UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No.     )

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PriceSmart, Inc.

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20142016 PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS

The Annual Meeting of Shareholders will be held at

PRICESMART, INC.

9740 Scranton Road

San Diego, California 92121

PRICESMART, INC.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT

TO THE STOCKHOLDERS OF PRICESMART, INC.:

Notice is hereby given that the Annual Meeting of the Stockholders of PriceSmart, Inc. (the “Company”), will be held at 10:00 a.m. on Tuesday,Wednesday, February 3, 20151, 2017 at the Company’s corporate headquarters, 9740 Scranton Road, San Diego, California, 92121 for the following purposes:

The foregoing items of business are more fully described in the Proxy Statement accompanying this Notice. The Board of Directors has fixed the close of business on December 12, 20149, 2016 as the record date for the determination of stockholders entitled to notice of and to vote at the Annual Meeting. A list of such stockholders shall be open to the examination of any stockholder at the Annual Meeting and for a period of ten days prior to the date of the Annual Meeting at the Company’s corporate headquarters, 9740 Scranton Road, San Diego, California 92121.

Accompanying this Notice is a Proxy. WHETHER OR NOT YOU EXPECT TO BE AT THE ANNUAL MEETING, PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY, OR YOU MAY VOTE YOUR SHARES BY TELEPHONE OR OVER THE INTERNET, AS DESCRIBED IN THE ENCLOSED PROXY. If you plan to attend the Annual Meeting and wish to vote your shares personally, you may do so at any time before the Proxy is voted.

All stockholders are cordially invited to attend the meeting.

BY ORDER OF THE BOARD OF DIRECTORS

Robert M. GansFrancisco J. Velasco

Secretary

San Diego, California

December 17, 201419, 2016

Table of Contents

PRICESMART, INC.

9740 Scranton Road

San Diego, California 92121

PROXY STATEMENT

for

ANNUAL MEETING OF STOCKHOLDERS

February 3, 20151, 2017

The Board of Directors of PriceSmart, Inc., a Delaware corporation (the “Company”), is soliciting the enclosed Proxy for use at the Annual Meeting of Stockholders of the Company to be held on February 3, 20151, 2017 (the “Annual Meeting”), and at any adjournments thereof. This Proxy Statement will be first sent to stockholders on or about December 17, 2014.9, 2016. You can submit your Proxy by mail or you may provide voting instructions for your shares by telephone or via the Internet. Instructions for voting by telephone, by using the Internet or by mail are described on the enclosed Proxy. If you plan to attend the Annual Meeting and wish to vote your shares personally, you may do so. Unless contrary instructions are indicated on the Proxy, all shares represented by valid Proxies received pursuant to this solicitation (and not revoked before they are voted) will be voted for the election of the Board of Directors’ nominees for directors, or for a substitute or substitutes selected by the Board of Directors in the event a nominee or nominees are unable to serve or decline to do so, and for approval of the compensation of the named executive officers as disclosed in this Proxy Statement.so. As to any other business which may properly come before the Annual Meeting and be submitted to a vote of the stockholders, Proxies received by the Board of Directors will be voted in accordance with the best judgment of the holders thereof.

A Proxy may be revoked by written notice to the Secretary of the Company at any time prior to the Annual Meeting by executing a later Proxy or by attending the Annual Meeting and voting in person.

The Company will bear the cost of solicitation of Proxies. In addition to the use of mails, Proxies may be solicited by personal interview, telephone, facsimile or e-mail, by officers, directors and other employees of the Company. The Company also will request persons, firms and corporations holding shares in their names, or in the names of their nominees, which are beneficially owned by others, to send, or cause to be sent, Proxy material to, and obtain Proxies from, such beneficial owners and will reimburse such holders for their reasonable expenses in so doing.

The Company’s mailing address is 9740 Scranton Road, San Diego, California 92121.

Voting

Stockholders of record at the close of business on December 12, 20149, 2016 (the “Record Date”) will be entitled to notice of, and to vote at, the Annual Meeting or any adjournments thereof.

As of December 12, 2014, 30,209,9179, 2016, 30,406,433 shares of the Company’s common stock, $.0001 par value per share (“Common Stock”), were outstanding, representing the only voting securities of the Company. Each share of Common Stock is entitled to one vote.

Votes cast by Proxy or in person at the Annual Meeting will be counted by the person appointed by the Company to act as Inspector of Election for the Annual Meeting. The Inspector of Election will treat shares represented by Proxies that reflect abstentions or include “broker non-votes” as shares that are present and entitled to vote for purposes of determining the presence of a quorum.

Because directors are elected by a plurality of the votes of the shares present in person or represented by Proxy at the Annual Meeting and entitled to vote on the election of directors, abstentions and “broker non-votes” do not constitute a vote “for” or “against” any nominee for the Board of Directors and thus will be disregarded in the calculation of “votes cast” for purposes of electing nominees to the Board of Directors. The non-binding advisory vote on executive compensation requires the affirmative vote of a majority of the aggregate votes present, in person or by proxy, and entitled to vote at the Annual Meeting. Abstentions will have the same effect as votes against this proposal and broker non-votes will have no effect on the outcome.

Proposal 1:1  Election of Directors

Based on the recommendation of the Nominating/Corporate Governance Committee, the Board of Directors of the Company has nominated and recommends for election as directors the nineten persons named herein to serve until the next Annual Meeting of Stockholders and until their respective successors shall have been duly elected and qualified. All of the nominees are presently directors of the Company, and following the Annual Meeting there will be no vacancies on the Board of Directors. Directors are elected by a plurality of the votes of the shares present in person or represented by Proxy at the Annual Meeting and entitled to vote on the election of directors. The enclosed Proxy will be voted in favor of the persons nominated unless otherwise indicated. If any of the nominees should be unable to serve or should decline to do so, the discretionary authority provided in the Proxy will be exercised by the proxy holders to vote the shares represented by the Proxies for one or more substitute nominees selected by the present Board of Directors. The Board of Directors does not believe at this time that any substitute nominee or nominees will be required.

Nominations Process

Identification and Evaluation of Nominees for Directors

The Nominating/Corporate Governance Committee identifies nominees for director by first evaluating the current members of our Board of Directors willing to continue in service. Current members with qualifications and skills that are consistent with the Nominating/Corporate Governance Committee’s criteria for board service, as set forth in the section below entitled “Director Qualifications,” and who are willing to continue in service are considered for re-nomination, balancing the value of continuity of service by existing members of our Board of Directors with that of obtaining a new perspective.

If any member of the Board of Directors does not wish to continue in service or if the Board of Directors decides not to re-nominate a member for re-election, the Nominating/Corporate Governance Committee identifies the desired skills and experience of a new nominee in light of the criteria set forth below in “Director Qualifications.” The Nominating/Corporate Governance Committee generally consults with other members of the Board of Directors and may seek input from management, independent counsel, industry experts or advisors that the Nominating/Corporate Governance Committee believes to be desirable and appropriate. The Nominating/Corporate Governance Committee reviews the qualifications, experience and background of any candidates who are identified. Final candidates are interviewed by the members of the Nominating/Corporate Governance Committee. In making its determinations, the Nominating/Corporate Governance Committee evaluates each individual in the context of the Board of Directors as a whole, with the objective of assembling a group that can best perpetuate the success of the Company and represent stockholder interests through the exercise of sound judgment. After review and deliberation of all feedback and data, the Nominating/Corporate Governance Committee makes its recommendation to the Board of Directors.

Pursuant to the Nominating/Corporate Governance Committee Charter, stockholders of the Company who have held shares of the Company’s common stockCommon Stock for at least one year and who hold a minimum of 1% of the Company’s outstanding shares of common stockCommon Stock may suggest a candidate for director by writing to the Secretary of the Company. In order to be considered, the recommendation for a candidate must include the following written information: (1) a detailed resume of the recommended candidate; (2) an explanation of the reasons why the stockholder believes the recommended candidate is qualified for service on the Board of Directors; (3) such other information that would be required by the rules of the SEC to be included in a proxy statement; (4) the written consent of the recommended candidate; (5) a description of any arrangements or undertakings between the stockholder and the recommended candidate regarding the nomination; and (6) proof of the recommending stockholder’s stock holdings in the Company. In addition, we may require any candidate to furnish such other information as may reasonably be required by the Company to determine the eligibility of such candidate to serve as an independent director in accordance with the Company’s corporate governance guidelines or that could be material to a reasonable stockholder’s understanding of the independence or lack of independence of such candidate. In order to give the Nominating/Corporate Governance Committee sufficient time to evaluate a recommended candidate and/or include the candidate in the Company’s proxy statement for the annual meeting to be held in 2016,2018, the recommendation should be received by the Secretary of the

Proposal 1:1  Election of Directors (continued)

Company at the Company’s principal executive offices in accordance with the timing in the section below entitled “Stockholder Proposals.”no later than August 21, 2017. In the event that the Company receives director candidate recommendations from stockholders, those recommendations are evaluated in the same manner that potential nominees suggested by Board members, management or other parties are evaluated. The Company does not intend to treat stockholder recommendations in any manner different from other recommendations.

Director Qualifications

In evaluating director nominees, the Nominating/Corporate Governance Committee considers, among other things, the following factors:

While the Company does not have a specific policy regarding board diversity, in connection with its evaluation of director nominees, the Nominating/Corporate Governance Committee also considers diversity of expertise and experience in substantive matters pertaining to our business relative to other members of the Board of Directors. The Nominating/Corporate Governance Committee’s objective is to assemble a group that can best perpetuate the success of the business and represent stockholder interests through the exercise of sound judgment using its diversity of experience.

Other than the foregoing, there are no stated minimum criteria for director nominees, although the Nominating/Corporate Governance Committee may also consider such other facts as it may deem are in the best interests of the Company and its stockholders. The Nominating/Corporate Governance Committee also believes it is appropriate for at least one, and, preferably, several, members of the Board of Directors to meet the criteria for an “audit committee financial expert” as defined by SEC rules, and that a majority of the members of the Board of Directors be independent as required under the Nasdaq Stock Market listing standards applicable to the Company. The Nominating/Corporate Governance Committee also believes it is appropriate for the Company’s chief executive officer to serve as a member of the Board of Directors. Directors’ performance and qualification criteria are reviewed annually by the Nominating/Corporate Governance Committee.

A copy of the Nominating/Corporate Governance Committee Charter is available on the Company’s website at www.pricesmart.com.

Independent Directors

The Company’s Board of Directors has determined that the following nominees for director are “independent” under the Nasdaq Stock Market listing standards applicable to the Company: Sherry Bahrambeygui, Gonzalo Barrutieta, Gordon Hanson, Katherine Hensley, Leon Janks, Mitchell Lynn, Robert PricePierre Mignault, Gary Malino and Edgar Zurcher.

Proposal 1:1  Election of Directors (continued)

Information Regarding Nominees

The table below indicates the name, current position with the Company and age as of October 31, 20142016 of each nominee for director.

Robert E. Price has been Chairman of the Board of Directors of the Company since July 1994 and served as Chief Executive Officer of the Company from April 2006 until July 2010. Mr. Price served as Interim Chief Executive Officer of the Company from April 2003 until April 2006 and also served as Interim President of the Company from April 2003 until October 2004. Mr. Price also served as President and Chief Executive Officer of the Company from July 1994 until January 1998. Mr. Price is President of Price Charities, fka San Diego Revitalization Corp. Mr. Price previously served as Chairman of the Board of Price Enterprises, Inc. (“PEI”) from July 1994 until November 1999 and was President and Chief Executive Officer of PEI from July 1994 until September 1997. Mr. Price was Chairman of the Board of Price/Costco, Inc. (“Price/Costco”) from October 1993 to December 1994. From 1976 to October 1993, he was Chief Executive Officer and a director of The Price Company (“TPC”). Mr. Price served as Chairman of the Board of TPC from January 1989 to October 1993, and as its President from 1976 until December 1990. Mr. Price has been a Manager of The Price Group, LLC since August 2000. Mr. Price’s significant experience as an executive and director of warehouse club merchandising businesses, as well as his extensive knowledge of the Company’s business, history and culture, contribute to the Board of Directors’ conclusion that he should serve as a director of the Company.

Sherry S. Bahrambeygui has been a director of the Company since November 2011.2011 and Vice Chair of the Board since October 2016. Ms. Bahrambeygui joined The Price Group, LLC in September 2006 and has served as a Managing Member of The Price Group, LLCManager since January 2007. Additionally, Ms. Bahrambeygui serves as Executive Vice President, Secretary and Vice Chairman of the Boards of Price Charities fka(fka San Diego Revitalization Corp.), and Price Philanthropies Foundation, and she is also the Chief Executive Officer of PS Ivanhoe, LLC, a commercial real estate company. Ms. Bahrambeygui was a licensed stockbroker and is a founding partner of the law firm of Hosey & Bahrambeygui, LLP. She has been practicingpracticed law with an emphasis in employment, compensation, business and business litigationcorporate matters since 1993 and had provided consultation and legal representation to the Company from time-to-time between 2001 and 2008. Ms. Bahrambeygui was admitted in August 2015 to the Bar of the Supreme Court of the United States. Ms. Bahrambeygui’s thorough understanding of the business and operations of the Company, as well as having effectively assisted the Company on certain legal and business matters, contribute to the Board of Directors’ conclusion that she should serve as a director of the Company.

Gonzalo Barrutietahas been a director of the Company since February 2008. Mr. Barrutieta was employed in several capacities with Grupo Gigante, S.A. de C. V. from 1994 to 2006, including as Director of Real Estate and New Business Development. Since 1994, he has served as a member of the board of directors of Grupo Gigante. From 2002 through 2005, Mr. Barrutieta was a director of PriceSmart Mexico (formerly a joint venture between the Company and Grupo Gigante) and

Proposal 1  Election of Directors (continued)

served as Chief Executive Officer of PriceSmart Mexico from 2003 to 2005. Mr. Barrutieta has also been a director of Hoteles Presidente since 2004, of Office Depot Mexico since 2005, of Radio Shack Mexico from 2005 until 2012, and has served as

Proposal 1: Election of Directors (continued)

President and director of Operadora IPC de Mexico since 2007. Mr. Barrutieta’s experience as an executive and director of international merchandising businesses, as well as his general knowledge and understanding of the markets in Central America, contribute to the Board of Directors’ conclusion that he should serve as a director of the Company.

Gordon H. Hanson has been a director of the Company since April 2014. Mr. Hanson has been a tenured member of the economics faculty at the University of California, San Diego since 2001. At UC San Diego, Mr. Hanson has faculty appointments inis the Acting Dean of the School of International Relations and Pacific Studies and the Department of Economics,Global Policy and also directs the Center on Emerging and Pacific Economies.Global Transformation. From 1998 to 2001, he was a tenured member of management faculty to the University of Michigan, and from 1992 to 1998, he was on the economics faculty of the University of Texas. From 2009 until 2014, he served as a director of the Washington Office on Latin America, a non-profit organization working to promote civic advancement in the region, chairing their development committee. Mr. Hanson’s extensive background in the analysis of the economies of Latin America, including over two decades of experience in consulting for international financial organizations, contribute to the Board of Directors’ conclusion that he should serve as director of the Company.

Katherine L. Hensley has been a director of the Company since July 1997 and served as a director of PEI from December 1994 until July 1997. She is a retired partner of the law firm of O’Melveny & Myers in Los Angeles, California. Ms. Hensley joined O’Melveny & Myers in 1978 and was a partner from 1986 to 1992. From 1994 to 2000, Ms. Hensley served as a trustee of Security First Trust, an open-end investment management company registered under the Investment Company Act of 1940. Ms. Hensley’s extensive background in the legal field, including her experience in executive compensation and corporate matters, as well as her many years of service to the Company as a member of the Board of Directors as well as its Audit, Finance, Compensation, Nominating and Governance Committees, contribute to the Board of Directors’ conclusion that she should serve as a director of the Company.

Leon C. Janks has been a director of the Company since July 1997 and served as a director of PEI from March 1995 until July 1997. He has been a partner in the accounting firm of Green, Hasson & Janks LLP in Los Angeles, California since 1980 and serves as its Managing Partner. Mr. Janks has extensive experience in domestic and international business, serving a wide variety of clients in diverse businesses. Mr. Janks is also a certified public accountant. Mr. Janks’ experience, as well asand his significant accounting, financial and tax expertise and his many years of service to the Company as a member of the Board of Directors, as well as its Audit, Finance, Compensation and Executive Committees, contribute to the Board of Directors’ conclusion that he should serve as a director of the Company.

Jose Luis Laparte has been a director of the Company since February 2008, Chief Executive Officer of the Company since July 2010 and President of the Company since October 2004. Mr. Laparte initially served as a consultant for the Company from December 2003 to October 2004. Prior to joining the Company as a consultant, Mr. Laparte worked for more than 14 years at Wal-Mart Stores, Inc. in Mexico and the United States in progressively responsible positions. From October 2002 through September 2003, he served as Vice President of Sam’s International, where he directed and managed the company’s operations, finance, sales, marketing, product development and merchandising. From May 2000 to October 2002, he served as Vice President, Wal-Mart de Mexico, responsible for sales and the expansion of the Sam’s Club format in Mexico. Mr. Laparte’s background and experience as an executive overseeing numerous operational aspects of the international merchandising business, including sales, product development, merchandising, marketing, finance and information technology, contribute to the Board of Directors’ conclusion that he should serve as a director of the Company.

Mitchell G. Lynn has been a director of the Company since November 2011. Mr. Lynn served in several senior executive positions and as the President and a director of TPC prior to its merger in 1993 with Costco, Inc., and from 1993 until 1994, he served as an executive officer, director and member of the Executive Committee of Price/Costco. Mr. Lynn also was a member of The Price Group, LLC from 2005 to 2008. Mr. Lynn is a founding and continuing director of Bodega Latina Corporation, dba El Super, a 46-store61-store warehouse-style grocery retailer that targets the Hispanic market in the Western United States. Mr. Lynn is

Proposal 1: Election of Directors (continued)

also the founder, limited partner and a general partner of CRI 2000, LP, dba Combined Resources International (CRI)(“CRI”), which designs, develops and manufactures consumer products under various brand names for domestic and international wholesale distribution, primarily through warehouse clubs. Mr. Lynn also is also a founder, , limited partner and a general partner of ECR4Kids LP (ECR)(“ECR”), which designs, manufactures and sells educational/children’sclassroom products to wholesale dealers. Additionally, Mr. Lynn served as a director of United PanAm Financial Corp. from 2001 until its sale in 2011. Mr. Lynn is a certified public accountant (inactive) and a licensed real estate broker in California. Mr. Lynn’s extensive prior experience in both the warehouse club business and general retailing and his significant knowledge relating to accounting and financial matters contribute to the Board of Directors’ conclusion that he should serve as a director of the Company.

Gary Malino has been a director of the Company since April 2016. Mr. Malino is a former senior executive of Realty Income Corporation, a real estate investment trust (REIT) listed on the New York Stock Exchange. Mr. Malino joined Realty Income

Proposal 1  Election of Directors (continued)

Corporation in 1985 and was the Chief Financial Officer from 1994 until 2001 when he was promoted to President and Chief Operating Officer, the position he held until his retirement in 2014. Prior to joining Realty Income, Mr. Malino was a certified public accountant for a Los Angeles based accounting firm (1981-1985) and assistant controller with McMillin Development Company, a real estate development company (1979-1981). Mr. Malino’s extensive experience as a prior executive of a publicly traded company, his accounting background and his extensive experience with finance and real estate matters contributed to the Board of Directors’ conclusion that he should serve as a director of the Company.

Pierre Mignaulthas been a director of the Company since August 2015. Mr. Mignault has more than 45 years’ experience in the retail sector, starting his career in 1969 as a management trainee with The Bay Department Stores (Hudson’s Bay Company) and working through a series of executive positions, ultimately serving as General Manager for the eastern region from 1983 until 1985. From 1985 to 1993, he served as Chief Executive Officer of Price Club Canada. Mr. Mignault served as Chief Executive Officer of Probigo Inc., a Canadian public company and the second largest food retailer in Canada, from 1993 until it was acquired by Loblaw Companies Limited in November 1998, remaining with that company through March 1999. From 2000 until September 2005, he was Chairman of Fly America Furniture, a private company. Mr. Mignault’s extensive knowledge and significant experience in both the warehouse club business and general retailing contribute to the Board of Directors’ conclusion that he should serve as a director of the Company.

Edgar Zurcherhas been a director of the Company since October 2009 and also served as a director of the Company from November 2000 to February 2008. Mr. Zurcher has been a partner in the law firm Zurcher, Odio & Raven in Costa Rica since 1980, which the Company uses as counsel for certain legal matters. Mr. Zurcher is also President of PLP, S.A., as well as a director of Payless ShoeSource Holdings, Ltd. (“Payless Shoes”). PLP, S.A. owns 40% of Payless Shoes, which rents retail space from PriceSmart. Additionally, Mr. Zurcher is a director of Molinos de Costa Rica Pasta and Roma S.A. dba Roma Prince S.A., from which the Company purchases products to sell to its members at its warehouse clubs, and is a director of Promerica Financial Corporation, S.A. from which the Company received rental income and credit card fees in fiscal years 2007 and 2008. Mr. Zurcher’s background in legal matters and his significant experience in Central America business and legal affairs contribute to the Board of Directors’ conclusion that he should serve as a director of the Company.

Recommendation of the Board of Directors

The Board of Directors recommends that stockholders vote FOR the slate of nominees set forth above. Proxies solicited by the Board of Directors will be so voted unless stockholders specify otherwise on the accompanying Proxy.

Proposal 2: Approval of the Compensation of the Named Executive Officers

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act, the Company’s stockholders are entitled to vote at the Annual Meeting to provide advisory approval of the compensation of the Company’s named executive officers as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission. Pursuant to the Dodd-Frank Act, the stockholder vote on executive compensation is an advisory vote only, and it is not binding on the Company or our Board of Directors.

Although the vote is non-binding, our Compensation Committee and Board of Directors appreciate the opinions of the stockholders and will consider the outcome of the vote when making future compensation decisions. As described more fully in the Compensation Discussion and Analysis section of this Proxy Statement, the Company’s executive compensation program is designed to attract, retain and motivate individuals with superior ability, experience and leadership capability to deliver on our annual and long-term business objectives necessary to achieve growth in stockholder value. We urge stockholders to read the Compensation Discussion and Analysis section of this Proxy Statement, which describes in detail how our executive compensation policies and procedures operate and are intended to operate in the future. The Compensation Committee and the Board of Directors believe that our executive compensation program fulfills these goals and is reasonable, competitive and aligned with our performance and the performance of our executives.

We are asking our stockholders to indicate their support for our named executive officer compensation as described in this Proxy Statement. This proposal, commonly known as a “say-on-pay” proposal, gives our stockholders the opportunity to express their views on our named executive officers’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this Proxy Statement. Accordingly, we ask that our stockholders vote “FOR” the following resolution:

“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 2015 Annual Meeting of Stockholders, pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the Summary Compensation Table and the other related tables and disclosure.”

Recommendation of the Board of Directors

The Board of Directors recommends that stockholders vote FOR the approval of the compensation of the named executive officers as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission. Proxies solicited by the Board of Directors will be so voted unless stockholders specify otherwise on the accompanying Proxy.

Information Regarding the Board of Directors

Board Meetings

The Company’s Board of Directors held eightsix meetings during fiscal year 2014. No2016. Except for Mr. Barrutieta (who resides in Mexico), Mr. Zurcher (who resides in Costa Rica) and Mr. Mignault (who resides in Canada), no nominee for director who served as a director during the past year attended fewer than 75% of the aggregate of the total number of meetings of the Board of Directors and the total number of meetings of committees of the Board of Directors on which he or she served.

Board Leadership Structure

The positions of Chairman and Chief Executive Officer are separated, with Mr. Price serving as Chairman and Mr. Laparte serving as Chief Executive Officer and President. As Chief Executive Officer and President, Mr. Laparte is responsible for the day to day leadership and performance of the Company, with the Board of Directors being responsible for setting the strategic direction of the Company. As Chairman, Mr. Price provides guidance to the Chief Executive Officer and President, sets the agenda for meetings of the Board of Directors and presides over those meetings. The Board of Directors believes that the current leadership of the Board of Directors by the Company’s non-executive Chairman enhances the effectiveness of its oversight of management and provides a perspective that is separate and distinct from that of management.

Role of the Board of Directors in Risk Oversight

The Board of Directors oversees the Company’s risk management processes, either as a whole or through its committees. Committees of the Board of Directors review with management and the Company’s internal audit department the Company’s major risk exposures, their potential impact on the Company’s business and the steps the Company takes to manage such risk exposures. The Board of Directors’ risk oversight process includes receiving reports from committees of the Board of Directors’ committeesDirectors and members of senior management.

Committees of the Board

Audit Committee. The Audit Committee, which currently consists of Messrs.Mr. Janks, and Lynn andMr. Barrutieta, Ms. Hensley and Mr. Malino, held sixfour meetings during fiscal year 2014.2016. The Audit Committee oversees the Company’s accounting and financial reporting processes and the audits of its consolidated financial statements. The Committee reviews the annual audits conducted by the Company’s independent public accountants, reviews and evaluates internal accounting controls, is responsible for the selection of the Company’s independent public accountants, and conducts such reviews and examinations as it deems necessary with respect to the practices and policies of, and the relationship between, the Company and its independent public accountants. All committee members satisfy the Nasdaq Stock Market’s standards for “independence,” including applicable audit committee independence requirements, and the Board of Directors has determined that Mr. Janks qualifies as an “audit committee financial expert” within the meaning of the applicable SEC rules and regulations. The Audit Committee is governed by a written charter adopted by the Board of Directors, which is available on the Company’s public website atwww.pricesmart.com.

Compensation Committee. The Compensation Committee, which currently consists of Ms. Bahrambeygui, Ms. Hensley, Ms. Bahrambeygui, and Messrs.Mr. Janks and Lynn,Mr. Mignault, held sixeight meetings during fiscal year 2014.2016. Each of the members of the Compensation Committee satisfies the Nasdaq Stock Market’s standards for “independence,” including applicable compensation committee independence requirements. The Compensation Committee reviews and approves the compensation program for the Company’s executive officers. The Committee is authorized to evaluate and determine the compensation of the Company’s Chief Executive Officer and reviews and approves compensation for all other executive officers. The Committee also administers, interprets and makes grants under the Company’s stock optionequity incentive award plans. The Compensation Committee is governed by a written charter adopted by the Board of Directors, which is available on the Company’s public website atwww.pricesmart.com.

Nominating/Corporate Governance CommitteeCommittee.. The Nominating Committee, which currently consists of Ms. Hensley, Ms. Bahrambeygui and Messrs. Price andMr. Lynn, held one meetingtwo meetings during fiscal year 2014.2016. The Nominating/Corporate Governance Committee considers the slate of nominees to be presented for reelection at annual meetings of stockholders. The Nominating/Corporate

Information Regarding the Board of Directors (continued)

Governance Committee also may evaluate and recommend candidates to fill vacancies on the Board of Directors, which vacancies may be

Information Regarding the Board of Directors (continued)

created by the departure of any directors or the expansion of the number of members of the Board of Directors. The Nominating/Corporate Governance Committee approved the nomination of the candidates reflected in Proposal 1 and approved the appointment of Mr. HansonMalino to the Board prior to his election ineffective as of April 2014.2016. The Nominating/Corporate Governance Committee also assists the Board of Directors as needed in establishing corporate governance guidelines and other policies and procedures pertaining to corporate governance matters. The Nominating/Corporate Governance Committee is governed by a written charter adopted by the Board of Directors, which is available on the Company’s public website atwww.pricesmart.com.

Executive Committee. The Executive Committee, which currently consists of Messrs.Mr. Price, Mr. Janks and Janks,Ms. Bahrambeygui, did not hold any meetings during fiscal year 2014.2016. The Executive Committee has all powers and rights necessary to exercise the full authority of the Board of Directors in the management of the business and affairs of the Company, except as provided in the Delaware General Corporation Law or the Bylaws of the Company.

Finance Committee. The Finance Committee, which currently consists of Messrs.Mr. Janks, Mr. Hanson, Lynn and Price and Ms. Hensley and Mr. Price, held fourfive meetings during fiscal year 2014.2016. The Finance Committee reviews and makes recommendations with respect to (1) annual budgets, (2) investments, (3) financing arrangements and (4) the creation, incurrence, assumption or guaranty by the Company of any indebtedness, obligation or liability, except, in each case, for any such transactions entered into in the ordinary course of business of the Company.

Real Estate Committee.The Real Estate Committee, which currently consists of Messrs.Mr. Price, Mr. Laparte, and Lynn and Ms. Bahrambeygui and Mr. Lynn, held foursix meetings during fiscal year 2014.2016. The Real Estate Committee reviews and approves the material terms of real estate-related transactions entered into by the Company, consistent with the applicable annual budget of the Company previously approved by the Board of Directors.

Policy Governing Stockholder Communications with the Board of Directors 

The Board of Directors welcomes communications from stockholders of the Company. Any stockholder who wishes to communicate with the Board of Directors or one or more members of the Board of Directors should do so in writing in care of the General Counsel of the Company, at the principal office of the Company, 9740 Scranton Road, San Diego, California 92121. The General Counsel is directed to forward each communication to the director or directors of the Company for whom it is intended.

Policy Governing Director Attendance at Annual Meetings of Stockholders

The Company encourages, but does not require, the members of its Board of Directors to attend the annual meeting of stockholders. Seven of the eightAll ten members then-serving on the Board of Directors attended the Annual Meeting of Stockholders held on January 22, 2014.February 3, 2016.

Audit Committee Report

The Audit Committee oversees the Company’s financial accounting and reporting process and the audits of the financial statements of the Company. All committee members satisfy the definition of independent director set forth at Rule 5605(a)(2) and Rule 5605(c)(2) of the Nasdaq Stock Market’s listing standards. The Audit Committee is governed by a written charter adopted by the Board of Directors, which is available on the Company’s public website atwww.pricesmart.com.

In fulfilling its oversight responsibilities, the committee reviewed and discussed with management the audited financial statements in the Company’s Annual Report on Form 10-K for the year ended August 31, 2014,2016, including a discussion of the quality, and not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements.

The Company’s independent registered public accounting firm, Ernst & Young LLP (EY), is responsible for expressing an opinion on the conformity of its audited financial statements with generally accepted accounting principles. EY met with the committee and expressed its judgment as to the quality, not just the acceptability, of the Company’s accounting principles and discussed with the committee other matters as required under generally accepted auditing standards, including those matters required to be discussed by Public Company Accounting Oversight Board Statement on Auditing Standards No. 16Communications with Audit Committees. In addition, EY discussed the accountants’ independence from the Company and from the Company’s management and delivered to the committee those matters to be set forth in written disclosures as required by applicable requirements of the Public Company Accounting Oversight Board regarding independent registered public accounting firm’s communications with the Audit Committee concerning independence.

The committee discussed with the Company’s independent registered public accounting firm the overall scope and plan of their audit. The committee meets with the independent registered public accounting firm, with and without our management present, to discuss the results of their examinations, their evaluations of the Company’s internal controls, and the overall quality of the Company’s financial reporting.

In reliance on the reviews and discussions referred to above, the committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended August 31, 20142016 for filing with the SEC.

This report of the Audit Committee shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under such acts.

Leon C. Janks

Gonzalo Barrutieta

Katherine L. Hensley

Mitchell G. LynnGary Malino

Securities Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information regarding the beneficial ownership of the Company’s Common Stock as of October 31, 20142016 by (1) each of its directors and nominees for director, (2) each of its Named Executive Officers, (3) each person or group known by it to own beneficially more than 5% of the Common Stock and (4) all directors and executive officers as a group.

Securities Ownership of Certain Beneficial Owners and Management (continued)

Securities Ownership of Certain Beneficial Owners and Management (continued)

Executive Officers of the Company

The executive officers of the Company and their ages as of October 31, 20142016 are as follows:

Jose Luis Laparte has been a director of the Company since February 2008, Chief Executive Officer of the Company since July 2010 and as President of the Company since October 2004. Mr. Laparte initially served as a consultant for the Company from December 2003 to October 2004. Prior to joining the Company as a consultant, Mr. Laparte worked for more than 14 years at Wal-Mart Stores, Inc. in Mexico and the United States in progressively responsible positions. From October 2002 through September 2003, he served as Vice President of Sam’s International, where he directed and managed the company’s operations, finance, sales, marketing, product development and merchandising. From May 2000 to October 2002, he served as Vice President, Wal-Mart de Mexico, responsible for sales and the expansion of the Sam’s Club format in Mexico.

John M. HeffnerRodrigo Calvo has been Executive Vice President and Chief Financial OfficerPresident—Real Estate of the Company since January 2004, after havingJune 2015. Mr. Calvo served as a consultant toSenior Vice President—Real Estate of the Company on financial matters from September 2003 through December 2003.January 2009 to June 2015 and was the Company’s Vice President—Real Estate from October 2004 to January 2009. From February 2000 until August 2003,2001 to 2004, Mr. Heffner was Vice President of FinanceCalvo worked in the real estate development business in Central America, and Chief Financial Officer of Kyocera Wireless Corp. Mr. Heffner’s previous professional experience was with Digital Equipment Corporation, where he held a variety of financial management roles over a 20-year period,from 1994 to 1997 in engineering and with QUALCOMM Incorporated, where he was a Vice President of Finance from July 1998 until February 2000.construction.

Robert M. GansFrank Diaz has been Executive Vice President, General CounselPresident—Logistics and Secretary of the CompanyDistribution since August 1997 and Chief Ethics and Compliance Officer since January 2014, and was Executive Vice President and General Counsel of PEI from October 1994 until July 1997.November 2015. Mr. Gans graduated from the University of California, Los Angeles School of Law in 1975 and actively practiced law in private practice from 1975 until 1994. From 1988 until October 1994, Mr. Gans was the senior member of the law firm of Gans, Blackmar & Stevens, A.P.C., of San Diego, California.

William J. Naylon has been Executive Vice President and Chief Operating Officer of the Company since January 2002. Mr. NaylonDiaz served as Executive Vice President—Merchandising of the Company from July 2001 until January 2002 and as Senior Vice President of the CompanyPresident—Logistics and Distribution from March 1998 until July 2001. From September 1995 through February 1998, Mr. Naylon2010 to October 2015 and was Managing Director for the Company’s licensee warehouse club operation in Indonesia.Vice President—Logistics and Distribution from September 2008 to February 2010. Prior to joining the Company, Mr. Naylon was a General Manager for Price/CostcoDiaz worked more than 20 years in progressively responsible positions in the areas of logistics operations, strategic planning, commercial development and served in various management roles for TPC.

Thomas D. Martin has been Executive Vice Presidentcustomer experience with top-tier logistics companies including United Parcel Service, Federal Express and Chief Merchandising Officer since November 2011. He served as Executive Vice President—Merchandising of the Company from October 1998 until November 2011 and as Senior Vice President of the Company from August 1997 to September 1998. Mr. Martin previously served as Vice President of PEI from August 1994 until July 1997, directing merchandising strategies and product sourcing for its international merchandising business, in addition to managing its trading company activities. Prior to joining PEI as Vice President in August 1994, Mr. Martin served as Vice President of Price/Costco from October 1993 to December 1994 and served in various management roles for TPC.DHL.

Executive Officers of the Company (continued)

Brud E. Drachman has been Executive Vice President – President—Construction and Facilities since August 2013, was Executive Vice President—Construction Management of the Company from November 2005 until July 2013, served as Executive Vice President—Real Estate and Construction of the Company from February 2005 through October 2005 and as Executive Vice President—Construction and Private Label Merchandising from November 2004 until January 2005. Mr. Drachman served as Executive Vice President—Real Estate and Construction of the Company from November 2002 until October 2004 and served as Senior Vice President—Real Estate and Construction of the Company from August 1998 to October 2002. Mr. Drachman previously served as Vice President—Real Estate and Construction at PEI from August 1994 to August 1997. Prior to joining PEI in 1994, Mr. Drachman served as Project Manager at TPC beginning in 1987.

John M. Heffner has been Executive Vice President and Chief Financial Officer of the Company since January 2004, after having served as a consultant to the Company on financial matters from September 2003 through December 2003. From February 2000 until August 2003, Mr. Heffner was Vice President of Finance and Chief Financial Officer of Kyocera Wireless

Executive Officers of the Company (continued)

Corp. Mr. Heffner’s previous professional experience was with Digital Equipment Corporation, where he held a variety of financial management roles over a 20-year period, and with QUALCOMM Incorporated, where he was a Vice President of Finance from July 1998 until February 2000.

John D. Hildebrandt has been Executive Vice President—Operations of the Company since February 2010. Mr. Hildebrandt served as Executive Vice President—Central America and Trinidad Operations from March 2009 through January 2010, as Executive Vice President—Central America Operations from August 2003 until February 2009, as Executive Vice President—Caribbean and Asia Operations from July 2001 until July 2003 and as Senior Vice President of the Company from September 2000 until July 2001. Mr. Hildebrandt previously served as Vice President of the Company from September 1998 until August 2000, overseeing operations in Central America. Mr. Hildebrandt served as the Company’s Country Manager in the Philippines and Panama from August 1997 until August 1998, and as PEI’s Country Manager in the Philippines and Panama from 1996 until the Company was spun off from PEI in August 1997. Prior to joining PEI as Country Manager in 1996, Mr. Hildebrandt was a Senior Operations Manager of Price/Costco from 1994 through 1996, and served in various management roles for TPC beginning in 1979.

William J. Naylon has been Executive Vice President and Chief Operating Officer of the Company since January 2002. Mr. Naylon served as Executive Vice President—Merchandising of the Company from July 2001 until January 2002 and as Senior Vice President of the Company from March 1998 until July 2001. From September 1995 through February 1998, Mr. Naylon was Managing Director for the Company’s licensee warehouse club operation in Indonesia. Prior to joining the Company, Mr. Naylon was a General Manager for Price/Costco and served in various management roles for TPC.

Francisco Velasco has been Executive Vice President, General Counsel and Secretary of the Company since July 2016 and Chief Ethics & Compliance Officer since October 2016. From June 2009 to June 2016, Mr. Velasco served as Regional Counsel Latin America for AbbVie Inc., a publicly traded global biopharmaceutical company. At AbbVie, Mr. Velasco was responsible for its legal affairs in Latin America, managing over a dozen in-house counsel plus supporting staff covering over 20 countries. Mr. Velasco attended law school in Mexico, has a Masters of Law degree from Georgetown University and has an MBA degree from Duke University.

Jesus Von Chonghas been Executive Vice President—Chief Merchandising Officer since September 2016 and was Executive Vice President—Foods Merchandising from November 2015 through August 2016. He served as Senior Vice President of Merchandising for Central America beginning in 2003, added Colombia to his responsibilities in March 2011 and the Caribbean Region in April 2015. He served as a Regional Merchandising Director for Panama, Costa Rica and Dominican Republic in 2000. He was first employed by the Company as a Buyer in the Company’s operations in Panama in 1996. Mr. Von Chong progressed to head Buyer in 1998, Warehouse Manager for Via Brasil Operations in 1999 and to Panama’s Country Manager in 2000.

Executive and Director Compensation

Compensation Discussion and Analysis

The Compensation Committee of our Board of Directors, comprised entirely of independent directors, administers the Company’s executive compensation program. The role of the Compensation Committee is to oversee compensation and benefit plans and policies, administer stock plans and review and approve annually all compensation decisions relating to all executive officers.

Purposes and Structure of the Executive Compensation Program

The executive compensation program is designed to:

To achieve these objectives, the Compensation Committee, which is comprised of members who have knowledge of executive compensation levels of other companies by virtue of their professional background, experience and dealings external to PriceSmart, has implemented and intends to maintain compensation plans that tieprovide a portioncompetitive salary and align compensation with the achievement of the executives’ overall compensation to keylong-term financial and operational goals.

TheIn fiscal year 2016, the compensation of our named executive officers isNamed Executive Officers was comprised of base salaries an annual corporate incentive bonus plan and long-term equity incentives in the form of restricted stock. The structure for fiscal year 2016 was a change from prior years when a portion of our Named Executive Officers’ compensation included an annual bonus based upon achievement of certain short-term levels of operating income and sales performance. The annual bonus as a percentage of total cash compensation for the three years preceding fiscal year 2016 ranged from 13.1% to 20.9% for our Named Executive Officers other than the Chief Executive Officer and President, and from 15.6% to 25.3% for our Chief Executive Officer and President. The Compensation Committee determined that our Named Executive Officers played an important and strategic role in guiding the Company toward sustainable and long-term success that could more effectively be incentivized by eliminating the annual bonus and increasing the long-term equity component of Named Executive Officers’ compensation. Equity grants to our executives vest with continued service over multiple years. This “over time” multi-year approach closely reflects the long-term orientation inherent in our membership-based business model. Further, the Compensation Committee’s administration of the annual cash incentive program has been challenged in recent years by economic variability and fluctuations in currency exchange rates in certain of PriceSmart’s principal business markets that resulted in financial outcomes unrelated to the performance of management. Equity grants, with their longer-term orientation to Company performance and pay delivery, can help manage through this variability. Finally, equity compensation underscores the alignment of our executives and stockholders over time, enhancing the ownership ethic. In moving away from formal annual incentive opportunities, the Committee determined it was appropriate to increase base salaries for our Named Executive Officers to insure that their cash compensation was competitive in the market and reflective of their on-going contribution.

In determining specific amounts and components of compensation, the Compensation Committee considersconsidered each officer’s performance, level of responsibility, skills and experience, and other compensation awards or arrangements, as more fully described below under “—Elements“Elements of Compensation.”

Compensation Determination Process

The Compensation Committee reviews and approves all elements of compensation for all named executive officersNamed Executive Officers taking into consideration recommendations from management. The Compensation Committee also reviews and approves all annual bonusequity awards for all executives and equity awards for all employees. The Company’s Chairman makes recommendations to the Compensation

Executive and Director Compensation (continued)

Committee with respect to salary bonus eligibility and restricted stock for the Chief Executive Officer and President, and the Chief Executive Officer and President makes recommendations to the Compensation Committee with respect to salary bonus eligibility and restricted stock for the Executive Vice Presidents. The Chief Executive Officer and President also provides information to the Committee members at their request to aid in their decision-making. The information includes historical salarycash compensation and bonus paymentsstock grants to PriceSmart executives, internal equity comparisons, and the financial impact to the Company of a particular compensation decision. The Compensation Committee also receives comparable company compensation information, as described below. After gathering this input and receiving these recommendations, the Compensation Committee determines the compensation of our named executive officersNamed Executive Officers in executive session. In the case of employees below the level of Executive Vice President, the Chief Executive Officer and President sets their salaries and bonus opportunitiescash compensation and makes recommendations to the Compensation Committee with respect to their equity awards.

TheExcept for the decision by the Compensation Committee to increase salaries and eliminate annual bonuses beginning in fiscal year 2016, the Compensation Committee has not adopted any formal or informal policies or guidelines for allocating compensation between long-term and currently paid out compensation, between cash and non-cash compensation, or among different forms of compensation. This is due to the small size of our executive team and the need to tailor each executive’s compensation

Executive Compensation (continued)

program to attract and retain that executive. However, the Committee believes that long-term compensation plays an increasingly important role in aligning the compensation of the senior management team to stockholder returns, and in the retention of key executives. In particular, the Committee believes that the Chief Executive Officer and President’s compensation should be more heavily weighted towards long-term incentives as compared to other members of senior management given his greater ability to affect the results of the Company and the importance to us of retaining his services.

Use of Independent Compensation Consultant

In January 2012, we held a stockholder advisory vote on the compensation of PriceSmart’s named executive officers, commonly referred to as a say-on-pay vote. Stockholders overwhelmingly approved the compensation of the named executive officers, with approximately 99% of stockholder votes cast in favor of the 2012 say-on-pay resolution (excluding abstentions and broker non-votes). Asfiscal year 2016, the Compensation Committee evaluated ourretained Semler Brossy Consulting Group as its independent executive compensation practicesconsultant. Semler Brossy has no other business relationship with PriceSmart and talent needs throughout 2013,receives no payments from us other than the fees for services to the Compensation Committee. Semler Brossy reports directly to the Compensation Committee, was mindful of the strong support PriceSmart’s stockholders expressed for our compensation philosophy. As a result, following the annual review of the executive compensation philosophy,and the Compensation Committee decided to generally retainmay replace Semler Brossy or hire additional consultants at any time.

During fiscal year 2016, the existing approach to executive compensation for continuing executives, with an emphasis on short- and long-term incentive compensation that rewards senior executives when they deliver value for stockholders. The Company is holding a stockholder advisory vote at the Annual Meeting on the compensationscope of our named executive officers. See Proposal 2.Semler Brossy’s engagement included:

Role of Comparable Company Compensation Information in the Compensation Determination Process

The Compensation Committee establishes individual executive compensation at levels the Compensation Committee believes are comparable with those of executives in other companies of similar size and stage of development operating in retail industries and similarly sized public companies in the Southern California region, taking into account our relative performance and our own strategic goals. Management utilized Equilar Inc.’s Executive Insight research database, a resource for referencing executive compensation and analyzing executive pay trends based on information Equilar gathers from proxy statements and reports filed with the Securities and Exchange Commission, and information provided by our compensation consultant, Semler Brossy, to aid the Compensation Committee in the identification of a peer group of publicly traded companies so that the Compensation Committee could consider competitive market data in determining the named executive officers’Named Executive Officers’ fiscal 20142016 compensation

Executive and Director Compensation (continued)

program and compensation levels. InWhile it is difficult to ascertain directly comparable companies given the unique characteristics of PriceSmart’s international warehouse club business, in establishing fiscal 20142016 compensation levels for the named executive officers,Named Executive Officers, the Compensation Committee evaluated the compensation practices of the following public company peer groups:

The public companies included in our peer groups change as companies move into and out of the annual revenue ranges or cease to be publicly traded. Our peer groups for fiscal year 2015 included 99 Cents Only Stores and The Active Network, Inc., which are no longer publicly traded. There were no other changes to our peer groups between fiscal year 2015 and fiscal year 2016.

In addition, the Compensation Committee reviewed and considered the compensation practices of Costco Wholesale Corporation because the Company’s business is similar to Costco’s. However, the Compensation Committee took into account Costco’s significantly larger size and world-wide operations compared to the Company’s in making comparisons about executive compensation.

As part of this process, the Compensation Committee reviews the mix of the compensation elements for the named executive officersNamed Executive Officers against the compensation data from Equilar and Semler Brossy for positions similar to those held by such officers within the peer group of companies and Costco. Equilar gathers data from proxy statements and reports filed with the Securities and Exchange Commission regarding the peer group companies. The Compensation Committee noted that there was substantial variation between the compensation levels of similarly situated named executive officersNamed Executive Officers across the comparable companies. In particular, the Compensation Committee noted that long-term equity compensation varied significantly company-to-company resulting from the timing of grants or stock options providedequity awards made to executives. As a result, the Compensation Committee focused on the cash

Executive Compensation (continued)

compensation aspect of overall compensation (that is, base salary and annual target bonus) of other companies’ executives relative to our named executive officers’Named Executive Officers’ cash compensation. The Compensation Committee determined that the cash compensation of our named executive officersNamed Executive Officers was below the midpoint of the similarly titled executives at the comparable companies and therefore concluded that the compensation was not excessive.

The named executive officersNamed Executive Officers are all employees of PriceSmart, Inc. and work and reside in the U.S. (either San Diego, California or in the case of Mr. Naylon and Mr. Hildebrandt, Miami, Florida). As such, the Compensation Committee concluded that the competition for executive talent for the Company’s named executives would likely be either similarly sized U.S. headquartered companies in the retail industry and/or similarly sized companies in varying industries located in Southern California. PriceSmart had to use a broader annual revenue range for U.S. retail companies than for Southern California companies to get an adequate sample of broad line retailers.

The Compensation Committee utilized data obtained from Equilar’s Executive Insight research database but did not otherwise engage Equilar as a compensation consultant and did not meet with any representative of Equilar, or any other external compensation consultant, with respect to any named executive officers’ compensation.

Based on the objectives outlined above, the Compensation Committee strives to set target total compensation opportunity levels and the individual components of compensation to be competitive with the market in which we compete for executive talent. The Compensation Committee does not, however, guarantee that any executive will receive a specific market-derived compensation level.

Compensation data for the peer group of companies is only one of the many factors the Compensation Committee considers in setting compensation for PriceSmart’s named executive officers,Named Executive Officers, and actual compensation may vary based on the Compensation Committee’s review of other considerations, including the Company’s and the individual named executive officer’sNamed Executive Officer’s performance and the value of the executive’s leadership and other skills to the Company. The named executive officers may also realize compensation above target opportunity levels based on achieving outstanding results, which is measured in large part based on Company performance relative to the annual financial

Executive and operational goals set by theDirector Compensation Committee. This approach is intended to ensure that there is a direct relationship between overall performance in the achievement of financial and operational goals and each individual named executive officer’s total compensation.(continued)

Elements of Compensation

Named Executive Officer compensation consistsduring fiscal year 2016 consisted of the following elements:

Base Salary. Base salaries for the named executive officersNamed Executive Officers were initially established either when they were hired into the position from outside the Company (the most recent such hire being October 1, 2004), or over an extended period as they were promoted to increasing levels of responsibility within the Company. Base salaries for the named executive officersNamed Executive Officers are generally established based on the scope of their responsibilities, level of experience and individual performance, taking into account both external competitiveness and internal equity considerations. While the goal for the base salary component is to compensate executives at a level that is competitive with the salaries of executives in comparable positions among our peer group, the Compensation Committee does not attempt to set base salaries at a certain target percentile within the peer group. Instead, the Compensation Committee considers the peer group information as merely a means by which to confirm that its base salary determinations based on the other factors described above are competitive within the peer group. In September 2015, at the time the annual management bonus program for fiscal 2016 would have been adopted, the Compensation Committee reset the annual base salary of each of the Named Executive Officers to compensate for the elimination of the annual bonus. The Compensation Committee considered the actual bonus payments made to the named executives over the previous three fiscal years. They ranged from 15.0% to 26.2% of annual salary for the Named Executive Officers, excluding the Chief Executive Officer, and from 18.3% to 33.6% of annual salary for the Chief Executive Officer. The Committee determined that an 18% increase in annual pay for the Named Executive Officers and the Chief Executive Officer was appropriate to insure a competitive level of cash compensation without the annual bonus.

The Compensation Committee annually evaluates the base salary levels of the named executive officersNamed Executive Officers to ensure that there is consistency within the Company based upon scope of responsibility and also to ensure that the base salaries are not excessive relative to otherthe peer companies of similar size.listed above. In establishing changes to base salaries, the Compensation Committee may consider the overall financial condition of the Company but does not make changes to executive salaries based on the achievement of any particular financial criteria.

Executive Compensation (continued)

In January 2014,2016, all of the named executive officersNamed Executive Officers received increases to their base salaries of 2%3%. The increase in base pay for non-executive U.S.-based employees within the Company was 3.4%3%. Mr. Laparte received an increase of $11,444,$21,300, Mr. Heffner received an increase of $6,732, Mr. Gans received an increase of $6,997,$12,540, Mr. Naylon received an increase of $8,160, and$15,180, Mr. Martin received an increase of $7,140.$13,290 and Mr. Hildebrandt received an increase of $11,760. In each case, these increases were intended to maintain base salaries at an appropriate level based upon the Compensation Committee’s review of peer group companies and taking into account general economic inflation.

Annual Management Bonus Program. The Company emphasizes pay-for-performance through an annual management bonus program. All named executive officers with at least six months of service who meet a minimum level of acceptable performance are eligible to participate in the program. Under the program, the Compensation Committee sets target bonus ranges for each participant. Actual bonuses are awarded only if the Company achieves certain levels of operating income and warehouse sales approved by the Compensation Committee. In establishing the levels of operating income and warehouse sales that would result in bonus payments at the threshold, target, and maximum levels, the Compensation Committee considers (1) the operating income and warehouse sales achieved by the Company in the year just completed; (2) the budgeted level of performance set by the Board of Directors for the current fiscal year; (3) the level of bonus payments that would be made to management at differing levels of performance as compared to levels of operating income and warehouse sales; and (4) whether the targets established are consistent with our longer-term business strategy and will not encourage undue risk taking by management simply to achieve a short term objective. After considering these factors, the Compensation Committee applies its judgment to establishing the target levels of performance for the various bonus levels.

In fiscal 2014, payment of a bonus unit to each named executive officer was contingent upon our achieving specified levels of targeted operating income, including currency gain/loss, of $133.7 million. Minimum performance of $130.0 million of operating income was required for any bonus payouts, with performance between $130.0 million and $133.7 million of operating income resulting in bonuses, as follows: 25% of the target bonus amount, or “bonus unit,” for operating income at $130.0 million of operating income, 50% of the bonus unit at $131.2 million of operating income, 75% of the bonus unit at $132.4 million of operating income and 100% of the bonus unit at $133.7 million of operating income. The 2014 program also allowed for (1) an additional bonus amount, of up to 100% of an executive’s bonus unit, with 50% for achievement of net warehouse sales above $2.480 billion with a maximum payout at net warehouse sales above $2.505 billion; and 50% of a bonus unit for achievement of operating income above $134.5 million with a maximum payout at operating income above $137.4 million; and (2) a second additional bonus amount, of up to 100% of an executive’s bonus unit, 50% for achievement of net warehouse sales above $2.514 billion with a maximum payout at net warehouse sales above $2.550 billion, and 50% for achievement of operating income above $138.4 million with a maximum payout at operating income above $142.4 million. The program allowed for an executive to begin receiving a bonus related to operating income over $138.4 million only if net warehouse sales exceeded $2.505 billion. The bonus unit for each of Messrs. Heffner, Gans, Naylon and Martin was 15% of annual salary as of August 31, 2014. However, if the maximum levels of both net warehouse sales and operating income were achieved, then each of these executives’ maximum bonus would be three times the bonus unit (or 45% of salary). The bonus unit for Mr. Laparte was $110,000. At that same achievement level, Mr. Laparte’s maximum bonus would be $330,000.

For fiscal 2014, our operating income was $137.7 million and net warehouse sales were $2.444 billion. Accordingly, the Company paid annual incentive bonuses to each of our named executive officers at 1.5 times their bonus units. The amounts paid to the named executive officers under the annual management bonus program for fiscal 2014 are disclosed in the Summary Compensation Table below as Non-Equity Incentive Plan Compensation. The named executive officers received the bonus amounts dictated by the 2014 Management Bonus Program, as described above, with no adjustment.

The Compensation Committee reserves the right to apply its judgment to the bonus amounts actually paid based on factors that may affect reported operating income, both positively and negatively, and specifically approves the payments made to our named executive officers. The Compensation Committee does not currently have specific guidelines regarding the exercise of such judgment by the Compensation Committee.

Executive Compensation (continued)

Long-Term Incentive Compensation. We believe that long-term incentives for higher level executives are consistent with the values and culture of the Company and therefore should be an integral and more important part of the overall executive compensation program and that ourprogram. Our long-term performance will be enhanced through the use of equity awards that reward Company executives for maximizing stockholder value over time. While we previously used stock options as the primary long-termWe provide equity incentive vehicle, in January 2006 we instead began usingincentives through restricted stock grants. The restricted stock vestsawards that vest based on continued employment over the vesting period, which historicallyperiod. The Company does not provide annual restricted stock grants. Rather individual awards are granted from time to time based upon the current level of unvested shares an executive has not exceeded five years. However,from previous grants for retention and incentive purposes. In January 2012, the named executive officers in January 2012Named Executive Officers other than Mr. Laparte received long-term retention awards that had varying vesting periods related to the ages of our named executive officerssuch Named Executive Officers, such that final vesting will occur up to but not beyond the executive’s attainment of age 66. These awards at the time they were granted vested over eight years (for Mr. Heffner), and ten years (for Messrs. Naylon, Martin and Martin)Hildebrandt). In April 2013, Mr. Laparte received a long-term retention award that provided for vesting in equal amounts in 2016, 2017 and originally2018. In November 2015, the Named Executive Officers received long-term retention awards as part of the overall redesign of the compensation program to eliminate annual bonuses and increase long-term incentives. These awards provided for equal vesting over five years (forwith the first vest on August 29, 2016. The award for Mr. Gans). Mr. Gans’ grant was acceleratedLaparte provided for 40% of the award to vest in fullequal parts on August 29, 2016, 2017 and 2018 and 60% of the award to vest in 2015. The Company did not make any restricted stock awards to Messrs. Gans, Heffner, Naylon or Martinequal parts in fiscal year 2014 or 2013 because the2019 and 2020.

Executive and Director Compensation Committee believes that the grants provided in fiscal year 2012 were substantial enough in value and provided for vesting over sufficiently long time periods as to meet the objectives of long-term equity compensation as noted below for these individuals.(continued)

PriceSmart has used restricted stock as the primary long-term incentive vehicle because:

We mayexpect to continue to use restricted stock, or other long-term incentives, to achieve these objectives.further enhance the connection to stockholder value over the longer-term.

In determining the number of shares of restricted stock to be granted to our named executive officers,Named Executive Officers and the vesting schedules applicable to such awards, the Compensation Committee takes into account the individual’s position, age, scope of responsibility, ability to affect profits and stockholder value and the value of restricted stock in relation to other elements of the individual executive’s total compensation. All awards of restricted stock are made by the Compensation Committee. We do not have equity ownership requirements or guidelines.

Our named executive officersNamed Executive Officers recognize taxable income from restricted stock when and as shares vest. On each vesting date, the Company repurchases a portion of the shares vesting on such vesting date from the participant to cover the tax obligations triggered by the vesting. The Company repurchases the shares at their fair market value on the date of vesting and pays this amount directly to the taxing authorities. PriceSmart generally receives a corresponding tax deduction for compensation expense in the year of vesting, subject to limits on the deductibility of compensation in excess of $1.0 million paid to certain executives under Internal Revenue Code Section 162(m) when the compensation does not qualify as “performance-based.” The amount included in the participant’s wages upon such vesting, and, subject to Section 162(m), the amount we may deduct, is equal to the fair market value of a share of Common Stock on the date the shares vest, multiplied by the number of shares vesting.

Severance and Change in Control Payments. We have entered into agreements and maintain plans that require us to make payments and/or provide benefits to our named executive officersNamed Executive Officers under specified circumstances in the event of a termination of their employment or a change in control. We provide for certain severance benefits in the event that a named executive officer’sNamed Executive Officer’s employment is involuntarily terminated. Such severance benefits are designed to alleviate the financial impact of an involuntary termination through salary continuation and with the intent of providingare intended to provide for a stable work environment. We believe that reasonable severance benefits for our named executive officersNamed Executive Officers are important because it may be difficult for our executive officers to find comparable employment within a short period of time following certain qualifying terminations. In addition to normal severance, we provide for accelerated vesting of all equity awards for all employees in the event of a change in control as a means of

Executive Compensation (continued)

reinforcing and encouraging the continued attention and dedication of itsour employees to their duties of employment without personal distraction or conflict of interest in circumstances which could arise from the occurrence of a change in control. We believe that the interests of stockholders will be best served if the interests of our senior management are aligned with them, and providing these change-in-control benefits should eliminate, or at least reduce, the reluctance of senior management to pursue potential change in control transactions that may be in the best interests of stockholders.

The Company provides severance, continuity and change-in-control benefits because they are essential to help us fulfill our objectives of attracting and retaining key managerial talent. These agreements are intended to be competitive with those of similarly sized companies in our industry and company size and to attract and retain highly qualified individuals. While these arrangements form an integral part of the total compensation provided to these individuals and are considered by the Compensation Committee when determining executive officer compensation, the decision to offer these benefits did not influence the Compensation Committee’s determinations concerning other direct compensation or benefit levels.

Executive and Director Compensation (continued)

Other Benefits. PriceSmart’s named executive officersNamed Executive Officers are eligible to participate in all of our employee benefit plans, such as our 401(k) plan and our medical, dental, vision, long and short-term disability and life insurance plans, in each case on the same basis as other employees. We also offer our Chief Executive Officer and President a housing allowance and travel benefits in accordance with his employment agreement described below. The Compensation Committee believes that these perquisites are no greater than competitors’ practices.

Compensation Committee Report

We have reviewed and discussed with management the Compensation Discussion and Analysis required to be included in this Proxy Statement. Based on the reviews and discussions referred to above, we recommend to the Board of Directors that the Compensation Discussion and Analysis referred to above be included in our Proxy Statement.

The foregoing has been furnished by the Compensation Committee.

Sherry Bahrambeygui

Katherine L. Hensley

Sherry Bahrambeygui

Leon C. Janks

Mitchell G. LynnPierre Mignault

Compensation Committee Interlocks and Insider Participation

The Compensation Committee is comprised of Ms. HensleyBahrambeygui and Ms. Bahrambeygui,Hensley, and Messrs. Janks and Lynn.Mignault. No interlocking relationship exists between any member of the Compensation Committee and any member of any other company’s Board of Directors or compensation committee. During fiscal 2014, Mr. Lynn had a relationship with the Company requiring disclosure under Item 404 of Regulation S-K. Please see the section entitled “Certain Transactions—Related Party Transactions” of this Proxy Statement for additional information about this relationship.

Executive and Director Compensation (continued)

Executive Compensation

Summary of Compensation

The following table shows information regarding the compensation earned by any person who served as our Chief Executive Officer or Chief Financial Officer during the fiscal year ended August 31, 20142016 and the three other most highly compensated executive officers who were serving as executive officers at August 31, 2014.2016. These persons are referred to as the Company’s “named executive officers”“Named Executive Officers” elsewhere in this Proxy Statement.

Summary Compensation Table

Executive and Director Compensation (continued)

Grants of Plan-Based Awards

The following table sets forth certain information with respect to grants of plan-based awards for the fiscal year ended August 31, 20142016 to the named executive officers.

Grants of Plan-Based AwardsNamed Executive Officers.

Employment Contracts

TheEffective September 1, 2015, the Company hasentered into new employment agreements with each of our namedthe Named Executive Officers that automatically renew each year unless either the Company or the executive officers.provides at least 60 days’ notice that the Company or executive, as the case may be, wishes to terminate the agreement. On September 1, 2016, these agreements automatically renewed. Each employment agreement currently has a one-year term and aspecified the base salary amount which is amended each time a determination is made to renew the agreement or increase the base salary. Each agreement statesin effect on September 1, 2015 and provides that the executive is eligible to participate in our bonus plan and to receive all other benefits offered to officers under our standard company benefits practices and plans. Underamount may be increased, but not decreased, at the agreements,Company’s discretion. On September 1, 2015 the executive may terminateCompensation Committee reset the agreement at any time on 90 days prior written notice. We may terminate the executive’s employment with or without cause upon immediate notice thereof, or upon the death or disability of the executive. The executive may not engage in any activities, with or without compensation, that would interfere with the performance of his duties or that would be adverse to our interests without our prior written consent. In the event that we terminate the agreement for any reason other than cause, death or disability, the executive will be entitled to the continuation of hisannual base salary for one year, payable in conformity with our normal payroll period. If the agreement expires and is not renewed by the Company upon expiration of the employment term with at least the same base annual salary or does not thereafter continue upon other mutually agreeable terms, the executive will be entitled to the continuation of his base salary for one year, reduced by any compensation he may receive from another employersalaries as follows:

Executive and Director Compensation (continued)

The employment agreements state that the executive is eligible to participate in the Company’s bonus plan in effect at the time and to receive all other benefits offered to senior executives of the Company under the Company’s benefit practices and plans. The Company discontinued its annual bonus plan for fiscal 2016, so there was no payment required to be made thereunder during fiscal 2016.

In addition to termination at the end of the term if one party elects to terminate the agreement, the executive may terminate his employment on 60 days’ prior written notice. The Company may terminate the executive’s employment with cause upon immediate notice or without cause upon 30 days’ prior written notice. In the event that year. Except as noted below,(i) the foregoing severance benefits areCompany terminates an executive’s employment without “cause”; (ii) upon termination due to an executive’s “disability;”(iii) the exclusive benefitsexecutive terminates his employment for “good reason;” or (iv) the Company elects to cause the non-renewal of the employment agreement such that would be payableit expires at the end of its then-current term, subject to the executive under his agreement by reasonproviding a release to the Company, the executive will be entitled to:

Upon an executive’s death, the executive’s estate will be entitled to receive continued contribution of histhe premium cost for executive’s eligible dependents’ participation in the Company’s group health plan for 12 months and payment of any accrued but any unpaid bonus for year prior to termination and wea pro rata bonus for the year of termination (payable when all other bonuses are not obligated to segregate any assets or procure any investment in order to fund such severance benefits. paid).

The employment agreements also contain confidentiality provisions, restrictions on solicitation of employees and interference with the Company’s customers and contracts, and other terms and conditions customary to executive employment agreements.

The following table showsIn addition to the name and titles of the named executive officers withforegoing, Mr. Laparte’s employment agreements, as well as the current expiration date:

Pursuant to his agreement Mr. Laparte also is entitled to receive anprovides for a $50,000 annual housing allowance, of $50,000 and upreimbursement for three round trip tickets from San Diego to 11 round-trip tickets annually between Mexico City for his wife and children, a total of eight round trips from Mexico City to San Diego, which may be used by any additional family members, and reimbursement of reasonable moving expenses to Mexico upon termination of Mr. Laparte’s employment other than by the Company for “cause” or by Mr. Laparte without “good reason” and members ofwithout 60 days’ prior notice.

On August 11, 2016, Thomas Martin announced his family.

For purposes of the employment agreements, “cause” generally means the executive’s (1) repeated and habitual failureplans to perform his dutiesretire, effective August 31, 2016. He was not entitled to any severance or obligations hereunder, (2) engaging in any act that has a direct, substantial and adverse effect on the Company’s interests, (3) personal dishonesty, willful misconduct, or breach of fiduciary duty involving personal profit, (4) intentional failure to perform his stated duties, (5) willful violation of any law, rule or regulation which materially adversely affects his ability to discharge his duties or has a direct, substantial and adverse effect on the Company’s interests, (6) any material breach of the employment agreement by the executive (if applicable), or (7) the executive’s willful breach of duty in the course ofother payments under his employment or habitual neglect of his duty or continued incapacity to perform it.agreement.

Equity Incentive Plans

Prior to January 22, 2013 the Company had three active Equity Incentive Plans. On January 22, 2013, the Company adopted the 2013 Equity Incentive Award Plan and agreed not to issue any additional awards under these Prior Plans.

2001 Equity Participation Plan

The 2001 Equity Participation Plan of PriceSmart, Inc. (the “2001 Plan”) has a total of 34,23618,102 shares outstanding as of October 31, 2014,2016, comprised of options to purchase an aggregate of 7,000 shares of Common Stock at prices ranging from $16.34 to $20.01 per share and 27,23618,102 shares subject to outstanding and unvested restricted stock units.

The 2001 Plan provides that in the event of a “Change in Control” or a “Corporate Transaction,” each as defined in the 2001 Plan, each outstanding award shall, immediately prior to the effective date of the Change in Control or Corporate Transaction, automatically become fully vested, exercisable or payable, as applicable, for all of the shares of Common Stock at the time subject to such award and, as applicable, may be exercised for any or all of those shares as fully vested shares of Common Stock.

Executive and Director Compensation (continued)

2002 Equity Participation Plan

The 2002 Equity Participation Plan of PriceSmart, Inc. (the “2002 Plan”) has a total of 409,951197,771 shares outstanding as of October 31, 2014,2016, comprised of options to purchase an aggregate of 16,000 shares of Common Stock at prices ranging from $40.40 to $67.92 per share and 393,951181,771 shares subject to outstanding and unvested restricted stock awards and restricted stock units.

Executive Compensation (continued)

The 2002 Plan provides that in the event of a “Change in Control” or a “Corporate Transaction,” each as defined in the 2002 Plan, each outstanding award shall, immediately prior to the effective date of the Change in Control or Corporate Transaction, automatically become fully vested, exercisable or payable, as applicable, for all of the shares of Common Stock at the time subject to such award and, as applicable, may be exercised for any or all of those shares as fully vested shares of Common Stock.

2013 Equity Incentive Award Plan

The 2013 Equity Incentive Award Plan of PriceSmart, Inc. (the “2013 Plan”) provides that the Compensation Committee of the Board of Directors or a subcommittee thereof may grant or issue incentive stock options, non-qualified stock options, stock purchase rights, stock appreciation rights, restricted stock, deferred stock, dividend equivalents, performance awards, stock payments and other stock related benefits, or any combination thereof.

The 2013 Plan provides for awards covering up to (1) 600,000 shares of Common Stock plus (2) the number of shares that remained available for issuance under the The 1998 Equity Participation Plan of PriceSmart, Inc., the 2001 Plan and the 2002 Plan (collectively, the “Prior Plans”) as of January 22, 2013. The number of shares reserved for issuance under the 2013 Plan increases during the term of the 2013 Plan by the number of shares relating to awards outstanding under the 2013 Plan or any of the Prior Plans that expire, or are forfeited, terminated, cancelled or repurchased, or are settled in cash in lieu of shares. However, in no event will more than an aggregate of 1,332,5401,141,769 shares of our Common Stock be issued under the 2013 Plan. As of October 31, 2014,2016, the 2013 Plan provided for the issuance of up to 888,353925,896 shares (including shares originally authorized for issuance under the Prior Plans), with 67,229319,778 shares subject to outstanding and unvested restricted stock awards and restricted stock units and 821,124606,118 shares remaining available for future grants.

The 2013 Plan provides that in the event of a “Change in Control” or a “Corporate Transaction,” each as defined in the 2013 Plan, each outstanding award shall, immediately prior to the effective date of the Change in Control or Corporate Transaction, automatically become fully vested, exercisable or payable, as applicable, for all of the shares of Common Stock at the time subject to such award and, as applicable, may be exercised for any or all of those shares as fully vested shares of Common Stock.

The Retirement Plan of PriceSmart, Inc.

In 1998, the Company established a retirement plan. The retirement plan is designed to be a “qualified” plan under applicable provisions of the Internal Revenue Code of 1986, as amended, covering all employees, who have completed 90 days of service, as defined in the retirement plan. Effective January 1, 2015, the 90-day waiting period for participation in the plan will be eliminated. Each year, participants may contribute up to 100% per pay period of their pre-tax annual compensation (as defined in the retirement plan) up to the maximum allowable by the Internal Revenue Code of 1986, as amended. Participants also may contribute amounts representing distributions from other qualified plans. Effective January 1, 2011, the Plan was amended to replace the Company match with a discretionary contribution of 4% of the employee’s eligible compensation up to the IRS maximum allowed to all employees regardless of their own salary deferrals. Prior to that amendment,Effective January 1, 2016, the Company providedbegan providing up to a 2% matching contribution equal to 100%non-officer employees who contribute at least 1% of the participant’s elective deferrals up to an annual maximum of 4% of base compensation.their eligible pay. Although the Company has not expressed any intent to do so, the Company has the right under the retirement plan to discontinue its contributions at any time and to terminate the retirement plan, subject to the provisions of Employee Retirement Income Security Act of 1974, as amended. All participants in the retirement plan are immediately vested in their accounts and earnings thereon.

Executive and Director Compensation (continued)

Outstanding Equity Awards at Fiscal Year End

The following table sets forth certain information with respect to outstanding equity awards at August 31, 20142016 with respect to the named executive officers.

Outstanding Equity Awards at Fiscal Year-End TableNamed Executive Officers.

Executive and Director Compensation (continued)

Option Exercises and Restricted Stock Vested

The following table sets forth certain information with respect to option exercises and the vesting of shares of restricted stock during the fiscal year ended August 31, 20142016 with respect to the named executive officers.Named Executive Officers.

Pension Benefits

Other than the Company’s retirement plan, which is described above, the Company does not have any plan that provides for payments or other benefits at, following, or in connection with, retirement for our named executive officers.Named Executive Officers.

Nonqualified Deferred Compensation

The Company does not have any plan that provides for deferred compensation.

Executive and Director Compensation (continued)

Severance and Change in Control Payments

The following table summarizes the potential payments to each Named Executive Officer in two different potential scenarios: (1) a termination of the Named Executive Officer without cause, and (2) a change in control without a termination of employment. The table assumes that the termination of employment or change in control occurred on August 31, 2016, the last business day of our last completed fiscal year. For purposes of estimating the value of accelerated vesting of equity awards to be received in the event of a change in control, the Company has assumed a price per share of our Common Stock of $83.53, which represents the closing market price of our Common Stock as reported on the Nasdaq Global Select Market on August 31, 2016 (the last trading day of fiscal 2016). As Mr. Martin retired on the last day of our fiscal year, the amounts listed next to his name below are the actual amount of compensation that he received in connection with his retirement. He would not be entitled to any additional compensation if there were to occur a change of control.

Director Compensation

Each non-employee director receives an annual retainer for serving on the Board of Directors.

Effective May 1, 2012,February 3, 2015, the Board of Directors adopted a newthe following cash compensation program for the non-employee directors. Under the program, each non-employee director receives an annual retainer of $25,000$36,000 per year for serving on the Board of Directors. Additionally, non-employee directors who also serve ason, but do not chair, committees receive an additional $5,000 per year per committee. Committee chairpersons of Committees receive additional annual retainers as follows: the chairperson of the Compensation Committee receives an additional annual retainer of $10,000,$15,000, the chairperson of the Finance Committee receives an additional annual retainer of $15,000, the chairperson of the Audit Committee receives an additional annual retainer of $35,000, and$19,000, the chairperson of the Nominating/Corporate Governance Committee receives an additional annual retainer of $5,000.$10,000, and the chairperson of the Audit Committee receives an additional annual retainer of $45,000. These annual retainers are paid on a quarterly basis.

Prior to May 1, 2012, each director was eligible to receive stock options pursuant to the Company’s 2001 Plan and the 2002 Plan. Under each of these plans, non-employee directors were entitled to receive initial grants of non-qualified stock options to purchase 3,000 shares of Common Stock upon becoming directors and additional grants of options to purchase 1,000 shares of Common Stock on the date of each annual meeting of stockholders at which the director was re-elected to the Board of Directors. Each year, the Company historically made a determination as to which equity plan the automatic non-employee option

Executive Compensation (continued)

awards were to be granted under for such year based in part on its review of the available share reserves under such equity plans. Non-employee directors did not receive automatic option grants under more than one equity plan during any year. These options provided for vesting in equal annual installments over a five-year period, with such vesting accelerating upon a change in control.

Pursuant to a resolution ofIn addition, effective February 3, 2015, the Board of Directors effective May 1, 2012, automatic stock option grants to non-employee directors upon election and re-election to the Board of Directors was suspended.

Effective May 1, 2012, following the suspension of the automatic option grant program, the Board of Directors granted to each non-employee director an award of 1,050 restricted stock units under the 2001 Plan, with dividend equivalents thereon, which number of restricted stock units was equal to (1) $75,000 divided by (2) the 30-trading-day average of the Company’s stock price prior to April 17, 2012. In addition, the Board of Directors adoptedamended a standing resolution pursuant to which a person who is initially elected or appointed to the Board of Directors, following May 1, 2012, and who is a non-employee director at the time of such initial election or appointment, will be automatically granted such number of restricted stock units, with dividend equivalents thereon, equal to (1) $75,000$100,000 divided by (2) the 30-trading-day average of the Company’s stock price prior to the date of such election or appointment.

Effective November 3, 2015, the Board of Directors granted to each non-employee director an award of 576 restricted stock units under the 2013 Plan, with dividend equivalents thereon, which number of restricted stock units was equal to (1) $47,000 divided by (2) the 30-trading-day average of the Company’s stock price prior to the grants. The foregoing awards will vest in three equal installmentsfull on the first three anniversaries of the date of grant,January 31, 2017, subject to the non-employee director’s continued service on the Board of Directors on each such vesting date. The vesting of all restricted stock units accelerates automatically upon a change in control.

Executive and Director Compensation (continued)

Mr. HansonMalino was granted 7291,208 restricted stock unit awards upon his appointment to the Board of Directors in April 2014.2016. At the same time, Mr. Malino was also granted an additional 568 shares in keeping with the grant to the non-employee directors in November 2015.

Directors also receive reimbursement for travel expenses incurred in connection with their duties as directors.

The following table sets forth a summary of the compensation we paid or was earned by our non-employee directors in the fiscal year ended August 31, 2014.

Director Compensation Table2016.

Executive Compensation (continued)

Severance and Change in Control Payments

The following table summarizes the potential payments to each named executive officer in two different potential scenarios: (1) a termination of the named executive officer without cause, and (2) a change in control without a termination of employment. The table assumes that the termination of employment or change in control occurred on August 31, 2014, the last business day of our last completed fiscal year. For purposes of estimating the value of accelerated vesting of equity awards to be received in the event of a change in control, the Company has assumed a price per share of our Common Stock of $89.62, which represents the closing market price of our Common Stock as reported on the Nasdaq Global Select Market on August 29, 2014 (the last trading day of fiscal 2014).

Risk Assessment

Management assessed the Company’s compensation program for the purpose of reviewing and considering any risks presented by the Company’s compensation policies and practices that are likely to have a material adverse effect on the Company.

As part of that assessment, management reviewed the primary elements of our compensation program, including base salary, annual short-term incentive compensation and long-term equity compensation. Management’s risk assessment included a review of the overall design of each primary element of our compensation program and an analysis of the various design features, controls and approval rights in place with respect to compensation paid to management and other employees that mitigate potential risks to the Company.

Following the assessment, management determined that the Company’s compensation policies and practices did not create risks that were reasonably likely to have a material adverse effect on the Company and reported the results of the assessment to the Compensation Committee.

Equity Compensation Plan Information

The following table sets forth the number and weighted-average exercise price of securities to be issued upon exercise or vesting of outstanding options, restricted stock units, warrants and rights, and the number of securities remaining available for future issuance under all of our equity compensation plans, at August 31, 2014.2016. For more information regarding the Company’s equity compensation plans, please see “Compensation Discussion and Analysis—Equity Incentive Plans” above.