other nominee to vote your shares held in street name at the meeting. Without your instructions, your broker or brokerage firm is permitted to use its discretion and vote your shares on certain routine matters (such as Item 2) but is not permitted to use discretion and vote your uninstructed shares on non-routine matters (such as Items 1 and 3 ). Therefore, we encourage you to give voting instructions to your broker or brokerage firm on all matters being considered at the meeting. Voting Shares Held in 401(k) Plan. If you participate in our 401(k) Retirement Investment Plan, you will receive a voting instruction card for the Macy’s common stock allocated to your account in the plan. You may instruct the plan trustee on how to vote your proportional interest in any Macy’s shares held by the plan by following the instructions on the enclosed voting instruction card. The plan trustee must receive your voting instructions by 11:59 p.m., Eastern Time, on Tuesday, May 14, 2019.12, 2020. The plan trustee will submit one proxy to vote all shares of Macy’s common stock in the plan. The trustee 1) will vote the shares of participants who submit voting instructions in accordance with their instructions and 2) will vote the shares of Macy’s common stock in the plan for which no voting instructions are received in the same proportion as the final votes of all participants who actually vote. If you do not submit voting instructions for the Macy’s shares allocated to your account by the voting deadline, those shares will be included with the other undirected shares and voted by the plan trustee as described above. Because the plan trustee submits one proxy to vote all shares of Macy’s common stock in the plan, you may not vote plan shares in personelectronically at the annual meeting. If you are a registered shareholder, you may revoke your proxy at any time by: •
submitting evidence of your revocation to Macy’s Corporate Secretary; •
voting again over the Internet or by telephone prior to 11:59 p.m., Eastern Time, on May 16, 2019;14, 2020; •
signing another proxy card bearing a later date and mailing it so it is received prior to 11:59 p.m., Eastern Time, on May 16, 2019;14, 2020; or •
logging onto and voting in person atduring the virtual annual meeting, although attending the annual meeting will not, by itself, revoke a proxy.meeting. If your shares are held in street name, you should contact your broker, bank or other holder of record about revoking your voting instructions and changing your vote prior to the annual meeting. For shares held in the 401(k) Plan, you may not revoke your proxy after 11:59 p.m., Eastern Time, on Tuesday, May 14, 2019.12, 2020. ELECTRONIC DELIVERY OF PROXY STATEMENT AND ANNUAL REPORT You can elect to view future proxy statements and annual reports over the Internet instead of receiving copies in the mail, and save the Company the cost of producing and mailing these documents, by: •
following the instructions provided on your proxy card, voting instruction card or Notice Regarding theof Internet Availability of Proxy Materials; or •
going to www.proxyvote.com and following the instructions provided. If you choose to receive future proxy statements and annual reports over the Internet, you will receive an email message next year containing the Internet address to access future proxy statements and annual reports. This email will include instructions for voting over the Internet. If you have not elected electronic delivery, you will receive either printed materials in the mail or a notice indicating that the Proxy Solicitation Materials are available at www.proxyvote.com.www.proxyvote.com. 82 investors.macysinc.com
ANNUAL MEETING AND VOTING INFORMATION
SHAREHOLDERS SHARING THE SAME ADDRESS We have adopted a procedure called “householding,” which has been approved by the SEC. Under this procedure, we will deliver only one copy of our Notice of Internet Availability of Proxy Materials, and for those shareholders that received a paper copy of proxy materials in the mail, one copy of our fiscal 20182019 annual report on Form 10-K to shareholders and this proxy statement, to multiple shareholders who share the same address (if they appear to be members of the same family) unless we have received contrary instructions from an affected shareholder. Shareholders who participate in householding will continue to receive separate proxy cards if they received a paper copy of proxy materials in the mail. This procedure reduces our printing costs, mailing costs and fees. We will deliver promptly, upon written or oral request, a separate copy of our fiscal 2019 annual report on Form 10-K, proxy statement, or Notice of Internet Availability of Proxy Materials, as applicable, to a shareholder at a shared address to which a single copy of the document was delivered. Please direct such requests to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717 or call toll free at (866) 540-7095. If you are a shareholder, share an address and last name with one or more other shareholders and would like to revoke your householding consent or you are a shareholder eligible for householding and would like to participate in householding, please contact Broadridge, either by calling toll free at (866) 540-7095 or by writing to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717. You will be removed from the householding program within 30 days of receipt of the revocation of your consent. A number of brokerage firms have instituted householding. If you hold your shares in “street name,” please contact your bank, broker or other holder of record to request information about householding. Macy’s, Inc. 2020 Notice of Meeting and Proxy Statement 8483 investors.macysinc.com
SUBMISSION OF FUTURE SHAREHOLDER PROPOSALS
SUBMISSION OF FUTURE SHAREHOLDER PROPOSALS Proposals for the 20202021 Annual Meeting Rule 14a-8. You may submit proposals on matters appropriate for shareholder action at Macy’s annual shareholders’ meetings in accordance with Rule 14a-8 under the Exchange Act. For such proposals to be included in our proxy materials for the 20202021 annual meeting of shareholders, you must satisfy all applicable requirements of Rule 14a-8 and we must receive such proposals no later than December 5, 2019.2, 2020. Advance Notice By-Law. Except in the case of proposals made in accordance with Rule 14a-8, our By-Laws require shareholders who bring business before an annual meeting of shareholders to deliver written notice to the Secretary of Macy’s not less than 60 days prior to the meeting. If the date of the meeting is not publicly announced by us in a report filed with the SEC, furnished to shareholders, or in a press release at least 75 days prior to the meeting date, notice must be delivered to the Secretary of Macy’s not later than the close of business on the 10th10th day following announcement of the meeting date. The By-Laws further require that the notice set forth a description of the business to be brought before the meeting and the reasons for conducting such business at the meeting and certain information concerning the shareholder proposing the business, including the shareholder’s name and address, the class and number of shares owned by the shareholder and any material interest of the shareholder in the business proposed. The chairman of the meeting may refuse to permit to be brought before the meeting any shareholder proposal (other than a proposal made in accordance with Rule 14a-8) not made in compliance with these requirements. Proxy Access By-Law. Submissions of nominees for director under our proxy access by-law provision for the 20202021 Annual Meeting must be submitted in compliance with the by-law provision no earlier than November 5, 20192, 2020 and no later than December 5, 2019.2, 2020. If the scheduled annual meeting date differs from the anniversary date of the prior year’s annual meeting by more than 30 calendar days, notice must be received not earlier than the close of business on the 120th120th calendar day and not later than the close of business on the 60th calendar day prior to the date of the annual meeting or, in the event the date of the annual meeting is not publicly announced at least 75 calendar days prior to the annual meeting date, notice must be received not later than the close of business on the 10th calendar day following the day on which the date of the annual meeting is first publicly announced. Our Board knows of no other business to be presented at the annual meeting other than as described in this proxy statement. If any business properly comes before the annual meeting, the persons named in the enclosed form of proxy or their substitutes will vote the proxy in respect of such business in accordance with their best judgment pursuant to the discretionary authority conferred by the proxy.
We will bear the cost of preparing, assembling and mailing the proxy material. Our Annual Report for fiscal 2018, which is being mailed to shareholders with this proxy statement, is not to be regarded as proxy soliciting material. We may solicit proxies other than by mail, in that certain of our officers and regular employees, without additional compensation, may use their personal
efforts, by telephone or otherwise, to obtain proxies. We will also request persons, firms and corporations holding shares in their names, or in the name of their nominees, which are beneficially owned by others, to send proxy material to and obtain proxies from such beneficial owners and will reimburse such holders for their reasonable expenses in so doing. We have engaged the firm of Georgeson, Inc., New York City, to assist in the solicitation of proxies on behalf of the Board. Georgeson will solicit proxies with respect to common stock held by brokers, bank nominees, other institutional holders and certain individuals, and will perform related services. It is anticipated that the cost of the solicitation service to us will not substantially exceed $9,000.
Macy’s, Inc. 2019 Notice of Meeting and Proxy Statement 85
Our Board knows of no other business to be presented at the annual meeting other than as described in this proxy statement. If any business properly comes before the annual meeting, the persons named in the enclosed form of proxy or their substitutes will vote the proxy in respect of such business in accordance with their best judgment pursuant to the discretionary authority conferred by the proxy. We will bear the cost of preparing, assembling and mailing the proxy material. Our Annual Report for fiscal 2019, which is being mailed to shareholders with this proxy statement, is not to be regarded as proxy soliciting material. We may solicit proxies other than by mail, in that certain of our officers and regular employees, without additional compensation, may use their personal efforts, by telephone or otherwise, to obtain proxies. We will also request persons, firms and corporations holding shares in their names, or in the name of their nominees, which are beneficially owned by others, to send proxy material to and obtain proxies from such beneficial owners and will reimburse such holders for their reasonable expenses in so doing. We have engaged the firm of Georgeson, Inc., New York City, to assist in the solicitation of proxies on behalf of the Board. Georgeson will solicit proxies with respect to common stock held by brokers, bank nominees, other institutional holders and certain individuals, and will perform related services. It is anticipated that the cost of the solicitation service to us will not substantially exceed $9,500. | | | | | | PLEASE CAST YOUR VOTE BY FOLLOWING THE INSTRUCTIONS ON THE ENCLOSED PROXY CARD.
IF YOU CHOOSE TO CAST YOUR VOTE BY COMPLETING THE ENCLOSED PROXY CARD, PLEASE
RETURN IT PROMPTLY IN THE ENCLOSED ADDRESSED ENVELOPE, WHICH REQUIRES NO POSTAGE
IF MAILED IN THE UNITED STATES. | | |
8684 investors.macysinc.com
APPENDIX A
POLICY AND PROCEDURES FOR PRE-APPROVAL OF NON-AUDIT SERVICES BY OUTSIDE AUDITORS
I.
Authority to Approve Non-Audit Services
Except as noted below, the Audit Committee (the “Committee”) will approve in advance all permitted non-audit services(1) (the “Permitted NAS”).
A.
The Committee may delegate to the Chair of the Committee the authority to pre-approve Permitted NAS; provided that any such pre-approval of Permitted NAS granted by any such delegee must be presented to the Committee at its meeting next following the approval.
B.
Pre-approval is not required for any Permitted NAS if:
1.
the aggregate amount of any such Permitted NAS constitutes no more than five percent (5%) of the total revenues paid by Macy’s to its auditors during the fiscal year in which the Permitted NAS are provided;
2.
the Permitted NAS were not recognized at the time of the auditor’s engagement to be a Permitted NAS (i.e., either a service indicated as an audit service at the time of the engagement evolves over the course of the engagement to become a non-audit service, or a non-audit service not contemplated at all at the time of the engagement is performed by the outside auditor after the engagement is approved); and
3.
the Permitted NAS are promptly brought to the attention of the Committee (or its delegee) by management and approved prior to the completion of the audit.
II.
Disclosure of Permitted Non-Audit Services in Outside Auditor’s Engagement Letter
A.
The Committee is to receive an itemization in the outside auditor’s engagement letter of Permitted NAS that the outside auditors
propose to deliver to Macy’s during the course of the year covered by the engagement and contemplated at the time of the engagement.
1.
In its submissions to management covering its proposed engagement the outside auditors are to include a statement that the delivery of Permitted NAS will not impair the independence of the outside auditors.
B.
Whether a Permitted NAS is set out in the auditor engagement letter or proposed by the outside auditors subsequent to the time the engagement letter is submitted, the Committee (or its delegee as described above) is to consider, with input from management, whether delivery of the Permitted NAS impairs independence of the outside auditors.
1.
The Committee is to evaluate, in making such consideration, the non-audit factors and other related principles (the “Qualifying Factors”) set out below.
•
Whether the service is being performed principally for the Audit Committee;
•
The effects of the service, if any, on audit effectiveness or on the quality and timeliness of Macy’s financial reporting process;
•
Whether the service would be performed by specialists (e.g., technology specialists) who ordinarily also provide recurring audit support;
•
Whether the service would be performed by outside audit personnel and, if so, whether it will enhance their knowledge of Macy’s business and operations;
•
Whether the role of those performing the service (e.g., a role where neutrality, impartiality and auditor skepticism are likely to be subverted) would be inconsistent with the outside auditor’s role;
(1)
The nine categories of prohibited non-audit services are: (i) bookkeeping or other services related to the accounting records or financial statements of the audit client; (ii) financial information systems design and implementation; (iii) appraisal or valuation services, fairness opinions, or contribution-in-kind reports; (iv) actuarial services; (v) internal audit outsourcing; (vi) management functions or human resources; (vii) broker or dealer, investment adviser, or investment banking services; (viii) legal services and expert services unrelated to the audit; and (ix) any other service that the Public Company Accounting Oversight Board determines, by regulation, is impermissible.
Macy’s, Inc. 2019 Notice of Meeting and Proxy Statement A-1
APPENDIX A![[MISSING IMAGE: tm2013061d1-fc_voluntpnlr.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm2013061d1-fc_voluntpnlr.jpg) •
Whether the outside audit firm’s personnel would be assuming a management role or creating a mutuality of interest with Macy’s management;
•
Whether the outside auditors, in effect, would be auditing their own numbers;
•
Whether the project must be started and completed very quickly;
•
Whether the outside audit firm has unique expertise in the service;
•
Whether the service entails the outside auditor serving in an advocacy role for Macy’s; and
•
The size of the fee(s) for the non-audit service(s).
III.
Annual Assessment of Policy
The Committee will determine on an annual basis whether to amend this policy.
A-2 investors.macysinc.com
Social Responsibility Integrity and good corporate citizenship are part of Macy’s DNA. From responsible sourcing and sustainable practices to diversity policies and corporate governance, we are proud of our standards, but will always challenge ourselves to do more. Macy’s, Inc. believes in giving back to our local communities. Our contributions, leadership and volunteer efforts help create stronger, healthier places for our customers and associatescolleagues to work and live. Collectively, contributions in 20182019 from the company –— as well as employee contributions through workplace giving campaigns and customer contributions through our signature giving programs –— totaled more than $52$48 million. In addition, our associates gave more than 133,000115,500 hours of their time for community service. MACY’S • BLOOMINGDALE’S • BLUEMERCURY macysinc.com
macysgreenliving.com
![[MISSING IMAGE: tv512179_pc1.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/tv512179_pc1.jpg) ![[MISSING IMAGE: tm2013061-1_pc1.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm2013061-1_pc1.jpg) MACY'S, INC.7VOTE BY INTERNETBefore The Meeting - Go to www.proxyvote.comMACY'S, INC.151 WEST 7TH34th STREET CINCINNATI, OH 45202-2471VOTE BY INTERNET - www.proxyvote.comUseNEW YORK, NY 10001Use the Internet to transmit your voting instructions and to sign up for electronic delivery of information up until 11:59 p.m. Eastern Time on May 16, 2019.14, 2020. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONSIf you would likeform.During The Meeting - Go to reducewww.virtualshareholdermeeting.com/M2020You may attend the costs incurred by Macy's, Inc. in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronicallymeeting via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and when prompted, indicatevote during the meeting. Have the information that you agree to receive or access shareholder communications electronicallyis printed in future years.VOTEthe box marked by the arrow available and follow the instructions.VOTE BY PHONE - 1-800-690-6903Use any touch-tone telephone to transmit your voting instructions up until11:59 p.m. Eastern Time on May 16, 2019.14, 2020. Have your proxy card in hand when youwhenyou call and then follow the instructions.VOTE BY MAILMark, sign and date your proxy card and return it in the postage-paid envelopepostage-paidenvelope we have provided or return it to Macy's, Inc., c/o Broadridge,51 Mercedes Way, Edgewood, NY 11717. Your proxy card must be received prior topriorto 11:59 p.m. Eastern Time on May 16, 2019.TO14, 2020.TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E70865-P20593-Z74548KEEPD03392-P35285-Z76510KEEP THIS PORTION FOR YOUR RECORDS THISRECORDSTHIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.DETACH AND RETURN THIS PORTION ONLYMACY'S, INC.The Board of Directors Recommends a Vote "For" the Following Nominees:1. ELECTION OF DIRECTORSFor Against Abstain1a. David P. Abney!Abney1b. Francis S. Blake! ! !! ! !The Board of Directors Recommends a Vote "For" Item 2.2. Ratification of the appointment of KPMG LLP as Macy'sFor Against Abstain1b. Francis S. Blake1c.Abstain1c. Torrence N. Boone1d. John A. Bryant1d.Bryant1e. Deirdre P. Connelly1e.Connelly1f. Jeff Gennette1f.Gennette1g. Leslie D. Hale1g.Hale1h. William H. Lenehan1h.Lenehan1i. Sara Levinson1i.Levinson1j. Joyce M. Roché1j.1k. Paul C. Varga!Varga1l. Marna C. Whittington! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !independent registered public accounting firm for the fiscal ! ! !year ending February 1, 2020.TheJanuary 30, 2021.The Board of Directors Recommends a Vote "For" Item 3.3. Advisory vote to approve named executive officer ! ! !compensation.The Board of Directors Recommends a Vote “Against” Item 4.4. Shareholder proposal on political disclosure. ! ! !The Board of Directors Recommends a Vote “Against” Item 5.5. Shareholder proposal on recruitment and forced labor. ! ! !NOTE:compensation.NOTE: At their discretion, the proxies are authorized to vote upon such other business that may properly come before the meeting or any adjournment or adjournments thereof.1k. Marna C. Whittington! ! ! Thethereof.The shares represented by this proxy when properly executed will be voted in the manner directed herein by the undersigned Shareholder(s). If no direction is made, and this proxy is returned, this proxy will be voted "FOR" all Nominees, and "FOR" Items 2For2 and 3. If any other matters properly come before the meeting, the person(s) named in this proxy will vote in their discretion.For purposes of the 2020 Annual Meeting, proxies will be held in confidence (subject to certain exceptions as set forth in the Proxy Statement) unless the undersigned checks the box to the left and provides comments where indicated on the reverse side. This proxy is governed by the laws of the State of Delaware.For address changes and/or comments, please check this box and write them on!on the back where indicated.Please sign your name exactly as it appears hereon. When signing as attorney, executor, administrator, trustee or guardian, please add your title as such. When signing as joint tenants, all parties in the joint tenancy must sign. If a signer is a corporation, please sign in full corporate name by duly authorized officer.and 3,officer.Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
![[MISSING IMAGE: tm2013061-1_pc2.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm2013061-1_pc2.jpg) D03395-P35285-Z76510Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Annual Report, Form 10-K and “AGAINST”Notice and Proxy Statement are available at www.proxyvote.com.Address Changes/Comments: (If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)MACY'S, INC.To: J.P. Morgan Chase Bank, as Trustee for the Macy’s, Inc. 401(k) Retirement Investment Plan.ANNUAL MEETING OF SHAREHOLDERSMay 15, 2020I acknowledge receipt of the Letter to Shareholders, the Notice of Annual Meeting of Shareholders of Macy’s, Inc. to be held on May 15, 2020,and the related Proxy Instructions.As to my proportional interest in any stock of Macy’s, Inc. registered in your name, you are directed as indicated on the reverse side as to thematters listed in the form of Proxy solicited by the Board of Directors of Macy’s, Inc. I understand that if I sign this instruction card on the otherside and return it without otherwise indicating my voting instructions, it will be understood that I wish my proportional interest in the sharesto be voted by you in accordance with the recommendations of the Board of Directors of Macy’s, Inc. as to Items 41 through 3. If my votinginstructions are not received by 11:59 p.m. Eastern Time on May 12, 2020, I understand that you will vote my proportional interest in the sameratio as you vote the proportional interest for which you receive instructions from other plan participants.If any such stock is registered in the name of your nominee, the authority and 5.directions herein shall extend to such nominee.THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE SHAREHOLDER(S). IF NO SUCH DIRECTIONS AREMADE, AND THIS PROXY IS RETURNED, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF ALL NOMINEES FOR THE BOARD OFDIRECTORS LISTED IN ITEM 1 ON THE REVERSE SIDE, AND "FOR" ITEMS 2 AND 3.PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPECONTINUED AND TO BE SIGNED ON REVERSE SIDE
![[MISSING IMAGE: tm2013061-1_pc3.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm2013061-1_pc3.jpg) VOTE BY INTERNETBefore The Meeting - Go to www.proxyvote.comMACY'S, INC.151 WEST 34th STREET NEW YORK, NY 10001Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on May 12, 2020. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.VOTE BY PHONE - 1-800-690-6903Use any touch-tone telephone to transmit your voting instructions up until11:59 p.m. Eastern Time on May 12, 2020. Have your proxy card in hand whenyou call and then follow the instructions.VOTE BY MAILMark, sign and date your proxy card and return it in the postage-paidenvelope we have provided or return it to Macy's, Inc., c/o Broadridge,51 Mercedes Way, Edgewood, NY 11717. Your proxy card must be received priorto 11:59 p.m. Eastern Time on May 12, 2020.ATTEND THE MEETINGYou may attend the meeting via the Inter net by going to www.virtualshareholdermeeting.com/M2020. Have the information that isprinted in the box marked by the arrow available and follow the instructions.TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:D03394-P35285-Z76510KEEP THIS PORTION FOR YOUR RECORDSTHIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.DETACH AND RETURN THIS PORTION ONLYMACY'S, INC.The Board of Directors Recommends a Vote "For" the Following Nominees:1. ELECTION OF DIRECTORSFor Against Abstain1a. David P. Abney1b. Francis S. Blake! ! !! ! !The Board of Directors Recommends a Vote "For" Item 2.2. Ratification of the appointment of KPMG LLP as Macy'sFor Against Abstain1c. Torrence N. Boone1d. John A. Bryant1e. Deirdre P. Connelly1f. Jeff Gennette1g. Leslie D. Hale1h. William H. Lenehan1i. Sara Levinson1j. Joyce M. Roché1k. Paul C. Varga1l. Marna C. Whittington! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !independent registered public accounting firm for the fiscal ! ! !year ending January 30, 2021.The Board of Directors Recommends a Vote "For" Item 3.3. Advisory vote to approve named executive officer compensation.NOTE: At their discretion, the proxies are authorized to vote upon such other business that may properly come before the meeting or any adjournment or adjournments thereof.The shares represented by this proxy when properly executed will be voted in the manner directed herein by the undersigned Shareholder(s). If no direction is made, and this proxy is returned, this proxy will be voted "FOR" all Nominees, and "FOR" Items 2 and 3. If any other matters properly come before the meeting, the person(s) named in this proxy will vote in their discretion.For purposes of the 20192020 Annual Meeting, proxies will be held in confidence (subject to certain exceptions as set forth in the Proxy Statement) unless the undersigned checks the box to the left and provides comments where indicated on the reverse side. This proxy is governed by the laws of the State of Delaware.Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
![[MISSING IMAGE: tv512179_pc2.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/tv512179_pc2.jpg) Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Annual Report, Form 10-K and Notice and Proxy Statement are available at www.proxyvote.com. E70866-P20593-Z74548 MACY'S, INC. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS ANNUAL MEETING OF SHAREHOLDERS May 17, 2019 The undersigned Shareholder(s) hereby appoint(s) Joyce M. Roché and Marna C. Whittington, or either of them, as proxies, each with the power to appoint her substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of Macy’s, Inc. that the shareholder(s) is/are entitled to vote at the Annual Meeting of Shareholders to be held at 11:00 a.m. Eastern Time on May 17, 2019, at the Macy’s, Inc. corporate offices located at 7 West 7th Street, Cincinnati, Ohio 45202, and any adjournment or postponement thereof. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE SHAREHOLDER(S). IF NO SUCH DIRECTIONS ARE MADE, AND THIS PROXY IS RETURNED, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF ALL NOMINEES FOR THE BOARD OF DIRECTORS LISTED IN ITEM 1 ON THE REVERSE SIDE, "FOR" ITEMS 2 AND 3, AND “AGAINST” ITEMS 4 AND 5. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE Address Changes/Comments: (If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) CONTINUED AND TO BE SIGNED ON REVERSE SIDE
![[MISSING IMAGE: tv512179_pc3.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/tv512179_pc3.jpg) MACY'S, INC. 7 WEST 7TH STREET CINCINNATI, OH 45202-2471 VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and to sign up for electronic delivery of information until 11:59 p.m. Eastern Time on May 14, 2019. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS If you would like to reduce the costs incurred by Macy's, Inc. in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access shareholder communications electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions until 11:59 p.m. Eastern Time on May 14, 2019. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Macy's, Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. Your proxy card must be received prior to 11:59 p.m. Eastern Time on May 14, 2019. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E70867-P20593-Z74548 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY MACY'S, INC. The Board of Directors Recommends a Vote "For" the Following Nominees: 1. ELECTION OF DIRECTORS For Against Abstain 1a. David P. Abney ! ! ! The Board of Directors Recommends a Vote "For" Item 2. 2. Ratification of the appointment of KPMG LLP as Macy's For Against Abstain 1b. Francis S. Blake 1c. John A. Bryant 1d. Deirdre P. Connelly 1e. Jeff Gennette 1f. Leslie D. Hale 1g. William H. Lenehan 1h. Sara Levinson 1i. Joyce M. Roché 1j. Paul C. Varga 1k. Marna C. Whittington ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! independent registered public accounting firm for the fiscal ! ! ! year ending February 1, 2020. The Board of Directors Recommends a Vote "For" Item 3. 3. Advisory vote to approve named executive officer ! ! ! compensation. The Board of Directors Recommends a Vote “Against” Item 4. 4. Shareholder proposal on political disclosure. ! ! ! The Board of Directors Recommends a Vote “Against” Item 5. 5. Shareholder proposal on recruitment and forced labor. ! ! ! NOTE: At their discretion, the proxies are authorized to vote upon such other business that may properly come before the meeting or any adjournment or adjournments thereof. The shares represented by this proxy when properly executed will be voted in the manner directed herein by the undersigned Shareholder(s). If no direction is made, and this proxy is returned, this proxy will be voted "FOR" all Nominees, "FOR" Items 2 ForDelaware.For address changes and/or comments, please check this box and write them on!on the back where indicated. Pleaseindicated.Please sign your name exactly as it appears hereon. When signing as attorney, executor, administrator, trustee or guardian, please add your title as such. When signing as joint tenants, all parties in the joint tenancy must sign. If a signer is a corporation, please sign in full corporate name by duly authorized officer. and 3, and “AGAINST” Items 4 and 5. If any other matters properly come before the meeting, the person(s) named in this proxy will vote in their discretion. For purposes of the 2019 Annual Meeting, proxies will be held in confidence (subject to certain exceptions as set forth in the Proxy Statement) unless the undersigned checks the box to the left and provides comments where indicated on the reverse side. This proxy is governed by the laws of the State of Delaware. Signatureofficer.Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
![[MISSING IMAGE: tv512179_pc4.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/tv512179_pc4.jpg) ![[MISSING IMAGE: tm2013061-1_pc4.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm2013061-1_pc4.jpg) Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Annual Report, Form 10-K and Notice and Proxy Statement are available at www.proxyvote.com. E70868-P20593-Z74548MACY'S, INC.To:D03395-P35285-Z76510 MACY'S, INC. To: J.P. Morgan Chase Bank, as Trustee for the Macy’s, Inc. 401(k) Retirement Investment Plan.ANNUALPlan. ANNUAL MEETING OF SHAREHOLDERS May 17, 2019I15, 2020 I acknowledge receipt of the Letter to Shareholders, the Notice of Annual Meeting of Shareholders of Macy’s, Inc. to be held on May 17, 2019,15, 2020, and the related Proxy Instructions.AsInstructions. As to my proportional interest in any stock of Macy’s, Inc. registered in your name, you are directed as indicated on the reverse side as to the matters listed in the form of Proxy solicited by the Board of Directors of Macy’s, Inc. I understand that if I sign this instruction card on the other side and return it without otherwise indicating my voting instructions, it will be understood that I wish my proportional interest in the shares to be voted by you in accordance with the recommendations of the Board of Directors of Macy’s, Inc. as to Items 1 through 5.3. If my voting instructions are not received by 11:59 p.m. Eastern Time on May 14, 2019,12, 2020, I understand that you will vote my proportional interest in the same ratio as you vote the proportional interest for which you receive instructions from other plan participants.Ifparticipants. If any such stock is registered in the name of your nominee, the authority and directions herein shall extend to such nominee.THISnominee. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE SHAREHOLDER(S). IF NO SUCH DIRECTIONS ARE MADE, AND THIS PROXY IS RETURNED, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF ALL NOMINEES FOR THE BOARD OF DIRECTORS LISTED IN ITEM 1 ON THE REVERSE SIDE, AND "FOR" ITEMS 2 AND 3, AND “AGAINST” ITEMS 4 AND 5.PLEASE3. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPEAddressENVELOPE Address Changes/Comments: (If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)CONTINUED AND TO BE SIGNED ON REVERSE SIDE
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Independent![[MISSING IMAGE: ph_francis-blake.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/ph_francis-blake.jpg)
![[MISSING IMAGE: ph_francisblake-4clr.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/ph_francisblake-4clr.jpg)
![[MISSING IMAGE: ph_john-bryant.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/ph_john-bryant.jpg)
![[MISSING IMAGE: ph_torrenceboone-4clr.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/ph_torrenceboone-4clr.jpg)
![[MISSING IMAGE: ph_johnbryant-4clr.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/ph_johnbryant-4clr.jpg)
![[MISSING IMAGE: ph_deirdre-connelly.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/ph_deirdre-connelly.jpg)
![[MISSING IMAGE: ph_deirdreconnelly-4clr.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/ph_deirdreconnelly-4clr.jpg)
![[MISSING IMAGE: ph_jeff-gennette.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/ph_jeff-gennette.jpg)
![[MISSING IMAGE: ph_jeffgenn-bwlr.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/ph_jeffgenn-bwlr.jpg)
![[MISSING IMAGE: ph_leslie-hale.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/ph_leslie-hale.jpg)
![[MISSING IMAGE: ph_lesliehale-4clr.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/ph_lesliehale-4clr.jpg)
![[MISSING IMAGE: ph_william-lenehan.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/ph_william-lenehan.jpg)
![[MISSING IMAGE: ph_williamlenehan-4clr.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/ph_williamlenehan-4clr.jpg)
![[MISSING IMAGE: ph_saralevinson-4clr.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/ph_saralevinson-4clr.jpg)
![[MISSING IMAGE: ph_sara-levinson.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/ph_sara-levinson.jpg)
![[MISSING IMAGE: ph_joyce-roche.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/ph_joyce-roche.jpg)
![[MISSING IMAGE: ph_joyceroche-4clr.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/ph_joyceroche-4clr.jpg)
![[MISSING IMAGE: ph_paulvarga-4clr.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/ph_paulvarga-4clr.jpg)
![[MISSING IMAGE: ph_paul-varga.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/ph_paul-varga.jpg)
![[MISSING IMAGE: ph_marna-whittington.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/ph_marna-whittington.jpg)
![[MISSING IMAGE: ph_marnawhittington-4clr.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/ph_marnawhittington-4clr.jpg)
![[MISSING IMAGE: tm2013061d1-fc_diverpn.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm2013061d1-fc_diverpn.jpg)
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![[MISSING IMAGE: tv506989_audit.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/tv506989_audit.jpg){kind=small}
![[MISSING IMAGE: tv506989_c.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/tv506989_c.jpg){kind=small}
![[MISSING IMAGE: ico_macys-leadership.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/ico_macys-leadership.jpg){kind=small}
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![[MISSING IMAGE: ico_macys-finance.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/ico_macys-finance.jpg){kind=small}
![[MISSING IMAGE: ico_macys-finance.gif]](https://files.docoh.com/DEF 14A/0001104659-20-041904/ico_macys-finance.gif){kind=small}
![[MISSING IMAGE: ico_macys-industry.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/ico_macys-industry.jpg){kind=small}
![[MISSING IMAGE: tm2013061d1-icon_industrybw.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm2013061d1-icon_industrybw.jpg){kind=icon}
![[MISSING IMAGE: ico_macys-sales.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/ico_macys-sales.jpg){kind=small}
![[MISSING IMAGE: ico_macys-sales.gif]](https://files.docoh.com/DEF 14A/0001104659-20-041904/ico_macys-sales.gif){kind=small}
![[MISSING IMAGE: ico_macys-tech.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/ico_macys-tech.jpg){kind=small}
![[MISSING IMAGE: tm2013061d1-icon_technolbw.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm2013061d1-icon_technolbw.jpg){kind=icon}
![[MISSING IMAGE: ico_macys-realestate.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/ico_macys-realestate.jpg){kind=small}
![[MISSING IMAGE: ico_macys-realestate.gif]](https://files.docoh.com/DEF 14A/0001104659-20-041904/ico_macys-realestate.gif){kind=small}
![[MISSING IMAGE: ico_macys-public.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/ico_macys-public.jpg){kind=small}
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![[MISSING IMAGE: ico_macystar-pms.gif]](https://files.docoh.com/DEF 14A/0001144204-19-017955/ico_macystar-pms.gif){kind=small}
![[MISSING IMAGE: tm207868d1-icon_starpn.gif]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm207868d1-icon_starpn.gif){kind=icon}
![[MISSING IMAGE: tm2013061d1-icon_financbw.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm2013061d1-icon_financbw.jpg){kind=icon}
![[MISSING IMAGE: tm2013061d1-icon_salesbw.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm2013061d1-icon_salesbw.jpg){kind=icon}
![[MISSING IMAGE: tm2013061d1-icon_realestbw.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm2013061d1-icon_realestbw.jpg){kind=icon}
![[MISSING IMAGE: tm2013061d1-icon_envirbwlr.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm2013061d1-icon_envirbwlr.jpg){kind=icon}
![[MISSING IMAGE: tm2013061d1-icon_social4clr.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm2013061d1-icon_social4clr.jpg){kind=icon}
![[MISSING IMAGE: tm2013061d1-icon_goverbwlr.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm2013061d1-icon_goverbwlr.jpg){kind=icon}
![[MISSING IMAGE: tm2013061d1-icon_sustapnlr.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm2013061d1-icon_sustapnlr.jpg){kind=icon}
![[MISSING IMAGE: tm2013061d1-fc_goverpn.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm2013061d1-fc_goverpn.jpg)
![[MISSING IMAGE: tm2013061d1-fc_sharepnlr.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm2013061d1-fc_sharepnlr.jpg)
![[MISSING IMAGE: tm2013061d1-fc_culturepnlr.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm2013061d1-fc_culturepnlr.jpg)
![[MISSING IMAGE: tm2013061d1-fc_careerpnlr.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm2013061d1-fc_careerpnlr.jpg)
![[MISSING IMAGE: tm2013061d1-icon_starpn.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm2013061d1-icon_starpn.jpg){kind=icon}
![[MISSING IMAGE: tv512179_chrt-ceoneo.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/tv512179_chrt-ceoneo.jpg)
![[MISSING IMAGE: tm2013061d1-icon_arrowpndown.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm2013061d1-icon_arrowpndown.jpg){kind=icon}
![[MISSING IMAGE: tm207868d1-bc_historypn.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm207868d1-bc_historypn.jpg)
![[MISSING IMAGE: tm207868d1-icon_watdopn.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm207868d1-icon_watdopn.jpg){kind=icon}
![[MISSING IMAGE: tm2013061d1_chrt-pie137.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm2013061d1_chrt-pie137.jpg)
![[MISSING IMAGE: tm207868d1-pc_stockpn.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm207868d1-pc_stockpn.jpg)
![[MISSING IMAGE: tm207868d1-bc_ceopn.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm207868d1-bc_ceopn.jpg)
![[MISSING IMAGE: tm207868d1-pgroup_19.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm207868d1-pgroup_19.jpg)
![[MISSING IMAGE: tm207868d1-pgroup_select.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm207868d1-pgroup_select.jpg)
![[MISSING IMAGE: tm2013061d1-ph_cover4clr.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm2013061d1-ph_cover4clr.jpg)
![[MISSING IMAGE: tm2013061d1-cv_macys4clr.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm2013061d1-cv_macys4clr.jpg)
![[MISSING IMAGE: ph_karenhoguet-gy.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/ph_karenhoguet-gy.jpg)
![[MISSING IMAGE: ph_harry.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/ph_harry.jpg)
![[MISSING IMAGE: ph_elisagarcia-gy.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/ph_elisagarcia-gy.jpg)
![[MISSING IMAGE: ph_danielle.jpg]](https://files.docoh.com/DEF 14A/0001144204-19-017955/ph_danielle.jpg)
![[MISSING IMAGE: ph_jeffgenn-bw.gif]](https://files.docoh.com/DEF 14A/0001104659-20-041904/ph_jeffgenn-bw.gif)
![[MISSING IMAGE: ph_paulapric-bwlr.gif]](https://files.docoh.com/DEF 14A/0001104659-20-041904/ph_paulapric-bwlr.gif)
![[MISSING IMAGE: ph_elisagarci-bwlr.gif]](https://files.docoh.com/DEF 14A/0001104659-20-041904/ph_elisagarci-bwlr.gif)
![[MISSING IMAGE: ph_johnharper-bw.gif]](https://files.docoh.com/DEF 14A/0001104659-20-041904/ph_johnharper-bw.gif)
![[MISSING IMAGE: ph_daniell-bwlr.gif]](https://files.docoh.com/DEF 14A/0001104659-20-041904/ph_daniell-bwlr.gif)
![[MISSING IMAGE: ph_harrylawto-bwlr.gif]](https://files.docoh.com/DEF 14A/0001104659-20-041904/ph_harrylawto-bwlr.gif)
![[MISSING IMAGE: tm2013061d1-fc_inpactpnlr.jpg]](https://files.docoh.com/DEF 14A/0001104659-20-041904/tm2013061d1-fc_inpactpnlr.jpg)
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