UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Securities Exchange Act of 1934 (Amendment
(Amendment No. )
Filed by the Registrant þx
Filed by a party other than the Registrant ¨
Check the appropriate box:
¨ | Preliminary Proxy Statement |
¨ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
x | Definitive Proxy Statement |
¨ | Definitive Additional Materials |
¨ | Soliciting Material Pursuant to §240.14a-12 |
The TJX Companies, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x | No fee required. |
¨ | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
1) | Title of each class of securities to which transaction applies: |
2) | Aggregate number of securities to which transaction applies: |
3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
4) | Proposed maximum aggregate value of transaction: |
5) | Total fee paid: |
¨ | Fee paid previously with preliminary materials. |
¨ | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
1) | Amount Previously Paid: |
2) | Form, Schedule or Registration Statement No.: |
3) | Filing Party: |
4) | Date Filed: |
770 Cochituate Road
Framingham, Massachusetts 01701
April 27, 201224, 2015
Dear Fellow Stockholder:
We cordially invite you to attend our 20122015 Annual Meeting on Wednesday,Thursday, June 13, 2012,11, 2015, at 11:9:00 a.m. (local time), to be held at our offices, 770 Cochituate Road, Framingham, Massachusetts. Please enter through the Northeast Entrance.
The proxy statement accompanying this letter describes the business we will consider at the meeting. Your vote is important regardless of the number of shares you own. Please read the proxy statement and vote your shares. Instructions for Internet and telephone voting are attached to your proxy card. If you prefer, you can vote by mail by completing and signing your proxy card and returning it in the enclosed pre-paid return envelope.
We hope that you will be able to join us on June 13th.11th.
Sincerely,
| ||||
Bernard Cammarata | Carol Meyrowitz | |||
Chairman of the Board | Chief Executive Officer |
Printed on Recycled Paper
Table of ContentsTABLE OF CONTENTS
The TJX Companies, Inc.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
June 13, 201211, 2015
The Annual Meeting of Stockholders of The TJX Companies, Inc. will be held at our offices, 770 Cochituate Road, Framingham, Massachusetts on Wednesday,Thursday, June 13, 2012,11, 2015, at 11:9:00 a.m. (local time) to vote on:
Election of directors
Ratification of appointment of our independent registered public accounting firm
for fiscal 2016
Approval of the material terms of executive officer performance goals under our cash incentive plans
Advisory approval of TJX’s executive compensation (the “say-on-pay vote”)
Any other business properly brought before the meeting
Stockholders of record at the close of business on April 16, 201214, 2015 are entitled to notice of, and entitled to vote at, the Annual Meeting and any adjournments or postponements thereof.
To attend the Annual Meeting, you must demonstrate that you were a TJX stockholder at the close of business on April 16, 201214, 2015 or hold a valid proxy for the Annual Meeting from such a stockholder. If you are not a stockholder of record but hold shares through a broker, trustee or nominee, you will need to bring proof of your beneficial ownership as of April 16, 2012,14, 2015, such as a brokerage account statement showing your ownership on that date or similar evidence of ownership. All stockholders will need to check in upon arrival and receive visitorattendee badges for building security.security purposes. Please allow additional time for these procedures.
By Order of the Board of Directors
Ann McCauley
Secretary
Framingham, Massachusetts
April 27, 201224, 2015
YOUR VOTE IS IMPORTANT.
PLEASE VOTE ONOVER THE INTERNET, BY TELEPHONE OR BY MAILMAIL.
The TJX Companies, Inc.
ANNUAL MEETING OF STOCKHOLDERS
June 13, 201211, 2015
PROXY STATEMENT
Why am I receiving this proxy statement?The Board of Directors of The TJX Companies, Inc., or TJX, is soliciting your proxy for the 20122015 Annual Meeting. Meeting, to be held on June 11, 2015, to vote on the following items:
• | Advisory approval of TJX’s executive compensation (the “say-on-pay vote”) (Proposal 3) – see page 48, and also theExecutive Compensationsection, starting on page 16 |
Who can vote at the meeting?Stockholders of record at the close of business on April 14, 2015 are entitled to vote at the meeting. Each of the 682,260,150 shares of common stock outstanding on the record date is entitled to one vote.
How do I vote?There are multiple ways to vote your shares.
Please note that the process for Internet and telephone voting is intended to authenticate your identity and permit you to confirm that your voting instructions are accurately reflected. Please seeVoting Requirements and Proxies on page 49 for further information about voting.
Can I change or revoke my proxy?Yes. If you are a stockholder of record, you may revoke your proxy at any time before it is voted at the Annual Meeting by voting later by Internet or telephone, returning a later-dated proxy card by mail, or delivering a written revocation to the Secretary of TJX at our corporate offices at 770 Cochituate Road, Framingham, Massachusetts 01701.
What constitutes a quorum for the meeting?A majority of the shares outstanding and entitled to vote at the meeting is required for a quorum for the meeting.
You may vote on the Internet, using the procedures and instructions described on the proxy card and other enclosures. You may vote by telephone using the toll-free telephone number on the proxy card. The process for Internet and telephone voting includes easy-to-follow instructions and is designed to authenticate your identity and permit you to confirm that your voting instructions are accurately reflected. Street name holders (who hold their shares through a third party, like a bank or broker) may vote by Internet or telephone if their banks or brokers make those methods available, in which case the banks or brokers will enclose the relevant instructions with the proxy statement. All stockholders of record may vote by signing and returning the enclosed proxy card.
You may revoke your proxy at any time before it is voted at the annual meeting by voting later by telephone or Internet, returning a later-dated proxy card, or delivering a written revocation to the Secretary of TJX. Our address is 770 Cochituate Road, Framingham, Massachusetts 01701.
Stockholders of record at the close of business on April 16, 2012 are entitled to vote at the meeting. Each of the 741,678,724 shares of common stock outstanding on the record date is entitled to one vote.
This proxy statement, the proxy card and the Annual Report to Stockholders for our fiscal year ended January 28, 201231, 2015 (fiscal 2012)2015) are being first mailed to stockholders on or about the date of the notice of meeting, April 27, 2012.24, 2015.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting To Be Held on June 13, 2012: This proxy statement and Annual Report and FormIMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING TO BE HELD ON JUNE 11, 2015: THIS PROXY STATEMENT AND ANNUAL REPORT AND FORM 10-K for fiscal 2012 are available at http:FOR FISCAL 2015 ARE AVAILABLE AT HTTP://bnymellon.mobular.net/bnymellon/tjxWWW.ENVISIONREPORTS.COM/TJX
- ELECTION OF DIRECTORS
Nominees and Their Qualifications
We seek nominees who have established strong professional reputations, sophistication and experience in the retail and consumer industries. We also seek nominees with experience in substantive areas that are important to our business such as international operations and growth; marketing and brand management; sales, buying and distribution; accounting, finance and capital structure; strategic planning and leadership of complex organizations; human resources and development practices; and strategy, growth and innovation. Our nominees hold or have held senior executive positions in large, complex organizations or in businesses related to important substantive areas important to our business, and in these positions have also gained experience in core management skills and substantive areas relevant to our business. Our nominees also have experience working with or serving on boards of directors and board committees of other public companies, and each of our nominees has an understanding of corporate governance practices and trends. In addition, most of our nominees have significant prior service on our Board, which has provided them with significant exposure to both our business and the industry in which we compete. We believe that all our nominees possess the professional and personal qualifications necessary for board service and we have highlighted particularly noteworthy attributes for each director in the individual biographies below.
The individuals listed below have been nominated and are standing for election at this year’s Annual Meeting. If elected, they will hold office until our 20132016 Annual Meeting of Stockholders and until their successors are duly elected and qualified. All of our nominees are current directors. Other than Mr. Abdalla,William H. Swanson, who was elected by the Board in January 2012,2015, all of our current directors were elected to the Board by our stockholders. Bernard Cammarata, after more than 25 years on our Board and nearly 40 years of service with the Company, has decided to retire as Chairman of the Board, effective at the 2015 Annual Meeting of Stockholders. After his retirement from the Board, Mr. Cammarata will remain with the Company in an advisory role as Founder and Executive Advisor.
Your Board of Directors unanimously recommends that you vote FOR the election of each of the nominees as director.
Zein Abdalla, 5356
Director since 2012
Mr. Abdalla has been CEO of PepsiCo Europe, a divisionwas the President of PepsiCo, Inc., a leading global food, snack and beverage company, since November 2009,from September 2012 through his retirement in December 2014, prior to which he served as CEO of PepsiCo Europe, a division of PepsiCo, starting in November 2009 and as President, PepsiCo Europe Region starting in January 2006. Mr. Abdalla previously held a variety of senior positions at PepsiCo since he joined that company in 1995, including as General Manager of PepsiCo’s European Beverage Business, General Manager of Tropicana Europe and Franchise Vice President for Pakistan and the Gulf region. Mr. Abdalla’s executive experience with a large global company has given him expertise in corporate management, including in emerging markets, operations, brand management, distribution and global strategy.
José B. Alvarez, 4952
Director since 2007
Mr. Alvarez has been a member of the faculty of the Harvard Business School since 2009. From August 2008 through December 2008, Mr. Alvarez was the Global Executive Vice President for Business Development for Ahold, a global supermarket retail company. From 2001 to August 2008, he held various executive positions with Stop & Shop/Giant-Landover, Ahold’s U.S. subsidiary, including President and Chief Executive Officer of Stop & Shop/Giant-Landover from 2006 to 2008 and Executive Vice President, Supply Chain and Logistics from 2004 to 2006. Previously, he served in executive positions at Shaw’s Supermarkets, Inc. and began his career at the Jewel Food Stores subsidiary of American Stores Company in 1990. Mr. Alvarez is also a director of United Rentals, Inc. and served on the board of Church & Dwight Co., Inc. from 2011 until 2013. Mr. Alvarez’s long career in retail has given him broad experience in large retail chain management, including store management, supply chain, logistics, distribution and strategy.
Alan M. Bennett, 61
Director since 2007
Mr. Bennett served as the Chief Executive Officer of H&R Block Inc., a tax services provider, from July 2010 to May 2011 and was previously Interim Chief Executive Officer from November 2007 through August 2008. He
was Senior Vice President and Chief Financial Officer and a Member of the Office of the Chairman of Aetna, Inc., a diversified healthcare benefits company, from 2001 to 2007, and previously held other senior financial management positions at Aetna after joining in 1995. Mr. Bennett held various senior management roles in finance and sales/marketing at Pirelli Armstrong Tire Corporation, formerly Armstrong Rubber Company, from 1981 to 1995 and began his career with Ernst & Ernst (now Ernst & Young LLP). Mr. Bennett is also a director of Halliburton Company and Fluor Corporation and was a director of H&R Block from 2008 to 2011 and Bausch & Lomb, Inc. from 2004 to 2007.2011. Mr. Bennett’s senior leadership roles in two significant financial businesses provide him with executive experience in managing very large businesses and change management as well as financial expertise including financial management, taxes, accounting, controls, finance and financial reporting.
Bernard Cammarata, 72
Director since 1989
Mr. Cammarata has been Chairman of the Board of TJX since 1999. Mr. Cammarata served as Acting Chief Executive Officer of TJX from September 2005 to January 2007. He also led TJX and its former TJX subsidiary and T.J. Maxx Division from the organization of the business in 1976 until 2000, including serving as Chief Executive Officer and President of TJX, Chairman and President of TJX’s T.J. Maxx Division and Chairman of The Marmaxx Group (Marmaxx). As the founder of TJX, Mr. Cammarata has participated in the leadership of TJX’s successful strategy and development from the beginning to its current position as the world’s largest off-price retailer and offers deep expertise in all aspects of TJX’s business, including management, operations, marketing, buying, distribution and financial matters.
David T. Ching, 5962
Director since 2007
Mr. Ching has beenwas Senior Vice President and Chief Information Officer for Safeway Inc., a food and drug retailer, from 1994 to January 2013 and has consulted through DTC Associates LLC, focusing on management consulting and technology services, since 1994.2013. Previously, Mr. Ching was the General Manager for British American Consulting Group, a software and consulting firm focusing on the distribution and retail industry. He also worked for Lucky Stores Inc., a subsidiary of American Stores Company from 1979 to 1993, including serving as the Senior Vice President of Information Systems. Mr. Ching was a director of Petco Animal Supplies, Inc. from 2005 to 2007. Mr. Ching’s strong technological experience and related management positions in the retail industry provide Mr. Ching expertise including information systems, information security and controls, technology implementation and operation, reporting and distribution in the retail industry.
Michael F. Hines, 5659
Director since 2007
Mr. Hines served as Executive Vice President and Chief Financial Officer of Dick’s Sporting Goods, Inc., a sporting goods retailer, from 1995 to March 2007. From 1990 to 1995, he held management positions with Staples, Inc., an office products retailer, most recently as Vice President, Finance. Mr. Hines spent 12 years in public accounting, the last eight years with the accounting firm Deloitte & Touche LLP. Mr. Hines is also a director of GNC Holdings, Inc., where he serves as non-executive Chairman, and Dunkin’ Brands Group, Inc. and was a director of The Yankee Candle Company, Inc. from 2003 to 2007. Mr. Hines’ experience as a financial executive and certified public accountant provides him with expertise in the retail industry including accounting, controls, financial reporting, tax, finance, risk management and financial management.
Amy B. Lane, 5962
Director since 2005
Ms. Lane was a Managing Director and Group Leader of the Global Retailing Investment Banking Group at Merrill Lynch & Co., Inc., from 1997 until her retirement in 2002. Ms. Lane previously served as a Managing Director at Salomon Brothers, Inc., where she founded and led the retail industry investment banking unit.
Ms. Lane is also a director of GNC Holdings, Inc., NextEra Energy, Inc. and was also a directormember of Borders Group, Inc. from 1995 to 1999 and from 2001 to 2009.the board of trustees of Urban Edge Properties. Ms. Lane’s experience as the leader of two investment banking practices covering the global retailing industry has given her substantial experience with financial services, capital markets, finance and accounting, capital structure, acquisitions and divestitures in that industry as well as management, leadership and strategy.
Carol Meyrowitz, 5861
Director since 2006
Ms. Meyrowitz has been Chief Executive Officer of TJX since January 2007, a director since September 2006 and also served as President from October 2005 to January 2011. She served as Senior Executive Vice President of TJX from 2004 until January 2005, Executive Vice President of TJX from 2001 to 2004 and President of Marmaxx from 2001 to January 2005. From January 2005 until October 2005, she was employed in an advisory role for TJX and consulted for Berkshire Partners LLC, a private equity firm. From 1987
1983 to 2001, she held various senior management and merchandising positions with Marmaxx and with Chadwick’s of Boston and Hit or Miss, former divisions of TJX. Ms. Meyrowitz is also a director of Amscan Holdings, Inc. and Staples, Inc. and was a director of The Yankee Candle Company,Amscan Holdings, Inc. from 20042005 to 2007.2012. As Chief Executive Officer of the Company, and through the many other positions Ms. Meyrowitz has held with TJX, since joining in 1987, Ms. Meyrowitz has a deep understanding of TJX and broad experience in all aspects of off-price retail, including innovation, strategy, buying, distribution, marketing, real estate, finance and accounting, and international operations.
John F. O’Brien, 6972
Director since 1996
Mr. O’Brien is the retired Chief Executive Officer and President of Allmerica Financial Corporation (now The Hanover Insurance Group, Inc.), an insurance and diversified financial services company, holding those positions from 1995 to 2002. Mr. O’Brien previously held executive positions at Fidelity Investments, an asset management firm, including Group Managing Director of FMR Corporation, Chairman of Institutional Services Company and Chairman of Brokerage Services, Inc. Mr. O’Brien serves as our Lead Director. Mr. O’Brien is also non-executive Chairman and a director of Cabot Corporation, a director of LKQ Corporation and a director of a family of 3593 registered investment companiesmutual funds managed by BlackRock, Inc., an investment management advisory firm. Mr. O’Brien has substantial executive experience with two financial services businesses, giving him expertise including general management and oversight with respect to strategy, financial planning, insurance, operations, finance and capital structure.
Willow B. Shire, 6467
Director since 1995
Ms. Shire has beenwas an executive consultant with Orchard Consulting Group sincefrom 1994 until January 2015, specializing in leadership development and strategic problem solving. Previously, she was Chairperson for the Computer Systems Public Policy Project within the National Academy of Science. She also held various positions at Digital Equipment Corporation, a computer hardware manufacturer, for 18 years, including Vice President and Officer, Health Industries Business Unit. Ms. Shire was a director of Vitesse Semiconductor Corporation from 2007 to 2009. Through her consulting experience and prior business experience, Ms. Shire brings expertise in leadership development, talent assessment, change management, human resources and development practices, cultural assessment and strategic problem solving.
William H. Swanson, 66
Director since February 2015
Mr. Swanson was the Chief Executive Officer of Raytheon Company, a technology and innovation leader specializing in defense, security and civil markets throughout the world, from July 2003 until March 2014 and served as Chairman of the board of Raytheon from January 2004 until his retirement in September 2014. Mr. Swanson had a career of more than 42 years with Raytheon, during which he held a wide range of leadership positions including serving as President of Raytheon from July 2002 to May 2004, Executive Vice President of Raytheon and President of its Electronic Systems division from January 2000 to July 2002, and Executive Vice President of Raytheon and Chairman and Chief Executive Officer of Raytheon Systems Company from January 1998 to January 2000. Mr. Swanson is also a director of NextEra Energy, Inc. Mr. Swanson’s qualifications include expertise in strategic planning, global business operations and extensive leadership experience from serving as chief executive of a Fortune 200 company.
Integrity has been a core tenet of TJX since itsour inception. We seek to perform with the highest standards of ethical conduct and in compliance with all laws and regulations that relate to our businesses. We have Corporate Governance Principles, a Global Code of Conduct for our Associates, a Code of Ethics for TJX Executives,written charters for each of our Board committees and a Director Code of Business Conduct and Ethics. The current versions of these documents and other items relating to our governance can be found aton our corporate website, www.tjx.com, as described below inwww.tjx.com.Online Availability of Information.
Board Independence
Independence Determination. Our Corporate Governance Principles provide that at least two-thirds of the members of our Board will be independent directors. The Board evaluates any relationships of each director and nominee with TJX and makes an affirmative determination whether or not each director and nominee is independent. To assist it in making its independence determination, the Board has adopted categorical standards, which are available in our Corporate Governance Principles on our website, atwww.tjx.com.
As part of the Board’s annual review of director independence, the Board considered the recommendation of our Corporate Governance Committee and reviewed any transactions and relationships between each non-management director or any member of his or her immediate family and TJX. The purpose of this review was to determine whether there were any such relationships or transactions and if so, whether they were inconsistent with a determination that the director was independent.
As a result of this review, our Board unanimously determined that eightnine directors of our 10-membercurrent 11-member Board (80%(82%) are independent: Zein Abdalla, José B. Alvarez, Alan M. Bennett, David T. Ching, Michael F. Hines, Amy B. Lane, John F. O’Brien, and Willow B. Shire.Shire and William H. Swanson. The same determination was made previously with respect to David A. Brandon and Fletcher H. Wiley,Dawn Lepore, who each served on theour Board until June 2011.2014. Each of these directors met our categorical standards of independence. Bernard Cammarata, as Chairman, and Carol Meyrowitz, as Chief Executive Officer, are employed by TJX.TJX and are therefore not independent. Mr. Cammarata is retiring from the Board effective at the 2015 Annual Meeting and therefore not standing for reelection.
Board Nominees and Service at TJX
Board Nominations.Nominations. The Corporate Governance Committee recommends to the Board individuals asto be director nominees who, in the opinion of the Corporate Governance Committee, have high personal and professional integrity, who have demonstrated ability, perspective and judgment and who will be effective in conjunction with the other nominees to and members of the Board, in collectively serving the long-term best interests of our stockholders. As described below inBoard Expertise and Diversity, the Committee considers a range of factors whenconsidering individual candidates, including professional experience, personal integrity and potential contributions to the Board as a whole. In addition, the Corporate Governance Committee considers each director nominee’s experience, qualifications, attributes and skills in light of our business, including those that are identified in the biographical information contained above underNominees and Their Qualifications.
The Corporate Governance Committee’s process for identifying and evaluating candidates, including candidates recommended by stockholders, includes actively seeking to identify qualified individuals by various means that may include reviewing lists of possible candidates, such as chief executive officers of public companies or leaders of finance or other industries; considering proposals from a range of sources, such as the Board of Directors, management, Associates, stockholders and industry contacts; and engaging a third-party search firm to expand our search and assist in compiling information about possible candidates. Mr. Swanson was recommended to the Committee for consideration as a board nominee by our Chief Executive Officer, reviewed by our Corporate Governance Committee and then elected by the full Board effective the beginning of fiscal 2016.
The Corporate Governance Committee has a policy with respect to submission by stockholders of candidates for director nominees which is available on our website. Any stockholder may submit in writing one candidate for consideration for each stockholder meeting at which directors are to be elected by no later than the 120th calendar day before the first anniversary of the date that we released our proxy statement to stockholders in connection with the previous year’s Annual Meeting. Recommendations should be sent to the Secretary of TJX,
The TJX Companies, Inc., 770 Cochituate Road, Framingham, Massachusetts 01701. A recommendation must include specified information about, and consents and agreements of, the candidate, as described in the policy. The Corporate Governance Committee evaluates candidates for the position of director recommended by stockholders or others in the same manner as candidates from other sources. The Corporate Governance Committee will determine whether to interview any candidates and may seek additional information about candidates from third-party sources.
Board Expertise and Diversity. As a global company with approximately 198,000 Associates at our fiscal year end, we consider diversity among our Associates, customers and vendors to be part of who we are and core to our culture. At the Board level and throughout the organization we strive to promote the benefits of leveraging differences and promoting a talented and diverse workforce. We seek to have a Board that represents diversity as to experience, gender and ethnicity/race and that reflects a range of talents, ages, skills, viewpoints, professional experience, educational background and expertise to provide sound and prudent guidance on our operations and interests. In evaluating the suitability of individual Board nominees, the Corporate Governance Committee does not have a formal policy with respect to diversity, but takes into account many factors, including general understanding of disciplines relevant to the success of a large publicly traded company in today’s business environment, understanding of our business and industry, professional background and leadership experience, experience on the boards of other large publicly traded companies, personal accomplishment, independence and geographic, gender, age, ethnic and racial diversity. The Corporate Governance Committee evaluates each individual in the context of the Board as a whole, with the objective of recommending a group that the Committee believes can best perpetuate the success of our business and representrepresents stockholder interests through the exercise of sound judgment using its collective diversity of experience. In addition, the Corporate Governance Committee considers, in light of our business, each director nominee’s experience, qualifications, attributes and skills that are identified in the biographical information contained under “Election of Directors.”
The Corporate Governance Committee’s process for identifying and evaluating candidates, including candidates recommended by stockholders, includes actively seeking to identify qualified individuals by various means which may include reviewing lists of possible candidates, such as chief executive officers of public companies or leaders of finance or other industries; considering proposals from sources, such as the Board of Directors, management, Associates, stockholders and industry contacts; and engaging a third-party search firm to expand our search and assist in compiling information about possible candidates. During fiscal 2012, Mr. Abdalla was recommended to the Corporate Governance Committee by a third-party search firm.
The Corporate Governance Committee has a policy with respect to submission by stockholders of candidates for director nominees which is available on our website atwww.tjx.com. Any stockholder may submit in writing one candidate for consideration for each stockholder meeting at which directors are to be elected by not later than the 120th calendar day before the first anniversary of the date that we released our proxy statement to stockholders in connection with the previous year’s annual meeting. Recommendations should be sent to the Secretary of TJX, c/o Office of the Secretary of The TJX Companies, Inc., 770 Cochituate Road, Framingham, Massachusetts 01701. A recommendation must include specified information about, and consents and agreements of, the candidate, as described in the policy. The Corporate Governance Committee evaluates candidates for the position of director recommended by stockholders or others in the same manner as candidates from other sources. The Corporate Governance Committee will determine whether to interview any candidates and may seek additional information about candidates from third-party sources.
Board Expertise and Diversity. We seek to have a Board that represents diversity as to experience, gender and ethnicity/race, but we do not have a formal policy with respect to diversity. We also seek to have a Board that reflects a range of talents, ages, skills, viewpoints, professional experience, educational background and expertise to provide sound and prudent guidance with respect to our operations and interests. All of our directors are financially literate, and, as described in our Audit Committee Report, two members of our Audit Committee are audit committee financial experts. We value the many kinds of diversity reflected in our Board and nominees.
Majority Voting.Voting. Our by-laws provide for the election of directors in an uncontested election by a majority of the shares properly cast at the meeting. Our Corporate Governance Principles available atwww.tjx.com, require any incumbent nominee for director to provide an irrevocable contingent resignation at or prior to election,election. This resignation would be effective only if such(a) the director fails to receive the requisite majority vote in an uncontested election and (b) the Board accepts suchthe resignation. Our Corporate Governance Principles provide procedures for the consideration of suchthis kind of resignation by the Board. Within 90 days of the date of the annual meeting of stockholders, the Board, with the recommendation of the Corporate Governance Committee, will act upon such resignation. In making its decision, the Board will consider the best interests of TJX and its stockholders and will take what it deems to be appropriate action. Such action, which may include accepting or rejecting the resignation or taking further measures to address those concerns that were the basis for the underlying stockholder vote.
Policies Relating to Board Service.Service Policies. It is our policy that no director shall be nominated who has attained the age of 75 prior to or on the date of his or her election. Under our Corporate Governance Principles, directors who are CEOs of public companies should not serve on more than two boards of public companies besides their own and no director should serve on more than five boards of public companies. Under our Audit Committee Charter, members of the Audit Committee should not serve on more than two audit committees of other companies. When a director’s principal occupation or business association changes during his or her tenure as a director, our Corporate Governance Principles provide that the director is required to tender his or her resignation from the Board, and the Corporate Governance Committee will recommend to the Board any action to be taken with respect to the resignation.
Board Attendance.Attendance. During fiscal 2012,2015, our Board met 10seven times. Each of our directors attended at least 75% of all meetings of the Board and committees of which he or she was then a member. At eachThe independent directors also met separately at regularly scheduled Board meeting, the independent directors met separately.executive sessions. It is our policy, included in our Corporate Governance Principles, that all nominees and directors standing for electionreelection are expected to attend the annual meeting of stockholders. All nine of our nominees and directors who stood for reelection at the 2014 Annual Meeting were then serving on our Board attended the 2011 Annual Meeting.in attendance.
The Board of Directors has five standing committees: Audit, Corporate Governance, Executive, Executive Compensation and Finance. Each committee’s charter is available on our website atwww.tjx.com.
All members of the Audit, Corporate Governance, Executive Compensation and Finance Committees are independent directors. While each committee has designated responsibilities, the committeeseach committee may act on behalf of the entire Board. The committees regularly report on their activities to the entire Board.
The table below provides information about membership and meetings of these committees during fiscal 2012:2015:
Name | Audit | Corporate Governance | Executive | Executive Compensation | Finance | |||||||||||||||||||||||||
Name1 | Audit | Corporate Governance | Executive | Executive Compensation | Finance | |||||||||||||||||||||||||
Zein Abdalla | + | |||||||||||||||||||||||||||||
José B. Alvarez | X | X | + | + | ||||||||||||||||||||||||||
Alan M. Bennett | X | X | * | X | * | + | ||||||||||||||||||||||||
David A. Brandon** | X | * | X | |||||||||||||||||||||||||||
Bernard Cammarata | X | * | * | |||||||||||||||||||||||||||
David T. Ching | X | X | + | + | ||||||||||||||||||||||||||
Michael F. Hines | X | * | X | * | + | |||||||||||||||||||||||||
Amy B. Lane | X | X | X | * | + | + | * | |||||||||||||||||||||||
Dawn Lepore2 | + | |||||||||||||||||||||||||||||
Carol Meyrowitz | ||||||||||||||||||||||||||||||
John F. O’Brien | X | X | + | + | ||||||||||||||||||||||||||
Willow B. Shire | X | * | X | * | + | |||||||||||||||||||||||||
Fletcher H. Wiley** | X | X | ||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||
Number of meetings during fiscal 2012 | 11 | 3 | 0 | 7 | 4 | |||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||
Number of meetings during fiscal 2015 | 12 | 4 | 0 | 6 | 4 |
* Committee Chair.
1. Mr. Swanson joined the Board and the Executive Compensation Committee as of the start of fiscal 2016.
2. Ms. Lepore served on the Board and the Finance Committee until June 2014.
Audit Committee.Committee. (Mr. Hines,Chair; Mr. Alvarez; Mr. Ching; Ms. Lane) The Audit Committee is directly responsible for the annual appointment, compensation, retention and oversight of the independent registered public accounting firm and oversight of the financial reporting process. Each member of the Audit Committee is a non-employee director and meets the independence standards adopted by the Board in compliance with New York Stock Exchange (NYSE) listing standards. The Audit Committee operates under the terms of a written charter which is reviewed by members of the committee annually. Specifically, theThe Audit Committee’s responsibilities include:include, among other things:
reviewing with management, internal auditors and the independent registered public accounting firm our quarterly and annual financial statements, including the accounting principles and procedures applied in their preparation and any changes in accounting policies;
monitoring our system of internal financial controls and accounting practices;
overseeing the internal and external audit process, including the scope and implementation of the annual audit;
overseeing our compliance and ethics programs;
selecting, or terminatingretaining, approving the compensation of, overseeing and if necessary, replacing the independent registered public accounting firm, approving their compensation and evaluating the performance of the independent registered public accounting firm, including the lead audit and reviewing partners;
establishing and maintaining procedures for receipt, retention and treatment of complaints, including the confidential and anonymous submission of complaints by employees, regarding accounting or auditing matters;
pre-approving all work by the independent registered public accounting firm; and
reviewing other matters as the Board deems appropriate.
In addition to assuring the regular rotation of the lead partner of the independent auditor, as required by law, the Audit Committee, including its Chair, has been involved in the selection of, and reviews and evaluates the performance of, the independent auditor, including the lead audit partner, and further considers whether there should be regular rotation of the audit function among firms.
Executive Compensation Committee.Committee. (Mr. Bennett,Chair; Mr. Alvarez; Mr. O’Brien; Ms. Shire; Mr. Swanson) The Executive Compensation Committee, or the ECC, is responsible for overseeing executive compensation and benefits. Each member of the ECC is a non-employee director and meets the independence standards adopted by the Board in compliance with New York Stock Exchangeand those required by NYSE listing standards. The ECC operates under the terms of a written charter which is reviewed by the members of the
committee annually. Pursuant to its charter, the ECC may delegate its authority to a subcommittee or to such other person that the ECC determines is appropriate and is permitted by law. Specifically, theapplicable law, regulations and listing standards. The ECC’s responsibilities include:include, among other things:
determining the compensation of the Chief Executive Officer, including awards of stock options, bonuses and other awards and incentives, based on the evaluation by the Corporate Governance Committee of the performance of the Chief Executive Officer and such other factors as the CommitteeECC deems relevant;
determining the performance goals and performance criteria under our incentive plans;
approving the terms of employment of our executive officers, including employment and other agreements with such officers;
reviewing and undertaking other matters that the Board or the ECC deems appropriate, such as the review of our succession plan for the CEOChief Executive Officer and other executive officers; and
overseeing the administration of our incentive plans.
The ECC also reviewedreviews our compensation policies and practices for our Associates to confirm thatdetermine whether they do not give rise to risks which are reasonably likely to have a material adverse effect on the Company. SeeCompensation Program Risk Assessment,below.
Corporate Governance Committee.Committee. (Ms. Shire,Chair;Mr. Abdalla; Mr. Ching) The Corporate Governance Committee is responsible for recommending nominees for directors to theserve as members of our Board and for overseeing our corporate governance practices. Each member of the Corporate Governance Committee is a non-employee director and meets the independence standards adopted by the Board in compliance with New York Stock ExchangeNYSE listing standards. The Corporate Governance Committee operates under the terms of a written charter which is reviewed by the members of the committee annually. Specifically, theThe Corporate Governance Committee’s responsibilities include:include, among other things:
recommending director nominees to the Board;
developing and reviewing corporate governance principles;
reviewing our policies with respect to corporate public responsibility, including charitable and political contributions and political advocacy;
reviewing practices and policies with respect to directors, including retirement policies, the size of the Board and the meeting frequency of the Board, and reviewing the functions, duties and composition of the committees of the Board and compensation for Board and committee members;
recommending processes for the annual evaluations of the performance of the Board, the Chairman, the independent Lead Director and each committee and its chair;
establishing performance objectives for the Chief Executive Officer and annually evaluating the performance of the Chief Executive Officer against such objectives; and
overseeing the maintenance and presentation to the Board of management’s plans for succession to senior management positions.
Executive Committee.Committee. (Mr. Cammarata,Chair; Ms. Lane; Mr. O’Brien) The Executive Committee meets at such times as it determines to be appropriate and has the authority to act for the Board on specified matters during the intervals between meetings of the Board.
Finance Committee.Committee. (Ms. Lane,Chair; Mr. Bennett; Mr. Hines) The Finance Committee is responsible for reviewing and making recommendations to the Board relating to our financial activities and condition. The Finance Committee operates under the terms of a written charter which is reviewed by the members of the committee annually. Specifically, the Finance Committee’s responsibilities include:include, among other things:
reviewing and making recommendations to the Board with respect to our financing plans and strategies,strategies; financial condition,condition; capital structure,structure; tax strategies, liabilities and payments, dividends,payments; dividends; stock repurchase programs and insurance programs;
approving our cash investment policies, foreign exchange risk management policies, andcommodity hedging policies, capital investment criteria and agreements for borrowing by us and our subsidiaries from banks and other financial institutions; and
reviewing investment policies as well as the performance and actuarial status of our pension and other retirement benefit plans.
Board Leadership Structure and Role in Risk Oversight.
Board Leadership Structure. Our Board annually elects a Chairman of the Board of Directors. The Board has chosen to separate the roles of Chairman and Chief Executive Officer. Consistent with our Corporate Governance Principles, because our current Chairman, Bernard Cammarata, is not independent, our independent directors have elected aan independent Lead Director, John F. O’Brien. In thishis role as Lead Director, among other duties, Mr. O’Brien O’Brien:
The Board believes that the separate roles of Mr. Cammarata, Ms. Meyrowitz and Mr. O’Brien arehave been in the best interests of TJX and its stockholders. Mr. Cammarata has wide-ranging, in-depth knowledge of our business arising from his many years of service to TJX and, as a result, provideshas provided effective leadership for the Board and support for Ms. Meyrowitz and other management. The structure permitsWith Mr. Cammarata’s retirement, the Board plans to elect Ms. Meyrowitz to devotethe additional position of Chairman at the Board meeting immediately following the annual meeting of stockholders. Given her attention to leadingclose involvement with the operations of TJX and focus onher deep knowledge of our Company, our industry and our Board, the executionBoard believes that it will continue to receive effective leadership with Ms. Meyrowitz serving as its Chairman as well as CEO, and that combining the roles at this time
is in the best interests of its business strategy.the stockholders and TJX. Mr. O’Brien provideswill continue to serve as Lead Director and provide independence in TJX’s Board leadership, as provided in the Corporate Governance Principles, through his review and approval of Board meeting agendas, his participation in management business review meetings and his leadership of the independent directors.
Board’s Role in Risk Oversight. It is management’s responsibility to manage risk and bring to the Board’s attention risks that are material to TJX. The Board has oversight responsibility for the systems established to report and monitor the most significant risks applicable to TJX. The Board administers its risk oversight role directly and through its committee structure and the committees’ regular reports to the Board at Board meetings. The Board reviews strategic, financial and execution risks and exposures associated with the annual plan and multi-year plans, any major litigation and other matters that may present material risk to the Company’s operations, plans, prospects or reputation, acquisitions and divestitures and senior management succession planning and receives regular reports from our Chief Compliance Officer and Director of Enterprise Risk. The Audit Committee reviews risks associated with financial and accounting matters, including financial reporting, accounting, disclosure, internal controls over financial reporting, ethics and compliance programs, compliance with orders and data security. The ECC reviews risks related to executive compensation and the design of compensation programs, plans and arrangements. The Corporate Governance Committee deals with risks related to board and CEO evaluations and management succession. The Finance Committee is responsible for risks related to financing, investment, capital structure, liquidity, and investment performance, asset allocation strategies and funding of our benefit plans.
Board’s Role in Risk Oversight It is management’s responsibility to manage risk and bring to the Board’s attention risks that are material to TJX. The Board has oversight responsibility for the systems established to report and monitor the most significant risks applicable to TJX. The Board administers its risk oversight role directly and through its committee structure and the committees’ regular reports at Board meetings. In general terms: |
• The Boardreviews strategic, financial and execution risks and exposures associated with the annual plan and multi-year plans, any major litigation and other matters that may present material risk to our operations, plans, prospects or reputation, acquisitions and divestitures and senior management succession planning and receives regular reports from our Chief Compliance Officer and Director of Enterprise Risk. |
• The Audit Committee reviews risks associated with financial and accounting matters, including financial reporting, accounting, disclosure, internal controls over financial reporting, ethics and compliance programs, compliance with orders and data security and receives regular reports from our Chief Compliance Officer and Director of Enterprise Risk. |
• The ECC reviews risks related to executive compensation and the design of compensation programs, plans and arrangements. |
• The Corporate Governance Committee reviews risks related to Board and CEO evaluations and management succession. |
• The Finance Committee reviews risks related to financing plans, investment policies, capital structure and liquidity, foreign exchange and commodity hedging, and investment performance, asset allocation strategies and funding of our benefit plans. |
Compensation Program Risk Assessment. Assessment. As part of our regular enterprise risk assessment process overseen by the Board and described above, we review the risks associated with our compensation plans and arrangements. In fiscal 2012,2015, the ECC reviewed TJX’s employeeAssociate compensation policies and practices and determined that they do not give rise to risks that are reasonably likely to have a material adverse effect on TJX. The ECC’s assessment considered (a) what risks could be created or encouraged by our executive and broad-based compensation plans and arrangements worldwide, (b) how those potential risks are monitored, mitigated and managed and (c) whether those potential risks are reasonably likely to have a material adverse effect on TJX. The assessment was led by our Chief Compliance Officer and Director of Enterprise Risk, whose responsibilitiesincluderesponsibilities include leadership of our enterprise risk management process, and included consultation with and input by, among others, executive officers, senior human resources and financial executives, the ECC’s independent compensation consultant and internal and external legal counsel. This process included:
a review of our compensation programs and practices, including our historical compensation practices;
analysis of programs or program features and practices that could potentially encourage excessive or unreasonable risk-taking of a material nature;
a review of business risks that these program features could potentially encourage;
identification of factors that mitigate risks to the business and incentives for executives to take excessive risk,risks, including, among others, a review of compensation design and elements of the compensation programs,programs; the balance among these program elements,elements; role of compensation consultants and other advisors,advisors; authority and discretion of the Board, the ECC and other Board committees in compensation,compensation; controls and procedures,procedures; program and cultural elements and potential for individual or group influences; and
consideration of the balance of potential risks and rewards related to our compensation programs and its role in implementation of our corporate strategy.
Codes of Conduct and Ethics and Other Policies
Global Code of Conduct for Associates. We have a Global Code of Conduct for our Associates designedthat requires our Associates to ensure thatconduct our business is conducted with integrity. Our Global Code of Conduct covers professional conduct, including employment policies, ethical business dealings, conflicts of interest, confidentiality, intellectual property rights and the protection of confidential information, as well as adherence to laws and regulations applicable to the conduct of our business. We have a Code of Conduct helpline to allow Associates to voice their concerns. We also have procedures for Associates to report complaints regarding accounting and auditing matters. Information about the helpline and procedures arematters, available on our website, atwww.tjx.com.www.tjx.com.
Code of Ethics for TJX Executives and Director Code of Business Conduct and Ethics.. We have a Code of Ethics for TJX Executives governing our Chairman, Chief Executive Officer, President, Chief Financial Officer and other senior operating, financial and legal executives. The Code of Ethics for TJX Executives is designed to ensure integrity in our financial reports and public disclosures. We also have a Director Code of Business Conduct and Ethics whichthat promotes honest and ethical conduct, compliance with applicable laws, rules and regulations and the avoidance of conflicts of interest.interest for our Board members. We intend to disclose any future amendments to, or waivers from, the Code of Ethics for TJX Executives or the Director Code of Business Conduct and Ethics, as required, within four business days of the waiver or amendment through a website posting or by filing a Current Report on Form 8-K with the Securities and Exchange Commission, or SEC.
Stock Ownership Guidelines for Directors and Executives.. Our Corporate Governance Principles provide that a director is expected to acquire initially at least $10,000 of our common stock outright and to attain stock ownership with a fair market value equal to at least five times the annual retainer paid to the directors within five years of initial election to the Board. Our Chief Executive Officer isNew board members are also expected to attainacquire initially at least $10,000 of our common stock outright upon joining the Board. As described further on page 27 in theCompensation Discussion and Analysis section, our executives are also subject to stock ownership with a fair market value equal to at least five times annual base compensationguidelines. As of April 14, 2015, all of our directors and our President, our Chief Financial Officer and each Senior Executive Vice President is expected to attain stock ownership with a fair market value of at least three times annual base compensation. Such ownership guidelines for our executive officers are reduced by 50% at age 62. Executives are expected to make steady progress toward thesewere in compliance with our ownership guidelines and to attain them within five years from their respective dates of hire as or promotion to the above positions. It is expected that executives who have not yet achieved these guidelines will retain 50% of their shares (on an after-tax basis) resulting from the exercise of stock options and vesting of restricted and deferred stock.guidelines.
Board Annual Performance Reviews.Reviews. We have a comprehensive review process for evaluating the performance of our Board and our directors. Our Corporate Governance Committee oversees the annual performance evaluation of the entire Board, our Chairman, our independent Lead Director, each of our committees and its chair, and each of our individual directors. We review our process annually. In addition, each of our independent committees conducts an annual self-assessment.
Environmental Sustainability. As part of our continued commitment to corporate responsibility, TJX has long pursued solutions to sustainability challengesinitiatives that are good for the environment as well as our profitability. We believe in the Company’s profitability.
We continue to be committed tovalue of environmentally sound business practices throughout our operations, including energy and water conservation as well as recycling and waste reduction.reduction efforts. We have discussed our efforts with stockholder groups over the years and understand the importancethat strong, sustainable business practices are important to our business,stakeholders, including stockholders, Associates, customers and the communities of strong, sustainable business practices.in which we work, and we work hard to evolve and improve our programs each year. Our corporate social responsibility report, which highlights efforts we have made in these initiatives, is available on our website,at www.tjx.com,. in the Corporate Responsibility section.
Online Availability of Information. The current versions of our Corporate Governance Principles, Global Associate Code of Conduct, Code of Ethics for TJX Executives, Director Code of Business Conduct and Ethics, and charters for our Audit, Corporate Governance, Executive, Executive Compensation and Finance Committees are available on our website atwww.tjx.com.
Online Availability of Information Our Corporate Governance Principles, Global Code of Conduct, Code of Ethics for TJX Executives, Director Code of Business Conduct and Ethics, and charters for our Audit, Corporate Governance, Executive, Executive Compensation and Finance Committees are available on our website, www.tjx.com in the Corporate Responsibility: Attention to Governance section. Information appearing on www.tjx.com is not a part of, and is not incorporated by reference in, this proxy statement. |
Communications with theour Board
Security holders and other interested parties may communicate directly with theour Board, the non-management directors or the independent directors as a group, specified individual directors or the Lead Director by writing to such individual or group c/o Office of the Secretary, The TJX Companies, Inc., 770 Cochituate Road, Framingham, Massachusetts 01701. The Secretary will forward such communications to the relevant group or individual at or prior to the next meeting of the Board.Board meeting. Stockholders and others can communicate complaints regarding accounting, internal accounting controls or auditing matters by writing to the Audit Committee, c/o Vice President, Corporate Internal Audit Director, The TJX Companies, Inc., 770 Cochituate Road, Framingham, Massachusetts 01701.
Transactions with Related Persons
Under the Corporate Governance Committee’s charter, thethat Committee is responsible for reviewing and approving or ratifying any transaction in which TJX is a participant and any of our directors, director nominees, executive officers, 5% stockholders and their immediate family members is a participant and in which such person has a direct or indirect material interest, as provided under SEC rules. In the course of reviewing potential related person transactions, the Corporate Governance Committee considers the nature of the related person’s interest in the transaction; the presence of standard prices, rates or charges or terms otherwise consistent with arms-length dealings with unrelated third parties; the materiality of the transaction to each party; the reasons for TJX entering into the transaction with the related person; the potential effect of the transaction on the status of a director as an independent, outside or disinterested director or committee member; and any other factors the Committee may deem relevant. Our General Counsel’s office is primarily responsible for the implementation of processes and procedures for screening potential transactions and providing information to the Corporate Governance Committee.
In April 2012, we acquired two office buildings in Marlborough, Massachusetts intended to be used as part of our corporate headquarters for an aggregate purchase price of approximately $62.5 million from affiliates of FMR LLC, which, with its related funds, beneficially owns more than 5% of our outstanding stock. We employ During fiscal 2015, Charles Barios, theBairos, brother-in-law of Ms. Meyrowitz, our CEO, as a Managerand Barbara House, sister-in-law of Technical Services. HeMr. Sherr, an executive officer, were employed by TJX. They received compensation from us, consistent with other Associates at his leveltheir respective levels and with his responsibilities, that totaledtotaling approximately $145,436$173,151 and $201,857, respectively, for fiscal 2012,2015, including salary and incentive compensation (cash and he participatesequity). They each also participated in company benefit plans generally available to similarly situated Associates. Lisa Cammarata, daughter of Mr. Cammarata, our Chairman, is an executive and owner of one of the vendors from which TJX acquires merchandise from time to time. During fiscal 2015, TJX purchased approximately $4.7 million in merchandise from that vendor and during fiscal 2016 to the date of this proxy statement, approximately $0.8 million. Our Corporate Governance Committee discussed and approved these transactions, consistent with our review process described above.
We operateThe Audit Committee operates in accordance with a written charter adopted by the Board and reviewed annually by the Committee. We are responsible for overseeing the quality and integrity of TJX’s accounting, auditing and financial reporting practices. The Audit Committee is composed solely of members who are independent, as defined by the New York Stock ExchangeNYSE and TJX’s Corporate Governance Principles. Further, the Board has determined that two of our members (Mr. Hines and Ms. Lane) are audit committee financial experts as defined by the rules of the SEC.
The Audit CommitteeWe met 1112 times during fiscal 2012,2015, including four meetings held with TJX’s Chief Financial Officer, Corporate Controller, Corporate Internal Audit and PricewaterhouseCoopers LLP, or PwC, TJX’s independent registered public accounting firm, prior to the public release of TJX’s quarterly and annual earnings announcements in order to discuss the financial information contained in the announcements. Management has the responsibility for the preparation of TJX’s financial statements, and PwC has the responsibility for the audit of those statements.
We took numerous actions to discharge our oversight responsibility with respect to the audit process. We reviewed and discussed the audited financial statements of TJX as of and for fiscal 2015 with management and PwC. We received the written disclosures and the letter from PwC pursuant to Rule 3526, Communication with Audit Committees Concerning Independence,required by applicable requirements of the Public Company Accounting Oversight Board (PCAOB) regarding the independent accountant’s communications with the audit committee concerning any relationships between PwC and TJXindependence and the potential effects of any disclosed
relationships on PwC’s independence and discussed with PwC its independence. We discussed with management, the internal auditors and PwC, TJX’s internal control over financial reporting and management’s assessment of the effectiveness of internal control over financial reporting and the internal audit function’s organization, responsibilities, budget and staffing. We reviewed with both PwC and our internal auditors their audit plans, audit scope and identification of audit risks.
We discussedreviewed and revieweddiscussed with PwC communications required by the Standards of the PCAOB (United States), as described in PCAOB AU Section 380,Auditing Standard 16, “Communication with Audit Committees,” and, with and without management present, discussed and reviewed the results of PwC’s examination of TJX’s financial statements. We also discussed the results of the internal audit examinations with and without management present.
Based on these reviews and discussions with management and PwC, we recommended to the Board that TJX’s audited financial statements be included in its Annual Report on Form 10-K for fiscal 2015 for filing with the SEC. We also have selected PwC as the independent registered public accounting firm for fiscal 2016, subject to ratification by TJX’s stockholders.
Audit Committee
Michael F. Hines,Chair
José B. Alvarez
David T. Ching
Amy B. Lane
Auditor Fees
The aggregate fees that TJX paid for professional services rendered by PwC for fiscal 20122015 and fiscal 20112014 were:
In thousands | 2012 | 2011 | 2015 | 2014 | ||||||||||||
Audit | $ | 4,967 | $ | 4,377 | $ | 6,588 | $ | 5,482 | ||||||||
Audit Related | 295 | 415 | 1,017 | 403 | ||||||||||||
Tax | 318 | 488 | 861 | 495 | ||||||||||||
All Other | 22 | 12 | 73 | 227 | ||||||||||||
|
| |||||||||||||||
Total | $ | 5,602 | $ | 5,292 | $ | 8,539 | $ | 6,607 | ||||||||
|
|
Audit fees were for professional services rendered for the audits of TJX’s consolidated financial statements including financial statement schedules and statutory and subsidiary audits, assistance with review of documents filed with the SEC, review of and opinions on the effectiveness of internal control over financial reporting and providing a comfort letter in connection with respect to fiscal 2012 and fiscal 2011.
Audit related fees were for services related to medical claims audits for fiscal 2014, consultations concerning financial accounting and reporting standards and employee benefit plan audits for fiscal 2014 and medical claims audits.
Tax fees were for services related to tax compliance, planning and advice, including assistance with tax audits and appeals, tax services for employee benefit plans, transfer pricing and requests for rulings and technical advice from tax authorities.
All other fees were for services related to training for TJX’s internal audit department and advisory services in fiscal 2012our on-going development of TJX’s conflict minerals program in compliance with Section 1502 of the Dodd-Frank Wall Street Reform and fiscal 2011.
We pre-approveThe Audit Committee is responsible for the audit fee negotiations associated with the Company’s retention of PwC. The Audit Committee of the Board pre-approves all audit services and all permitted non-audit services
by PwC, including engagement fees and terms. We haveThe Audit Committee has delegated the authority to take such action between meetings to the Audit Committee chair, who reports the decisions made to the full Audit Committee at its next scheduled meeting.
Our policies prohibit TJX from engaging PwC to provide any services relating to bookkeeping or other services related to accounting records or financial statements, financial information system design and implementation, appraisal or valuation services, fairness opinions or contribution-in-kind reports, actuarial
services, internal audit outsourcing, any management function, legal services or expert services not related to the audit, broker-dealer, investment adviser, or investment banking services or human resource consulting. In addition, we evaluatethe Audit Committee evaluates whether TJX’s use of PwC for permitted non-audit services is compatible with maintaining PwC’s independence. WeThe Audit Committee concluded that PwC’s provision of non-audit services, which wewere approved in advance, was compatible with their independence.
We reviewed and discussed the audited financial statements of TJX as of and for fiscal 2012 with management and PwC. Management has the responsibility for the preparation of TJX’s financial statements, and PwC has the responsibility for the audit of those statements.
Based on these reviews and discussions with management and PwC, we recommended to the Board that TJX’s audited financial statements be included in its Annual Report on Form 10-K for fiscal 2012 for filing with the SEC. We also have selected PwC as the independent registered public accounting firm for fiscal 2013, subject to ratification by TJX’s stockholders.
Audit Committee
Michael F. Hines,Chair
José B. Alvarez
David T. Ching
Amy B. Lane
Beneficial OwnershipBENEFICIAL OWNERSHIP
The following table shows, as of April 16, 2012,14, 2015, the number of shares of our common stock beneficially owned by each director, director nominee and executive officer named in the Summary Compensation Table and all directors and executive officers as a group. All share and share-based numbers in this proxy statement reflect the two-for-one stock split effected February 2, 2012.
Name | Number of Shares(1) | ||||
Zein Abdalla | |||||
José B. Alvarez | |||||
Alan M. Bennett | |||||
Bernard Cammarata(2) | |||||
David T. Ching | |||||
| |||||
Ernie Herrman | 711,325 | ||||
Michael F. Hines | |||||
Amy B. | |||||
| |||||
| |||||
John F. O’Brien | |||||
| |||||
Willow B. Shire | |||||
| |||||
All Directors |
The total number of shares beneficially owned by each individual and by the group above constitutes, in each constitutescase, less than 1% of the outstanding shares. Reflects sole voting and investment power except as indicated in footnotes below.
(1) |
|
(2) |
(3) |
Includes 16,000 shares owned jointly and over which an executive officer and spouse share voting and dispositive power. |
The following table shows, as of April 16, 2012,14, 2015, each person known by us to be the beneficial owner of 5% or more of our outstanding common stock:
Name and Address of Beneficial Owner | Number of Shares | Percentage of Class Outstanding | Number of Shares | Percentage of Class Outstanding | ||||||||
FMR LLC 82 Devonshire Street Boston, MA 02109 | 95,850,314 | 12.71 | % | |||||||||
FMR LLC(1) 245 Summer Street Boston, MA 02210 | 58,061,824 | 8.4% | ||||||||||
The Vanguard Group(2) 100 Vanguard Blvd. Malvern, PA 19355 | 40,793,864 | 5.9% | ||||||||||
BlackRock, Inc.(3) 40 East 52nd Street New York, NY 10022 | 35,732,475 | 5.2% |
The amounts above are based on ownership of FMR LLC at December 31, 2011, as indicated in its Schedule 13G/A filed with the SEC on February 14, 2012, which reflected sole voting power with respect to 5,289,370 of the shares and sole dispositive power with respect to 95,850,314 shares.
(1) | Amounts above based on ownership of FMR LLC at December 31, 2014 as indicated in its Schedule 13G/A filed with the SEC on February 13, 2015, which reflected sole voting power with respect to 4,887,711 of the shares and sole dispositive power with respect to 58,061,824 of the shares. |
(2) | Amounts above based on ownership of The Vanguard Group at December 31, 2014 as indicated in its Schedule 13G/A filed with the SEC on February 10, 2015, which reflected sole voting power with respect to 1,196,300 of the shares, sole dispositive power with respect to 39,660,054 shares and shared dispositive power over 1,133,810 shares. |
(3) | Amounts above based on ownership of BlackRock, Inc. and certain subsidiaries at December 31, 2014 as indicated in its Schedule 13G/A filed with the SEC on February 9, 2015, which reflected sole voting with respect to 29,500,938 shares and sole dispositive power with respect to 35,732,475 shares. |
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors and executive officers to file reports of holdings and transactions in our common stock with the SEC and the New York Stock Exchange.NYSE. To facilitate compliance, we have undertaken the responsibility to prepare and file these reports on behalf of our officers and directors. Based on our records and other information, all reports were timely filed.filed, other than a delay in filing a Form 4 to report transfers of shares for equivalent value to Mr. Cammarata from three family trusts and to report the surrender of shares to TJX for tax withholding upon vesting of Ms. Meyrowitz’s performance-based restricted stock award in March 2015.
Compensation Discussion and Analysis
This Compensation Discussion and Analysis section provides details of the compensation for fiscal 2015 for our fiscal 2015 named executive officers: Carol Meyrowitz, Chief Executive SummaryOfficer; Ernie Herrman, President; Michael MacMillan, Senior Executive Vice President, Group President; Richard Sherr, Senior Executive Vice President, Group President; and Scott Goldenberg, Senior Executive Vice President, Chief Financial Officer.
OverThis section is organized into the last 10 years, ourfollowing parts:
> Executive Summary: Performance and Program Highlights
> Overview of Process: How Compensation Decisions Are Made
> Compensation Program Elements
> Related Policies and Considerations
> Executive Summary: Performance and Program Highlights
TJX is the leading off-price apparel and home fashions retailer in the United States and worldwide. Our management has led TJX’s excellentvery strong performance at TJX through weak and strong economies, more than doubling sales and earnings.economies. We believe our compensation program has been a key component to achieving this success and is critical to motivating our management to achieve our business goals, encouraginggoals. We also believe that a key component to our success is maintaining the ability to develop new and existing talent to execute our business model and long-term, strategy, rewarding them forglobal strategy. Our overall compensation philosophy is to create a balanced program to attract and retain top talent, motivate executives to achieve our business objectives, reward performance, and retaining them. The fiscal 2012 compensationmaintain shareholder-friendly pay practices that help align the interest of our named executive officers reflects our strong performance for the fiscal year.Associates and shareholders.
Our Performance
Fiscal 20122015 was anothera successful year for TJX.
Our fiscal 2012 net sales reached $23.2 billion, a 6% increase over last year.
Our U.S. businesses continued to exceedTJX, reflecting our expectations in fiscal 2012, posting significant comparable store sales increases on top of significant increases in the prior two years and continuing to increase their segment profits. Our international businesses regained their momentum by the end of fiscal 2012.
Our total stockholder return for fiscal 2012 was 43%.
Our performance continued to reflectmanagement’s strong execution by our management of our business model.
For the third consecutive fiscal year, we increased customer traffic.
We delivered another year of double digit earnings growth, with a 14% increase in adjusted earnings per share* in fiscal 2012, on top of 23% and 48% increases in the prior two years.
Our three- and five-year growth through fiscal 2012 surpassed that of our peer group.
Our market capitalization continued to grow.
$29.1 B Net Sales | ||
16% Total Stockholder Return | ||
$45.2 B Market Cap | ||
176 / 3,395 Net New Stores/Total Stores | ||
We reached $29.1 billion in net sales, 6% more than last year. We added a net of 176 new stores in fiscal 2015, continuing our growth across our geographies. Our total stockholder return was 16% for fiscal 2015 on top of 28% for the year before. Our market capitalization continued to grow, from $40.4 billion in fiscal 2014 to $45.2 billion at the end of fiscal 2015.
Our three- and five-year compound annual growth rate for shareholder return of 26% and 30%, respectively, again exceeded the performance of the general market (S&P 500) and that of our compensation peer group |
Total Stockholder Return Growth Rates | Adjusted EPS | |
As a result of our performance-based compensation program, our executives’ fiscal 2012 compensation reflects our outstanding performance.
We exceeded our corporate pre-tax income-based target for fiscal 2012 under our short-term cash incentive plan, resulting in a 117.95% payout of corporate short-term award opportunities for our named executive officers.
Our performance for the cumulative fiscal 2010-2012 period substantially exceeded the business plan-based targets for that three year period under our long-term cash incentive plan and resulted in a 138.70% payout of award opportunities for our named executive officers.
We satisfied all of the performance-based vesting conditions ending in fiscal 2012 for performance-based restricted stock awards held by our named executive officers.
Our stock price rose to $33.69 at fiscal year-end (on a post-split basis), a 41% increase over last fiscal year end.
Our CEO’s earned compensation over the last five fiscal years is correlatedcontinued to be aligned with our strong performance:performance.
Our Compensation Program
We have a total compensation approach focused on performance-based incentive compensation that seeks to:
attract and retain very talented individuals in the highly competitive retail environment, maintaining an extremely high talent level in our company and providing for succession broadly across our management;
reward objective achievement of the short- and long-term financial objectives reflected in our business plans; and
enhance shareholder value by directly aligning the interests of our management and shareholders.
Our plan-based compensation program for fiscal 2015 reflects our executives is heavily weighted to incentive compensation that is at risk. Base salary is the only one of the four principal elements of our compensation program that is fixed. Each of the other elements is variable: short- and long-term cash incentive plan awards are earned solely on the achievement of objective performance goals, vesting of performance-based restricted stock requires achievement of objective performance goals, and stock options have value only to the extent the value of our stock increases. As shown in the following charts, performance-based compensation (equity incentives, short-term cash incentives and long-term cash incentives) constituted a significant portion of our named executive officers’ (NEOs) direct annual compensation at target in fiscal 2012.
Fiscal 2012 Compensation Elements*strong performance.
Annual Cash Incentive Plan 119.62% Payout for above target corporate performance for FY15 | Long Term Cash Incentive Plan 125.49% Payout for above target performance for FY13- FY15 cycle | Performance-Based Stock Awards ü Performance conditions satisfied for periods ending in FY15 |
*Notes on Charts:
1. Adjusted earnings per share (EPS) of TJX and several of the peer group members exclude from diluted EPS from continuing operations computed in accordance with U.S. generally accepted accounting principles (GAAP) the positive and negative effects of items that affect comparability between periods. Peer group average includes only those companies with positive adjusted EPS in the most recent fiscal year or comparable period. Our fiscal 2011 adjusted EPS of $1.75 does not include the negative impact of $0.11 per share from operating losses and closing costs of A.J. Wright stores and $0.01 per share benefit for a reduction for Computer Intrusion related costs from GAAP EPS of $1.65. Our fiscal 2012 adjusted EPS of $1.99 excludes the negative impact of $0.06 per share from the A.J. Wright consolidation from GAAP EPS of $1.93. Our fiscal 2013 adjusted EPS of $2.47 excludes an estimated $0.08 per share benefit from the 53rd week from GAAP EPS of $2.55. Our fiscal 2014 adjusted EPS of $2.83 excludes an $0.11 per share tax benefit from GAAP EPS of $2.94. Our fiscal 2015 adjusted EPS of $3.16 excludes the impact of a second quarter debt extinguishment charge of $.01 per share from GAAP EPS of $3.15.
2. In the CEO Pay for Performance chart, Total Compensation for our CEO for each fiscal year consists of base salary, annual and long-term cash incentives (MIP and LRPIP) with performance periods ending in that fiscal year, stock options valued at grant date and performance-based stock awards valued at grant date and allocated to the year of the related performance and service (seeReporting of Performance-Based Stock Awards, below). Reconciliations of adjusted EPS are included in the note above. Information reflected in this chart differs from, and is not a substitute for, the information presented in the Summary Compensation Table on page 30 of this proxy statement.
3. In the Fiscal 2015 Compensation Elements chart on page 18, Other NEO Average includes all named executive officers other than the CEO. Target compensation for both the CEO and other NEOs consists of annual salary, target cash incentive awards with performance periods ending in fiscal 2015 (fiscal 2015 MIP and fiscal 2013-2015 LRPIP), performance-based stock awards with performance periods ending in fiscal 2015 (valued at grant date fair value) and fiscal 2015 option awards (valued at grant date fair value).
Elements ofTJX Compensation Program Highlights
IncentiveOur compensation comprisesprogram emphasizes variable, performance-based compensation. These elements constituted a substantialsignificant portion of eachtarget compensation for our named executive officer’s compensation opportunity. These incentives directly tie the amount of each named executive officer’sofficers in fiscal 2015, as shown below.
Fiscal 2015 Compensation Elements*
*SeeNotes on Charts on page 17 for more information.
Key Principles
Key Program Elements and Objectives
The table below describes the key elements of our compensation program for our named executive officers. In addition to the more specific objectives summarized below, all elements of our program are shown below:intended to help us attract and retain talented individuals.
Element | Objectives | Balance | ||||||||
Salary |
• Provide a base level of compensation that reflects individual responsibilities. • Recognize individual performance and achievement. | term | Cash | |||||||
Incentives (MIP) | • | Incentivize performance to reach or exceed our short-term, annual financial objectives, primarily within each business division. Encourage engagement and teamwork within division. • Reward achievement of financial goals for the current fiscal year, | Variable | Shorter- term | Cash | |||||
Long-Term Cash Incentives (LRPIP) | • Incentivize performance to reach or exceed our longer term financial objectives across the Company. Foster teamwork across divisions. | • Reward company-wide achievement of multi-year financial goals • Provide longer-term retention incentives. | Variable | Longer- term | Cash | |||||
Equity Incentives (Options and Performance-Based Stock Awards) | • Reward corporate performance reflected in stock performance. • Provide longer-term retention incentives. | Variable | Longer- term | Equity |
In addition, we provide health and welfare, deferred compensation and retirement benefits, as well as limited perquisites, to further support our competitive position and promote retention. We also provide relocation-related benefits, including tax equalization, to facilitate deployment of our Associates in global service.
What We Do | ||||
Pay for Performance | ü | Our short- and long-term cash incentive compensation is tied directly to achievement of objective, Board-approved performance metrics based on core business goals. | ||
Award Limits | ü | Incentive plan payouts for our named executive officers can be decreased but not increased and are subject to limits on maximum payout. | ||
Performance-Based Awards | ü | All of our | ||
Stock Ownership Guidelines | We have stock ownership guidelines of 5x base salary for our CEO, 3x base salary for other executive officers and 5x annual retainer for non-employee directors. | |||
Clawback Policy | ü | We have a policy for recovery of incentive compensation that applies to all executive officers. | ||
Independent Compensation Consultant | ü | Our Executive Compensation Committee (ECC) directly engages an independent compensation consultant. The ECC’s consultant does not provide other services to management. | ||
Annual Compensation Risk Assessment | ü | We conduct a risk assessment of our compensation programs on an annual basis. | ||
Annual Say-on-Pay | ü | Our Board elected to have our executive compensation program considered by shareholders annually through our say-on-pay vote (see Proposal 3). We have received more than 97% approval each year we have presented it to our shareholders. |
What We Don’t Do | ||||||||||||||
| ||||||||||||||
Single-Trigger Severance following Change of Control | × | Severance benefits are payable to our named executive officers following a change of control only upon involuntary termination of employment or termination by the executive for “good reason.” | ||||||||||||
Hedging or Pledging of Company Stock | × | Our policies prohibit our executives from hedging or pledging TJX securities. | ||||||||||||
Pay Dividends on Unearned Awards | × | Dividends or dividend equivalent payments on performance-based stock awards to our executive officers are deferred until the underlying award vests. | ||||||||||||
Repricing or Exchange of Underwater Stock Options | × | Our Stock Incentive Plan (SIP) prohibits any amendment providing for the payment or provision of other consideration on termination or cancellation of any underwater stock option without stockholder approval. |
Our incentive compensation program is consistent and transparent to our Associates. The targets that must be achieved to earn incentive awards and performance-based restricted stock are clear, objective and directly reflect our targeted operating performance. The incentive compensation targets for all of our divisions are derived from our Board-approved business plans, which, in turn, form the basis for our corporate incentive targets.Stockholder Response
Our compensation program aligns the interests of our Associates, our businesses and our stockholders and is designed to drive outstanding performance. The incentive plan targets are derived from our business plans, focusing all of our executives and other key Associates on the same objectives. For our short-term cash incentive plan, the ECC selected an annual operating profit goal measure based on pre-tax income. Annual performance for divisional level Associates is measured based on targets taken from the divisional business plans and annual performance for our executives and other corporate Associates is measured against an aggregation of those divisional targets. For our long-term cash incentive plan, the ECC selected an operating goal and approved a
target that is the weighted aggregation of multi-year divisional profit targets, designed to measure results over the long term. The weighting and aggregation of the long term divisional goals, based on adjusted pre-tax income measures, adds focus on performance division by division and encourages growth and performance of the smaller divisions. The business plans that underlie our incentive targets also are the basis for the projections of performance that we give to investors at the beginning of each fiscal year. As a result, our incentive targets across the company drive the performance that we need to achieve our projections and align the interests of our Associates and those of our stockholders.
We believe that our approach to compensation serves to align management’s interests with those of shareholders and has contributed to our strong overall performance over many years in all types of business environments. As of the end of fiscal 2012, our total stockholder return significantly exceeded the performance of the general market (S&P 500) and our industry index (Dow Jones U.S. Apparel Retailers Index) over the past three- and five-year fiscal periods.
TJX Total Shareholder Return Growth v. Market and Retail Indexes
We maintain shareholder friendly pay practices.
Our named executive officers receive limited perquisites, all of which are shown and quantified in the Summary Compensation Table.
Our short- and long-term bonuses are earned by our executives based solely on achievement of objective Board-approved metrics. The bonus payouts for our named executive officers can be decreased but not increased under our bonus plans and are subject to limits on maximum payout.
All of our restricted stock awards have performance-based vesting conditions in addition to time-based vesting conditions. None of these awards vest based on time alone.
We do not provide tax gross-ups on regular compensation or golden parachute tax gross-ups. Severance benefits are payable to our named executive officers following a change of control only upon involuntary terminations of employment or termination by the executive for “good reason.”
We have not offered a primary Supplemental Executive Retirement Plan (SERP) benefit to new participants for many years. Only vested participants still have this benefit.
Our executive officers are subject to and are in compliance with published stock ownership guidelines.
Our stockholders showedhave shown strong approval forof our executive compensation program. At our last annual meeting, Holders of more than 97% of our stockholdersthe shares voting on the proposal have approved our advisory “say“say-on-pay” proposal each year since 2011 when we first asked stockholders to vote on pay” proposal on the compensation of our executive officers.an advisory say-on-pay proposal. The ECC viewsbelieves that these results as demonstratingreflect our stockholders’ support for our approach to executive compensation, including the focus on incentive components linked to our performance, and washas been mindful of this stockholder support when acting on compensation matters during the remainder of fiscal 2012 and in considering compensation for fiscal 2013.matters.
> Overview of Process: How Compensation Decisions Are Made
The Executive Compensation Committee (ECC),ECC, an independent committee of our Board of Directors, is responsible for compensation design and for approving compensation for our executive officers. The ECC has the authority, without Board or management approval, to retain and terminate its compensation consultants and to determine their fees and terms of engagement. The ECC reviews and approves compensation matters at various meetings during the year.
The ECC has used the same principle of compensation design for many years: establish a program of total compensation competitive with our peers, heavily weighted toward objective, performance-based incentives.incentives that focus on execution and reward achievement of our core business goals. In determining the overall level of executive compensation and establishing the allocationdesign and mix of its components,specific elements, the ECC considers various quantitative and qualitative factors, such as company and divisional performance, individual executive performance and responsibility,responsibilities, market data and peer practices, its experience with existing compensation programs, results of our advisory votes on executive compensation, the limitation on income tax deductions imposed by Section 162(m) of the Internal Revenue Code (Section 162(m)), recruitment, retention and succession planning.planning, contractual obligations, promotions, organizational changes, relocations and transitional roles.
The ECC has an annual cycle of executive compensation actions and also acts to address any special actions in connection with management changes; employment agreements; retirement plans, deferred compensation and other benefits; and other ECC charter responsibilities. The ECC typically reviews and approves elements of compensation for our overall corporate and divisional performance as well asnamed executive officers on the individual performance of the executives, including both quantitative and qualitative performance factors. In setting targets and evaluatingannual schedule below:
By the beginning of the fiscal year | • Review and approve peer group for new fiscal year | |
By the end of the first fiscal quarter | • Establish award opportunities and goals for new MIP and LRPIP performance periods • Grant performance-based stock awards • Approve salary adjustments | |
In September | • Grant stock options | |
After the fiscal year end | • Certify performance results for completed performance cycles (for MIP, LRPIP and performance-based stock awards) |
As discussed further below, the ECC consults with and reviews various metricsdata from an independent compensation consultant to assess the overall competitiveness of corporate performance, including adjusted EPS. our executives’ individual compensation and our compensation program overall and to determine appropriate levels and mix of individual compensation components.
Role of Executives
Our named executive officers play a limited role in determining executive compensation. Our CEO provides an annual self-assessment to the Corporate Governance Committee and makes recommendations to the ECC regarding compensation of our other named executive officers. These recommendations are based on annual performance reviews completed by the executive to whom each named executive officer directly reports. The ECC also receives a performance evaluation of our CEO, including her achievement of performance objectives set by the Corporate Governance Committee, which does not make compensation process. Our namedrecommendations. The ECC considers these performance reviews and recommendations, among other factors, in establishing base salaries, cash incentive opportunities and equity grants for our executive officers. More generally, executive officers participate in our strategic planning process and recommend to the Board for its review and approval the annual and multi-year business plans for TJX and its divisions. These approvedBoard-approved plans are the basis for the short- and long-term incentive performance targets and the restricted stock award performance criteria, all of which are approved by the ECC. Additionally,The ECC regularly meets in executive session (without our CEO provides an annual self-assessmentmanagement directors present) and annual performance reviews of the other namedinvites executive officers and makes recommendations to the ECC regarding the base salaries andattend other elementsportions of compensation for those executives. The Corporate Governance Committee of the Board provides the ECC with a review of the performance of our CEO for the year, including her achievement of performance objectives set by the Corporate Governance Committee in addition to those provided in our incentive plans, but does not make compensation recommendations. The ECC then considers these performance reviews and recommendations in establishing base salaries, cash incentive opportunities and equity grants.its meetings.
Compensation Consultants
The ECC also consults withhas the authority, without Board or management approval, to retain and reviews data from aterminate compensation consultantconsultants and advisors and to assess the overall competitivenessdetermine their fees and terms of our executives’ individual compensation and our compensation programs overall. For fiscal 2012 compensation, as discussed below under “ECC Compensation Consultant and Peer Group Information,” theengagement. The ECC reviewed peer group data provided byengaged Pearl Meyer & Partners, LLC, (PM&P), its independent compensation consultant, with respect to the named executive officers. The ECC also receives advice from PM&P on other matters, such as contracts with executives and plan targets.
The ECC considers the effects on retention and succession at the executive officer and other management levels when determining the levels and design of compensation. The ECC takes into account contractual obligations, historical compensation practices believed successful and the limitation on income tax deductions imposed by Section 162(m) of the Internal Revenue Code (Section 162(m)). The ECC also considers matters such as recruitment, new hires, promotions, organizational changes, relocations and transitional roles.
The ECC uses all of this information to determine the overall level and appropriate mix of short-term versus long-term incentive opportunities and cash versus equity-based compensation and opportunities to provide a competitive mix and encourage achievement of our short- and long-range goals and also encourage employee retention and succession. The ECC separately determines individual compensation components at its various meetings throughout the year. The ECC also uses this information to determine the appropriate level of retirement benefits, deferred compensation opportunities and limited perquisites. These help us maintain our competitive position and retain our executives.
ECC Compensation Consultant and Peer Group Information
The ECC engagedor PM&P, to serve as the independent compensation consultant to the ECC for fiscal 2012.2015. PM&P provided industry, peer and market data and advised the ECC with respect toon a variety of matters, including the design and competitive positioning of basekey compensation elements (base salary, annual bonus and long-term cash and equity incentivesincentives) for our named executive officers and other senior management, including
the establishment and evaluation of a compensation peer group, employment agreement terms, aggregate equity usage and program review, practices and updates on trends and regulatory developments. The ECC uses this information to determine the design, overall level and appropriate mix of employment agreements.fixed and variable compensation, appropriate plan metrics, short-term and long-term incentive opportunities and cash and equity-based opportunities and to determine individual compensation components, including benefits and perquisites. PM&P did not perform any services for TJX other than work for the ECC and for the Corporate Governance Committee with respect to compensation of directors. PM&P reported directly to the ECC, which determined the scope of PM&P’s engagement and its fees.
The ECC regularly reviews the services provided to the ECC by outside consultants and believes that PM&P is independent in providing executive compensation consulting services. During fiscal 2015, the ECC reviewed its existing relationship with PM&P, including potential conflicts of interest, and determined that PM&P’s work for the ECC did not raise any conflicts of interest and that PM&P continued to be an independent advisor to the ECC.
During fiscal 2015, our management engaged The Hay Group as a compensation consultant to review our broader-based equity and cash incentive programs for eligible Associates, including our named executive officers. The Hay Group conducted its analysis of the broader programs based on interviews with management and ECC members and peer and market data. After the ECC considered factors relevant to the independence of The Hay Group and determined that its work did not raise any conflict of interest, The Hay Group presented its findings to the ECC as a supplement to the analysis and advice from PM&P.
Peer Group
As described above, the ECC uses a peer group to provide context for its compensation decision-making for our named executive officers. Each year, theThe ECC considers revisions to theregularly assesses this peer group and inconsiders revisions. Before the start of fiscal 2011 it substantially revised the peer group. In June 2011,2015, advised by PM&P, the ECC reviewed the composition of its peer group including considerations ofto be considered in establishing and evaluating fiscal 2015 compensation for our named executive officers and determined that the following pre-determined criteria:group of 19 large, publicly traded consumer-oriented companies would be appropriate:
Fiscal 2015 Peer Group | ||||
Amazon.com, Inc. | Kimberly-Clark Corporation | Ross Stores, Inc. | ||
Bed Bath & Beyond Inc. | Kohl’s Corporation | Staples, Inc. | ||
Best Buy Co., Inc. | L Brands, Inc. | Starbucks Corporation | ||
eBay, Inc. | Lowe’s Companies, Inc. | Target Corporation | ||
The Gap, Inc. | Macy’s, Inc. | Walgreen Co. | ||
Home Depot, Inc. | Nike, Inc. | YUM! Brands, Inc. | ||
Nordstrom, Inc. |
The ECC determined that the above group was an appropriate peer group for TJX for fiscal 2015 based on criteria that included the following:
industry similarity;
similarity, targeting retail companies with and also considering consumer product companies that met complexity criteria;
companies with market capitalization ranging from approximately one-fourth to four times our market capitalization (generally between $5Bapproximately $10 billion and $74B$160 billion at that time)the time of the analysis); and
similarcomparability of business model, including levels of operational complexity in terms ofsuch as geographic span, global operations, and brand and/or product line diversity.diversity, e-commerce strategy, business segments and other strategic and operational factors that contribute to business complexity; and
The ECC determined thatconsidered all of these criteria and constructed the followingfiscal 2015 peer group to reflect a level of 17 large, publicly traded consumer-oriented companies usedbusiness complexity and performance more similar to TJX’s (which resulted in removing J.C. Penney and adding eBay, Inc. and Walgreens as compared to the fiscal 2011 continued to be an appropriate2014 peer group for TJX for fiscal 2012:group).
Fiscal 2012 Peer Group Companies
| ||||
| ||||
| ||||
| ||||
Although the ECC uses peer group data to provide context for its own determinations, it does not target compensation or any element of compensation for our named executive officers by reference to any specified level at the peer group.
> Compensation DesignProgram Elements
Compensation for our named executive officers includes base salary, incentive compensation (both equitycash and cash)equity) and other benefits, each of which is described further below. TheRather than applying a set formula, the ECC evaluates and balances the portion of total compensation payable as each elementoverall mix of compensation rather than applying a set formula.elements.
Base Salary
Each of our named executive officers receives a base salary in cash during the fiscal year. Base salary contributesyear that is intended to our overall compensation approach by providingprovide competitive, fixed compensation to attract and retain talented individualsthe executive at a level that reflects the executive’scommensurate with his or her responsibilities, performance, experience and value in the marketplace. Base salaries are typically reviewed on an annual basis and also at the time of amay be reviewed in connection with new employment agreement, promotion,agreements, new positions, or other significant changes in responsibilities. Base salaries at the end of fiscal 2015 are listed below.
Incentive Compensation
Base Salaries at Fiscal 2015 Year End | ||||
Carol Meyrowitz | $ | 1,575,000 | ||
Ernie Herrman | $ | 1,340,000 | ||
Michael MacMillan | $ | 970,000 | ||
Richard Sherr | $ | 820,000 | ||
Scott Goldenberg | $ | 675,000 | ||
The ECC approved base salaries for fiscal 2015 based on various factors, including assessment of individual performance and responsibilities, our fiscal 2014 performance, contractual obligations and overall competitiveness. The ECC approved salary increases for each of our named executive officers as part of our annual individual performance and salary review process described above.
Cash Incentives
A significant portion of each named executive officer’s compensation is equity andconsists of cash incentive compensationincentives granted under awards requiring an increase in the value of our stock orManagement Incentive Plan (MIP) and Long Range Performance Incentive Plan (LRPIP). Awards under these plans require achievement, of performance goals, at levels specified by the ECC, of performance goals based on performance measures approved by our stockholders. Performance results for both MIP and LRPIP must be certified by the ECC, which has the authority to reduce but not increase the awards to our named executive officers. All MIP and LRPIP awards are subject to a maximum individual payout limit under plan terms (no more than $5.5125 million for fiscal 2015 MIP and no more than $5 million for the fiscal 2013-2015 LRPIP cycle). Our equity-based and cash incentive compensation forincentives granted to our U.S. named executive officers induring fiscal 2012 was2015 were intended to qualify for an exemption from the deduction limitation rules of Section 162(m).
Short-TermAnnual Cash Incentives (MIP). The annualshort-term cash incentive awards made under our Management Incentive Plan (MIP)MIP are designed to motivate our named executive officers and other key Associates to achieve or exceed a performance target established
pre-established by the ECC for the fiscal year. Each individual MIP award has a target award opportunity, based on achievementexpressed as a percentage of this target.base salary earned during the fiscal year, tied to fiscal year goals for one or more of the divisions (divisional goals) or a combination of our four major divisions (corporate goals). The actual payout of a MIP award is determined by measurement of actual performance againstgoals and target opportunities for our named executive officers for fiscal 2015 are shown below.
Fiscal 2015 MIP: Target Opportunities and Goals | ||||||||
Name | % of Salary | $ Target | Goals | |||||
Carol Meyrowitz | 150% | $ | 2,362,503 | Corporate | ||||
Ernie Herrman | 100% | $ | 1,327,693 | Corporate | ||||
Michael MacMillan | 55% | $ | 529,270 | 75% TJX Europe; 25% Corporate | ||||
Richard Sherr | 55% | $ | 446,770 | 75% Marmaxx; 25% Corporate | ||||
Scott Goldenberg | 55% | $ | 364,905 | Corporate |
For each fiscal year, the performance target. IfECC pre-establishes the targeted performance is met, participants are eligible to receive their target MIP awards. If performance exceeds the performance target, participants are eligible to be paid more than their target MIP awards based on the extent to which performance exceeds thedivisional and corporate performance targets, (but not more than two times the target award, and not more than a pre-established maximum, $5 million per award under current plan terms, for any participant whose compensation is expected to be subject to the limits on deductibility under Section 162(m)). If performance does not meet the performance target, participants are eligible to receive a payout below their MIP target awards, based on the extent to which performance falls below the performance targets; or, if performance does not meet a minimum threshold, no award is earned. MIP performance targets (including any objective factors that may affect financial results, the occurrence of which would result in automatic adjustments to the targets), award opportunities and amounts payable at different levels of performance, specified rates for converting foreign income (to remove the intra-year impact of changes in currency exchange rates) and automatic adjustments to reflect certain contingent (but objectively determinable) events that may affect performance. For fiscal 2015, the MIP performance targets were set at specified levels of pre-tax income for each division (or, for corporate awards, a specified level of consolidated pre-tax income for the Marmaxx, HomeGoods, TJX Europe and TJX Canada divisions), adjusted to exclude in each case capitalized inventory costs, interest income and expense, and U.S. e-commerce and to reflect the pre-established exchange rates. As annual pre-tax income is a profitability measure, it reflects other metrics, such as revenue and operating expenses, and is used across our company to plan, manage and evaluate our business. The ECC continued to view adjusted annual pre-tax income as an appropriate metric to motivate and reward year-over-year performance across the company, particularly for our management. In setting these goals, the ECC believed that the various targets were challenging but reasonably achievable and that the payout formulas reflected an appropriate pay-for-performance sensitivity based on the maturity and expected growth of each division. The ECC also established a maximum payout percentage of 200%.
The fiscal 2015 MIP performance levels and corresponding payout percentages are shown below, including the thresholds (the level of performance at or below which no payout would be made) and maximums (the level at or above which the award payout would be the maximum under the award terms). After the end of the fiscal year, our performance is measured against the pre-established performance targets and MIP performance results are certified by the ECC. Participants are eligible to receive their target award if MIP performance equals the target performance. The payout formulas pre-established by the ECC determine payout percentages for performance above or below target.
Fiscal 2015 MIP Performance Goals | Fiscal 2015 MIP Performance Results | |||||||||||||||||||||||||
(in 000s)
| (in 000s)
| |||||||||||||||||||||||||
Threshold (Payout % = 0%) | Target (Payout % = 100%) | Maximum (Payout % = 200%) | MIP Performance | Payout % | ||||||||||||||||||||||
(% of Target) | (% of Target) | (% of Target) | ||||||||||||||||||||||||
Corporate | $ | 3,397,173 | 87.5% | $ | 3,882,456 | $ | 4,270,682 | 110.0% | $ | 3,958,610 | 101.96 | % | 119.62% | |||||||||||||
TJX Europe | £ | 169,271 | 80.0% | £ | 211,586 | £ | 241,811 | 114.3% | £ | 202,930 | 95.90 | % | 79.55% | |||||||||||||
Marmaxx | $ | 2,434,048 | 88.9% | $ | 2,738,287 | $ | 2,966,466 | 108.3% | $ | 2,760,805 | 100.82 | % | 109.87% |
The payout of each individual MIP award was determined by applying the applicable payout percentage to the individual’s target opportunity. Based on the performance results for fiscal year. Performance results must be certified by2015, the ECC, which has the authority to reduce but not increase the MIP awards to our named executive officers.officers with corporate MIP goals earned awards equal to 119.62% of their target award opportunities. Mr. MacMillan earned an award equal to 89.57% of his target award opportunity (79.55% payout for 75% of his award based on TJX Europe plus 119.62% payout for 25% of his award based on corporate results). Mr. Sherr earned an award equal to 112.30% of his target award opportunity (109.87% payout for 75% of his award based on Marmaxx plus 119.62% for 25% of his award based on corporate). The actual MIP award earned by each named executive officer for fiscal 2015 is included in the Non-Equity Incentive Plan column of the Summary Compensation Table.
Long-Term Cash Incentives (LRPIP).. The long-term cash incentive awards made under our Long Range Performance Incentive Plan (LRPIP)LRPIP are based on cumulative divisional performance targets for a multi-year period. The program is designed to motivate our named executive officers and other key Associates to achieve or exceed cumulativelong-term financial goals, as well as to foster teamwork across the company and promote retention. As LRPIP awards have overlapping multi-year cycles, in each fiscal year we complete a cycle, continue our performance under an ongoing cycle and grant awards for a new cycle.
Completion of LRPIP Cycle. LRPIP awards for the fiscal 2013-2015 cycle were granted in fiscal 2013, with individual target opportunities and company-wide performance goals. Our named executive officers’ target award opportunities for this cycle were pre-established by the ECC as follows:
Fiscal 2013-2015 LRPIP: Target Opportunities | ||||
Name | Target | |||
Carol Meyrowitz | $ | 1,400,000 | ||
Ernie Herrman | $ | 1,100,000 | ||
Michael MacMillan | $ | 700,000 | ||
Richard Sherr | $ | 400,000 | ||
Scott Goldenberg | $ | 300,000 |
The ECC pre-established the LRPIP performance goals, including multi-year performance targets and weightings for a multi-year period, which also promotes retention. Each LRPIP award has a target award opportunity based on achievement of these targets. As with the MIP, the payout of LRPIP awards is determined by measurement of actual performance against the pre-established performance targets. If the targeted performance is met, participants are eligible to receive their target LRPIP awards. If performance exceeds the performance targets, participants are eligible to be paid more than their target LRPIP awards based on the extent to which performance exceeds the performance targets (but not more than 150% of the target award, and not more than a pre-established maximum, $5 million per award under current plan terms, for any participant whose compensation is expected to be subject to the limits on deductibility under Section 162(m)). If performance does not meet the performance targets, participants are eligible to receive a payout below their LRPIP target awards, based on the extent to which performance falls below the performance targets, or, if performance does not meet a minimum threshold, no award is earned. LRPIP performance targets (including any objective factors, the occurrence of which would result in automatic adjustments to the targets), award opportunities andeach division, amounts payable at different levels of performance, specified rates for converting foreign income (to remove the intra-cycle impact of currency exchange rates) and automatic adjustments to reflect certain contingent (but objectively determinable) events that may affect performance. For fiscal 2013-2015 cycle, the LRPIP target (shown in column A in the table below) was based on pre-tax income targets for our four major divisions for the three-year period, adjusted to exclude capitalized inventory costs, interest income and expense and U.S. e-commerce and to reflect the pre-established exchange rates. Adjusted pre-tax income over a multi-year period was considered by the ECC to be an appropriate metric to use as a basis for plan targets to motivate and reward long-term performance, as it is a core business metric used across our company to plan long-term growth, manage our divisions and evaluate our long-term performance. The ECC also established divisional weightings (shown in column B in the table below), designed to maintain focus at the smaller divisions, and a maximum LRPIP payout percentage of 150%, with each division contributing between 0% and 150% toward the final payout for performance ranging from 33% to 133% of the divisional performance target. In setting these levels, the ECC believed that the targets were challenging but reasonably achievable and that using the weighted combination of performance of our main divisions helps to promote our team-based approach to achieving our goals.
After the end of fiscal 2015, divisional performance for the three-year cycle (shown in column C in the table below) was measured against each divisional target and the LRPIP performance results were certified by the ECC. Participants are eligible to receive their target award if the LRPIP performance target at each division is met and the payout formulas pre-established by the ECC determine payout percentages for divisional performance above or below target. The resulting payout percentages (shown in column D in the table below) are then weighted according to the pre-established divisional weightings (column B) and added together to determine the overall LRPIP award payout percentage.
Fiscal 2013-2015 LRPIP Performance Goals
| Fiscal 2013-2015 LRPIP Performance Results
| |||||||||||||||||||||
Cumulative 3-Year (in 000s) | Divisional Weightings | Cumulative 3-Year (in 000s) | Unweighted Contribution to Award Payout % | Weighted Contribution to Award Payout % | ||||||||||||||||||
(A) | (B) | (C) | (D) | (D x B) | ||||||||||||||||||
Marmaxx | $ | 6,947,870 | 68.5% | $ | 7,896,454 | 120.48 % | 82.53 % | |||||||||||||||
HomeGoods | $ | 863,164 | 10.5% | $ | 1,170,626 | 150.00 % | 15.75 % | |||||||||||||||
TJX Europe | £ | 362,328 | 10.5% | £ | 516,489 | 150.00 % | 15.75 % | |||||||||||||||
TJX Canada | C$ | 1,173,756 | 10.5% | C$ | 1,245,458 | 109.17 % | 11.46 % | |||||||||||||||
|
| |||||||||||||||||||||
100% | Total Payout | 125.49% |
The payout of each LRPIP award is determined by applying the overall payout percentage to the individual’s target opportunity for that cycle. The actual LRPIP amounts earned by the named executive officers for the fiscal 2013-2015 LRPIP awards are included in the Non-Equity Incentive Compensation column of the Summary Compensation Table.
New LRPIP Cycle. During fiscal 2015, the ECC established the following LRPIP dollar target award opportunities and performance goals for the fiscal 2015-2017 cycle for our named executive officers: Ms. Meyrowitz, $1,575,000; Mr. Herrman, $1,100,000; Mr. MacMillan, $700,000; Mr. Sherr, $500,000; and Mr. Goldenberg, $500,000. The ECC also established LRPIP performance targets for each division for the new cycle, divisional weightings, and a maximum LRPIP payout percentage of 200% for the fiscal 2015-2017 cycle, with each division contributing toward the final payout without a divisional threshold or maximum to reflect aggregate company results. Assuming that each division performs at the same level against its target performance, cycle. Performance results must be certified by the minimum (threshold) level for any payout is 60% of the performance target and the maximum payout level is achieved if performance is at or above 140% of the performance target. Consistent with our past disclosure practice, we plan to provide additional detail about the performance goals for this cycle, which are based on business targets for fiscal 2015 and future periods (fiscal 2016 and fiscal 2017), once the performance cycle is complete.
Equity Incentives
Equity awards are made under the SIP, generally in the form of stock options and performance-based stock awards. Stock options do not deliver value unless the value of our stock appreciates and then only to the extent of such appreciation, thus linking the interests of our executive officers with those of our stockholders. Performance-based stock awards include vesting conditions requiring achievement of pre-established performance criteria, linked to TJX’s financial performance. Both stock options and performance-based stock awards also have service-based vesting conditions that provide important retention incentives. Our equity incentives granted to our named executive officers during fiscal 2015 were intended to qualify for an exemption from the deduction limitation rules of Section 162(m). | ||||
Stock Option Grants. The ECC determined the number of stock options granted to our named executive officers in September 2014 by setting a fixed dollar value for each named executive officer and dividing this value by the stock price on the grant date. The fixed dollar value for named executive officers is a function of internal compensation levels and historical practices and is reviewed by the ECC for overall market competitiveness. All option awards were granted with an exercise price equal to the closing stock price on the NYSE on the date of grant. Performance Based Stock Awards. Vesting of Performance-Based Stock Awards. Each named executive officer held performance-based stock awards with performance-based vesting criteria that were satisfied based on fiscal 2015 MIP performance or fiscal 2013-2015 LRPIP performance, as follows: | Equity Grant Practices • All of our equity awards are made under our shareholder-approved Stock Incentive Plan (SIP). • The exercise price of each stock option grant is the closing stock price on the NYSE on the grant date. • The ECC does not have any programs, plans or practices of timing these equity grants in coordination with the release of material non-public information. • Virtually all of our equity awards are granted at regularly scheduled ECC meetings held at approximately the same times each year and scheduled in advance. | |||
• | The MIP-based award held by Ms. Meyrowitz fully vested upon ECC certification of achievement of a fiscal 2015 payout of 119.62% of the corporate MIP target awards (as described underAnnual Cash |
Incentives (MIP), above). The performance condition for full vesting was achievement of a payout of not less than 67% of the corporate MIP target payout, which required us to achieve 96% of the targeted performance reflected in the fiscal 2015 plan. |
• | LRPIP-based awards held by our other named executive officers contained performance-based vesting conditions that were satisfied upon ECC certification of achievement of a payout of 125.49% of the fiscal 2013-2015 LRPIP target awards (as described underCompletion of LRPIP Cycle, above). The performance condition for full vesting of these awards was achievement of a payout of not less than 67% of the fiscal 2013-2015 LRPIP target payout, which, reflecting the weighting of the divisions and assuming that each division performed at the same level against its target performance, required us to achieve 78% of the targeted cumulative performance reflected in that plan. These awards remained subject to service-based vesting conditions after fiscal 2015 year end, as described in footnote 3 to the Outstanding Equity Awards table. |
Grants of New Performance-Based Stock Awards. The ECC which has the authority to reduce but not increase the LRPIPawarded new performance-based stock awards in fiscal 2015 to our named executive officers.officers based on factors including the executive’s responsibilities, the potential value of each grant and the overall competitiveness and mix of executive compensation. Ms. Meyrowitz’s performance-based stock award was granted at the end of fiscal 2015 in connection with her entering into a new employment agreement as described below and includes vesting conditions requiring satisfaction of MIP-based performance goals and service requirements for fiscal 2016. The other named executive officers received fiscal 2015-2017 LRPIP-based stock awards.
Equity-Based Compensation. EquityThese awards are made under our Stock Incentive Plan, or SIP, generallyreflected in the formcompensation tables below. Full vesting of stock optionsthese awards is subject to satisfaction of performance-based conditions requiring achievement of a payout of not less than 67% of the target corporate MIP or LRPIP payout for the performance period, which will require us to achieve 96% of targeted performance under MIP (for the fiscal 2016 MIP-based award) or 87% of targeted cumulative performance under LRPIP (for fiscal 2015-2017 LRPIP-based awards), taking into account divisional weightings and performance-based restricted stockassuming that each division performs at the same level against its target performance. Performance resulting in a payout below this target level reduces the number of shares that would otherwise vest, pro rata, with no shares vesting if no payout is achieved. Vesting of these awards is also subject to satisfaction of service requirements specified in the awards. The ECC grants eachbelieves that, in addition to linking individual compensation to our target performance, these awards perform an important retention function.
Reporting of Performance-Based Stock Awards
Our performance-based stock option with an exercise price equalawards include vesting conditions requiring satisfaction of performance and service requirements pre-established by the ECC. Under SEC rules, these awards are reported in the proxy statement in the year of grant, as determined for accounting purposes under ASC Topic 718. As a result, the equity compensation of our named executive officers shown in the Summary Compensation Table and in the Grants of Plan-Based Awards table as granted for a particular year sometimes reflects awards intended by the ECC to compensate the executives for service and performance in other years. See footnote 3 to the closing price of our common stockOutstanding Equity Awards table for further detail on the date of grant. Stock options do not deliver value unless the value of our stock appreciates and then only to the extent of such appreciation, thus linking the interests of our executive officers with those of our stockholders. Performance-based restrictedvesting terms for stock awards vest only to the extent of achievement of the performance criteria, linked to TJX’s financial performance, provided for those awards. Both stock options and performance-based restricted stock awards also have service-based vesting conditions that provide important retention incentives.held by our named executive officers.
Other Elements of Compensation Components
Retirement BenefitsBenefits.. All of our U.S. named executive officers are eligible to participate in our 401(k) plan and also participate in a broad-based pension plan for U.S. Associates under which benefits are accrued based on compensation and service. They are also eligible to participate in our 401(k) plan. As a resident of the U.K., Mr. Sweetenham participated in our retirement plan for U.K. Associates under which participants may defer earnings, receive an employer match and invest their funds to purchase benefits at retirement. We also maintain a Supplemental Executive Retirement Plan or SERP.(SERP). Ms. Meyrowitz and Mr. Rossi participateis a vested participant in our primary SERP benefit program.program, a nonqualified pension benefit based on final average earnings. We have not offered primary SERP benefits to new participants for many years. Mr. Herrman, Mr. MacMillan, Mr. Sherr and Mr. NaylorGoldenberg participate in our alternative SERP benefit program, each discussed below under “Pension Benefits.”which
is intended to restore pension benefits that would otherwise not be available due to Internal Revenue Code restrictions. These programs are discussed underPension Benefits, below.
Deferred Compensation. Our U.S. named executive officers can defer compensation under our Executive Savings Plan or ESP,(ESP), an elective deferred compensation plan, intended to help us compete for and retain talent by providing participants with additional opportunities for personal financial planning and by rewarding and encouraging retention. Participants in the ESP, other than those eligible for our primary SERP benefit, receive an employer match based in part on our performance under MIP. Mr. Herrman, Mr. MacMillan, Mr. Sherr and Mr. Goldenberg received this match for fiscal 2015. Amounts deferred under the ESP are notionally invested in mutual funds or other market investments. Participants ininvestments selected by the ESP (other than those eligible for our primary SERP benefit) receive an employer match, subject to a vesting schedule, that is similarly notionally invested. Mr. Naylor and Mr. Herrman received this match for fiscal 2012, a portion of which is based on our performance under MIP. Mr. Sweetenham was eligible for a similar performance-based deferred compensation benefit in the U.K., which was forfeited in connection with his departure from TJX. Some of our named executive officers also haveparticipant. Ms. Meyrowitz has amounts previously deferred under our General Deferred Compensation Plan or GDCP,(GDCP), now closed to new deferrals. Under this plan, deferrals, are credited to an account that earnswhich earn notional interest until distributed at an annually adjusted rate based on U.S. Treasury securities. Mr. MacMillan also has amounts previously saved under our Canadian Executive Savings Plan (CESP). Our deferred compensation plans for named executive officers are discussed with the compensation tables below under “NonqualifiedNonqualified Deferred Compensation Plans.”Plans.
Relocation and Expatriate-Related Expenses. As part of our global mobility program, our policies provide that executive officers and other eligible Associates who relocate at our request are eligible for certain relocation and expatriate benefits to facilitate the transition and international assignment, including moving expenses, allowances for housing and goods and services, and tax assistance. These policies are intended to recognize and compensate Associates for higher costs associated with living and working outside the Associates’ home countries, with the goal that Associates are not financially advantaged or disadvantaged as a result of their international assignment and related taxes. During fiscal 2015, Mr. MacMillan continued his leadership of our European division as Senior Executive Vice President, Group President, after relocating from the U.S. to the U.K. in fiscal 2013, and was eligible for expatriate benefits under this program. These expenses are detailed in footnote 5 to the Summary Compensation Table.
Perquisites. We provide limited perquisites and other personal benefits to our named executive officers. These benefits, which are all included below as part of All Other Compensation and detailed in footnote 5 ofto the Summary Compensation Table, consist generally consist of automobile allowances, financial and tax planning services and payment of insurance premiums and payment of legal fees associated with employment agreement negotiations.premiums. None of these perquisites is grossed up for taxes.
> Related Policies and Considerations
Fiscal 2012 CompensationStock Ownership Guidelines.
Fiscal 2012 Base Salary. Ms. Meyrowitz and Mr. Herrman’s salaries were set at the end We have stock ownership guidelines that apply to all of fiscal 2011 in connection with their employment agreements and reflected the new roles they assumed in fiscal 2012, including the mutual expectation that Ms. Meyrowitz would retain responsibility for allour executive functions associated with her role asofficers. Our Chief Executive Officer but that,is expected to attain stock ownership with Mr. Herrman taking ona fair market value equal to at least five times annual base compensation. Our President, Chief Financial Officer and each Senior Executive Vice President are expected to attain stock ownership with a fair market value of at least three times annual base compensation. At age 62, the roleownership guidelines are reduced by fifty percent. These guidelines are designed to align our executives’ interests with those of President, she would be ableour stockholders and to delegate more of her day-to-day responsibilities. During fiscal 2012, the ECC approved salary increases for Mr. Rossi and Mr. Naylor based on various factors including assessment of individual performance,encourage a long-term focus. Our policies also prohibit our fiscal 2011 performance, responsibilities, contractual agreements and peer group review. The overall salary earned by each named executive officer during fiscal 2012 is reflected in the Summary Compensation Table. The base salaries for our named executive officers asfrom engaging in hedging transactions with respect to TJX stock. As of the endApril 14, 2015, each of fiscal 2012 were as follows:
Name | Salary | |||
Carol Meyrowitz | $ | 1,320,000 | ||
Ernie L. Herrman | $ | 1,100,000 | ||
Jeffrey G. Naylor | $ | 830,000 | ||
Jerome Rossi | $ | 780,000 | ||
Paul Sweetenham | £ | 525,045 |
Fiscal 2012 MIP. The MIP award opportunities for all of our named executive officers other than Mr. Sweetenham were based solely on our corporate MIP target. Mr. Sweetenham’s award opportunity was based on both corporate and TJX Europe targets. For fiscal 2012, the target MIP award opportunities (as a percentage of salary earned during the fiscal year) were as follows:
|
| |||||
| ||||||
| ||||||
| ||||||
| ||||||
|
|
For fiscal 2012, the ECC approved MIP performance targets based on Board-approved divisional pre-tax income plans, a metric intended to focus the executives on targets that drive the performance the company needs to achieve its publicly announced performance projections for the fiscal year. For corporate Associates, the MIP performance target was consolidated divisional pre-tax income excluding capitalized inventory costs, and intercompany, imputed, direct and fixture interest income and expense and did not include the former A.J. Wright division. For TJX Europe, the MIP performance target was TJX Europe divisional pre-tax income excluding capitalized inventory costs, and intercompany, imputed, direct and fixture interest income and expense. In setting the targets, the ECC believed that they were challenging but reasonably achievable. The table below shows these performance targets as well as the performance at or below which the award payout is zero and at or above which the award payout is the maximum under the terms of the award.
Fiscal 2012 MIP Targets
(Amounts in 000’s)
Threshold (% of Target) | Target | Maximum (% of Target) | ||||||||||
Corporate | $
| 2,112,977 (80%) |
| $
| 2,641,221 (100%) |
| $
| 3,018,538 (114.3%) |
| |||
TJX Europe | £
| 78,347 (75%) |
| £
| 104,463 (100%) |
| £
| 125,355 (120%) |
| |||
Payout (%) | 0% | 100% | 200% |
The MIP awards for fiscal 2012 for our named executive officers were earned as follows:
Fiscal 2012 MIP Results
(Amounts in 000’s)
MIP Target | Actual Performance | Amount Above Target | % of Target | MIP Award Payout Percentage | ||||||||||||||||
Corporate | $ | 2,641,221 | $ | 2,708,956 | $ | 67,735 | 102.6 | % | 117.95 | % | ||||||||||
TJX Europe | £ | 104,463 | £ | 45,142 | — | 43.2 | % | 0 | % |
Based on these results, the named executive officers earned awards equal to 117.95% of their award opportunities, other than Mr. Sweetenham, who earned a fiscal 2012 MIP award of 29.49% of his target award opportunity (117.95% of 25% of his target award).
Completion of Fiscal 2010-2012 LRPIP Award Cycle. Fiscal 2012 completed the performance cycle for the fiscal 2010-2012 LRPIP awards. Our LRPIP award target for our named executive officers was based onin compliance with our Board-approved business plans for the covered fiscal years at the time of grant to reflect overall company performance objectivesstock ownership guidelines and was intended to motivate achievement of long-term business goals. The target was based on an aggregate of weighted cumulative pre-tax income targets for each of our divisions for fiscal years 2010, 2011 and 2012, excluding capitalized inventory costs, but including intercompany, imputed, direct and fixture interest income and expense, and automatically adjusted during fiscal 2011 to exclude the A.J. Wright division. Actual divisional performance for the cycle was compared to each divisional target resulting in divisional payout percentages, based on a pre-established formula (payout ranging from 0% to 150% for performance ranging from 33% to 133% of the divisional performance target). These percentages were then weighted according to pre-established weightings designed to make performance at the smaller divisions more meaningful to the LRPIP award and intended to promote focus on their performance. The resulting weighted divisional percentages were added together to determine the overall award payout percentage. In setting the targets, the ECC believed that they were challenging but reasonably achievable.policies.
For the fiscal 2010-2012 LRPIP cycle, our named executive officers’ target award opportunities were: Ms. Meyrowitz, $1,423,333; Mr. Herrman, Mr. Naylor and Mr. Sweetenham, $700,000; and Mr. Rossi, $375,000. Their actual awards for this cycle, shown in the Summary Compensation Table, were earned on the following basis:
Fiscal 2010-2012 LRPIP ResultsEmployment Agreements.
(Amounts in 000’s)
Divisions | Cumulative 3-Year Performance Target | Cumulative 3-Year Actual Performance | Unweighted Contribution to Target Award | Divisional Weightings* | Weighted Contribution to Target Award | |||||||||||||||
In the US: | ||||||||||||||||||||
Marmaxx | $ | 3,708,378 | $ | 6,135,242 | 150.00 | % | 68.4 | % | 102.63 | % | ||||||||||
HomeGoods | $ | 117,739 | $ | 566,526 | 150.00 | % | 10.5 | % | 15.79 | % | ||||||||||
TJX Canada | C$ | 670,485 | C$ | 1,066,012 | 150.00 | % | 10.5 | % | 15.79 | % | ||||||||||
TJX Europe | £ | 321,905 | £ | 198,947 | 42.70 | % | 10.5 | % | 4.49 | % | ||||||||||
|
| |||||||||||||||||||
Total LRPIP Award: 138.70% |
Grant of Fiscal 2012-2014 LRPIP Award Opportunities. The ECC established the following LRPIP target award opportunities for the fiscal 2012-2014 cycle for our named executive officers: Ms. Meyrowitz, $1,320,000; Mr. Herrman, $1,100,000; Mr. Naylor and Mr. Sweetenham, $700,000; and Mr. Rossi, $375,000. The minimum level for any payout is 33.33% of the performance target and the maximum payout level is 133.33% of the performance target. Consistent with our past disclosure practice, we plan to disclose the performance targets, which are based on business targets for future periods, after the completion of the performance cycle.
Equity-Based Compensation
Grant of Performance-Based Restricted Stock Awards. The ECC granted performance-based restricted stock awards in fiscal 2012 to our named executive officers, as shown in the Grant of Plan Based Awards table, other than our CEO and our President, who each were granted restricted stock awards in connection with their new employment agreements at the end of fiscal 2011. The ECC determined the number of shares granted in fiscal 2012 based on factors including the level of responsibility of the executives, the potential value of each grant and the executive’s total compensation. The performance condition for full vesting of these awards is achievement of a payout of not less than 67% of the target corporate LRPIP payout for the performance period, linking the vesting with our corporate performance. Performance below this target level reduces the number of shares that would otherwise vest, pro rata, with no shares vesting if performance is below the minimum threshold. Vesting of these performance-based restricted stock awards is also subject to satisfaction of the service requirements specified in the awards. The ECC believes these awards perform an important retention function.
Allocation of Performance-Based Restricted Stock Awards to Years of Intended Compensation. Under SEC rules, the entire value of our performance-based restricted stock awards is shown in the Summary Compensation Table in the year of grant. As a result, the equity compensation of our named executive officers shown in the Summary Compensation Table for a particular year sometimes reflects awards intended by the ECC to compensate the executives for service and performance in different years. For example, performance-based restricted stock awards for Ms. Meyrowitz reflected in the Summary Compensation Table for fiscal 2011 valued at approximately $5,725,000 (based on the grant date fair value) were intended by the ECC to compensate Ms. Meyrowitz for service and performance in fiscal 2012.
Satisfaction of Performance-Based Vesting Conditions for Restricted Stock Awards. During fiscal 2012, each named executive officer held performance-based restricted stock awards with performance-based vesting criteria that were satisfied based on fiscal 2012 MIP performance or fiscal 2010-2012 LRPIP performance.
The fiscal 2012 portion of the award held by Ms. Meyrowitz fully vested upon ECC certification of achievement of a fiscal 2012 MIP payout of 117.95% of the corporate MIP target awards (as described under “Fiscal 2012 MIP” above). The performance condition for full vesting was achievement of a payout of not less than 67% of the corporate MIP target payout, which required us to achieve 93% of the targeted performance reflected in the fiscal 2012 plan.
The awards held by our other named executive officers contained performance-based vesting conditions that were satisfied due to achievement of a payout of 138.70% of the fiscal 2010-2012 LRPIP target awards (as described under “Completion of Fiscal 2010-2012 LRPIP Award Cycle” above). The performance condition for full vesting of these awards was achievement of a payout of not less than 67% of the fiscal 2010-2012 LRPIP target payout, which, as a result of the weighting of the smaller divisions, required us to achieve 78% of the targeted cumulative performance reflected in the fiscal 2010-2012 plan (assuming that each division performed at the same level against its target performance). These awards remain subject to service-based vesting conditions after fiscal 2012.
Grant of Stock Options in Fiscal 2012. The ECC determined the number of stock options granted to our named executive officers and other Associates in September 2011 by setting a fixed dollar value by executive and/or position and dividing this value by the stock price on the grant date. All options were granted with an exercise price equal to the closing stock price on the New York Stock Exchange on the grant date, and in general, have a maximum term of ten years, vest over three years and, to the extent vested, are exercisable for a limited period following termination of employment.
Related Policies and Considerations
Employment Agreements. The ECChas reviewed and approved, after consultation with its independent compensation consultant, individual employment agreements for each of our named executive officers that set their terms of employment, including compensation, benefits and termination and change of control provisions discussed below under “Severance and Change of Control Provisions.” The agreements establish a minimum level of base salary and provide for participation in SIP, MIP and LRPIP, at levels commensurate with the executive’s position and responsibilities and subject to the terms established by the ECC, and also entitle the executives to participate in TJX’s fringe benefit and deferred compensation plans.
Each of the employment agreements with Ms. Meyrowitz, Mr. Herrman, and Mr. Naylor, described in our proxy statement for fiscal 2011 and with the notes and narrative to the compensation tables below, became effective at the beginning of fiscal 2012 and, unless earlier terminated in accordance with its terms, continues until February 2, 2013 for Ms. Meyrowitz and Mr. Herrman and until February 1, 2014 for Mr. Naylor. In January 2012, we entered into a new employment agreement with Mr. Rossi that became effective at the beginning of fiscal 2013 and, unless earlier terminated in accordance with its terms, continues until February 1, 2014. This new employment agreement replaces his previous two-year agreement entered into in January 2010 and, among other things, set his minimum base salary at $780,000.
Severance and Change of Control Provisions. We believe that these employment agreements help retain our executives and support our succession planning process. The ECC takes the terms of these agreements into account when approving compensation for our named executive officers, including the performance-based stock award granted to Ms. Meyrowitz in connection with her entering into a new employment agreement during fiscal 2015.
In January 2014, we entered into a new employment agreement with Mr. MacMillan, which became effective at the beginning of fiscal 2015 and, unless terminated earlier in accordance with its terms, continues until January 28, 2017. In January 2015, we entered into new employment agreements, effective at the beginning of fiscal 2016, with Ms. Meyrowitz, Mr. Goldenberg, and Mr. Sherr. The agreements replace the existing two-year agreement with Ms. Meyrowitz and the existing three-year agreements with Mr. Goldenberg and Mr. Sherr, and, unless terminated earlier in accordance with their terms, will continue until January 28, 2017 in the case of Ms. Meyrowitz and until February 3, 2018 in the case of Mr. Goldenberg and Mr. Sherr.
The agreements with our named executive officers establish a minimum level of base salary and provide for participation in the SIP, MIP and LRPIP, at levels commensurate with the executive’s position and responsibilities and subject to terms established by the ECC, and also entitle the executives to participate in TJX’s fringe benefit and deferred compensation plans. Consistent with her prior agreements, the agreement with Ms. Meyrowitz reflects the understanding that she has delegated and is expected to continue to delegate certain day-to-day responsibilities while retaining responsibility for all executive functions associated with her duties and responsibilities as CEO of TJX. Ms. Meyrowitz’s agreement also provides for minimum MIP and LRPIP target award levels during the term of the agreement as well as limited perquisites and specified interest rate assumptions for determining her SERP benefit. Mr. MacMillan’s agreement includes expatriate-related benefits and other provisions related to his assignment with TJX Europe.
Severance and Change of Control Provisions. We provide severance terms to our executive officers, including in connection with a change of control, in our employment agreements and plans, and, as with Mr. Sweetenham, in separate arrangements that may be negotiated in connection with a departure.plans. In connection with these terms, each named executive officer has agreed to post-employment non-competition, non-solicitation and other covenants intended to protect our business. We believe that severance and change of control protections assist in attracting and retaining high quality executives and in keeping them focused on their responsibilities during any period in which a change of control may be contemplated or pending and that, more generally, it is important to define the relative obligations of TJX and our named executive officers, including obtaining protection against competition
and solicitation. We seek to achieve these objectives in a manner consistent with our shareholder-friendly pay practices, taking into account contractual obligations and current market practice, among other considerations, such as foreign status.considerations. These provisions are described under “PotentialPotential Payments upon Termination or Change of Control.”Control.
Stock Ownership GuidelinesClawback Policy. We have stock ownership guidelinesa clawback policy that, applyin the event of a material restatement of financial results, allows the Board, based on available remedies, to allseek recovery or forfeiture from any executive officer of the portion of incentive compensation that was received by or vested in the executive officer during the three-year period prior to the determination that a restatement was required and that would not have been earned had performance been measured on the basis of the restated results where the Board reasonably determines that the executive engaged in knowing or intentional fraudulent or illegal conduct that materially contributed to the need for the restatement.
Annual Compensation Risk Assessment. As discussed inCompensation Program Risk Assessment, above, we consider our compensation policies and practices, including our executive officers’ compensation program, as part of our executive officers. As described above under “Stock Ownership Guidelines for Directors and Executives” in “Corporate Governance,” our Chief Executive Officer is expected to attain stock ownership with a fair market value equal to at least five times annual base compensation and our President, our Chief Financial Officer and each Senior Executive Vice President is expected to attain stock ownership with a fair market value of at least three times annual base compensation. These guidelines are designed to align our executives’ interests with those of our stockholders and to encourage a long-term focus. Our policies also prohibitenterprise risk assessment process. The ECC considers, among other things, what risks could be created or encouraged by our executive officers from engaging in hedging transactions with respectcompensation plans and arrangements and how those potential risks are monitored, mitigated and managed. In fiscal 2015, the ECC determined that our overall compensation policies and practices do not give rise to TJX stock. Each of our executive officers is in compliance with our stock ownership guidelines and policies.risks that are reasonably likely to have a material adverse effect on TJX.
Tax and Accounting Considerations.Considerations. We generally structure U.S. incentive compensation arrangements with a view towards qualifying them as performance-based compensation exempt from the deduction limitations under Section 162(m), but we view the availability of a tax deduction as only one relevant consideration. We are seeking stockholder approval of the performance goals under MIP and LRPIP, consistent with Section 162(m), and we continue to emphasize performance-based compensation for executives and thus generally minimize the effect of Section 162(m). However,Further, the ECC believes that its primary responsibility is to provide a compensation program that attracts, retains and rewards the executive talent necessary for our success. Consequently, the ECC authorizes compensation in excess of $1 million that is not exempt from the deduction limitations under Section 162(m).
Equity Grant Practices. All of our equity awards are made under our stockholder-approved SIP. Virtually all of our stock options and other equity-based awards are granted at regularly scheduled ECC meetings held at approximately the same times each year. The specific dates of the meetings are scheduled by the Board, along with its determination of all regularly scheduled Board and committee meetings, generally about two years in advance. In limited circumstances, typically at regularly scheduled ECC meetings and in connection with new hires or promotions, the ECC approves or grants stock options and stock awards at other times during the year. The ECC does not have any programs, plans or practices of timing these equity grants in coordination with the release of material non-public information. The exercise price of each stock option grant is the closing stock price on the New York Stock Exchange on the grant date. The SIP prohibits, without stockholder approval, any repricing requiring stockholder approval under applicable NYSE rules.
We have reviewed and discussed the Compensation Discussion and Analysis with management. Based on these reviews and discussions, we recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement and in the Annual Report on Form 10-K for the fiscal year ended January 28, 2012.31, 2015.
Executive Compensation Committee
Alan M. Bennett,Chair
José B. Alvarez
John F. O’Brien
Willow B. Shire
William H. Swanson*
* Mr. Swanson joined the ECC in February 2015.
The following table provides information concerning compensation for our principal executive officer, our principal financial officer and our three other most highly paid executive officers during fiscal 20122015 (collectively, our named executive officers):
Name and | Fiscal Year | Salary(1) | Bonus | Stock Awards(2) | Option Awards(2) | Non-Equity Incentive Plan Compensation(3) | Change in Pension Value and Nonqualified Deferred Compensation Earnings(4) | All Other Compensation(5) | Total | |||||||||||||||||||||||||||
Carol Meyrowitz(6) | 2012 | $ | 1,320,000 | — | — | $ | 708,954 | $ | 4,309,576 | $ | 4,700,459 | $ | 48,660 | $ | 11,087,649 | |||||||||||||||||||||
Chief Executive | 2011 | $ | 1,575,000 | — | $ | 12,559,150 | $ | 947,524 | $ | 4,127,571 | $ | 3,826,370 | $ | 43,495 | $ | 23,079,110 | ||||||||||||||||||||
2010 | $ | 1,475,000 | — | $ | 7,692,000 | $ | 1,168,840 | $ | 4,409,361 | $ | 2,565,940 | $ | 50,971 | $ | 17,362,112 | |||||||||||||||||||||
Ernie L. Herrman(7) | 2012 | $ | 1,100,000 | — | — | $ | 591,537 | $ | 2,008,860 | $ | 432,987 | $ | 310,681 | $ | 4,444,065 | |||||||||||||||||||||
President | 2011 | $ | 987,021 | — | $ | 4,664,150 | $ | 631,755 | $ | 1,839,085 | $ | 250,167 | $ | 294,210 | $ | 8,666,388 | ||||||||||||||||||||
2010 | $ | 925,000 | — | $ | 772,500 | $ | 779,390 | $ | 1,747,180 | $ | 190,998 | $ | 41,280 | $ | 4,456,348 | |||||||||||||||||||||
Jeffrey G. Naylor(8) | 2012 | $ | 823,078 | — | $ | 1,488,000 | $ | 443,227 | $ | 1,601,933 | $ | 272,302 | $ | 243,994 | $ | 4,872,534 | ||||||||||||||||||||
Senior Executive Vice | 2011 | $ | 773,656 | — | $ | 1,419,200 | $ | 473,925 | $ | 1,506,429 | $ | 178,511 | $ | 239,892 | $ | 4,591,613 | ||||||||||||||||||||
2010 | $ | 740,000 | — | $ | 643,750 | $ | 584,666 | $ | 1,543,680 | $ | 114,886 | $ | 115,375 | $ | 3,742,357 | |||||||||||||||||||||
Jerome Rossi | 2012 | $ | 773,943 | — | $ | 595,200 | $ | 443,227 | $ | 976,558 | $ | 649,987 | $ | 43,473 | $ | 3,482,388 | ||||||||||||||||||||
Senior Executive Vice | 2011 | $ | 730,290 | — | $ | 842,650 | $ | 473,925 | $ | 1,018,251 | $ | 744,267 | $ | 43,559 | $ | 3,852,942 | ||||||||||||||||||||
2010 | $ | 700,000 | — | $ | 309,000 | $ | 584,666 | $ | 1,090,900 | $ | 873,736 | $ | 43,347 | $ | 3,601,649 | |||||||||||||||||||||
Paul Sweetenham(9) | 2012 | $ | 838,864 | — | $ | 1,240,000 | $ | 320,443 | $ | 1,122,305 | — | $ | 1,168,166 | $ | 4,689,778 | |||||||||||||||||||||
Senior Executive Vice | 2011 | $ | 812,035 | — | $ | 1,419,200 | $ | 342,652 | $ | 830,100 | — | $ | 354,696 | $ | 3,758,683 | |||||||||||||||||||||
2010 | $ | 734,349 | — | $ | 515,000 | $ | 350,922 | $ | 969,251 | — | $ | 310,987 | $ | 2,880,509 | ||||||||||||||||||||||
Name and Principal Position | Fiscal Year | Salary(1) | Bonus | Stock Awards(2) | Option Awards(2) | Non-Equity Incentive Plan Compen- sation(3) | Change in Pension Value and Nonqualified Deferred Compensation Earnings(4) | All Other Compen- sation(5) | Total | |||||||||||||
Carol Meyrowitz(6) | 2015 | $1,575,002 | – | $16,485,000 | $636,000 | $4,582,886 | $5,369,489 | $ 44,014 | $ 28,692,391 | |||||||||||||
Chief Executive Officer | 2014 | 1,475,001 | – | 13,898,400 | 680,528 | 4,623,832 | 1,793,231 | 43,041 | 22,514,033 | |||||||||||||
2013 | 1,426,924 | – | 10,872,000 | 654,630 | 6,050,370 | 2,716,326 | 48,550 | 21,768,800 | ||||||||||||||
Ernie Herrman(7) | 2015 | 1,327,693 | – | 7,954,700 | 530,760 | 2,968,577 | 963,397 | 361,869 | 14,106,996 | |||||||||||||
President | 2014 | 1,260,002 | – | 6,158,100 | 567,934 | 2,876,223 | 286,123 | 356,994 | 11,505,376 | |||||||||||||
2013 | 1,205,770 | – | 7,312,350 | 546,279 | 2,999,808 | 416,056 | 340,672 | 12,820,935 | ||||||||||||||
Michael MacMillan(8) | 2015 | 962,308 | – | 2,447,600 | 287,520 | 1,352,483 | 470,719 | 1,980,244 | 7,500,874 | |||||||||||||
SEVP, Group President | 2014 | 912,310 | – | 1,894,800 | 307,586 | 1,216,798 | 225,462 | 1,968,434 | 6,525,390 | |||||||||||||
2013 | 886,732 | – | 1,594,800 | 295,961 | 1,416,231 | 236,223 | 3,287,710 | 7,717,657 | ||||||||||||||
Richard Sherr | 2015 | 812,309 | – | 2,141,650 | 331,680 | 1,003,716 | 514,560 | 237,658 | 5,041,573 | |||||||||||||
SEVP, Group President | 2014 | 762,308 | – | 1,421,100 | 307,586 | 926,275 | 157,923 | 232,728 | 3,807,920 | |||||||||||||
2013 | 733,849 | – | 1,196,100 | 295,961 | 1,099,700 | 263,712 | 220,858 | 3,810,180 | ||||||||||||||
Scott Goldenberg | 2015 | 663,463 | – | 1,835,700 | 287,520 | 812,969 | 371,148 | 178,764 | 4,149,564 | |||||||||||||
SEVP, Chief Financial Officer | 2014 | 592,310 | – | 947,400 | 236,729 | 563,098 | 131,796 | 84,193 | 2,555,526 | |||||||||||||
2013 | 560,578 | – | 558,180 | 159,340 | 612,198 | 172,147 | 80,723 | 2,143,166 |
(1) | Reflects salary |
(2) | Reflects the aggregate grant date fair value of stock and option |
(3) | Reflects amounts earned under both MIP and LRPIP. For fiscal |
(4) | Reflects the change in the actuarial present value of accumulated benefit obligations under our broad-based retirement plan and our SERP. |
tables issued by the Society of Actuaries). In particular, approximately 61% of the fiscal 2015 change in pension value for Ms. Meyrowitz was due to these |
(5) | The table below provides additional details about the amounts listed under All Other Compensation for fiscal |
Automobile Benefit | Reimbursement for Financial, Tax Planning and Legal Services | Employer Contributions or Credits Under Savings Plans(a) | Company Paid Amounts for Life Insurance(b) | Paid or Accrued Termination Payments(c) | Total All Other Compensation | |||||||||||||||||||
Carol Meyrowitz | $ | 35,904 | $ | 6,638 | $ | 4,983 | $ | 1,135 | — | $ | 48,660 | |||||||||||||
Ernie L. Herrman | $ | 35,904 | $ | 1,500 | $ | 272,142 | $ | 1,135 | — | $ | 310,681 | |||||||||||||
Jeffrey G. Naylor | $ | 35,904 | $ | 1,500 | $ | 205,455 | $ | 1,135 | — | $ | 243,994 | |||||||||||||
Jerome Rossi | $ | 35,904 | $ | 1,500 | $ | 4,934 | $ | 1,135 | — | $ | 43,473 | |||||||||||||
Paul Sweetenham | $ | 35,434 | $ | 11,184 | $ | 67,109 | $ | 2,035 | $ | 1,052,404 | $ | 1,168,166 |
Automobile Benefit | Reimbursement for Financial | Employer Contributions or Credits Under Savings Plans(a) | Company Paid Insurance(b) | Expatriate- | Tax | Total All Other Compensation | ||||||||||||||||||||||
Carol Meyrowitz | $35,904 | $3,585 | $3,484 | $1,041 | – | – | $44,014 | |||||||||||||||||||||
Ernie Herrman | 35,904 | 1,500 | 323,424 | 1,041 | – | – | 361,869 | |||||||||||||||||||||
Michael MacMillan | 35,578 | – | 235,501 | 1,041 | $1,010,739 | $697,385 | 1,980,244 | |||||||||||||||||||||
Richard Sherr | 35,904 | 1,500 | 199,213 | 1,041 | – | – | 237,658 | |||||||||||||||||||||
Scott Goldenberg | 35,904 | 1,500 | 140,319 | 1,041 | – | – | 178,764 |
(a) | Reflects matching contributions under our 401(k) plan as well as, |
(b) | Reflects company-paid amounts under our management life insurance program or, for Mr. Herrman, payment in lieu of participation in that program. |
(c) | Reflects expenses pursuant to our global mobility program in connection with Mr. MacMillan’s assignment with TJX Europe during fiscal 2015 after his relocation from the U.S. to the U.K. during fiscal 2013. Amounts listed under Expatriate-Related Expenses include a U.K. housing allowance ($395,858), a goods and services allowance, and administrative and living expenses, as well as tax reimbursement in connection with such benefits ($497,663). Mr. MacMillan was also eligible for expatriate coverage under our medical plans, but was not eligible for payments for any loss on the sale of his home. Amounts listed under Tax Equalization reflect estimated net amounts |
(6) |
(7) | Mr. Herrman’s stock awards and total compensation reported above include the grant date value of the following awards: for fiscal |
(8) | Amounts received by Mr. |
Total compensation for our named executive officers consists of base salary, short-term and long-term cash incentives, equity incentives, retirement and deferred compensation benefits and limited perquisites. Mr. Sweetenham also received termination-related payments in connection with his departure, as further described below.
Our named executive officers were entitled under their employment agreements to participate in our SIP, MIP and LRPIP and received cash incentives and equity incentives only pursuant to these plans during fiscal 2012.2015. Ms. Meyrowitz’s agreement provides for target awardsaward opportunities during the term of the agreement of at least 150% of her base salary for MIP and at least 100% of her base salary for LRPIP, payment of reasonable fees of her legal and forfinancial advisors incurred in negotiating her agreement and an automobile allowance commensurate with her position.
In connection with entering into her new employment agreement, on January 30, 2015 Ms. Meyrowitz received 250,000 shares of performance-based restricted stock with service and performance conditions relating to fiscal 2016. Mr. RossiMacMillan’s agreement provides for specified vacation/holiday benefits and benefits under our global mobility policies in connection with his assignment with TJX Europe. Mr. MacMillan also remains entitled to benefits in connection with his prior relocation to the U.S. from TJX Canada, including service credit for vesting purposes, supplemental amounts under our ESP, and applicable tax equalization benefits.
In fiscal 2015, all of our named executive officers participated in our alternative SERP benefit except Ms. Meyrowitz, who participated in our primary SERP benefit and Mr. Herrman and Mr. Naylor participated in our alternative SERP benefit. All of our U.S. named executive officers participated in our tax-qualified defined benefit plan and were eligible to make deferrals to our 401(k) plan and our ESP. Mr. Naylor and Mr. HerrmanAll of our named executive officers except Ms. Meyrowitz received matching credits under the ESP during all or part of fiscal 2012. Mr. Sweetenham, as a resident of the U.K., participated in a retirement plan for U.K. Associates under which they may defer salary and bonus and receive an employer match.2015. Our named executive officers were also entitled to receive an automobile benefit and to participate in fringe benefit plans and programs made available to executives generally.
Grants of Plan-Based Awards in Fiscal 2012
The following table reports potential payouts under our cash incentive plans and all other stock and option awards that were granted during fiscal 20122015 to our named executive officers:
Name and Award Type | Grant Date | Estimated Future 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 | Exercise or Base Price of Options Awards(1) | Grant Date Fair Value of Stock and Option Awards(2) | |||||||||||||||||||||||||||||||||||||
Threshold | Target | Maximum | Threshold | Target | Maximum | |||||||||||||||||||||||||||||||||||||||
Carol Meyrowitz | ||||||||||||||||||||||||||||||||||||||||||||
MIP(3) | — | $ | 1,980,000 | $ | 3,960,000 | |||||||||||||||||||||||||||||||||||||||
LRPIP(4) | — | $ | 1,320,000 | $ | 1,980,000 | |||||||||||||||||||||||||||||||||||||||
Stock Options | 09/07/11 | 108,320 | $ | 26.555 | $ | 708,954 | ||||||||||||||||||||||||||||||||||||||
Stock Awards(5) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Ernie L. Herrman | ||||||||||||||||||||||||||||||||||||||||||||
MIP(3) | — | $ | 880,000 | $ | 1,760,000 | |||||||||||||||||||||||||||||||||||||||
LRPIP(4) | — | $ | 1,100,000 | $ | 1,650,000 | |||||||||||||||||||||||||||||||||||||||
Stock Options | 09/07/11 | 90,380 | $ | 26.555 | $ | 591,537 | ||||||||||||||||||||||||||||||||||||||
Stock Awards(5) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Jeffrey G. Naylor | ||||||||||||||||||||||||||||||||||||||||||||
MIP(3) | — | $ | 535,000 | $ | 1,070,000 | |||||||||||||||||||||||||||||||||||||||
LRPIP(4) | — | $ | 700,000 | $ | 1,050,000 | |||||||||||||||||||||||||||||||||||||||
Stock Options | 09/07/11 | 67,720 | $ | 26.555 | $ | 443,227 | ||||||||||||||||||||||||||||||||||||||
Stock Awards | 04/04/11 | 0 | 60,000 | 60,000 | — | $ | 1,488,000 | |||||||||||||||||||||||||||||||||||||
Jerome Rossi | ||||||||||||||||||||||||||||||||||||||||||||
MIP(3) | — | $ | 386,970 | $ | 773,940 | |||||||||||||||||||||||||||||||||||||||
LRPIP(4) | — | $ | 375,000 | $ | 562,500 | |||||||||||||||||||||||||||||||||||||||
Stock Options | 09/07/11 | — | 67,720 | $ | 26.555 | $ | 443,227 | |||||||||||||||||||||||||||||||||||||
Stock Awards | 04/04/11 | 0 | 24,000 | 24,000 | $ | 595,200 | ||||||||||||||||||||||||||||||||||||||
Paul Sweetenham | ||||||||||||||||||||||||||||||||||||||||||||
MIP(3) | — | $ | 461,375 | $ | 922,750 | |||||||||||||||||||||||||||||||||||||||
LRPIP(4) | — | $ | 700,000 | $ | 1,050,000 | |||||||||||||||||||||||||||||||||||||||
Stock Options | 09/07/11 | 48,960 | $ | 26.555 | $ | 320,443 | ||||||||||||||||||||||||||||||||||||||
Stock Awards | 04/04/11 | 0 | 50,000 | 50,000 | — | $ | 1,240,000 |
Name and Award Type | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards($)(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(#) | All Stock Awards: | All Other Option Awards: | Exercise or Base Price of Option Awards($)(2) | Grant Date Fair Value of Stock and Option Awards($)(3) | |||||||||||||||||||||||||||||||||
Threshold | Target | Maximum | Threshold | Target | Maximum | |||||||||||||||||||||||||||||||||||
Carol Meyrowitz | ||||||||||||||||||||||||||||||||||||||||
MIP(4) | – | $ | 2,362,503 | $ | 4,725,006 | |||||||||||||||||||||||||||||||||||
LRPIP(5) | – | 1,575,000 | 3,150,000 | |||||||||||||||||||||||||||||||||||||
Stock Options | 9/10/2014 | 53,000 | $ | 59.70 | $ | 636,000 | ||||||||||||||||||||||||||||||||||
Stock Awards(6) | 1/30/2015 | – | 250,000 | – | 16,485,000 | |||||||||||||||||||||||||||||||||||
Ernie Herrman | ||||||||||||||||||||||||||||||||||||||||
MIP(4) | – | 1,327,693 | 2,655,387 | |||||||||||||||||||||||||||||||||||||
LRPIP(5) | – | 1,100,000 | 2,200,000 | |||||||||||||||||||||||||||||||||||||
Stock Options | 9/10/2014 | 44,230 | 59.70 | 530,760 | ||||||||||||||||||||||||||||||||||||
Stock Awards(6) | 4/01/2014 | – | 130,000 | – | 7,954,700 | |||||||||||||||||||||||||||||||||||
Michael MacMillan | ||||||||||||||||||||||||||||||||||||||||
MIP(4) | – | 529,270 | 1,058,539 | |||||||||||||||||||||||||||||||||||||
LRPIP(5) | – | 700,000 | 1,400,000 | |||||||||||||||||||||||||||||||||||||
Stock Options | 9/10/2014 | 23,960 | 59.70 | 287,520 | ||||||||||||||||||||||||||||||||||||
Stock Awards(6) | 4/01/2014 | – | 40,000 | – | 2,447,600 | |||||||||||||||||||||||||||||||||||
Richard Sherr | ||||||||||||||||||||||||||||||||||||||||
MIP(4) | – | 446,770 | 893,539 | |||||||||||||||||||||||||||||||||||||
LRPIP(5) | – | 500,000 | 1,000,000 | |||||||||||||||||||||||||||||||||||||
Stock Options | 9/10/2014 | 27,640 | 59.70 | 331,680 | ||||||||||||||||||||||||||||||||||||
Stock Awards(6) | 4/01/2014 | – | 35,000 | – | 2,141,650 | |||||||||||||||||||||||||||||||||||
Scott Goldenberg | ||||||||||||||||||||||||||||||||||||||||
MIP(4) | – | 364,905 | 729,810 | |||||||||||||||||||||||||||||||||||||
LRPIP(5) | – | 500,000 | 1,000,000 | |||||||||||||||||||||||||||||||||||||
Stock Options | 9/10/2014 | 23,960 | 59.70 | 287,520 | ||||||||||||||||||||||||||||||||||||
Stock Awards(6) | 4/01/2014 | – | 30,000 | – | 1,835,700 |
(1) | Non-Equity Incentive Plan amounts above reflect short-term cash incentives granted under our MIP and long-term cash incentives granted under our LRPIP. Our MIP and LRPIP are discussed above inCompensation Discussion and Analysis. |
(2) | All option awards were granted with an exercise price equal to the closing price on the |
Reflects the aggregate fair market value of stock and option awards on the grant date. Stock awards are valued based on the closing price of our common stock on the |
Reflects award opportunities under the fiscal |
Reflects award opportunities under the fiscal |
Non-Equity Incentive Plan amounts above reflect short-term cash incentives granted under our MIP and long-term cash incentives granted under our LRPIP. Our MIP and LRPIP are discussed above in “Compensation Discussion and Analysis.”
In fiscal 2012,2015, we granted all equity incentives, including stock options and performance-based restricted stock awards, under our SIP. Stock options have a maximum term of ten years and generally vest in equal annual installments over three years, upon a change of control and in the event of certain terminations of employment. In the event a named executive officer’s employment is terminated by reason of death, disability, or retirement at or after age 65 with five or more years of service, vested options generally remain exercisable for up to five years following termination, unless the option terminates on an earlier date pursuant to its terms. Following a retirement at or after age 65 with ten or more years of service, or a retirement at or after age 60 with twenty or more years of service, vested options generally remain exercisable for five years following termination and unvested options continue to vest for the three-year period following retirement on the same basis as if the named executive officer had not retired and generally remain exercisable for an extended period,five years following retirement, unless the option terminates on an earlier date pursuant to its terms. In the event of any other termination, other than a termination for cause, vested options for our named executive officers generally remain exercisable for up to six months following termination (or such other period(as specified under the terms of up to three years as the ECC determines at or after the grant date)option), unless the option terminates on an earlier date pursuant to its terms. All options, whether or not then vested, are forfeited on a termination for cause.
The restrictedperformance-based stock awards have both service-based and performance-based vesting conditions, except that awards fully vest upon a change of control.control and, for Ms. Meyrowitz, in the event of her death or disability. For performance-based restricted stock grantedawarded to our named executive officers in fiscal 2012,2015, the service-based conditions are satisfied by continuous employment through the scheduled vesting date (or, for Mr. Naylor, throughor in the endevent of fiscal 2013),certain terminations of employment (as described below) and the performance-based conditions are tied to the corporate performance target under our MIP or LRPIP, foras described in the fiscal 2012-2014 cycle,Compensation Discussion and Analysis, with full vesting subject to achievement of a payout of at least 67% of the target payout under LRPIP for the cycle.applicable plan. If the LRPIP payout is less than 67% for the cycle,performance period, a prorated portion of the unvested award will be forfeited. If no LRPIP payout is achieved for the cycle,performance period, the entire unvested award will be forfeited. When a participant’s shares of restrictedperformance-based stock vest,award vests, the participant is entitled to any dividends paid on(or dividend equivalents) for the shares while they were restricted.
After the close of fiscal 2012, the ECC modified the service-based condition applicable to Mr. Rossi’s award in connection with his new employment agreement. As modified, the service-based condition would be satisfied by Mr. Rossi’s continued employment through fiscal 2014 (to correspond with the term of his new agreement), with any additional service condition waived, and he would be entitled to the award to the extent the original performance-based conditions are met.restricted period.
Outstanding Equity Awards at Fiscal 20122015 Year End
The following table provides information on outstanding option and stock awards held as of January 28, 201231, 2015 by our named executive officers:
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options Exercisable(1) | Number of Securities Underlying Unexercised Options Unexercisable(1) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested(3) | Market Value of Shares or Units of Stock That Have Not Vested(2)(3) | Equity Incentive Plan Awards: | ||||||||||||||||||||||||||||
Number of Unearned Shares, Units or Other Rights That Have Not Vested(3) | Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(2)(3) | |||||||||||||||||||||||||||||||||||
Carol Meyrowitz | 127,014 | 63,506 | — | $ | 18.870 | 09/17/19 | ||||||||||||||||||||||||||||||
58,274 | 116,546 | $ | 20.565 | 09/09/20 | ||||||||||||||||||||||||||||||||
0 | 108,320 | $ | 26.555 | 09/07/21 | ||||||||||||||||||||||||||||||||
240,000 | $ | 8,084,400 | 240,000 | $ | 8,084,400 | |||||||||||||||||||||||||||||||
Ernie L. Herrman | 60,000 | 0 | — | $ | 14.615 | 09/10/17 | ||||||||||||||||||||||||||||||
136,860 | 0 | $ | 17.515 | 09/08/18 | ||||||||||||||||||||||||||||||||
84,694 | 42,346 | $ | 18.870 | 09/17/19 | ||||||||||||||||||||||||||||||||
38,854 | 77,706 | $ | 20.565 | 09/09/20 | ||||||||||||||||||||||||||||||||
0 | 90,380 | $ | 26.555 | 09/07/21 | ||||||||||||||||||||||||||||||||
60,000 | $ | 2,021,100 | 180,000 | $ | 6,063,300 | |||||||||||||||||||||||||||||||
Jeffrey G. Naylor | 0 | 31,766 | — | $ | 18.870 | 09/17/19 | ||||||||||||||||||||||||||||||
0 | 58,292 | $ | 20.565 | 09/09/20 | ||||||||||||||||||||||||||||||||
0 | 67,720 | $ | 26.555 | 09/07/21 | ||||||||||||||||||||||||||||||||
50,000 | $ | 1,684,250 | 110,000 | $ | 3,705,350 | |||||||||||||||||||||||||||||||
Jerome Rossi | 0 | 31,766 | — | $ | 18.870 | 09/17/19 | ||||||||||||||||||||||||||||||
29,148 | 58,292 | $ | 20.565 | 09/09/20 | ||||||||||||||||||||||||||||||||
0 | 67,720 | $ | 26.555 | 09/07/21 | ||||||||||||||||||||||||||||||||
24,000 | $ | 808,440 | 48,000 | $ | 1,616,880 | |||||||||||||||||||||||||||||||
Paul Sweetenham(4) | 0 | 19,066 | — | $ | 18.870 | 09/17/19 | ||||||||||||||||||||||||||||||
0 | 42,144 | $ | 20.565 | 09/09/20 | ||||||||||||||||||||||||||||||||
0 | 48,960 | $ | 26.555 | 09/07/21 | ||||||||||||||||||||||||||||||||
40,000 | $ | 1,347,400 | 100,000 | $ | 3,368,500 |
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||
Name | Number of Securities Options | Number of Securities Unexercisable(#)(1) | Equity Number of Options | Option Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested(#)(3) | Market Value of Shares or Units of Stock That Have Not Vested($)(2)(3) | Equity Incentive Plan Awards: | ||||||||||||||||||||||||||
Number of Unearned | Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested($)(2)(3) | |||||||||||||||||||||||||||||||||
Carol Meyrowitz |
| |||||||||||||||||||||||||||||||||
11,383 | 0 | $ | 18.870 | 9/17/19 | ||||||||||||||||||||||||||||||
116,546 | 0 | 20.565 | 9/09/20 | |||||||||||||||||||||||||||||||
108,320 | 0 | 26.555 | 9/07/21 | |||||||||||||||||||||||||||||||
42,454 | 21,226 | 45.170 | 9/20/22 | |||||||||||||||||||||||||||||||
18,595 | 37,186 | 56.720 | 9/19/23 | |||||||||||||||||||||||||||||||
0 | 53,000 | 59.700 | 9/10/24 | |||||||||||||||||||||||||||||||
240,000 | $ | 15,825,600 | 250,000 | $ | 16,485,000 | |||||||||||||||||||||||||||||
Ernie Herrman |
| |||||||||||||||||||||||||||||||||
91,560 | 0 | 20.565 | 9/09/20 | |||||||||||||||||||||||||||||||
90,380 | 0 | 26.555 | 9/07/21 | |||||||||||||||||||||||||||||||
35,427 | 17,713 | 45.170 | 9/20/22 | |||||||||||||||||||||||||||||||
15,518 | 31,034 | 56.720 | 9/19/23 | |||||||||||||||||||||||||||||||
0 | 44,230 | 59.700 | 9/10/24 | |||||||||||||||||||||||||||||||
130,000 | 8,572,200 | 260,000 | 17,144,400 | |||||||||||||||||||||||||||||||
Michael MacMillan |
| |||||||||||||||||||||||||||||||||
16,320 | 0 | 26.555 | 9/07/21 | |||||||||||||||||||||||||||||||
9,597 | 9,596 | 45.170 | 9/20/22 | |||||||||||||||||||||||||||||||
8,404 | 16,808 | 56.720 | 9/19/23 | |||||||||||||||||||||||||||||||
0 | 23,960 | 59.700 | 9/10/24 | |||||||||||||||||||||||||||||||
40,000 | 2,637,600 | 80,000 | 5,275,200 | |||||||||||||||||||||||||||||||
Richard Sherr |
| |||||||||||||||||||||||||||||||||
0 | 9,596 | 45.170 | 9/20/22 | |||||||||||||||||||||||||||||||
8,404 | 16,808 | 56.720 | 9/19/23 | |||||||||||||||||||||||||||||||
0 | 27,640 | 59.700 | 9/10/24 | |||||||||||||||||||||||||||||||
30,000 | 1,978,200 | 65,000 | 4,286,100 | |||||||||||||||||||||||||||||||
Scott Goldenberg |
| |||||||||||||||||||||||||||||||||
5,026 | 0 | 26.555 | 9/07/21 | |||||||||||||||||||||||||||||||
10,334 | 5,166 | 45.170 | 9/20/22 | |||||||||||||||||||||||||||||||
6,468 | 12,936 | 56.720 | 9/19/23 | |||||||||||||||||||||||||||||||
0 | 23,960 | 59.700 | 9/10/24 | |||||||||||||||||||||||||||||||
14,000 | 923,160 | 50,000 | 3,297,000 | |||||||||||||||||||||||||||||||
(1) | All option awards have a ten-year maximum term and vest in equal annual installments over three years, beginning on the first anniversary of the grant date, and upon a change of control and certain employment terminations. |
(2) | Market values reflect the closing price of our common stock on the |
(3) | The |
| ||||||
| ||||||
| ||||||
| ||||||
| ||||||
Name | Number of Unvested Shares | Performance Conditions(a) | Vesting Date(b) | |||||
Carol Meyrowitz | 240,000 | Fiscal 2015 MIP (Corporate) | 3/03/15 | |||||
250,000 | Fiscal 2016 MIP (Corporate) | 3/16(c) | ||||||
Ernie Herrman | 130,000 | Fiscal 2013-15 LRPIP | 4/15/15 | |||||
130,000 | Fiscal 2014-16 LRPIP | 4/15/16 | ||||||
130,000 | Fiscal 2015-17 LRPIP | 4/15/17 | ||||||
Michael MacMillan | 40,000 | Fiscal 2013-15 LRPIP | 4/15/15 | |||||
40,000 | Fiscal 2014-16 LRPIP | 4/15/16 | ||||||
40,000 | Fiscal 2015-17 LRPIP | 4/15/17 | ||||||
Richard Sherr | 30,000 | Fiscal 2013-15 LRPIP | 4/15/15 | |||||
30,000 | Fiscal 2014-16 LRPIP | 4/15/16 | ||||||
35,000 | Fiscal 2015-17 LRPIP | 4/15/17 | ||||||
Scott Goldenberg | 14,000 | Fiscal 2013-15 LRPIP | 4/15/15 | |||||
20,000 | Fiscal 2014-16 LRPIP | 4/15/16 | ||||||
30,000 | Fiscal 2015-17 LRPIP | 4/15/17 | ||||||
(a) | Performance-based vesting conditions |
(b) | Each of Ms. Meyrowitz’s stock awards has service-based vesting conditions that will be satisfied by continued employment through the end of |
(c) |
Option Exercises and Stock Awards Vested during Fiscal 20122015
The following table provides information relating to option exercises and performance-based stock award vesting of performance-based restricted stock for our named executive officers during fiscal 2012.2015.
Option Awards | Stock Awards | |||||||||||||||
Name | Number of Shares Acquired on Exercise | Value Realized on Exercise(1) | Number of Shares Acquired on Vesting | Value Realized on Vesting(2) | ||||||||||||
Carol Meyrowitz | 136,840 | $ | 2,086,228 | 350,000 | $ | 8,914,500 | ||||||||||
Ernie L. Herrman | 287,500 | $ | 4,196,709 | 46,376 | $ | 1,195,213 | ||||||||||
Jeffrey G. Naylor | 315,342 | $ | 3,543,549 | 38,376 | $ | 983,287 | ||||||||||
Jerome Rossi | 324,320 | $ | 3,811,848 | 29,600 | $ | 762,882 | ||||||||||
Paul Sweetenham | 184,830 | $ | 1,625,492 | 32,200 | $ | 830,599 |
Option Awards | Stock Awards | |||||||||||||
Name | Number of Shares Acquired on Exercise(#) | Value Realized on Exercise($)(1) | Number of Shares Acquired on Vesting(#) | Value Realized on Vesting($)(2) | ||||||||||
Carol Meyrowitz | 52,123 | $ | 2,197,545 | 240,000 | $ | 14,769,600 | ||||||||
Ernie Herrman | 42,346 | 1,721,087 | 135,000 | 8,193,500 | ||||||||||
Michael MacMillan | – | – | 30,000 | 1,834,500 | ||||||||||
Richard Sherr | 22,017 | 555,723 | 20,000 | 1,223,000 | ||||||||||
Scott Goldenberg | – | – | 7,000 | 428,050 |
(1) | Represents the stock price on the |
(2) | Represents the fair market value of the shares on the vesting date, calculated as the closing stock price on the |
In the U.S., we have a tax-qualified defined benefit plan, or Retirement Plan, and a nonqualified Supplemental Executive Retirement Plan, or SERP. We do not have a policy of granting extra years of credited service for purposes of these plans. Our Retirement Plan was closed to new participantshires as of February 1, 2006, although participants employed prior to that date continue to accrue benefits. We have not offered primary SERP benefits to any new participants in many years and do not currently intend to do so in the future, although we continue to offer an alternative SERP benefit.
Under our Retirement Plan, participants accrue a benefit payable as an annuity at retirement or, if vested, following an earlier termination of employment.retirement. Once participation commences after an initial one-year eligibility period, the amount accrued each year, expressed as a life annuity commencing at age 65, is 1% of eligible compensation (base salary and MIP awards) up to a periodically adjusted limit ($99,000116,000 in calendar 20112015 and $103,000$111,000 in calendar 2012)2014) and 1.4% of eligible compensation in excess of that limit. For years of service in excess of 35, the accrual rate is 1% per year of eligible compensation. Compensation for any year in excess of another periodically adjusted limit, currently $250,000,$265,000, is disregarded for these purposes. Eligible participants are also entitled to supplemental credits. Benefits under the Retirement Plan generally vest after five years of vesting service. A vested participant who retires or whose employment terminates prior to age 65 with at least ten years of vesting service may elect to receive a reduced annuity benefit commencing at age 55 or later. If the participant dies before commencing his or her benefit, a pre-retirement death benefit is payable to the participant’s surviving spouse.
Under our SERP, the primary benefit provides participants who retire at or after age 55 with at least ten years of service a benefit equal to the value of an annuity commencing at age 65 providing annual payments up to a maximum of 50% of the participant’s final average earnings, less other employer-provided retirement benefits and social security benefits. ThisMs. Meyrowitz is the only one of our named executive officers eligible for a SERP primary benefit before offsets, accrues atand has accrued the rate of 2.5% offull benefit except for any increases related to final average earnings for each year of service not in excess of 20 until age 65. In view of his continued service beyond age 65, Mr. Rossi is entitled to additional retirement benefit accruals based on his earnings and service after age 65 if more favorable than his primary benefit under existing SERP terms.earnings. Under her employment agreement, Ms. Meyrowitz is entitled to specified interest rate averaging assumptions if more favorable than her primary benefit under existing SERP terms. In determining final average earnings, the primary SERP includes base salary and MIP, but not LRPIP, and uses the highest average of five years over the preceding ten years. The alternative SERP benefit provides participants whose Retirement Plan benefits are affected by Internal Revenue Code benefit restrictions
with the amount of the benefits lost by reason of those restrictions. Participants who are eligible for the primary benefit are eligible to receive the alternative benefit in lieu of the primary benefit if it provides a greater benefit at the time of retirement or other termination of employment. Benefits under SERP are payable following retirement or other termination of employment in installments or in certain other forms of actuarially equivalent value.value, including a lump sum. If the participant dies prior to retirement or other termination of employment, a pre-retirement death benefit is payable to the participant’s surviving spouse.
Pension Benefits for Fiscal 2012
The following table provides information on pension benefits for our named executive officers eligible for these benefits as of January 28, 2012:31, 2015. All of our named executive officers are fully vested in their Retirement Plan and SERP benefits.
Name | Plan Name(1) | Number of Years of Credited Service | Present Value of Accumulated Benefit(2) | Payments Made During Last Fiscal Year | ||||||||||
Carol Meyrowitz(3) | Retirement Plan | 25 | $ | 480,870 | — | |||||||||
SERP (Primary) | 20 | $ | 16,916,123 | — | ||||||||||
Ernie L. Herrman(3) | Retirement Plan | 21 | $ | 314,605 | — | |||||||||
SERP (Alternative) | 21 | $ | 982,131 | — | ||||||||||
Jeffrey G. Naylor(3) | Retirement Plan | 7 | $ | 157,725 | — | |||||||||
SERP (Alternative) | 7 | $ | 601,551 | — | ||||||||||
Jerome Rossi(3) | Retirement Plan | 15 | $ | 415,578 | — | |||||||||
SERP (Primary) | 20 | $ | 5,569,319 | — |
Name | Plan Name | Number of Years of Credited Service(1) | Present Value of Accumulated Benefit(2) | Payments Made During Last Fiscal Year | ||||||
Carol Meyrowitz | Retirement Plan SERP (Primary) | 28 | $ 763,090 | – | ||||||
20 | 26,512,949 | – | ||||||||
Ernie Herrman | Retirement Plan SERP (Alternative) | 25 | 520,493 | – | ||||||
25 | 2,406,099 | – | ||||||||
Michael MacMillan | Retirement Plan SERP (Alternative) | 10 | 237,345 | – | ||||||
10 | 1,134,491 | – | ||||||||
Richard Sherr | Retirement Plan SERP (Alternative) | 22 | 585,889 | – | ||||||
22 | 1,200,108 | – | ||||||||
Scott Goldenberg | Retirement Plan SERP (Alternative) | 22 | 614,351 | – | ||||||
22 | 729,001 | – | ||||||||
(1) | Participants in our Retirement Plan and our alternative SERP benefit program |
(2) |
Nonqualified Deferred Compensation Plans
We have an Executive Savings Plan, or ESP, which is a nonqualified deferred compensation plan available to key employees.employees and our directors. Under the ESP, our U.S. named executive officers and other eligible Associates can elect to defer up to 20% of base salary and up to 100% of any MIP and LRPIP awards and our directors can elect to defer retainers and meeting fees.annual retainers. Our U.S. named executive officers not(other than Ms. Meyrowitz) were eligible for primary SERP benefits (currently Mr. Herrman and Mr. Naylor) are eligibleduring fiscal 2015 to receive matching credits on base salary deferrals of up to 10% of base salary, with an enhanced level of matching credits generally based on the executive’s job level, age and/or pension eligibility for a period of up to 15 years. For calendar 2011,2014, the potential match for Mr. Herrman and Mr. NaylorSenior Executive Vice Presidents was 100% of their eligible deferrals, plus, if our MIP performance resulted in a payout of between 90% and 125% of the target corporate award opportunities for fiscal 2012,2015, an additional match ranging from 50% to 150% of their eligible deferrals. Mr. Herrman and Mr. NaylorOur named executive officers (other than Ms. Meyrowitz) earned this additional performance-based match at 142.5%139.24% based on fiscal 20122015 corporate MIP results. For a portion of fiscal 2015, Mr. Goldenberg earned an ESP match at the Executive Vice President level equal to 20% of his eligible deferrals plus an additional performance-based match of 45.70% of his eligible deferrals based on fiscal 2015 corporate MIP results. Matching employer credits are 50% vested after five years of plan participation and are 100% vested after ten years of plan participation, at age 55, or upon a change of control or separation from service by reason of death or disability. Eligible participants are also entitled to supplemental employer credits. As of January 31, 2015, all named executive officers with ESP employer credits were fully vested. All amounts deferred or credited to a participant’s account under the ESP are notionally invested in mutual funds or other investments available on the market. Although not required by the ESP, it ishas been our practice to purchase the investments notionally invested under the participants’ accounts thus realizingto help meet our future obligations under the actual return of the notional investments.ESP.
Under the ESP, amounts deferred (and earnings on those amounts) are generally distributed following termination of employment unless the participant has elected an earlier distribution date, which may be no earlier than January 1st of the second year following the year of the deferral. Vested employer matching credits (and earnings on those amounts) are generally distributed before age 55 upon deathat, or on a deferred basis following, a participant’s separation from service due to disability, at age 55 if a participant has separated for any other reason, or upon a separation from service after age 55.service. Distributions are generally made in a lump sum payment; however,payment, but a participant may elect to be paid in annual installments over a period of not more than ten years in the event that his or her employment terminates after age 55.years. Amounts vested under the ESP prior to January 1, 2005 (and earnings on those amounts) can be distributed at the participant’s request prior to termination of employment in a lump sum distribution of 85% of the vested account, with the remaining 15% forfeited. As a resident of the U.K., Mr. Sweetenham was eligible to receive annual performance-based matching credits similar to those provided under the ESP to our eligible U.S. named executive officers but this benefit was forfeited in
In connection with his departure atprior service with TJX Canada, Mr. MacMillan participated in the endCanadian Executive Savings Plan, or CESP, a deferred compensation plan for eligible employees of TJX Canada. Under the CESP, participants can contribute a portion of their base earnings to a trust fund maintained in Canada and receive notional matching employer credits, including a performance-based match based on MIP results. CESP contributions are invested, and matching credits are notionally invested, in mutual funds or other investments available on the market. Mr. MacMillan holds amounts previously deferred under the CESP but was not eligible to make new contributions or receive matching credits under the CESP during fiscal 2012.2015. Mr. MacMillan has a current right to his participant contributions to the CESP (and earnings on those amounts) and a right to employer matching credits (and earnings on those amounts) upon termination of employment. Distributions of matching credits are generally made in a lump sum or up to ten annual installments.
Through December 31, 2007, we offered eligible Associates (including our U.S. named executive officers)key employees and directors the opportunity to participate in the General Deferred Compensation Plan, or GDCP, another U.S. nonqualified deferred compensation plan. Ms. Meyrowitz is a vested participant in this plan. Under the GDCP, participants could defer all or a portion of base salary and MIP and LRPIP awards and, in the case of directors, retainers and meeting fees, which deferrals are credited with notional interest at an annually adjusted rate based on an average yield of Treasury securities during the prior year. For calendar 2011,2014, this rate was 3.13%2.36%. No further deferrals were permitted beginning with fiscal 2009 compensation, but previously deferred amounts continue to be credited with notional interest amounts.
Amounts deferred under the GDCP on or after January 1, 2005 (and earnings on those amounts) that had not been distributed prior to January 1, 2009 are distributed under the terms of the ESP, as described above. Amounts deferred under the GDCP prior to January 1, 2005 (and earnings on those amounts credited prior to that date) are distributed in a lump sum at termination of service or upon an event or at a date (no later than the tenth anniversary of termination of service) and in a lump sum or in monthly installments as elected by the participant. Upon a change of control, each participant receives the entire amount credited to his deferred account in a lump sum payment.
Nonqualified Deferred Compensation for Fiscal 2012
The following table provides information on fiscal 2015 nonqualified deferred compensation plans for our named executive officers as of January 28, 2012:officers:
Name and 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) | |||||||||||||||
Carol Meyrowitz | ||||||||||||||||||||
GDCP | $ | 0 | $ | 0 | $ | 17,856 | $ | 0 | $ | 577,260 | ||||||||||
ESP | $ | 271,039 | $ | 0 | $ | 18,470 | $ | 0 | $ | 1,310,881 | ||||||||||
Ernie L. Herrman | ||||||||||||||||||||
GDCP | — | — | — | — | — | |||||||||||||||
ESP | $ | 111,731 | $ | 267,155 | $ | 88,578 | $ | 0 | $ | 1,400,692 | ||||||||||
Jeffrey G. Naylor | ||||||||||||||||||||
GDCP | $ | 0 | $ | 0 | $ | 4,267 | $ | 0 | $ | 137,949 | ||||||||||
ESP | $ | 167,500 | $ | 200,524 | $ | (30,195 | ) | $ | 0 | $ | 1,517,294 | |||||||||
Jerome Rossi | ||||||||||||||||||||
GDCP | $ | 0 | $ | 0 | $ | 36,555 | $ | 0 | $ | 1,216,057 | ||||||||||
ESP | — | — | — | — | — |
Name and 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) | |||||||||||||||
Carol Meyrowitz | ||||||||||||||||||||
GDCP | – | – | $ 14,269 | – | $ 617,381 | |||||||||||||||
ESP | $315,000 | – | 159,580 | – | 2,777,345 | |||||||||||||||
Ernie Herrman | ||||||||||||||||||||
ESP | 132,770 | $319,940 | 128,978 | – | 2,918,991 | |||||||||||||||
Michael MacMillan | ||||||||||||||||||||
ESP | 96,231 | 232,017 | 208,569 | – | 2,235,975 | |||||||||||||||
CESP(5) | – | – | 39,702 | $697 | 365,061 | |||||||||||||||
Richard Sherr | ||||||||||||||||||||
ESP | 121,846 | 195,729 | 166,706 | – | 2,884,737 | |||||||||||||||
Scott Goldenberg | ||||||||||||||||||||
ESP | 66,346 | 136,835 | 132,967 | – | 1,884,379 | |||||||||||||||
(1) |
(2) |
(3) | Reflects notional market-based earnings on deferrals and other amounts credited to the account of plan |
(4) | The aggregate balance includes deferrals of income for prior fiscal years. Amounts deferred by individuals who were named executive officers for the fiscal year of the deferral were included in the compensation reported for those individuals in the compensation tables in prior proxy statements. The aggregate balance also includes earnings on amounts deferred and performance-based matching credits earned under the ESP for fiscal |
(5) | CESP amounts for Mr. MacMillan are converted from Canadian dollars at the average annual exchange rate of $0.8982 per Canadian dollar. |
Potential Payments upon Termination or Change of Control
We believe that providing severance and change of control benefits helps us attract and retain high quality executives and protect our other business interests, as discussed further in “CompensationCompensation Discussion and Analysis.”Analysis.
Potential Payments under our Employment and Severance Agreements. Each of our named executive officers in fiscal 20122015 was party to an employment agreement providing for payments in connection with the specified termination or change of control events generally described below. In addition, in connection with his departure at the end of fiscal 2012 Mr. Sweetenham entered into agreements with TJX and its subsidiary TJX UK that clarified and supplemented the entitlements under his employment agreement.
• | Termination Other than for Cause or Constructive Termination: |
cover the cost of any COBRA continuation of health benefits elected by the executive; cash incentive awards under MIP and LRPIP for each uncompleted year or award cycle, |
Under agreements entered into in connection with his departure from TJX, Mr. Sweetenham is also eligible to receive the same amount of severance benefits as described above for U.S. named executive officers (other than Ms. Meyrowitz), except that he is entitled to twelve months of automobile allowance (instead of twenty-four) and is not entitled to health coverage-related payments. Mr. Sweetenham is also eligible under these agreements for an additional year of base salary and, in respect of his performance-based restricted stock award scheduled to vest in 2012 that was forfeited under plan terms at his departure, a payment of up to £807,692.31 to the extent the performance goals applicable to such award are met. In exchange for these benefits, Mr. Sweetenham agreed to provide transition assistance and gave additional undertakings regarding non-competition, non-solicitation and other covenants and releases. The amounts payable to Mr. Sweetenham in connection with his departure are detailed in the table below.
• | Death or Disability: Upon a termination of employment by reason of death or disability, each |
• | Voluntary Termination: Our |
control, she would be entitled to salary continuation, automobile allowance, and health coverage-related payments on the same basis as if she had been involuntarily terminated without cause, as well as prorated LRPIP benefits for any full fiscal years in a cycle completed prior to the date of termination. |
• | End of Contract Term: For |
• | Change of Control: Upon a change of control (with or without a termination of employment), each |
The events that constitute a change of control under the agreements in effect during fiscal 2012 agreements2015 generally consist of the following, subject to the qualifications set forth in those agreements: (i) a change of control required to be reported under the Securities Exchange Act of 1934, as amended; (ii) the acquisition of 20% or more of our common stock followed by a change in a majority of our boardBoard of directors;Directors; (iii) a proxy solicitation or solicitations followed by a change in a majority of our boardBoard of directors;Directors; and (iv) the execution of certain agreements of acquisition, merger or consolidation followed by consummation of the transactions contemplated by such agreement.
• | Change of Control Followed by Qualifying Termination: Upon a qualifying termination of employment following a change of control, each |
A qualifying termination for these purposes includes a termination by us other than for cause, by the executive for good reason (as defined in the agreements), or a termination by reason of death or disability, in each case within 24 months following a change of control. A qualifying termination does not include a voluntary termination without good reason. Under the agreement with Mr. Rossi in effect during fiscal 2012 (but not under his new agreement) the qualifying termination would also have to have occurred by the end of agreement term.
In addition to the amounts described above, the executives would remain entitled to vested and accrued, but unpaid, compensation and benefits (including earned but unpaid amounts under MIP and LRPIP). and to any SIP or deferred compensation benefit as described below. We have reserved the right to determine the extent to which Mr. MacMillan would be entitled to any compensation and benefits under our global mobility program following completion of his assignment with TJX Europe or a termination of employment for any reason. Our named executive officers would not be entitled to any tax gross-up payment for any “golden parachute” excise tax on change of control benefits, but payments and benefits to each executive would be reduced if and to the extent such a reduction would have put the executive in a better after-tax position.
Potential Acceleration of Unvested Equity Awards. Under the terms of awards granted under our SIP, each of our U.S. named executive officers would be entitled to partial vesting of stock options upon a termination due to death or disability (for options granted more than three months prior to the date of termination) and full vesting of both stock options and stock awards upon a change of control. Ms. Meyrowitz would also be entitled to full vesting of unvested stock awards upon termination of employment by reason of death or disability. In the event of a termination without cause or a constructive termination, Ms. Meyrowitz’s options vest in full and her stock awards remain subject to the satisfaction of the applicable performance conditions but applicable service-based conditions would be deemed satisfied. Each of the executives, other than Ms. Meyrowitz, would be entitled to continued vesting of stock awards granted in April 2013 or later upon termination of employment by reason of death or disability (and, for Mr. Herrman, in the event of a termination without cause or a constructive termination), to the extent applicable performance goals are met and prorated, if applicable, based on the completed portion of the performance period. Following a termination of employment at the end of fiscal 2012,2015, the executives would have been able to exercise vested options in accordance with applicable post-termination exercise periods and Mr. Rossi (had he retired at the end of fiscal 2012)(upon an eligible retirement) would have been eligible for continued vesting of his outstanding options, in each case in accordance with the terms described above under the “GrantsGrants of Plan-Based Awards in Fiscal 2012” table.
The following table sets forth the aggregate estimated value of the acceleration of unvested equity awards held by each of our named executive officers assuming the triggering events occurred on January 28, 2012,31, 2015, all pursuant to the terms of TJX’s plans and each executive’s awards as in effect on such date. These amounts are also included in the potential payment table below. Mr. Sweetenham’s unvested equity awards were forfeited as of January 28, 2012.
Triggering Event(1) | ||||||||||||||||||||||||
Death/Disability | Termination without Cause(2) | Change of Control(3) | ||||||||||||||||||||||
Name | Option Awards | Stock Awards | Option Awards | Stock Awards | Option Awards | Stock Awards | ||||||||||||||||||
Carol Meyrowitz | $ | 736,185 | $ | 8,172,000 | $ | 3,243,647 | $ | 8,172,000 | $ | 3,243,647 | $ | 8,172,000 | ||||||||||||
Ernie L. Herrman | $ | 507,778 | — | — | — | $ | 2,292,384 | $ | 8,215,650 | |||||||||||||||
Jeffrey G. Naylor | $ | 380,829 | — | — | — | $ | 1,719,084 | $ | 5,478,000 | |||||||||||||||
Jerome Rossi | $ | 380,829 | — | — | — | $ | 1,719,084 | $ | 2,466,360 |
Triggering Event(1) | ||||||||||||||||||||||||
Death/Disability(2) | Termination without Cause(3) | Change of Control(4) | ||||||||||||||||||||||
Name | Option Awards | Stock Awards | Option Awards | Stock Awards | Option Awards | Stock Awards | ||||||||||||||||||
Carol Meyrowitz | $ | 266,496 | $ | 16,485,000 | $ | 1,114,439 | $ | 16,485,000 | $ | 1,114,439 | $ | 16,485,000 | ||||||||||||
Ernie Herrman | 222,402 | 8,690,717 | – | 8,690,717 | 930,028 | 26,131,950 | ||||||||||||||||||
Michael MacMillan | 120,473 | 2,674,067 | – | – | 503,789 | 8,040,600 | ||||||||||||||||||
Richard Sherr | 123,469 | 2,116,325 | – | – | 526,752 | 6,362,775 | ||||||||||||||||||
Scott Goldenberg | 80,415 | 1,558,583 | – | – | 376,078 | 4,279,920 |
(1) | For purposes of these estimates, we valued performance-based |
event. See the |
(2) | Assumes, for executives other than Ms. Meyrowitz, that the performance conditions applicable to the executives’ unvested stock awards granted in April 2013 or later would have been satisfied. |
(3) | Assumes that the performance conditions applicable to Ms. Meyrowitz’s unvested stock |
Assumes that all awards would have been cashed out at closing, and that any change of control would have qualified as a “change in control event” under Section 409A of the Internal Revenue Code (Section 409A). |
Potential Acceleration of Unvested Deferred Compensation. As noted above under “NonqualifiedNonqualified Deferred Compensation Plans”, any unvested employer credit accounts under the ESP also vest in full upon a change of control or termination of employment due to death or disability. Of our named executive officers, only Mr. Naylor had an employer credit account under ESP that was not fully vested as of the end of fiscal 2012.
Related ProvisionsProvisions.. Each U.S. named executive officer agreed to non-solicitation and non-competition provisions that operate during the term of employment and for twenty-four months thereafter (or, in the case of Mr. Goldenberg’s non-competition provision, for fifteen months thereafter), and to confidentiality provisions during and after employment. Under his new employment agreement (effective at the beginning of fiscal 2016) Mr. Goldenberg’s non-competition provision operates for twenty-four months (instead of fifteen months) after employment. Benefits under the employment agreements and SERP, as well as benefits attributable to the enhanced employer match for Senior Executive Vice Presidents under the ESP, are also conditioned on compliance with restrictive covenants. Mr. Naylor agreed to additional restrictive covenants applicable to the stock award granted to him during fiscal 2012, as described above under “Outstanding Equity Awards at Fiscal 2012 Year End.” Mr. Sweetenham agreed to post-employment non-solicitation and non-competition provisions for twenty-four and eighteen months, respectively, under his agreement with TJX and for twelve months under his agreement with TJX UK, as well as post-employment confidentiality and non-disparagement provisions under both agreements. Upon a change of control, our named executive officers would no longer be subject to any covenant not to compete following a termination of employment. In accordance with TJX policy regarding expatriate and tax equalization benefits, TJX has the discretion to require repayment by Mr. MacMillan of all or a portion of his assignment-related benefits if he resigns before completion of his assignment with TJX Europe, if his employment is terminated for cause, or if he fails to comply with restrictive covenants.
The agreements and plans include terms designed to comply with the deferred compensation provisions of Section 409A, including provisions that would delay certain termination-related benefits for six months beyond termination of employment and alternative payment provisions that could apply in connection with a change of control not described in Section 409A.
The following table sets forth aggregate estimated payment obligations to each of our U.S. named executive officers, assuming that the triggering events had occurred on January 28, 2012,31, 2015, all pursuant to the terms of TJX’s plans and each executive’s employment agreement as in effect on such date (which do not reflect the changes described above in Mr. Rossi’s new agreement). Because our post-termination obligations to Mr. Sweetenham upon his departure were established as of January 28, 2012, the table below reflects only those obligations.date.
Triggering Event and Payments(1) | C. Meyrowitz | E. Herrman | J. Naylor | J. Rossi | P. Sweetenham(2) | C. Meyrowitz | E. Herrman | M. MacMillan | R. Sherr | S. Goldenberg | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Death/Disability | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Severance | $ | 3,150,000 | $ | 2,200,000 | $ | 1,660,000 | $ | 1,560,000 | $ | — | $ | 3,150,000 | $ | 2,680,000 | $ | 1,940,000 | $ | 1,640,000 | $ | 843,750 | ||||||||||||||||||||||||||||||||||||||||||||||||||
MIP/LRPIP(3) | 3,356,667 | 1,813,333 | 1,235,000 | 761,970 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acceleration of Unvested Equity Awards(4) | 8,908,185 | 507,778 | 380,829 | 380,829 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Compensation Enhancement(5) | — | — | 276,503 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MIP/LRPIP(2) | 3,870,833 | 2,440,000 | 1,233,500 | 951,000 | 804,583 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acceleration of Unvested Equity Awards(3) | 16,751,496 | 8,913,119 | 2,794,540 | 2,239,794 | 1,638,998 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Health, Life, and/or Automobile Benefits | 106,779 | 118,671 | 106,779 | 118,671 | — | 110,775 | 120,069 | 110,775 | 120,069 | 77,352 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total(6) | $ | 15,521,631 | $ | 4,639,782 | $ | 3,659,111 | $ | 2,821,470 | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Voluntary Termination with 90 Days Notice | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total(4) | $ | 23,833,104 | $ | 14,153,188 | $ | 6,078,815 | $ | 4,950,863 | $ | 3,364,683 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Voluntary Termination with 90 Days’ Notice | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Severance | $ | 3,150,000 | $ | — | $ | — | $ | — | $ | — | $ | 3,150,000 | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
LRPIP | 1,376,667 | — | — | — | — | 1,508,333 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Health, Life, and/or Automobile Benefits | 106,779 | — | — | — | — | 110,775 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 4,633,446 | $ | — | $ | — | $ | — | $ | — | $ | 4,769,108 | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Termination without Cause/Constructive Termination | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Severance | $ | 3,150,000 | $ | 2,200,000 | $ | 1,660,000 | $ | 1,560,000 | $ | 2,550,000 | $ | 3,150,000 | $ | 2,680,000 | $ | 1,940,000 | $ | 1,640,000 | $ | 843,750 | ||||||||||||||||||||||||||||||||||||||||||||||||||
MIP/LRPIP(3) | 1,376,667 | 933,333 | 700,000 | 375,000 | 700,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acceleration of Unvested Equity Awards(4) | 11,415,647 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MIP/LRPIP(2) | 1,508,333 | 1,100,000 | 700,000 | 500,000 | 433,333 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acceleration of Unvested Equity Awards(3) | 17,599,439 | 8,690,717 | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Health, Life and/or Automobile Benefits | 106,779 | 118,671 | 106,779 | 118,671 | 35,904 | 110,775 | 120,069 | 110,775 | 120,069 | 77,352 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional Payments(7) | — | — | — | — | 1,271,184 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 16,049,093 | $ | 3,252,004 | $ | 2,466,779 | $ | 2,053,671 | $ | 4,557,088 | $ | 22,368,547 | $ | 12,590,786 | $ | 2,750,775 | $ | 2,260,069 | $ | 1,354,435 | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Change of Control | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Settlement of MIP/LRPIP | $ | 2,725,000 | $ | 1,950,000 | $ | 1,400,000 | $ | 1,898,940 | $ | — | $ | 3,050,000 | $ | 2,200,000 | $ | 1,400,000 | $ | 1,000,000 | $ | 900,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Acceleration of Unvested Equity Awards(4) | 11,415,647 | 10,508,034 | 7,197,084 | 4,185,444 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Compensation Enhancement(5) | — | — | 276,503 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acceleration of Unvested Equity Awards(3) | 17,599,439 | 27,061,978 | 8,544,389 | 6,889,527 | 4,655,998 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 14,140,647 | $ | 12,458,034 | $ | 8,873,587 | $ | 6,084,384 | $ | — | $ | 20,649,439 | $ | 29,261,978 | $ | 9,944,389 | $ | 7,889,527 | $ | 5,555,998 | ||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Change of Control followed by Qualifying Termination | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Change of Control Benefits (see above) | $ | 14,140,647 | $ | 12,458,034 | $ | 8,873,587 | $ | 6,084,384 | $ | — | $ | 20,649,439 | $ | 29,261,978 | $ | 9,944,389 | $ | 7,889,527 | $ | 5,555,998 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Severance | 7,110,000 | 3,960,000 | 2,739,000 | 1,560,000 | — | 7,875,000 | 5,360,000 | 3,007,000 | 2,542,000 | 2,092,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Compensation Enhancement(5) | 5,413,176 | — | — | — | — | 7,122,271 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Health, Life, and/or Automobile Benefits | 100,917 | 110,676 | 100,917 | 110,677 | — | 115,584 | 115,912 | 115,584 | 115,912 | 115,584 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reduction to Maximize After-Tax Benefit(6) | — | — | — | — | (1,058,184) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total(6) | $ | 26,764,740 | $ | 16,528,710 | $ | 11,713,504 | $ | 7,755,061 | $ | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total(4) | $ | 35,762,294 | $ | 34,737,890 | $ | 13,066,973 | $ | 10,547,439 | $ | 6,705,898 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
(1) | We used the following assumptions to calculate the payments set forth in the table: |
We assumed in each case that the termination was not for cause; the executive does not violate his or her non-competition, non-solicitation, confidentiality or other obligations to us following termination; the executive receives COBRA continuation of medical coverage for up to 18 months (or, in the case of Mr. Goldenberg, up to 15 months) but does not receive medical or life insurance coverage from another employer within the relevant periods; and the executive does not incur legal fees requiring reimbursement from us. We also assumed that any change of control would have qualified as a “change in control event” under Section 409A.
For health care benefits, we assumed COBRAestimated an amount sufficient after taxes to cover the cost of continuation for 18 months in the event that an executive (other than Mr. Sweetenham) would be contractually entitled to paymentsof medical coverage based on the costCOBRA rates in effect as of such coverageJanuary 31, 2015 and assumed, in the case of a qualifying termination following a terminationchange of employment.control, that employee contributions for medical coverage will continue at rates in effect as of January 31, 2015.
In the case of payments following termination by reason of disability, the amounts shown assume salary continuation and/or long-term disability payments, coordinated to avoid duplication.
We did not include any amounts in respect of accrued but unpaid base salary or benefits, (such as Mr. Sweetenham’s accrued holiday pay included above under All Other Compensation for fiscal 2012), or any amounts in respect of bonuses under MIP and LRPIP for performance periods ending on January 28, 201231, 2015 that were
earned but remained unpaid as of that date.date or, for Mr. MacMillan, any amounts under our global mobility program. For additional assumptions applicable to equity awards, see “PotentialPotential Acceleration of Unvested Equity Awards”Awards, above. In addition to the SERP benefits described in footnote 5 of this table, our named executive officers were eligible for benefits described above underPension Benefits andNonqualified Deferred Compensation Plans.
(2) |
The amount, for each executive, includes a prorated award for each LRPIP cycle ending after January |
See |
In the event of death on January |
For Ms. Meyrowitz, the amount represents the estimated value of any enhancement under our SERP in the case of a qualifying termination following a change of control. The enhancement value represents the difference between (a) the estimated amount |
(6) | In the case of a change of control (both with and without a termination) occurring on January 31, 2015, we estimated the mandatory reductions to benefits that would apply in order to maximize the executive’s benefit after change-of-control excise and other taxes. We determined that no mandatory reduction to benefits would apply in the case of a change of control, without a qualifying termination, occurring on January 31, 2015 and that such reduction would only apply to Mr. Goldenberg’s benefits in the case of a change in control, with an accompanying termination, occurring on January 31, 2015. For purposes of this determination, we assumed that all equity awards would have been cashed out at closing in the amounts described above under |
Although certain amounts in the tables above are subject to reduction if, as a result of change-of-control excise and other taxes, a reduction is needed to maximize an executive’s after-tax benefits, we determined that no mandatory reduction to benefits would apply in the case of a change of control (both with and without a qualifying termination) occurring on January 28, 2012. For purposes of this determination, we assumed that all equity awards would have been cashed out at closing; and that only a portion of the value of stock options, performance-based stock awards with performance periods ending on January 28, 2012, accumulated cash dividends with respect to such stock awards, and certain other payments, would have been treated as contingent upon a change of control.
DIRECTORSDIRECTOR COMPENSATION
For fiscal 2012, we paid all of2015, our non-employee directors as follows:were entitled to the following payments:
Annual retainer of $50,000$75,000 for each director.
Fee of $1,500 for each Board meeting attended (each day of a multiple day Board meeting is treated as a separate Board meeting with respect to this fee).
Fee of $2,000 for each Committee meeting attended as a Committee member or $2,500 for each regularly scheduled Committee meeting attended as Committee chair (other than, in each case, the Executive Committee).
Two annual deferred stock awards for each non-employee director, each representing shares of our common stock valued at $62,500.
Payment of fees for attendance at special meetings of the Board or committees is at the discretion of the Chairman of the Board or the Lead Director, taking into consideration such matters as deemed relevant by the Chairman of the Board or the Lead Director, as applicable, such as the length of the meeting and preparation time required. Employee directors do not receive separate compensation for their service as directors. TheMembers of the Executive Committee doesdo not receive the committee-specific compensation. Directors are reimbursed for customary expenses for attending Board and committee meetings. The deferred stock awards (and deferred dividends on those awards) are granted under our SIP. One of the deferred stock awards vests immediately and is payable with accumulated dividends in stock at the earlier of separation from service as a director or change of control. The second award vests atbased on a director’s continued service until the annual meeting next following the grant of the award, based on service as a director for that year, and is payable with accumulated dividends in stock upon vesting or, if an irrevocable advance election is made, at the same time as the first award. In the event that a non-employee director separates from service as a director prior to vesting in the second award, that award will be forfeited.
Our non-employee directors are eligible to defer their retainers and fees under the ESP but are not eligible for matching credits. Amounts deferred by directors under the ESP are notionally invested in mutual funds or other market investments. Participating non-employee directors may select a distribution date earlier than retirement from the Board, but no earlier than January 1st of the second year following the year of the deferral. During fiscal 2012,2015, Mr. Bennett and Ms. Shire participated indeferred amounts under the ESP deferral program.ESP. Prior to January 1, 2008, our non-employee directors were eligible to defer their retainers and fees in our GDCP, under which amounts deferred earn interest at a periodically adjusted market-based rate. Amounts deferred under the GDCP on or after January 1, 2005 (and earnings on those amounts) will be distributed under the terms of the ESP, as described above. Amounts deferred under the GDCP prior to January 1, 2005 (and earnings on those amounts credited prior to that date) will be paid on leaving the Board. Mr. Bennett and Ms. Shire currently participate in the GDCP. We do not provide retirement, health or life insurance benefits forto our non-employee directors.
The following table provides information concerning compensation for our non-employee directors for fiscal 2012.2015. Compensation for Mr. Cammarata as an employee and executive officer of TJX for fiscal 20122015 is included below, although it is our policy that employee directors are not paid additional compensation for their service as directors. Ms. Meyrowitz’s compensation is shown above in the Summary Compensation Table with that of the other named executive officers. Mr. Abdalla was elected to the Board at the beginning of fiscal 2013 so did not receive compensation during fiscal 2012.
Directors Compensation for Fiscal 2012
Name | Fees Earned or Paid In Cash | Stock Awards(1)(2) | Option Awards(2) | Non-Equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation | Total | |||||||||||||||||||||
José B. Alvarez | $ | 88,500 | $ | 132,205 | — | — | — | — | $ | 220,705 | ||||||||||||||||||
Alan M. Bennett | $ | 85,764 | $ | 132,205 | — | — | — | — | $ | 217,969 | ||||||||||||||||||
David A. Brandon(6) | $ | 35,168 | $ | 13,894 | — | — | — | — | $ | 49,062 | ||||||||||||||||||
Bernard Cammarata | $ | 500,000 | (3) | — | — | — | $ | 68,855 | (4) | $ | 42,304 | (5) | $ | 611,159 | ||||||||||||||
David T. Ching | $ | 84,500 | $ | 130,804 | — | — | — | — | $ | 215,304 | ||||||||||||||||||
Michael F. Hines | $ | 101,000 | $ | 132,883 | — | — | — | — | $ | 233,883 | ||||||||||||||||||
Amy B. Lane | $ | 98,500 | $ | 133,681 | — | — | — | — | $ | 232,181 | ||||||||||||||||||
John F. O’Brien | $ | 140,500 | $ | 139,112 | — | — | — | — | $ | 279,612 | ||||||||||||||||||
Willow Shire | $ | 88,000 | $ | 139,167 | — | — | — | — | $ | 227,167 | ||||||||||||||||||
Fletcher Wiley(6) | $ | 31,431 | $ | 21,924 | — | — | — | — | $ | 53,355 |
Name | Fees Earned or Paid In Cash | Stock Awards(1)(2) | Option Awards(2) | Non-Equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation | Total | |||||||||||||||||
Zein Abdalla | $ | 83,000 | $ | 143,058 | – | – | – | – | $ | 226,058 | ||||||||||||||
José B. Alvarez | 100,000 | 160,891 | – | – | – | – | 260,891 | |||||||||||||||||
Alan M. Bennett | 106,000 | 160,891 | – | – | – | – | 266,891 | |||||||||||||||||
Bernard Cammarata | 500,000 | (3) | – | – | – | $ 306,040 | (4) | $ 41,929 | (5) | 847,969 | ||||||||||||||
David T. Ching | 98,000 | 154,268 | – | – | – | – | 252,268 | |||||||||||||||||
Michael F. Hines | 111,000 | 162,226 | – | – | – | – | 273,226 | |||||||||||||||||
Amy B. Lane | 108,000 | 159,932 | – | – | – | – | 267,932 | |||||||||||||||||
Dawn Lepore(6) | 29,281 | 1,712 | – | – | – | 10,915 | 41,908 | |||||||||||||||||
John F. O’Brien | 155,000 | 170,625 | – | – | – | – | 325,625 | |||||||||||||||||
Willow B. Shire | 103,000 | 170,733 | – | – | – | – | 273,733 |
(1) |
(2) | The following table shows the number of |
Name | Outstanding Deferred Stock Awards(a) | Outstanding Option Awards(b) | Outstanding Stock Awards(a) | Outstanding Option Awards(b) | ||||||||
Zein Abdalla | 6,146 | – | ||||||||||
José B. Alvarez | 27,849 | — | 37,118 | – | ||||||||
Alan M. Bennett | 27,849 | — | 37,118 | – | ||||||||
David A. Brandon | — | — | ||||||||||
Bernard Cammarata | — | — | – | – | ||||||||
David T. Ching | 21,215 | — | 24,722 | – | ||||||||
Michael F. Hines | 29,995 | — | 39,330 | – | ||||||||
Amy B. Lane | 30,323 | 13,912 | 34,109 | 8,500 | ||||||||
Dawn Lepore | – | – | ||||||||||
John F. O’Brien | 47,515 | 24,000 | 51,829 | – | ||||||||
Willow B. Shire | 47,687 | 72,000 | 53,425 | – | ||||||||
Fletcher H. Wiley | — | — |
(a) |
(b) | All options were granted with an exercise price equal to the closing price on the |
(3) | Represents Mr. Cammarata’s salary under his employment |
(4) | Represents the increase in the actuarial present value of Mr. Cammarata’s accumulated benefit obligations under our |
(5) | Consists of an automobile benefit of |
(6) |
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
The Audit Committee of our Board of Directors has appointed PricewaterhouseCoopers LLP (PwC) as our independent registered public accounting firm for the fiscal year ending February 2, 2013.January 30, 2016. PwC has been retained as the Company’s independent registered public accounting firm since 1962. We are asking stockholders to ratify thisPwC’s appointment. Representatives of PwC will attend the Annual Meeting, where they will have the opportunity to make a statement if they wish to do so and will be available to answer questions from the stockholders. The members of the Audit Committee and Board believe that the continued retention of PwC to serve as the Company’s independent external auditor is in the best interests of the Company and its stockholders.
Your Board of Directors unanimously recommends a vote FOR Proposal 2, Ratification of Appointment of Independent Registered Public Accounting Firm.
APPROVAL OF MATERIAL TERMS OF EXECUTIVE OFFICER PERFORMANCE GOALS
UNDER CASH INCENTIVE PLANS
We are seeking approval of the material terms of performance goals of our cash incentive plans, MIP and LRPIP, as they apply to our executive officers.
Section 162(m) of the Internal Revenue Code generally provides that compensation provided to a publicly held corporation’s CEO or any of its three most highly paid named executive officers (other than its CEO or CFO) is not deductible by the corporation for U.S. income tax purposes for any taxable year to the extent it exceeds $1 million. This limitation does not apply to compensation that qualifies as exempt performance-based compensation by meeting certain requirements under Section 162(m), including the requirement that the material terms of the related performance goals be disclosed to and approved by shareholders every five years. Under Section 162(m), the material terms include the class of eligible employees, a description of the business criteria on which the performance goals may be based and the maximum amount that can be paid to any participant for a specified period. Although shareholder approval is one of the requirements for exemption under Section 162(m), even with shareholder approval there can be no guarantee that compensation will be treated as exempt performance-based compensation under Section 162(m).
Our stockholders last approved the material terms of MIP and LRPIP performance goals at our Annual Meeting in 2007. Those terms will continue to apply to outstanding MIP and LRPIP awards. The ECC amended MIP and LRPIP in April 2012 to expand the available business criteria on which future performance goals may be based and to increase the award maximum per participant for future awards, as described below.
We now seek approval of the material terms of MIP and LRPIP performance goals to enable us to provide exempt performance-based compensation under these programs. As discussed above in Tax and Accounting Considerations in “Compensation Discussion and Analysis,” notwithstanding stockholder approval of these performance goals, the ECC will continue to have authority to provide compensation that is not exempt from the limits on deductibility under Section 162(m).
Overview. MIP and LRPIP are both administered by the ECC, which consists solely of outside directors. Awards consist of individual award opportunities and related performance targets for a specified performance period, typically one year for MIP and three years for LRPIP. For awards intended to qualify as exempt performance-based compensation under Section 162(m), objectively determinable performance goals and payout formulas are pre-established by the ECC for each performance period. After completion of the performance period, the ECC reviews and certifies performance results and the payout for the awards. Once award terms have been established, the Section 162(m) exemption rules generally prohibit discretionary adjustments, other than
adjustments to reduce any amount payable under the award. Amounts payable under the amended MIP and LRPIP performance goals described in this proposal will be based on future award opportunities and performance and are not determinable at this time. For a description of prior MIP and LRPIP awards for our named executive officers, see the “Compensation Discussion and Analysis” and related compensation tables, above.
Eligibility and Participation. Awards under MIP and LRPIP may be granted to executive officers selected from time to time by the ECC and to other key employees of TJX and its subsidiaries selected from time to time by the ECC or its authorized delegate. Currently, approximately 3,400 Associates participate in these plans, including our executive officers.
Business Criteria for MIP and LRPIP Performance Goals. For each award granted under MIP and LRPIP that is intended to qualify as exempt performance-based compensation, the performance goals set by the ECC will be one or more objectively determinable measures of performance relating to any one or any combination of the following business criteria (measured on an absolute basis or relative to one or more comparators, including one or more companies or indices, and determined on a consolidated, divisional, line of business, project, geographical or area of executive’s responsibilities basis, or any combination thereof):
Sales, revenues, or comparable store sales;
Assets, inventory levels, inventory turns, working capital, cash flow or expenses;
Earnings, profit, income, losses or margins, before or after deduction for all or any portion of interest, taxes, depreciation, amortization, rent, or such other items as the ECC may determine at the time the performance goals are pre-established, whether or not on a continuing operations and aggregate or per share basis, basic or diluted, before or after dividends;
Return on investment, capital, equity, assets, sales or revenues, or economic value added models or equivalent metrics;
Market share, store openings or closings, customer service or satisfaction levels, or employee recruiting, retention or diversity;
Stock price, dividends, or total shareholder return, or credit ratings; or
Strategic plan implementations.
The ECC may provide for automatic adjustments (in measures of achievement, amounts payable, or other award terms) to reflect objectively determinable events (for example, acquisitions, divestitures, extraordinary items, other unusual or non-recurring items and/or changes in accounting principles) that may affect the business criteria, any such adjustment to be established and administered in a manner consistent with the requirements for exempt performance-based compensation under Section 162(m).
Maximum Awards. Under the amended plans, the maximum amount payable to any participant under MIP for any fiscal year, and the maximum amount payable to any participant under LRPIP for one or more performance cycles beginning in a single fiscal year, is $5 million, increased by 5% per year starting with our fiscal year ending February 1, 2014 (fiscal 2014).
Performance-based awards under our MIP and LRPIP are an important part of our compensation system. We rely on them to attract and retain our management. In order to preserve our ability to make tax deductible awards under MIP and LRPIP, we are seeking your approval of the material terms of the performance goals described above.
Your Board of Directors unanimously recommends that you vote FOR Proposal 3, Approval of Material Terms of Executive Officer Performance Goals under Cash Incentive Plans.
ADVISORY APPROVAL OF EXECUTIVE COMPENSATION
TheCompensation Discussion and Analysis, compensation tables and narrative discussion beginning on page 1516 of this Proxy Statementproxy statement describes our executive compensation program and the compensation of our named executive officers for fiscal 2012. 2015, including an overview of our program design and details of the various elements of the program. It also provides details of our fiscal 2015 performance to provide context for the compensation.
The Board of Directors, as required pursuant to Section 14A of the Securities Exchange Act, is asking stockholders to cast a non-binding, advisory vote indicating their approval of that compensation by voting FOR the following resolution:
“RESOLVED, that the stockholders of The TJX Companies, Inc. APPROVE, on an advisory basis, the compensation paid to its named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and narrative discussion.”
As described in more detail in theCompensation Discussion and Analysis we, our compensation philosophy is to create a program that attracts, motivates and rewards our executives while maintaining shareholder-friendly pay practices that help align the interest of our Associates and shareholders. We have designed a total compensation approach focused on performance-based incentive compensationprogram that seeks to:
attract and retain very talented individualstop talent in the highly competitive retail environment, maintaining
reward objectively determinableobjective achievement of theour short- and long-term financial objectives reflected in ourwith plans based on core business plans,goals, and
enhance shareholder value by directly aligning the interests of our executivesAssociates and stockholders.
The Board is asking stockholders to support this proposal. We believe TJX’s performance demonstrates the effectiveness of our compensation program. We received a strong supporting vote last yearin the past several years (more than 97% of votes cast) expressing support for our compensation policies and practices and believe our program continues to be effective. We continue to focus on pay for performance in our compensation program, as described in the Compensation Discussion and Analysis, which we encourage you to review. Although the vote we are asking you to cast is non-binding, the ECC and the Board value the views of our stockholders. As with the results last year,past years, the Board and Executive Compensation CommitteeECC will consider the outcome of this vote when determining future compensation arrangements for our named executive officers. Our Board of Directors currently intends to conduct an annual advisory stockholder vote on executive compensation each year until the next advisory vote on the frequency of our say on paysay-on-pay advisory votes is held, which will be no later than the annual meeting of the stockholders in 2017.
Your Board of Directors unanimously recommends a vote FOR Proposal 4, 3,
Advisory Approval of Executive Compensation.
EQUITY COMPENSATION PLAN INFORMATION
The following table provides certain information as of January 31, 2015 with respect to our equity compensation plans:
Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights(a) | 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) | |||||||
Equity compensation plans approved by security holders(1) | 30,586,031 | $ 34.91 | 40,393,448 | |||||||
Equity compensation plans not approved by security holders | N/A | N/A | N/A | |||||||
|
|
|
|
| ||||||
Total | 30,586,031 | $ 34.91 | 40,393,448 | |||||||
|
|
|
|
|
(1) | We use one equity compensation plan, the Stock Incentive Plan (or SIP), which was most recently approved by shareholders in 2013. Securities reported in column (a) include outstanding options as well as outstanding performance-based deferred stock awards and director deferred share awards where the underlying shares have not been issued. The weighted-average exercise price in column (b) takes into account option awards but not the 507,802 shares subject to performance-based deferred stock awards and director deferred share awards. |
For additional information concerning our equity compensation plan see Note I to our consolidated financial statements included in our Annual Report on Form 10-K.
VOTING REQUIREMENTS AND PROXIES
The nominees receiving a majority of votes properly cast at the meeting will be elected directors. All other proposals require the approval of the majority of votes properly cast.
If you vote your shares by mail, telephone or Internet, your shares will be voted in accordance with your directions. If you do not indicate specific choices when you vote by mail, telephone or Internet, but do not indicate specific choices as part of that process, your shares will be voted for the election of the director nominees (Proposal 1), for the ratification of the appointment of the independent registered public accounting firm (Proposal 2), for the approval of material terms of executive officer performance goals under cash incentive plans (Proposal 3) and for the advisory approval of the company’sour executive compensation (Proposal 4)3). The persons named as proxies will also be able to vote your shares at postponed or adjourned meetings. If any nominee should become unavailable, your shares will be voted for another nominee selected by the Board or for only the remaining nominees. BrokersHowever, brokers are not permitted to vote your shares on any matter other than the ratification of the appointment of the independent registered
public accounting firm
(Proposal (Proposal 2) without instruction from you. If your shares are held in the name of a broker or nominee and you do not instruct the broker or nominee how to vote your shares with respect to the election of directorsthe director nominees (Proposal 1) or Proposals 3 or 4,the advisory vote on executive compensation (Proposal 3), or if you abstain or withhold authority to vote on any matter, your shares will not be counted as having been voted on that matter, but will be counted as in attendance at the meeting for purposes of a quorum.
If you are voting plan shares, you must provide your voting instructions by the deadline described above in theIntroduction so that the plan trustee may vote your plan shares in accordance with your instructions. If you do not timely provide your voting instructions, your plan shares will not be voted.
STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS
A stockholder who intends to present a proposal at the 20132016 Annual Meeting of Stockholders and who wishes the proposal to be included in our proxy materials for that meeting must submit the proposal in writing to us so that we receive it no later than December 28, 2012.26, 2015. A stockholder who intends to present a proposal at the 20132016 Annual Meeting of Stockholders but does not wish the proposal to be included in our proxy materials for that meeting must provide written notice of the proposal to us no earlier than February 13, 201312, 2016 and no later than March 15, 2013.13, 2016. We reserve the right to reject, rule out of order, or take other appropriate action with respect to any proposal that does not comply with these and other applicable requirements. Our by-laws, which are available aton our website, www.tjx.com,, describe the requirements for submitting proposals at the Annual Meeting. A stockholder who wishes to nominate a director at the 20132016 Annual Meeting must notify us in writing no earlier than February 13, 201312, 2016 and no later than March 15, 2013.13, 2016. The notice must be given in the manner and must include the information and representations required by our by-laws.
At the time of mailing of this proxy, we do not know of any other matter that may come before the Annual Meeting and do not intend to present any other matter. However, if any other matters properly come before the meeting or any adjournment, the persons named as proxies will have discretionary authority to vote the shares represented by the proxies in accordance with their own judgment, including the authority to vote to adjourn the meeting.
We will bear the cost of solicitation of proxies. We have retained Morrow & Co., Inc.LLC to assist in soliciting proxies by mail, telephone and personal interview for a fee of $11,000,$11,500, plus expenses. Our officers and other Associates may also assist in soliciting proxies in those manners.
DIRECTIONS TO THE TJX ANNUAL MEETING
TJX CORPORATE HEADQUARTERS
770 Cochituate Road
Framingham, MA 01701
From Exit 13 on the Massachusetts Turnpike
After the tollbooth, bear left on the exit ramp across an overpass and onto Route 30 / Cochituate Road. At the second set of lights, turn left into The TJX Companies, Inc. facility.
From Logan International Airport (From the East)
Leaving the Airport, follow the signs for the Massachusetts Turnpike West (I-90W). Follow the Massachusetts Turnpike West for approximately 20 miles to exit 13 (Framingham/Natick). Follow the directions above for“From Exit 13 on the Massachusetts Turnpike.”Turnpike.
From the West
Take Massachusetts Turnpike East (I-90E) to exit 13 (Framingham/Natick). Follow the directions above for“From Exit 13 on the Massachusetts Turnpike.”Turnpike.
From the North
Take I-95 South to exit 25 (Massachusetts Turnpike I-90). Take the Massachusetts Turnpike West (I-90W) approximately 6.5 miles to exit 13 (Framingham/Natick). Follow the directions above for“From Exit 13 on the Massachusetts Turnpike.”
From the South
Take I-95 North to exit 25 (Massachusetts Turnpike). Take the Massachusetts Turnpike West (I-90W) approximately 6.5 miles to exit 13 (Framingham/Natick). Follow the directions above for“From Exit 13 on the Massachusetts Turnpike.”Turnpike.
Parking
TJX offers free parking. Follow the parking lot directory signage to the visitor parking areas.
Building Entrance
Enter the building through the Northeast Entrance (facing the Massachusetts Turnpike (I-90)).
YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY.
We encourage you to take advantage of Internet or telephone voting.
Both are available 24 hours a day, 7 days a week.
Internet and telephone voting are available through 11:59 PM Eastern Time on the day prior to the annual meeting.
| ||||||
| ||||||
| ||||||
Instead of mailing your proxy, you may choose one of the | ||||||
VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. | ||||||
Proxies for record holders submitted by the
| ||||||
|
• Go towww.envisionreports.com/TJX • Or scan the QR code with your smartphone • Follow the steps outlined on the secure website | |||||
| ||||||
| ||||||
• Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada on a touch tone telephone
• Follow the instructions provided by | ||||||
Mark your votes with anX as shown in this example. Please do not write outside the designated areas. | x |
| |||
|
q FOLD AND DETACH HEREq
|
|
| ||
Proposals —The Board recommends a voteFOR each of the nominees andFOR Proposals 2 and 3. |
1. Election of | For | Against | Abstain | For | Against | Abstain | For | Against | Abstain | + | ||||||||||||||||||||
01 - Zein Abdalla | ¨ | ¨ | ¨ | 02 - José B. Alvarez | ¨ | ¨ | ¨ | 03 - Alan M. Bennett | ¨ | ¨ | ¨ | |||||||||||||||||||
04 - David T. Ching | ¨ | ¨ | ¨ | 05 - Michael F. Hines | ¨ | ¨ | ¨ | 06 - Amy B. Lane | ¨ | ¨ | ¨ | |||||||||||||||||||
07 - Carol Meyrowitz | ¨ | ¨ | ¨ | 08 - John F. O’Brien | ¨ | ¨ | ¨ | 09 - Willow B. Shire | ¨ | ¨ | ¨ | |||||||||||||||||||
10 - William H. Swanson | ¨ | ¨ | ¨ | |||||||||||||||||||||||||||
|
|
|
|
|
| |||||||||||||||||||||||||
|
| |||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||
For | Against | Abstain | For | Against | Abstain | |||||||||||
2. Ratification of appointment of independent registered public accounting firm for fiscal 2016. | ¨ | ¨ | ¨ | 3. Say-on-Pay: Advisory approval of TJX’s executive compensation. | ¨ | ¨ | ¨ |
B | Non-Voting Items | |||||
Change of Address — Please print new address below. | Comments— Please print your comments below. |
Please sign exactly as your name(s) appear(s) on the books of the Company. Joint owners should each sign personally. Trustees and other fiduciaries should indicate the capacity in which they sign, and when more than one name appears, a majority must sign. If a corporation, this signature should be that of an authorized officer who should state his or her title.
Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below | ||||||||||||||||||
Please sign exactly as your name(s) appear(s) on the books of the Company. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee, guardian, or custodian, please give full title to indicate the capacity in which you are signing. |
Date (mm/dd/yyyy) — Please print date below. |
| Signature | 1 — Please keep signature within the box. |
| Signature 2 — Please keep signature within the box. |
You can access yourThe TJX Companies, Inc.account online.
Access your The TJX Companies, Inc. account online via Investor ServiceDirect® (ISD).
The transfer agent for The TJX Companies, Inc. makes it easy and convenient to get current information on your shareholder account.
/ / | ||||||||
Visit us on the web at www.bnymellon.com/shareowner/equityaccess
For Technical Assistance Call 1-877-978-7778 between 9am-7pm
Monday-Friday Eastern Time
For all other inquiries call
Investor ServiceDirect®
Available 24 hours per day, 7 days per week
TOLL FREE NUMBER: 1-866-606-8365
|
The TJX Companies, Inc.
2015 Annual Meeting of Stockholders
Thursday, June 11, 2015, 9:00 a.m. Eastern Daylight Time
TJX Corporate Headquarters
770 Cochituate Road
Framingham, Massachusetts 01701
Important notice regarding the Internet availability of proxy materials for the Annual Meeting of Stockholders.You can view the Annual Report and Proxy Statement on the Internet at:http://bnymellon.mobular.net/bnymellon/tjxwww.envisionreports.com/TJX
Your vote is important. Please vote by internet, by telephone or by mail.
q IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND DETACH HERERETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q
Proxy — THE TJX COMPANIES, INC.
ANNUAL MEETING OF STOCKHOLDERS — JUNE 13, 2012
The stockholder(s) whose signature(s) appear(s)
2015 Annual Meeting of Stockholders
Proxy Solicited by Board of Directors for Annual Meeting - June 11, 2015
Carol Meyrowitz, Scott Goldenberg and Mary B. Reynolds, or any of them, each with the full power of substitution, are hereby authorized as Proxies to represent and vote the shares of the undersigned with respect to all of the matters indicated on the reverse side of this Proxy Card hereby appoint(s) CAROL MEYROWITZ, SCOTT GOLDENBERGcard and MARY B. REYNOLDS, or any of them, eachother matters which may properly come before the Annual Meeting, with full power of substitution, as proxies, to voteall the powers which the undersigned would possess if personally present, at the Annual Meeting of Stockholders of The TJX Companies, Inc. (the “Company”) to be held at the Company’s corporate office,TJX Corporate Headquarters, 770 Cochituate Road, Framingham, Massachusetts on Wednesday,Thursday, June 13, 201211, 2015 at 11:9:00 a.m. Eastern Time, and(local time), or at any postponement or adjournment or postponement thereof, allthereof.
Shares represented by this proxy will be voted by the shares of Common Stock ofProxies subject to the Company whichdirections indicated by the stockholder(s) could vote, if present, as directedstockholder on the reverse side of this cardcard. If no directions are indicated, the Proxies will have authority to vote FOR each nominee and inFOR Proposals 2 and 3. In their discretion, the Proxies are hereby authorized to vote upon such mannerother business as the proxies may determine on any other matters which may properly come before the meeting.meeting or any postponement or adjournment thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN.However, if you are voting shares held in the TJX stock fund available through The TJX Companies, Inc. General Savings/Profit Sharing Plan, our U.S. 401(k) plan, or The TJX Companies, Inc. General Savings/Profit Sharing Plan (P.R.), our Puerto Rico savings plan, (collectively, “plan shares”), your plan shares will be voted by the plan trustee in accordance with your instructions. Your voting instructions must be received byIF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE DIRECTOR NOMINEES, FOR PROPOSAL 2, FOR PROPOSAL 3 AND FOR PROPOSAL 4.11:59 p.m. Eastern Daylight Time, Sunday, June 7, 2015THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENT OR POSTPONEMENT.to allow time for tabulation and voting.THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS.Please note that if your instructions are not received by this time, your plan shares will not be voted.
The Board of Directors recommends a vote FOR the election of the Director nominees, FOR Proposal 2, FOR Proposal 3 and FOR Proposal 4.
| ||||
|
(Continued andItems to be marked, dated and signed,voted appear on the other side)reverse side.)