SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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NOTICE OF 2022 ANNUAL MEETING AND PROXY STATEMENT |
VIRTUAL ANNUAL MEETING | MOLINE, ILLINOIS | FEBRUARY 23, 2022 |
WHO WE ARE
LEAPING FORWARD
For more than 180 years, John Deere ishas led the way in developing innovative solutions to help our customers become more efficient and productive. We conduct business essential to life. Running for the people who trust us and the planet that sustains us.
We produce intelligent, connected machines and applications that are helping revolutionize the agriculture and construction industries – and enable life to leap forward. Our technology-driven efforts are guided by a single, overarching goal – unlocking customer economic value. Our easy-to-use technology helps deliver results our customers see in the field, on the job site, and in their pockets.
Our smart industrial business strategy accelerates the integration of technology with our legacy of manufacturing excellence. We’re focused on delivering intelligent, connected machines and solutions toapplications that revolutionize our customers’production
systems in agriculture and construction businesses, unlocking economicto unlock customer value acrossin a sustainable and profitable manner.
We ensure seamless access to parts, services, and performance upgrades from take-home to trade-in by providing world-class support throughout the full lifecycle of their equipment with productivity and sustainability always in mind. And we never forget that we’re here to help life leap forward.
OUR CORE VALUES
In conducting business, we are guided by four core values that company founder John Deere was known for— Integrity, Quality, Commitment, and Innovation.
We apply those values in everything we do, from designing and manufacturing our products and services to delivering solutions to our customers that enable them to be more productive, profitable, and sustainable.
“I will never put my name on a product that does not have in waysit the best that are sustainable for all.is in me.”
– John Deere
Founder, 1837
January 7, 2022 DEAR FELLOW SHAREHOLDERS, On behalf of the Board of Directors and the senior management team, we cordially invite you to attend Deere & Company’s Annual Meeting of Shareholders, which will be held Wednesday, February 23, 2022, at 10 a.m. Central Standard Time at www.virtualshareholdermeeting.com/DE2022. As part of our continued precautions regarding the coronavirus and to support the health and well-being of our shareholders, the 2022 Annual Meeting of Shareholders will be held exclusively online. There will not be a physical location for the Annual Meeting and you will not be able to attend the meeting in person. At this meeting, you will have a chance to vote on the matters set forth in the accompanying Notice of Annual Meeting and Proxy Statement, and we will share a report on our operations. Your vote is important. Whether or not you plan to virtually attend the Annual Meeting, please vote by internet, telephone, or mail as soon as possible to ensure your vote is recorded promptly. The instructions set forth in the Proxy Statement and on the proxy card explain how to vote your shares. On behalf of the Board of Directors, thank you for your ongoing support of Deere & Company. | |||
| Sincerely, | |||
 |  | ||
John C. May Chairman of the Board | Charles O. Holliday, Jr. Presiding Director | ||
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Notice of 2022 Annual Meeting of Shareholders
| DATE | TIME | PLACE |
| Wednesday, February 23, 2022 | 10 a.m. Central Standard Time | www.virtualshareholdermeeting.com/DE2022 |
| As part of our continued precautions regarding the coronavirus and to support the health and well-being of our employees and shareholders, the 2022 Annual Meeting of Shareholders (the “Annual Meeting”) will be held exclusively online. There will not be a physical location for the Annual Meeting, and you will not be able to attend the meeting in person. To be admitted to the Annual Meeting at www.virtualshareholdermeeting.com/DE2022, you must enter the 16-digit control number on your proxy card, voting instruction form, or Notice of Internet Availability you previously received. See additional instructions on page 85. | ||
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January 8, 2021
DEAR FELLOW SHAREHOLDERS,
On behalf of the Board of Directors and the senior management team, we cordially invite you to attend Deere & Company’s Annual Meeting of Shareholders, which will be held Wednesday, February 24, 2021, at 10 a.m. Central Standard Time at www.virtualshareholdermeeting.com/DE2021. As part of our precautions regarding the coronavirus and to support the health and well-being of our shareholders, the 2021 Annual Meeting of Shareholders will be held exclusively online. There will not be a physical location for the Annual Meeting and you will not be able to attend the meeting in person.
At this meeting, you will have a chance to vote on the matters set forth in the accompanying Notice of Annual Meeting and Proxy Statement, and we will share a report on our operations.
Your vote is important. Even if you plan to participate in the Annual Meeting, please vote by internet, telephone, or mail as soon as possible to ensure your vote is recorded promptly. The instructions set forth in the Proxy Statement and on the proxy card explain how to vote your shares.
On behalf of the Board of Directors, thank you for your ongoing support of Deere & Company.
Sincerely,
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Notice of 2021 Annual Meeting of Shareholders
Your opinion is very important. Please vote on the matters described in the accompanying Proxy Statement as soon as possible, In addition to the Proxy Statement, we are sending you our Annual Report, which includes our fiscal | IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE VIRTUAL ANNUAL MEETING TO BE HELD ON FEBRUARY The Proxy Statement and Annual Report are available on our website at www.JohnDeere.com/stock. |
| At the Annual Meeting, shareholders will be asked to: | ||
| 1. | Elect the 11 director nominees named in the Proxy Statement (see page | 2. | Approve the compensation of Deere’s named | 3. | Ratify the appointment of Deloitte & Touche LLP as Deere’s independent registered public accounting firm for fiscal | 4. Approve the Deere & Company Nonemployee Director Stock Ownership Plan (see page 75). | 5. Vote on the Shareholder Proposal, if properly presented at the meeting (see page 79). | 6. Consider any other business properly brought before the meeting. |
| Please vote your shares | ||
Holders of record atof shares of Deere common stock as of the close of business on December 31, 2020, we2021, the record date, are entitled to vote. We encourage you to vote promptly in one of the following ways:
| BY TELEPHONE | BY MAIL | BY INTERNET | DURING MEETING | |||
| In the U.S. or Canada, you can vote your shares by calling 1-800-690-6903. | You can vote by mail by marking, dating, and signing your proxy card or voting instruction form and returning it in the postage-paid envelope. | You can vote your shares online at www.proxyvote.com. You will need the 16-digit control number on the Notice of Internet Availability, voting instruction form, or proxy card. | You can vote electronically at the Annual | |||
On behalf of the Board of Directors, I thank you for exercising your right to vote your shares.
For the Board of Directors,
Todd E. Davies, Corporate Secretary
Moline, Illinois, January 8, 20217, 2022
This Proxy Statement is issued in connection with the solicitation of proxies by the Board of Directors of Deere & Company for use at the Annual Meeting and at any adjournment or postponement thereof. |
1 DEERE & COMPANY2022 PROXY STATEMENT
Proxy Summary
Meeting Agenda and Voting Recommendations
This summary highlights selected information contained in this Proxy Statement, but it does not contain all the information you should consider. We urge you to read the whole Proxy Statement before you vote. You also may wish to review Deere’s Annual Report on Form 10-K for the fiscal year ended November 1, 2020.October 31, 2021. Deere uses a 52/53 week fiscal year ending on the last Sunday in the reporting period. Deere’s 2021, 2020, 2019, and 20182019 fiscal years ended on October 31, 2021, November 1, 2020, and November 3, 2019, and October 28, 2018, respectively. Unless otherwise stated, all information presented in this Proxy Statement is based on Deere’s fiscal calendar.
Meeting Agenda and Voting Recommendations
| Item | Item | Voting Standard | Vote Recommendation | Page Reference | Item | Voting Standard | Vote Recommendation | Page Reference | ||||||
| 1. | Annual election of directors | Majority of votes cast | FOR each nominee | 7 | Annual Election of Directors | Majority of votes cast | FOR each nominee | 8 | ||||||
| 2. | Advisory vote on executive compensation | Majority of votes present in person or by proxy | FOR | 26 | Advisory Vote on Executive Compensation | Majority of votes present in person or by proxy | FOR | 28 | ||||||
| 3. | Ratification of independent registered public accounting firm | Majority of votes present in person or by proxy | FOR | 71 | Ratification of Independent Registered Public Accounting Firm | Majority of votes present in person or by proxy | FOR | 72 | ||||||
| 4. | Approval of the Deere & Company Nonemployee Director Stock Ownership Plan | Majority of votes present in person or by proxy | FOR | 75 | ||||||||||
| 5. | Shareholder Proposal Regarding Special Shareholder Meeting Improvement | Majority of votes present in person or by proxy | AGAINST | 79 | ||||||||||
Director Nominee Highlights
Every member of our Board of Directors is elected annually. You are being asked to vote on the election of these 11 nominees, all of whom currently serve as directors.
| Committee Memberships | |||||||||||||||
| Name | Age | Director Since | Executive | Audit Review | Compensation | Corporate Governance | Finance | ||||||||
| Leanne G. Caret EVP, The Boeing Company and President and CEO, Boeing Defense, Space & Security | 55 | 2021 | ■ | ■ | |||||||||||
| Tamra A. Erwin EVP and Group CEO, Verizon Business Group | 57 | 2020 | ■ | ■ | |||||||||||
| Alan C. Heuberger Senior Investment Manager, Cascade Asset Management Company | 48 | 2016 | ■ | ■ | |||||||||||
| Charles O. Holliday, Jr. Retired Chairman and CEO, DuPont | 73 | 2007-2016; since 2018 | ■ | ■ | |||||||||||
| Michael O. Johanns Retired United States Senator from Nebraska and former U.S. Secretary of Agriculture | 71 | 2015 | ■ | ■ | |||||||||||
| Clayton M. Jones Retired Chairman and Chief Executive Officer, Rockwell Collins, Inc. | 72 | 2007 | ■ | ■ | CHAIR | ||||||||||
| John C. May Chairman, CEO, and President, Deere & Company | 52 | 2019 | CHAIR | ||||||||||||
| Gregory R. Page Chairman, Corteva, Inc. | 70 | 2013 | ■ | ■ | CHAIR | ||||||||||
| Sherry M. Smith Former EVP and CFO, SuperValu Inc. | 60 | 2011 | ■ | CHAIR | ■ | ||||||||||
| Dmitri L. Stockton Retired Special Advisor to Chairman and Senior VP, GE and Former Chairman, President, and CEO, GE Asset Management | 57 | 2015 | ■ | CHAIR | ■ | ||||||||||
| Sheila G. Talton President and CEO, Gray Matter Analytics | 69 | 2015 | ■ | ■ | |||||||||||
2 DEERE & COMPANY2022 PROXY STATEMENT
| Committee Memberships | ||||||||||||||
| Name | Age | Director Since | Executive | Audit Review | Compensation | Corporate Governance | Finance | |||||||
| Tamra A. Erwin Executive Vice President and Group CEO, Verizon Business Group | 56 | 2020 | ■ | ■ | ||||||||||
| Alan C. Heuberger Senior Manager, BMGI | 47 | 2016 | ■ | ■ | ||||||||||
| Charles O. Holliday, Jr. Chairman of Royal Dutch Shell plc | 72 | 2007-2016; since 2018 | ■ | ■ | ||||||||||
| Dipak C. Jain President (Europe), China Europe International Business School | 63 | 2002 | ■ | ■ | ||||||||||
| Michael O. Johanns Retired United States Senator from Nebraska | 70 | 2015 | ■ | ■ | ||||||||||
| Clayton M. Jones Retired Chairman, Rockwell Collins | 71 | 2007 | ■ | ■ | CHAIR | |||||||||
| John C. May Chairman, Chief Executive Officer, and President Deere & Company | 51 | 2019 | CHAIR | |||||||||||
| Gregory R. Page Chairman, Corteva, Inc. | 69 | 2013 | ■ | ■ | CHAIR | |||||||||
| Sherry M. Smith Former Executive VP and CFO, SuperValu | 59 | 2011 | ■ | CHAIR | ■ | |||||||||
| Dmitri L. Stockton Retired Special Advisor to Chairman and Senior VP, GE and Former Chairman, President, and CEO, GE Asset Management | 56 | 2015 | ■ | CHAIR | ■ | |||||||||
| Sheila G. Talton President and CEO, Gray Matter Analytics | 68 | 2015 | ■ | ■ | ||||||||||
Proxy Summary
Director Nominee Highlights
The board regularly assesses the diversity of its members and nominees as part of its annual evaluation process. We believe the 11 director nominees represent a diverse and broad range of attributes, qualifications, experiences, and skills to provide an effective mix of viewpoints and knowledge.
| STRONG BOARD DIVERSITY |
| DIVERSE REPRESENTATION | CORPORATE GOVERNANCE EXPERIENCE | |||
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| female directors | ||||
| ethnically diverse directors | |||
2 | ||||
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8 of 11 | ||||
| RANGE OF TENURES* | BALANCED MIX OF AGES* | INDEPENDENT OVERSIGHT | ||
Average Tenure: |
Average Age: 62 |
10 of 11 independent director nominees | ||
* Tenure and age are as of January 8, 2021.
* | Tenure and age as of January 7, 2022. |
| DIVERSE AND BALANCED MIX OF ATTRIBUTES AND EXPERIENCE |
3 DEERE & COMPANY2022 PROXY STATEMENT
Proxy SummaryFiscal 2020 Performance HighlightsAnnual Meeting of Shareholders
Annual Meeting of Shareholders
You are entitled to vote at the meeting if you were a holder of record of our common stock at the close of business on December 31, 2020.2021, the record date. Please see “Additional Information – Voting and Meeting Information – How Do I Vote?” for instructions on how to vote your shares and other important Annual Meeting information. If you wish to attend the virtual only shareholder meeting, see “Additional Information – Voting and Meeting Information – Virtual Meeting Information” for additional instructions.
Governance and Compensation Changes
Over our more than 180-year history, one of the things we have learned is the inevitability of change. As a result, we regularly assess what we do to determine how we can adapt and improve. This approach applies to our corporate governance and compensation plans as much as it does to our manufacturing processes and product innovation. Here is a summary of the changes we have made in recent years.made:
CORPORATE GOVERNANCE | |
| — | We adopted a bylaw, statement. |
| — | In 2020, shareholders approved and we adopted a bylaw providing that certain legal actions involving the Company will be litigated exclusively in the courts located in the State of Delaware where the company is incorporated. |
| — | In 2020, we adopted a bylaw amendment allowing eligible shareholders to call special shareholder meetings. |
| — | In 2020, due to COVID-19, we adapted and responded by adopting a bylaw amendment allowing meetings of shareholders to be held on such business day and at such time and place as may be designated by the Chair or Board, therefore allowing a virtual annual meeting. |
COMPENSATION | |
| — | The performance goals for our short-term incentive plan were significantly increased in 2018 to align more appropriately to our current enterprise strategy. |
| — | A downward |
| — | Effective with the three-year performance period ending in fiscal 2020, Performance Stock Units (PSUs) are |
| — | Effective with fiscal 2021, Wirtgen is fully integrated to the Operating Return on Operating Assets (OROA), Shareholder Value Added (SVA), and revenue metrics. For fiscal 2018, 2019, and 2020, the consolidated financials of the Wirtgen acquisition |
4 DEERE & COMPANY2022 PROXY STATEMENT
Proxy Summary
Fiscal 2021 Performance Highlights
Fiscal 20202021 Performance HighlightsDespite the global pandemic, Deere
In a number of ways, 2021 was a year of outstanding achievement for John Deere. It was a year in which we reported our strong financial results in 2020.while facing the challenges of an ongoing pandemic and work stoppage. Deere & Company (Deere or the Company) achieved a record $44.024 billion net sales and revenues ofcompared with $35.540 billion in fiscal 2020 compared with $39.258 billion in fiscal 2019.
Fiscal 2020 net income attributable to Deere & Company was $2.751 billion, the sixth best year in company history. This equated to $8.69 per share, compared with $3.253 billion, or $10.15 per share, in fiscal 2019.2020. Common stock closed at $225.91 on Oct. 30, 2020,$342.31 per share at the end of fiscal 2021, an increase of 2852 percent compared to $176.11$225.91 at the end of fiscal 2020.
Deere’s results reflected strong end-market demand and our ability to continue serving customers while managing supply-chain issues and conducting successful contract negotiations with our largest union. The business model we launched in 2019.2020 continued to yield impressive results. Not least, Deere delivered strong financial performance and solid returns for investors.
In 2020, Deere introduced a new operating model that will be effective in 2021 that could have a transformative impact on the business. It focuses on our customers’ production systems, advanced technologies, and aligning resources with
the products and services that deliver the highest return. At the same time,addition, customers responded positively to our new products and adopted precision technologies at a high rate.
Other financial highlights for the year include:
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| — |
For more information regarding our fiscal 20202021 financial performance, please see our Annual Report, which is available at www.JohnDeere.com/stock.
5 DEERE & COMPANY2022 PROXY STATEMENT
Proxy Summary
Fiscal 20202021 Performance Highlights
NET SALES | NET INCOME (1) | SHAREHOLDER | ||||||
(Millions) | (Millions) | |||||||
  |   |   | ||||||
| Net sales and revenues | Net income | Enterprise Shareholder Value Added (SVA) increased | ||||||
| (1) Net income attributable to Deere & Company. | ||||||||
| (2) SVA is a non-GAAP measure. Further details can be reviewed in Appendix B. | ||||||||
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| EQUIPMENT OPERATIONS | EQUIPMENT OPERATIONS | FINANCIAL SERVICES RETURN ON EQUITY | ||||
 |  |  |  | |||||
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| (3) Normal means mid-cycle. OROA is a non-GAAP measure. See Appendix B for details. Prior numbers have been adjusted to exclude goodwill. | ||||||||
TOTAL SHAREHOLDER RETURN (TSR) | CASH FLOW FROM OPERATING ACTIVITIES (Millions)
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 | ||
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6 DEERE & COMPANY2022 PROXY STATEMENT
Proxy Summary
Fiscal 2021 Executive Compensation Highlights
Fiscal 20202021 Executive Compensation Highlights
Fiscal 2020 Executive Compensation Highlights
Our compensation programs and practices are designed to create incentive opportunities for advancing our shareholders’ long-term interests. We use metrics that align with our business strategy and motivate our executives to create value for shareholders at all points in the business cycle. For fiscal 2020, we had three separate2021, the variable pay components (described below) — Short-Term Incentive (STI), Long-Term Incentive Cash (LTIC),are made up of both short-term and Long-Term Incentive (LTI) —long-term metrics, which stimulate complementary behaviors.
behaviors and align with Deere’s pay for performance compensation philosophy.
| This metric | For this type of compensation | Contributes to this goal | ||||
 | Operating Assets (OROA) (1)(2) | Annual cash bonus (known within Deere as STI) | exceptional operating performance for Equipment Operations | |||
| Return on | exceptional operating performance for Financial Services | |||||
| Net Sales and Revenues | importance of sustainable growth in near-term decisions | |||||
 | Shareholder Value Added (SVA) (2) | Long-term cash (known within Deere as LTIC) | sustainable, profitable growth | |||
| Total Shareholder Return (TSR) | exceptional equity appreciation | |||||
| Revenue | Long-term equity (known within Deere as LTI) | sustainable growth |
| (1) | OROA is a non-GAAP measure. The Equipment Operations OROA calculation excludes the assets from our Financial Services segment and certain corporate assets. Corporate assets are primarily the Equipment Operations’ goodwill, retirement benefits, deferred income tax assets, marketable securities, and cash and cash equivalents. ROE is based solely on the Financial Services segment. See Appendix B for details. |
| (2) | Wirtgen is |
For information about the metrics we use to measure compensation and the resulting payouts, see the Executive Summary of the Compensation Discussion and Analysis (CD&A).
The table below highlights the 20202021 compensation for the Chairman and CEO and, on average, for all the other named executive officers (NEOs) as disclosed in the Fiscal 20202021 Summary Compensation Table. The table also shows how muchthe significant amount of at-risk compensation wasthat is performance based and the amount delivered in cash (versus equity) and the significant portion that is performance-based and therefore at risk.versus equity.
| Summary Compensation Table Elements | Salary | STI | LTIC | Performance Stock Units | Restricted Stock Units and Stock Options | Retirement and Other Compensation | Total |
| Chairman and CEO(a) | |||||||
| Compensation | $1,199,245 | $2,180,768 | $1,560,484 | $5,003,327 | $4,499,825 | $1,144,735 | $15,588,384 |
| % of Total | 8% | 14% | 10% | 32% | 29% | 7% | 100% |
| Cash vs. Equity | Total Cash 32% | Total Equity 61% | Other 7% | 100% | |||
| Short-Term vs. Long-Term | Short-Term 22% | Long-Term 78% | 100% | ||||
| Fixed vs. Performance-Based | Fixed 8% | Performance-Based 85% | Other 7% | 100% | |||
| Average Other NEO | |||||||
| Compensation | $769,352 | $932,686 | $1,364,587 | $1,316,352 | $1,183,991 | $739,366 | $6,306,334 |
| % of Total | 12% | 15% | 22% | 21% | 19% | 11% | 100% |
| Cash vs. Equity | Total Cash 49% | Total Equity 40% | Other 11% | 100% | |||
| Short-Term vs. Long-Term | Short-Term 27% | Long-Term 73% | 100% | ||||
| Fixed vs. Performance-Based | Fixed 12% | Performance-Based 77% | Other 11% | 100% | |||
7 DEERE & COMPANY2022 PROXY STATEMENT | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Item 1 – Election of Directors
How We Identify and Evaluate Director Nominees
The Corporate Governance Committee of the Board is responsible for screening candidates and recommending director nominees to the full Board. The Board nominates the slate of directors for election at each Annual Meeting of Shareholders and elects directors to fill vacancies or newly created Board seats.
The Corporate Governance Committee considers candidates recommended by shareholders, directors, officers, and third-party search firms. Third-party search firms may be used to identify and provide information on director candidates. Tamra A. Erwin was recommended as a director by non-management directors and a third-party search firm. If you wish to nominate a director, please review the procedures described under “Additional Information – 20222023 Shareholder Proposals and Nominations” in this Proxy Statement. The Corporate Governance Committee evaluates all candidates in the same manner, regardless of the source of the recommendation.
Deere’s Corporate Governance Policies, which are described in the “Corporate Governance” section of this Proxy Statement, establish the general criteria and framework for assessing director candidates. In particular, the Corporate Governance Committee considers each nominee’s skills, experience, international versus domestic background, age, and diversity, as well as legal and regulatory requirements and the particular needs of the Board at the time. The Committee implements these criteria, including diversity, by considering the information about the nominee provided by the proponent, the nominee, third parties and other sources. In addition, the Board assesses the diversity of its members and nominees as part of an annual performance evaluation by considering, among other factors, diversity in expertise, experience, background, ethnicity, race, and gender. We believe a Board composed of members with complementary skills, qualifications, experiences, and attributes is best equipped to meet its responsibilities effectively.
Any director who experiences a material change in occupation, career, or principal business activity, including retirement, must tender a resignation to the Board. Upon recommendation from the Corporate Governance Committee, the Board may decline to accept any such resignation. Directors must retire from the Board upon the first Annual Meeting of Shareholders after reaching the age of 75, except as approved by the Board.
8 DEERE & COMPANY2022 PROXY STATEMENT
Election of DirectorsBoard DiversityItem 1 – Election of Directors
Director Nominees
The Corporate Governance Committee has recommended, and the Board has nominated, each of Leanne G. Caret, Tamra A. Erwin, Alan C. Heuberger, Charles O. Holliday, Jr., Dipak C. Jain, Michael O. Johanns, Clayton M. Jones, John C. May, Gregory R. Page, Sherry M. Smith, Dmitri L. Stockton, and Sheila G. Talton to be elected for terms expiring at the Annual Meeting in 2022. All of the nominees2023.
There are currentcurrently twelve members of the Board, but Deere’s CertificateBoard. Mr. Jain is not standing for re-election at the 2022 Annual Shareholder Meeting. On the date of Incorporation and good governance practices require all membersthe Annual Meeting, the size of the Board will be reduced to be elected annually.eleven members.
We have confidence that this talented slate of nominees will lead Deere capably in the year ahead. We discuss the nominees’ professional backgrounds and qualifications in the shortbrief biographies that follow.
  | THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FORALL 11 NOMINEES. |
Board Diversity
The Corporate Governance Committee believes that our Board is most effective when it embodies a diverse set of viewpoints and practical experiences. To maintain an effective Board, the Corporate Governance Committee considers how each nominee’s particular background, experience, qualifications, attributes, and skills will contribute to Deere’s success. As shown below, the independent members of our Board nominees have a range of viewpoints, backgrounds, expertise, and attributes.
| DIVERSE BOARD REPRESENTATION | ||
  | ||
| female directors | |
| ethnically diverse directors | |
2 | Board committees led by diverse directors | |
| RANGE OF |
Average Tenure: |
| BALANCED MIX OF AGES* |
Average Age: 62 |
| * Tenure and age as of January 7, 2022. |
BOARD MEMBER SKILLS
| Executive | Manufacturing | International | Academic | Agriculture | Technology/Data Analytics | Finance | Risk Management | Corporate Governance | ||||||||||
| Leanne G. Caret | ■ | ■ | ■ | ■ | ■ | ■ | ||||||||||||
| Tamra A. Erwin | ■ | ■ | ■ | ■ | ■ | |||||||||||||
| Alan C. Heuberger | ■ | ■ | ■ | ■ | ■ | |||||||||||||
| Charles O. Holliday, Jr. | ■ | ■ | ■ | ■ | ||||||||||||||
| Michael O. Johanns | ■ | ■ | ■ | ■ | ||||||||||||||
| Clayton M. Jones | ■ | ■ | ■ | ■ | ■ | |||||||||||||
| John C. May | ■ | ■ | ■ | |||||||||||||||
| Gregory R. Page | ■ | ■ | ■ | ■ | ■ | |||||||||||||
| Sherry M. Smith | ■ | ■ | ■ | ■ | ||||||||||||||
| Dmitri L. Stockton | ■ | ■ | ■ | ■ | ■ | |||||||||||||
| Sheila G. Talton | ■ | ■ | ■ | ■ |
■ Audit committee financial expert under Securities and Exchange Commission (SEC) rules
9 DEERE & COMPANY2022 PROXY STATEMENT
Election of Directors
Item 1 – Election of Directors
Age: 55 Director since: Committees: Compensation, | LEANNE G. CARET | ||
| Executive Vice President of The Boeing Company and President and Chief Executive Officer of Boeing Defense, Space & Security (since 2016) | |||
Past Positions at The Boeing Company (aircraft, defense, intelligence and satellite systems and services, and related financing) | |||
— President, Global Services & Support – 2015 to 2016 — Chief Financial Officer and Vice President, Finance, Defense, Space & Security – 2014 to 2015 — Vice President and General Manager, Vertical Lift – 2013 to 2014 | — Vice President, H-47 Programs, Vertical Lift – 2009 to 2013 — General Manager, Global Transport & Executive Systems – 1998 to 2009 | ||
Key Qualifications, Experiences, and Attributes In addition to her professional background and prior Deere Board experience, the following qualifications led the Board to conclude that Ms. Caret should serve on Deere’s Board of Directors: her leadership qualities developed from her experience while serving as Executive Vice President of The Boeing Company, President and Chief Executive Officer of Boeing Defense, Space & Security and as an officer of other global operations; the breadth of her experiences in global operations in manufacturing and high-technology industries, global supply chain operations, financial management, business acquisitions and integrations, government contracting, diversity and inclusion strategies, and other areas of oversight while serving as an executive officer of The Boeing Company; and her subject matter knowledge in the areas of digital engineering and advanced manufacturing solutions, development of advanced and new technologies, automation and investor relations. | |||
Age: 57 Director since: 2020 Committees: Compensation, Corporate Governance | TAMRA A. ERWIN | |||
| Executive Vice President and Group Chief Executive Officer of Verizon Business Group | ||||
Past Positions at Verizon Communications Inc. (communications, information and entertainment products and services) | ||||
—Executive Vice President and Chief Operating Officer, Verizon Wireless Group – 2016 to 2019 —Group President, Consumer and Mass Business Markets Sales and Service – 2015 to 2016 | —President, National Operations, Wireline/Consumer and Mass Business Markets – 2013 to 2015 —Corporate Chief Marketing Officer – 2012 to 2013 —President, West Area – 2008 to 2011 | |||
Key Qualifications, Experiences, and Attributes | ||||
In addition to her professional background and prior Deere Board experience, the following qualifications led the Board to conclude that Ms. Erwin should serve on Deere’s Board of Directors: her leadership qualities developed from her experience while serving as a senior executive and as Executive Vice President, Chief Executive Officer and Chief Operating Officer of Verizon Group businesses; the breadth of her experiences in product and service development, customer service operations and support, marketing, sales, and strategic planning, and other areas of oversight while serving as an executive officer of Verizon Communications Inc.; and her subject matter knowledge in the areas of advanced communications and information technology products and services, customer relations, and human resources. | ||||
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Election of Directors
Item 1 – Election of Directors
Age: 48 Director since: Committees: Audit Review, Finance | ALAN C. HEUBERGER
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| Senior Investment Manager, Cascade Asset Management Company (formerly BMGI) (since 2021) | |||
Past Positions at BMGI (private investment management) | |||
— Senior Manager — 2004 to 2021 —Investment Analyst — 1996 to 2004 | |||
Key Qualifications, Experiences, and Attributes | |||
In addition to his professional background and prior Deere Board experience, the following qualifications led the Board to conclude that Mr. Heuberger should serve on Deere’s Board of Directors: his leadership qualities developed from his service as | |||
Election of DirectorsItem 1 – Election of Directors
Age: 73 Director since: Committees: Compensation, | CHARLES O. HOLLIDAY, JR. | ||
| Retired Chairman and Chief Executive Officer of DuPont and Former Chairman of Royal Dutch Shell plc | |||
Past Positions | Other Current Directorships | ||
— Chairman of Royal Dutch Shell plc (oil and natural gas exploration, refining and product sales) | |||
—Chairman of the National Academy of Engineering (nonprofit engineering institution) — 2012 to 2016 —Chairman of Bank of America Corporation (banking, investing, and asset management) — 2010 to 2014 —Chairman from 1999 to 2009 and Chief Executive Officer from 1998 through 2008 of DuPont (agricultural, electronics, material science, safety and security, and biotechnology) |
—HCA Healthcare, Inc. Previous Directorships —Royal Dutch Shell plc
—CH2M HILL Companies, Ltd. | ||
Key Qualifications, Experiences, and Attributes | |||
In addition to his professional background and prior Deere Board experience, the following qualifications led the Board to conclude that Mr. Holliday should serve on Deere’s Board of Directors: his leadership qualities developed from his experiences while serving as Chairman of Royal Dutch Shell, Chairman of the National Academy of Engineering, Chairman of Bank of America Corporation, and Chairman and Chief Executive Officer of DuPont; the breadth of his experiences in auditing, compensation, and other areas of oversight while serving as a member of the boards of directors of other global corporations; and his subject matter knowledge in the areas of engineering, finance, business development, and corporate responsibility. | |||
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Election of Directors
Item 1 – Election of Directors
Age: 71 Director since: Committees: Compensation, | MICHAEL O. JOHANNS | |||
| Retired U.S. Senator from Nebraska and former U.S. Secretary of Agriculture | ||||
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— 2015 — 2007 — 2005 | — |
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Key Qualifications, Experiences, and Attributes | ||||
In addition to his professional background and prior Deere Board experience, the following qualifications led | ||||
Election of DirectorsItem 1 – Election of Directors
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Age: 72 Director since: 2007 Committees: Corporate | CLAYTON M. JONES | ||
| Retired Chairman and Chief Executive Officer of Rockwell Collins, Inc. | |||
Past Positions at Rockwell Collins, Inc. (aviation electronics and communications) | Other Current Directorships — Motorola Solutions, Inc. | ||
—Chairman — 2013 to 2014 —Chairman and Chief Executive Officer — 2012 to 2013 —Chairman, President, and Chief Executive Officer — 2002 to 2012 |
Previous Directorships — Cardinal Health, Inc. | ||
Key Qualifications, Experiences, and Attributes | |||
In addition to his professional background and prior Deere Board experience, the following qualifications led the Board to conclude that Mr. Jones should serve on Deere’s Board of Directors: his leadership qualities developed from his service as Chairman and Chief Executive Officer of Rockwell Collins; the breadth of his experiences in corporate governance, finance, compensation, and other areas of oversight while serving as a member of the boards of directors of other global corporations; and his subject matter knowledge in the areas of technology, government affairs, and marketing. | |||
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Item 1 – Election of Directors
Age: 52 Director since: 2019 | JOHN C. MAY | ||
| Chairman, Chief Executive Officer and President of Deere & Company (since 2020) | |||
Past Positions at Deere & Company | Other Current Directorships | ||
—Chief Executive Officer and President – November 2019 to May 2020 —President and Chief Operating Officer — April 2019 to November 2019 —President, Worldwide Agriculture & Turf Division, Global Harvesting and Turf Platforms, Ag Solutions (Americas and Australia) — 2018 to 2019 —President, Agricultural Solutions & Chief Information Officer — 2012 to 2018 —Vice President, Agriculture & Turf Global Platform, Turf & Utility — 2009 to 2012 —Factory Manager, John Deere Dubuque Works — 2007 to 2009 —Director, China Operations — 2004 to 2007 | — Ford Motor Company | ||
Key Qualifications, Experiences, and Attributes | |||
In addition to his professional background and prior Deere Board experience, the following qualifications led the Board to conclude that Mr. May should serve on Deere’s Board of Directors: his leadership experience as an officer of Deere since 2009; the breadth of his management experiences within, and knowledge of, Deere’s global operations, precision agriculture, and information technology; and his subject matter knowledge in the areas of leadership, manufacturing, and information technology. | |||
Age: 70 Director since: 2013 Committees: Finance (Chair), | GREGORY R. PAGE | ||
| Chairman of Corteva, Inc. (agricultural seeds, crop protection products, and digital solutions) (since 2019) | |||
Past Positions at Cargill, Incorporated | Other Current Directorships — Eaton Corporation plc | ||
—Executive Director — 2015 to 2016 —Executive Chairman — 2013 to 2015 —Chairman and Chief Executive Officer — 2011 to 2013 —Chairman, Chief Executive Officer, and President — 2007 to 2011 |
— 3M Company — Corteva, Inc. Previous Directorships —
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Key Qualifications, Experiences, and Attributes | |||
In addition to his professional background and prior Deere Board experience, the following qualifications led the Board to conclude that Mr. Page should serve on Deere’s Board of Directors: his leadership qualities developed from his experiences while serving as Chairman of Corteva, Inc. and Chairman and Chief Executive Officer of Cargill; the breadth of his experiences in auditing, corporate governance, and other areas of oversight while serving as a member of the boards of directors of other global corporations; and his subject matter knowledge in the areas of commodities, agriculture, operating processes, finance, and economics. | |||
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Item 1 – Election of Directors
Age: 60 Director since: 2011 Committees: Audit Review (Chair), | SHERRY M. SMITH | ||
| Former Executive Vice President and Chief Financial Officer of SuperValu Inc. | |||
Past Positions at SuperValu Inc. | Other Current Directorships — Piper Sandler Companies — Realogy Holdings Corp. — Tuesday Morning Corp. | ||
—Executive Vice President and Chief Financial Officer — 2010 to 2013 —Senior Vice President, Finance — 2005 to 2010 —Senior Vice President, Finance and Treasurer — 2002 to 2005 |
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Key Qualifications, Experiences, and Attributes | |||
In addition to her professional background and prior Deere Board experience, the following qualifications led the Board to conclude that Ms. Smith should serve on Deere’s Board of Directors: her leadership qualities developed from her experience while serving as a senior executive and as Chief Financial Officer of SuperValu; the breadth of her experiences in auditing, finance, accounting, compensation, strategic planning, and other areas of oversight while serving as a member of the boards of directors of other public corporations; her family farming background; and her subject matter knowledge in the areas of finance, accounting, and food and supply chain management. | |||
Age: 57 Director since: 2015 Committees: Compensation (Chair), | DMITRI L. STOCKTON | ||
| Retired Special Advisor to Chairman and Senior Vice President of General Electric Company and Former Chairman, President, and Chief Executive Officer of GE Asset Management Incorporated | |||
Past Positions | Other Current Directorships | ||
—Special Advisor to the Chairman and Senior Vice President of GE (power and water, aviation, oil and gas, healthcare, appliances and lighting, energy management, transportation and financial services) — 2016 to 2017 —Chairman, President, and Chief Executive Officer of GE Asset Management Incorporated (global investments) and Senior Vice President of General Electric Company — 2011 to 2016 —President and Chief Executive Officer of GE Capital Global Banking and Senior Vice President of GE |
—Ryder System, Inc. —Stanley Black & Decker, Inc. —Target Corp.
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Key Qualifications, Experiences, and Attributes | |||
In addition to his professional background and prior Deere Board experience, the following qualifications led the Board to conclude that Mr. Stockton should serve on Deere’s Board of Directors: his leadership qualities developed from his service as Chairman, President, and Chief Executive Officer of GE Asset Management and as a senior officer of other global operations; the breadth of his experiences in risk management, governance, regulatory compliance, and other areas of oversight while serving as a member of the boards of directors and trustees of global asset management, investment, and employee benefit entities; and his subject matter knowledge in the areas of finance, banking, and asset management. | |||
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Item 1 – Election of Directors
Age: 69 Director since: 2015 Committees: Audit Review, | SHEILA G. TALTON | ||
| President and Chief Executive Officer of Gray Matter Analytics (healthcare analytics for healthcare providers, payers, and pharma companies) (since 2013) | |||
Past Positions | Other Current Directorships | ||
—President and Chief Executive Officer of SGT Ltd. (strategy and technology consulting services) — 2011 to 2013 —Vice President of Cisco Systems, Inc. (information technology and solutions) — 2008 to 2011 |
—OGE Energy Corp. —Sysco Previous Directorships —Wintrust Financial | ||
Key Qualifications, Experiences, and Attributes | |||
In addition to her professional background and prior Deere Board experience, the following qualifications led the Board to conclude that Ms. Talton should serve on Deere’s Board of Directors: her leadership qualities developed from her service as President and Chief Executive Officer of Gray Matter Analytics and as an officer of other global technology and consulting firms; the breadth of her experiences in compensation, governance, risk management, and other areas of oversight while serving as a member of the boards of directors of other global public corporations; and her subject matter knowledge in the areas of technology, data analytics, and global strategies. | |||
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Election of Directors
Corporate Governance
Corporate Governance Highlights
At Deere, we recognize that strong corporate governance contributes to long-term shareholder value.
We are committed to sound governance practices, including those described below:
INDEPENDENCE | BEST PRACTICES | |
—All of our director nominees, except our Chairman and CEO, are independent — The independent Presiding Director has a role with significant governance responsibilities— All standing Board committees other than the Executive Committee are composed wholly of independent directors— Independent directors meet regularly in executive session without management present | — Directors may not stand for re-election after their 75th— Our recoupment policy requires an executive to return any incentive compensation found to have been awarded erroneously due to accounting misconduct— Directors and executives are subject to stock ownership requirements— Directors and executives are prohibited from hedging or pledging their Deere stock | |
ACCOUNTABILITY | RISK OVERSIGHT | |
—All directors are elected annually — In uncontested elections, directors are elected by majority vote— The Board and each active Board committee conducts an annual performance self-evaluation— Shareholders have the ability to include nominees in our proxy statement (so-called proxy access rights) | — The Board oversees Deere’s overall risk-management structure— Individual Board committees oversee certain risks related to their specific areas of responsibility— We have robust risk management processes throughout the company |
Our Values
At Deere, our actions are guided by our core values: integrity, quality, commitment,Integrity, Quality, Commitment, and innovation.Innovation. We strive to live up to these values in everything we do — not just because it is good business, but because we are committed to strong corporate governance. We are committed to strong corporate governance as a means of upholding these values and ensuring that we are accountable to our shareholders.
Director Independence
The Board has adopted categorical standards (see Appendix A) that help us evaluate each director’s independence. Specifically, these standards are intended to assist the Board in determining whether certain relationships between our directors and Deere or its affiliates are “material relationships” for purposes of the New York Stock Exchange (NYSE) independence standards. The categorical standards establish thresholds, short of which any such relationship is deemed not to be material. In addition, each director’s independence is evaluated under our Related Person Transactions Approval Policy as discussed in the “Review and Approval of Related Person Transactions” section. Deere’s independence standards meet or exceed the NYSE’s independence requirements.
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Corporate Governance
In November 2020,2021, we reviewed the independence of each then-sitting director (including all our nominees), applying the independence standards set forth in our Corporate Governance Policies. The reviews considered relationships and transactions between each director (and the director’s immediate family and affiliates) and Deere, Deere’s management, and Deere’s independent registered public accounting firm. Based on this review, the Board affirmatively determined at its regular December 20202021 meeting that no director other than Mr. May has a material relationship with Deere and its affiliates and that each director other than Mr. May is independent as defined in our Corporate Governance Policies and the NYSE’s listing standards. Mr. May is not independent because of his employment relationship with Deere.
Board Leadership Structure
John C. May currently serves as Deere’s Chairman, Chief Executive Officer and President. The position of Chairman has traditionally been held by Deere’s Chief Executive Officer. The Board believes the decisions as to who should serve as Chairman and as Chief Executive Officer and whether the offices shall be combined or separated is the proper responsibility of the Board. The Board also believes that having an independent Chairman is unnecessary in normal circumstances. Additionally, the enhanced role of the independent Presiding Director provides a strong counterbalance to the non-independent Chairman and Chief Executive Officer roles. The Board’s governance processes preserve Board independence by ensuring discussion among independent directors and independent evaluation of and communication with members of senior management. Additionally, the enhanced role of the independent Presiding Director provides a strong counterbalance to the non-independent Chairman and Chief Executive Officer roles.
Presiding Director
Charles O. Holliday, Jr. has served as our independent Presiding Director since the 2020 Annual Meeting.February 2020.
The Presiding Director is elected by a majority of the independent directors upon a recommendation from the Corporate Governance Committee. The Presiding Director is appointed for a one-year term beginning upon election and expiring upon the selection of a successor.
The Board has assigned the Presiding Director the following duties and responsibilities:
| — | Preside at all meetings of the Board at which the Chairman is not present, including executive sessions of the independent directors; |
| — | Serve as liaison between the Chairman and the independent directors; |
| — | In consultation with the Chairman, review and approve the schedule of meetings of the Board, the proposed agendas, and the materials to be sent to the Board; |
| — | Call meetings of the independent directors when necessary; and |
| — | Remain available for consultation and direct communication with Deere’s shareholders. |
The Board believes the role of the Presiding Director exemplifies Deere’s continuing commitment to strong corporate governance and Board independence.
Board Meetings
Under Deere’s bylaws, regular meetings of the Board are held at least quarterly. Our typicalpre-pandemic practice iswas to schedule at least one Board meeting per year at a company location other than our World Headquarters so directors havehad an opportunity to observe different aspects of our business first-hand. The Board met foursix times during fiscal 2020.2021.
Directors are expected to attend Board meetings, meetings of committees on which they serve, and annual shareholder meetings. More to the point, directors are expected to spend the time needed and meet as frequently as necessary to properly discharge their responsibilities. During fiscal 2020,2021, all incumbent directors attended 75% or more of the meetings of the Board and committees on which they served. Overall attendance at Board and committee meetings was 98%. All directors then in office attended the Annual Meeting of Shareholders in February 2020.2021.
Each Board meeting normally begins or ends with a session between the CEO and the independent directors. This provides a platform for discussions outside the presence of the non-Board management attendees. The independent directors may meet in executive session, without the CEO, at any time, but such non-management executive sessions are scheduled and typically occur at each regular Board meeting. The Presiding Director presides over these executive sessions.
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Corporate Governance
Board Committees
The Board has delegated some of its authority to five committees: the Executive Committee, the Audit Review Committee, the Compensation Committee, the Corporate Governance Committee, and the Finance Committee.
Periodically, the Board approves the rotation of certain directors’ committee memberships. The Board believes that committee rotation is generally desirable to ensure that committees regularly benefit from new perspectives. Effective November 2020, Dipak C. Jain was appointed to the Compensation Committee and left the Audit Review Committee, and Clayton M. Jones was appointed to the Audit Review Committee and left the Compensation Committee.
Each of our Board committees has adopted a charter that complies with current NYSE rules relating to corporate governance matters. Copies of the committee charters are available at www.JohnDeere.com/corpgovand may also be obtained upon request to the Deere & Company Shareholder Relations Department. Each committee (other than the Executive Committee, which did not meet in 20202021 and of which Mr. May serves as chair) is composed solely of independent directors.
The committee structure and memberships are described below and reflect the changes that becomebecame effective in November 2020.December 2021. Every committee other than the Executive Committee regularly reports on its activities to the full Board.
EXECUTIVE COMMITTEE
Members: John C. May (Chair) Clayton M. Jones Gregory R. Page Sherry M. Smith Dmitri L. Stockton | — Acts on matters requiring Board action between meetings of the full Board— Has authority to act on certain significant matters, limited by our bylaws and applicable law— All members, other than Mr. May, are independent |
AUDIT REVIEW COMMITTEE
Members: Sherry M. Smith (Chair) Alan C. Heuberger Clayton M. Jones Gregory R. Page Sheila G. Talton | — Oversees the independent registered public accounting firm’s qualifications, independence, and performance— Assists the Board in overseeing the integrity of our financial statements, compliance with legal requirements, and the performance of our internal auditors— Pre-approves all audit and allowable non-audit services by the independent registered public accounting firm— With the assistance of management, approves the selection of the independent registered public accounting firm’s lead engagement partner— All members have been determined to be independent and financially literate under current NYSE listing standards, including those standards applicable specifically to audit committee members— The Board has determined that Ms. Smith, Mr. Heuberger, Mr. Jones and Mr. Page are “audit committee financial experts” as defined by the |
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Corporate Governance
COMPENSATION COMMITTEE
Members: Dmitri L. Stockton (Chair) Leanne G. Caret Tamra A. Erwin Charles O. Holliday, Jr. Dipak C. Michael O. Johanns | — Makes recommendations to the Board regarding incentive and equity-based compensation plans— Evaluates and approves the compensation of our executive officers (except for the compensation of our CEO, which is approved by the full Board), including reviewing and approving the performance goals and objectives that will affect that compensation— Evaluates and approves compensation granted pursuant to Deere’s equity-based and incentive compensation plans, policies, and programs— Retains, oversees, and assesses the independence of compensation consultants and other advisors— Oversees our policies on structuring compensation programs for executive officers relative to tax deductibility— Reviews and discusses the CD&A with management and determines whether to recommend to the Board that the CD&A be included in our filings with the SEC— All members have been determined to be independent under current NYSE listing standards, including those standards applicable specifically to compensation committee members |
CORPORATE GOVERNANCE COMMITTEE
Members: Clayton M. Jones (Chair) Tamra A. Erwin Charles O. Holliday, Jr. Michael O. Johanns Sheila G. Talton | — Monitors corporate governance policies and oversees our Center for Global Business Conduct— Reviews senior management succession plans and identifies and recommends to the Board individuals to be nominated as directors— Makes recommendations concerning the size, composition, committee structure, and fees for the Board— Reviews and reports to the Board on the performance and effectiveness of the Board— Oversees the evaluation of our management— Monitors and oversees aspirations and activities related to environmental, social, and governance (ESG) matters— All members have been determined to be independent under current NYSE listing standards |
FINANCE COMMITTEE
Members: Gregory R. Page (Chair) Leanne G. Caret Alan C. Heuberger Dipak C. Sherry M. Smith Dmitri L. Stockton | — Reviews the policies, practices, strategies, and risks relating to Deere’s financial affairs— Exercises oversight of the business of Deere’s Financial Services segment— Formulates our pension funding policies— Oversees our pension plans— All members have been determined to be independent under current NYSE listing standards |
* Mr. Jain is not standing for re-election at the 2022 Annual Shareholder Meeting.
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Corporate Governance
Board Oversight of Risk Management
The Board believes that strong and effective internal controls and risk management processes are essential for achieving long-term shareholder value. The Board, directly and through its committees, is responsible for monitoring risks that may affect Deere.
RISK MANAGEMENT APPROACH
We maintain a structured risk management approach to facilitate our strategic business objectives. To that end, we identify and categorize risks and then escalate them as needed. Our internal risk management structure is administered by a Management Risk Committee consisting of the CEO and his direct reports. This committee provides periodic reports to the Board regarding Deere’s risk management processes and reviews with the Board high-priority areas of enterprise risk.risk with the Board.
Dedicated risk management reports typically take place at regularly scheduled Board meetings, and risk management topics are discussed as needed at other Board and committee meetings.
BOARD AND COMMITTEE RISK OVERSIGHT RESPONSIBILITIES
Each Board committee is responsible for oversight of risk categories related to its specific areaareas of focus, while the full Board exercises ultimate responsibility for overseeing the risk management function as a whole and has direct oversight responsibility for many risk categories including cyber security risks.
The areas of risk oversight exercised by the Board and its committees are:
| Who is responsible? | Primary areas of risk oversight | |
| Full Board | Oversees overall risk management function and regularly receives and evaluates reports and presentations from the chairs of the individual Board committees on risk-related matters falling within each committee’s oversight | |
| Audit Review Committee | Monitors operational, strategic, and legal and regulatory risks by regularly reviewing reports and presentations given by management, including our Senior Vice President, personnel | |
| Regularly reviews our risk management practices and risk-related policies (for example, Deere’s risk management and insurance portfolio, and legal and regulatory | ||
| Evaluates potential risks related to internal control over financial reporting and information system risks, and shares with the full Board oversight responsibility for cyber security | ||
| Compensation Committee | Monitors potential risks related to the design and administration of our compensation plans, policies, and programs, including our performance-based compensation programs, to promote appropriate incentives that do not encourage executive officers or employees to take unnecessary and/or excessive | |
| Corporate Governance Committee | Monitors potential risks related to our governance practices by, among other things, reviewing succession plans and performance evaluations of the Board and CEO, monitoring legal developments and trends regarding corporate governance practices, monitoring the Code of Business Conduct, overseeing the aspirations and activities related to ESG matters, and evaluating potential related person transactions | |
| Monitors product safety and other compliance | ||
| Finance Committee | Monitors operational and strategic risks related to Deere’s financial affairs, including capital structure and liquidity risks, and reviews the policies and strategies for managing financial exposure and contingent liabilities | |
| Monitors potential risks related to funding our U.S. qualified pension plans (other than the defined contribution savings and investment plans) and monitors compliance with applicable laws and internal policies and |
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Corporate Governance
Shareholder Outreach
To ensure the continued delivery of sustainable, long-term value to our shareholders, we engage in proactive shareholder outreach three times per year, in addition to our regular ongoing dialogue with them. During 2020, we discussedshareholders and potential investors throughout the year. These proactive outreach efforts focus on governance, executive compensation, sustainability, and other issues withrelated topics. During 2021, as part of our shareholder outreach, we invited shareholders representing more than 45% of outstanding share ownership to engage in conversations with us on these topics. Of those we contacted, shareholders representing over 40% of our outstanding shares. The Board considers feedback from these conversations during its deliberations,share ownership participated in meetings and we regularly review and adjust our corporate governance structure and executive compensation policies and practicesoffered valuable insights.
– Focused on governance, board composition, board expertise, and executive compensation – Discussions related to overall program structure and key metrics in executive compensation – Questions on priorities and plans related to ESG, particularly climate PROXY SEASON ENGAGEMENT | SUSTAINABILITY REPORT – Focused on feedback related to our annual sustainability report – Shareholders view Deere positively for direct link between strategy and sustainable outcomes – Feedback received: Shareholders viewed climate change a key priority going forward – including Scope 3, Task Force on Climate-related Financial Disclosures (TCFD), alternative propulsion strategy – Open questions related to our diversity, equity, and inclusion (DEI) priorities | – Focused on updating shareholders on potential executive compensation changes and progress on ESG priorities – Climate remains a key focus area for investors – Board composition, including tenure, expertise and overboarding, is an area of interest – ESG integration into executive compensation is a key topic of inquiry MID-YEAR ENGAGEMENT |
In response to commentsthe feedback received from our shareholders.shareholders during 2021, we have taken the following actions:
| — | Quantified our Scope 3 greenhouse gas emissions and intend to include this metric in our 2021 Sustainability Report |
| — | Engaged in analysis of our risks and opportunities related to climate change to enable us to include a TCFD Report with our 2021 Sustainability Report |
| — | Evaluated the characteristics of a Science Based Target for our business and engaged in scenario analysis to determine the best path forward for our business and customers |
| — | Expanded customer outcome focused disclosures planned for 2021 Sustainability Report to further demonstrate alignment of strategy and sustainable outcomes |
| — | Included a key topic summary in the 2021 Sustainability Report to serve as a guide for sustainability priorities and strategy |
| — | Simplified the metric weighting in the STI calculation to reduce complexity in variable pay |
| — | Continued to align with shareholders by utilizing a relative TSR modifier and also a relative revenue growth metric |
| — | Plan to disclose EEO-1 data (with respect to our U.S. employees) in fiscal 2022 |
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Corporate Governance
Communication with the BoardIf you wish
Shareholders and other interested parties wishing to communicate with the Board you may send correspondence to: Corporate Secretary, Deere & Company, One John Deere Place, Moline, Illinois 61265-8098. The Corporate Secretary will submit yourall correspondence about bona fide issues or questions concerning the Company to the Board or the appropriate committee, as applicable.
You may communicate directly with the Presiding Director by sending correspondence to: Presiding Director, Board of Directors, Deere & Company, Department A, One John Deere Place, Moline, Illinois 61265-8098.
Corporate Governance Policies
Because we believe corporate governance is integral to creating long-term shareholder value, our Board of Directors has adopted company-wide Corporate Governance Policies, which are periodically reviewed and revised as appropriate to ensure that they reflect the Board’s corporate governance objectives.
Please visit the Corporate Governance section of our website (www.JohnDeere.com/corpgov) to learn more about our corporate governance practices and to access the following materials:
| — | Leadership Biographies |
| — | Core Values |
| — | Code of Ethics |
| — | Corporate Governance Policies |
| — | Charters for our Board Committees |
| — | Code of Business Conduct |
| — | Supplier Code of Conduct |
| — | Support of Human Rights in Our Business Practices |
| — | Conflict Minerals Policy |
Political Contributions
To promote transparency and good corporate citizenship we have provided voluntary disclosuredisclosures relating to the political contributions of Deere and its political action committee. This information is publicly available at www.JohnDeere.com/politicalcontributions.
Sustainability
In 2020, we launched the Smart Industrial Operating Model with the aim of making our company more efficient, nimble, and competitive. Through this model, we expect to help our customers become more profitable and sustainable. We expect to continue to revolutionize agriculture and construction through rapid introduction of new technologies and services that we expect will result in more sustainable outcomes for our customers, employees, dealers, suppliers, shareholders, and the communities we serve. Our Sustainability Report discusses our environmental, social, and governance (ESG) strategies, programs, and progress toward our goals and is publicly available on the Sustainability page of our website.
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Compensation of Directors
We have structured the compensation of our non-employeenonemployee directors with the following objectives in mind:
| — | Recognize the substantial investment of time and expertise necessary for the directors to discharge their duties to oversee Deere’s global affairs |
| — | Align the directors’ interests with the long-term interests of our shareholders |
| — | Ensure that compensation is easy to understand and is regarded positively by our shareholders and employees |
We pay non-employeenonemployee directors an annual retainer. In addition, committee chairpersonschairs and the Presiding Director receive fees for assuming those responsibilities. Directors who are employees receive no additional compensation for serving on the Board. We do not pay committee member retainers or meeting fees, but we do reimburse directors for expenses related to meeting attendance.
To supplement their cash compensation and align their interests with those of our shareholders, non-employeenonemployee directors are awarded restricted stock units (RSUs) after each Annual Meeting. A person who serves a partial term as a non-employeenonemployee director will receive a prorated retainer and a prorated RSU award.
Compensation for non-employeenonemployee directors is reviewed annuallyevery other year by the Corporate Governance Committee. At its December 2018February 2021 meeting, the Board approved compensation as noted below for non-employeenonemployee directors as recommended by the Corporate Governance Committee. The cash components are effective on January 1 following approval and the equity component isboth became effective for the annual award in March following approval.June 2021.
The following chart describes amounts we pay and the value of awards we grant to non-employee directors:nonemployee directors effective June 2021:
| Date Approved by Corporate Governance Committee: Effective Date of Annual Amounts: | December 2018 January & March 2019 | ||||||
| Retainer | $ | 135,000 | $ | 135,000 | |||
| Equity Award | $ | 160,000 | $ | 160,000 | |||
| Presiding Director Fee | $ | 30,000 | $ | 30,000 | |||
| Audit Review Committee Chair Fee | $ | 25,000 | $ | 25,000 | |||
| Compensation Committee Chair Fee | $ | 20,000 | $ | 20,000 | |||
| Corporate Governance Committee Chair Fee | $ | 15,000 | |||||
| Corporate Governance Committee Chair Fee* | $ | 20,000 | |||||
| Finance Committee Chair Fee | $ | 15,000 | $ | 15,000 | |||
| * | The Corporate Governance Committee Chair fee increased from $15,000 to $20,000 on June 1, 2021 |
Under our Non-employeeNonemployee Director Deferred Compensation Plan, directors may choose to defer some or all of their annual retainers until they retire from the Board. For deferrals through December 2016, a director could elect to have these deferrals invested in either an interest-bearing account or an account with a return equivalent to an investment in Deere common stock. For deferrals effective in January 2017 and later, directors may choose from a list of investment options, none of which yields an above-market earnings rate.
Our stock ownership guidelines require each non-employee director to own Deere common stock equivalent in value to at least three times the director’s annual cash retainer. This ownership level must be achieved within five years of the date the director joins the Board. Restricted shares (regularly granted to non-employee directors prior to 2008), RSUs, and any common stock held personally by the non-employee director are included in determining whether the applicable ownership threshold has been reached. Each non-employee director, except Ms. Erwin, who was appointed on May 1, 2020, has achieved stockholdings in excess of the applicable multiple as of the date of this Proxy Statement.
5x (an increase from previous |
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Election of Directors
Compensation of Directors
We require non-employeenonemployee directors to hold all equity awards until the occurrence of one of the following triggering events: retirement from the Board, total and permanent disability, death, or a change in control of Deere combined with a qualifying termination of the director’s service with the company. Directors may not sell, gift, or otherwise dispose of their equity awards before the occurrence of a triggering event. While the restrictions are in effect, non-employeenonemployee directors may vote their restricted shares (but not shares underlying RSUs) and receive dividends on the restricted shares and dividend equivalents on the RSUs.
During fiscal 2020, Samuel R. Allen served as our Executive Chairman until he elected to resign as Executive Chairman and as a Director, effective April 30, 2020. In his capacity as an Executive Officer during fiscal 2020, Mr. Allen received base salary of $551,894, STI of $802,873, LTIC for the performance period ended in fiscal 2020 of $2,944,374, a Long-Term Incentive Restricted Stock Unit award of $999,872 and other compensation of $300,135. Mr. Allen did not qualify as a Named Executive Officer for fiscal 2020. Mr. Allen did not receive any additional compensation for his service as a Director.
In fiscal 2020,2021, we provided the following compensation to our non-employeenonemployee directors:
| Name | Fees Earned or Paid in Cash (1) | Stock Awards (2) | Nonqualified Deferred Compensation Earnings (3) | Total | |||||
| Tamra A. Erwin (4) | $67,500 | $113,597 | $0 | $ | 181,097 | ||||
| Alan C. Heuberger | $135,000 | $159,855 | $0 | $ | 294,855 | ||||
| Charles O. Holliday, Jr. | $155,000 | $159,855 | $0 | $ | 314,855 | ||||
| Dipak C. Jain | $135,000 | $159,855 | $51,814 | $ | 346,669 | ||||
| Michael O. Johanns | $135,000 | $159,855 | $0 | $ | 294,855 | ||||
| Clayton M. Jones | $150,000 | $159,855 | $0 | $ | 309,855 | ||||
| Gregory R. Page | $150,000 | $159,855 | $970 | $ | 310,825 | ||||
| Sherry M. Smith | $160,000 | $159,855 | $2,697 | $ | 322,552 | ||||
| Dmitri L. Stockton | $148,334 | $159,855 | $0 | $ | 308,189 | ||||
| Sheila G. Talton | $135,000 | $159,855 | $0 | $ | 294,855 | ||||
DIRECTOR COMPENSATION
| Name | Fees Earned or Paid in Cash(1) | Stock Awards(2) | Nonqualified Deferred Compensation Earnings(3) | Change in pension value and nonqualified deferred compensation earnings | Total | |||||||||||||||||
| Tamra A. Erwin | $ | 135,000 | $ | 159,684 | $0 | – | $ | 294,684 | ||||||||||||||
| Alan C. Heuberger | $ | 135,000 | $ | 159,684 | $0 | – | $ | 294,684 | ||||||||||||||
| Charles O. Holliday, Jr. | $ | 165,000 | $ | 159,684 | $0 | – | $ | 324,684 | ||||||||||||||
| Dipak C. Jain | $ | 135,000 | $ | 159,684 | $42,382 | – | $ | 337,067 | ||||||||||||||
| Michael O. Johanns | $ | 135,000 | $ | 159,684 | $0 | – | $ | 294,684 | ||||||||||||||
| Clayton M. Jones | $ | 152,084 | $ | 159,684 | $0 | – | $ | 311,768 | ||||||||||||||
| Gregory R. Page | $ | 150,000 | $ | 159,684 | $777 | – | $ | 310,461 | ||||||||||||||
| Sherry M. Smith | $ | 160,000 | $ | 159,684 | $2,160 | – | $ | 321,844 | ||||||||||||||
| Dmitri L. Stockton | $ | 155,000 | $ | 159,684 | $0 | – | $ | 314,684 | ||||||||||||||
| Sheila G. Talton | $ | 135,000 | $ | 159,684 | $0 | – | $ | 294,684 | ||||||||||||||
| (1) | All fees earned in fiscal |
| (2) | Represents the aggregate grant date fair value of RSUs computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation – Stock Compensation and does not correspond to the actual value that will be realized by the |
| The | |
| Director Name | Restricted Stock | RSUs | Director Name | Restricted Stock | RSUs | ||||||
| Tamra A. Erwin | - | 811 | Clayton M. Jones | 824 | 18,941 | ||||||
| Alan C. Heuberger | - | 4,476 | Gregory R. Page | - | 9,393 | ||||||
| Charles O. Holliday, Jr. | - | 3,121 | Sherry M. Smith | - | 11,543 | ||||||
| Dipak C. Jain | 13,234 | 18,941 | Dmitri L. Stockton | - | 6,687 | ||||||
| Michael O. Johanns | - | 7,203 | Sheila G. Talton | - | 6,687 |
| Director Name | Restricted Stock | RSUs | Director Name | Restricted Stock | RSUs | |||||
| Tamra A. Erwin | - | 1,271 | Clayton M. Jones | 824 | 19,401 | |||||
| Alan C. Heuberger | - | 4,936 | Gregory R. Page | - | 9,853 | |||||
| Charles O. Holliday, Jr. | - | 3,581 | Sherry M. Smith | - | 12,003 | |||||
| Dipak C. Jain | 13,234 | 19,401 | Dmitri L. Stockton | - | 7,147 | |||||
| Michael O. Johanns | - | 7,663 | Sheila G. Talton | - | 7,147 |
| (3) | Directors are eligible to participate in the |
| – | ||
| – | ||
| Amounts included in this column represent the above-market earnings on any amounts deferred under the | ||
24 DEERE & COMPANY2022 PROXY STATEMENT
Election of Directors
Security Ownership of Certain Beneficial Owners and Management
Security Ownership of Certain Beneficial Owners and Management
The following table shows the number of shares of Deere common stock beneficially owned as of December 31, 2020,2021, (unless otherwise indicated) by:
| — | |
| — | |
| — | |
| — |
A beneficial owner of stock (represented in column (a)) below) is a person who has sole or shared voting power (meaning the power to control voting decisions) or sole or shared investment power (meaning the power to cause the sale or other disposition of the stock). A person also is considered the beneficial owner of shares to which that person has the right to acquire beneficial ownership (within the meaning of the preceding sentence) within 60 days. For this reason, the following table includes exercisable stock options (represented in column (b)) below), restricted shares, and RSUs that could become exercisable or be settled within 60 days of December 31, 2020,2021, at the discretion of an individual identified in the table (represented in column (c)) below).
All individuals listed in the table have sole voting and investment power over the shares unless otherwise noted.
As of December 31, 2020,2021, Deere had no preferred stock issued or outstanding.
| Shares Beneficially Owned and Held (a) | Exercisable Options (b) | Options, Restricted Shares, and RSUs Available Within 60 Days (c) | Total | Percent of Shares Outstanding | ||||||
Greater Than 5% Owners | 31,510,573 | — | — | 31,510,573 | 10.0% | |||||
| The Vanguard Group, Inc. (2) 100 Vanguard Blvd. Malvern, PA 19355 | 23,636,226 | — | — | 23,636,226 | 7.5% | |||||
| BlackRock, Inc.(3) 55 East 52nd Street New York, NY 10055 | 18,403,744 | — | — | 18,403,744 | 5.9% | |||||
| Wellington Management Group, LLP(4) 280 Congress St. Boston, MA, 02210 | 16,762,167 | — | — | 16,762,167 | 5.3% | |||||
| Shares Beneficially Owned and Held (a) | Exercisable Options (b) | Options, Restricted Shares, and RSUs Vesting Within 60 Days (c) | Total | Percent of Shares Outstanding | ||||||
| Greater Than 5% Owners | ||||||||||
| Cascade Investment, L.L.C.(1) 2365 Carillon Point Kirkland, WA 98033 | 26,446,073 | – | – | 26,446,073 | 8.5% | |||||
| The Vanguard Group, Inc.(2) 100 Vanguard Blvd. Malvern, PA 19355 | 21,972,786 | – | – | 21,972,786 | 7.0% | |||||
| BlackRock, Inc.(3) 55 East 52nd Street New York, NY 10055 | 20,066,592 | – | – | 20,066,592 | 6.4% | |||||
Election of DirectorsSecurity Ownership of Certain Beneficial Owners and Management
| Shares Beneficially Owned and Held (a) | Exercisable Options (b) | Options, Restricted Shares, and RSUs Available Within 60 Days (c) | Total | Percent of Shares Outstanding | ||||||
| Non-Employee Directors (5) | ||||||||||
| Tamra A. Erwin | — | — | 811 | 811 | * | |||||
| Alan C. Heuberger | 100 | — | 4,476 | 4,576 | * | |||||
| Charles O. Holliday, Jr. | 11,905 | — | 3,121 | 15,026 | * | |||||
| Dipak C. Jain | — | — | 32,175 | 32,175 | * | |||||
| Michael O. Johanns | — | — | 7,203 | 7,203 | * | |||||
| Clayton M. Jones | — | — | 19,765 | 19,765 | * | |||||
| Gregory R. Page | — | — | 9,393 | 9,393 | * | |||||
| Sherry M. Smith | — | — | 11,543 | 11,543 | * | |||||
| Dmitri L. Stockton | — | — | 6,687 | 6,687 | * | |||||
| Sheila G. Talton | — | — | 6,687 | 6,687 | * | |||||
| Named Executive Officers (6) | ||||||||||
| John C. May | 50,420 | 39,336 | - | 89,756 | * | |||||
| Ryan D. Campbell | 4,223 | 12,033 | - | 16,256 | * | |||||
| Mary K. W. Jones | 42,889 | 84,184 | - | 127,073 | * | |||||
| Rajesh Kalathur | 48,961 | 115,960 | - | 164,921 | * | |||||
| Cory J. Reed | 17,504 | 36,380 | - | 53,884 | * | |||||
| James M. Field | 52,531 | 72,365 | 17,138 | 124,896 | * | |||||
| All directors and executive officers as a group (19 persons) (7) | 306,284 | 517,963 | 149,147 | 973,394 | * |
| (1) | The ownership information for Cascade Investment, L.L.C. (“Cascade”) is based on information supplied by Cascade in |
| (2) | The ownership information for The Vanguard Group, Inc. (“Vanguard”) is based on information supplied by Vanguard in a statement on Amendment No. |
| (3) | The ownership information for BlackRock, Inc. (“BlackRock”) is based on information supplied by BlackRock in a statement on Amendment |
25 DEERE & COMPANY2022 PROXY STATEMENT
Election of Directors
Security Ownership of Certain Beneficial Owners and Management
| Shares Beneficially Owned and Held (a) | Exercisable Options (b) | Options, Restricted Shares, and RSUs Available Within 60 Days (c) | Total | Percent of Shares Outstanding | ||||||
| Nonemployee Directors (4) (5) | ||||||||||
| Leanne G. Caret | — | — | 144 | 144 | * | |||||
| Tamra A. Erwin | 275 | — | 1,271 | 1,546 | * | |||||
| Alan C. Heuberger | 100 | — | 4,936 | 5,036 | * | |||||
| Charles O. Holliday, Jr. | 11,905 | — | 3,581 | 15,486 | * | |||||
| Dipak C. Jain | — | — | 32,635 | 32,635 | * | |||||
| Michael O. Johanns | — | — | 7,663 | 7,663 | * | |||||
| Clayton M. Jones | — | — | 20,225 | 20,225 | * | |||||
| Gregory R. Page | — | — | 9,853 | 9,853 | * | |||||
| Sherry M. Smith | — | — | 12,003 | 12,003 | * | |||||
| Dmitri L. Stockton | — | — | 7,147 | 7,147 | * | |||||
| Sheila G. Talton | — | — | 7,147 | 7,147 | * | |||||
| Named Executive Officers (6) | ||||||||||
| Ryan D. Campbell | 5,824 | 11,429 | — | 17,253 | * | |||||
| Marc A. Howze | 10,672 | 24,551 | 20,353 | 55,576 | * | |||||
| Rajesh Kalathur | 55,909 | 102,727 | — | 158,636 | * | |||||
| John C. May II | 56,409 | 46,312 | — | 102,721 | * | |||||
| Cory J. Reed | 24,452 | 44,804 | — | 69,256 | * | |||||
| All directors and executive officers as a group | ||||||||||
| (19 persons) (7) | 297,569 | 319,825 | 126,958 | 744,352 | * | |||||
| Less than 1% of the outstanding shares of Deere common stock. | |
| (4) | The table includes restricted shares and RSUs awarded to directors under the Deere & Company |
| In addition, directors own the following number of deferred stock units, which are payable solely in cash under the terms of the | |
| Director | Deferred Units | |
| Dipak C. Jain | ||
| Michael O. Johanns | ||
| Gregory R. Page | ||
| Dmitri L. Stockton |
| (5) | The following table outlines the nonemployee director awards that are fully vested. The nonemployee director grants vest one year after grant date, but are required to be held until retirement. |
| Director | Vested Restricted Shares and RSUs | Unvested Restricted Shares and RSUs | Director | Vested Restricted Shares and RSUs | Unvested Restricted Shares and RSUs | |||||
| Leanne G. Caret | 0 | 144 | Clayton M. Jones | 18,941 | 1,284 | |||||
| Tami A. Erwin | 811 | 460 | Gregory R. Page | 9,393 | 460 | |||||
| Alan C. Heuberger | 4,476 | 460 | Sherry M. Smith | 11,543 | 460 | |||||
| Charles O. Holliday, Jr. | 3,121 | 460 | Dmitri L. Stockton | 6,687 | 460 | |||||
| Dipak C. Jain | 18,941 | 13,694 | Sheila G. Talton | 6,687 | 460 | |||||
| Michael O. Johanns | 7,203 | 460 |
| (6) | See the Outstanding Equity Awards table for additional information regarding equity ownership for NEOs. |
| (7) | The number of shares shown for all directors and executive officers as a group includes |
26 DEERE & COMPANY2022 PROXY STATEMENT
Election of Directors
Review and Approval of Related Person Transactions
The Board has adopted a written Related Person Transactions Approval Policy that assigns our Corporate Governance Committee the responsibility for reviewing, approving, or ratifying all related person transactions.
The written Related Person Transactions Approval Policy is concerned with three types of “related persons”:
| 1. | |
| 2. | |
| 3. |
Each year, our directors and executive officers complete questionnaires designed to elicit information about potential related person transactions. In addition, the directors and officers must promptly advise our Corporate Secretary if there are any changes to the information they previously provided. After consultation with our General Counsel, management, and outside counsel, as appropriate, our Corporate Secretary determines whether any transaction is reasonably likely to be a related person transaction. Transactions deemed reasonably likely to be related person transactions are submitted to the Corporate Governance Committee for considerationpre-approval at its next meeting, unless action is required sooner. In such a case, the transaction would be submitted to the ChairpersonChair of the Corporate Governance Committee, whose determination would be reported to the full committee at its next meeting.
When evaluating potential related person transactions, the Corporate Governance Committee or its Chairperson,Chair, as applicable, considers all reasonably available relevant facts and circumstances and approves only those related person transactions determined in good faith to be in compliance with or not inconsistent with our Code of Ethics and Code of Business Conduct and in the best interests of our shareholders.
The sister of Mary K. W. Jones, Senior Vice President, General Counsel, and Worldwide Public Affairs, is an employee in the Company’s corporate communications department. Ms. Jones does not directly or indirectly supervise her sister. During fiscal 2020,2021, the employee earned approximately $147,369$161,443 in direct cash compensation along with customary employee benefits available to salaried employees generally. The employee’s compensation is consistent with that of other employees at the same grade level. Pursuant to the Related Person Transactions Approval Policy, this transaction was approved by the Corporate Governance Committee after determining that it is not inconsistent with our Code of Ethics or Code of Business Conduct.
Section 16(a) of the Securities Exchange Act of 1934 and related regulations require our directors, certain of our officers, and persons who own more than 10% of a registered class of our equity securities to file reports of ownership and changes in ownership with the SEC.
To assist with these required reports, we have established procedures whereby directors and officers provide us with the relevant information regarding their transactions in Deere shares and we prepare and file the ownership reports on their behalf. In addition, our directors and officers have provided written statements regarding their Deere stock ownership and reports. Based solely upon a review of these statements and reports, we believe that all Section 16(a) filing requirements applicable to our insiders were complied with during fiscal 2020 except for the following: an annual statement of change in beneficial ownership on Form 5 for Gregory R. Page was not timely filed for his gift of company common stock on September 26, 2019. A Form 4 for Mr. Page reporting the gift was filed on October 27 2020.DEERE & COMPANY2022 PROXY STATEMENT
In accordance with Section 14A of the Exchange Act, we are asking our shareholders to approve, on an advisory basis, the compensation of the executives named in the Summary Compensation Table of this Proxy Statement. Deere’s practice, which was approved by our shareholders at the 2017 Annual Meeting, is to conduct this non-binding vote annually.
Supporting Statement
PAY FOR PERFORMANCE
Deere’s compensation philosophy is to pay for performance, support Deere’s business strategies, and offer competitive compensation. Our compensation programs consist of complementary elements that reward achievement of both short-term and long-term objectives. The metrics used for our incentive programs are either associated with operating performance or are based on a function of Deere’s stock price with linkage to revenue growth and Total Shareholder Return (TSR). See “Review of Pay for Performance Relative to Compensation Peer Group” in the CD&A, which highlights our success in connecting executive compensation with Deere’s financial performance.
COMPENSATION PHILOSOPHY
PROGRAM DESIGN
The CD&A offers a detailed description of our compensation programs and philosophy. Our compensation approach is supported by the following principles, among others, as fully described in the CD&A:
| — | We strive to attract, retain, and motivate high-caliber executives |
| — | As executives assume more responsibility, we increase the portion of their total compensation that is at-risk and that is tied to long-term incentives |
| — | We |
| — | We recognize the need to manage value throughout the business cycle |
28 DEERE & COMPANY2022 PROXY STATEMENT
Advisory Vote on Executive Compensation
Compensation Discussion and Analysis
At our 20202021 Annual Meeting, we held a shareholder advisory vote on executive compensation in which shareholders approved the advisory vote on the compensation of our NEOs.NEOs with a 93.7 percent favorable result.
The Board believes that the executive compensation as disclosed in the CD&A, the accompanying tables, and other disclosures in this Proxy Statement is consistent with our compensation philosophy and aligns with the pay practices of our peer group.
  | FOR THE REASONS STATED, THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FORTHE FOLLOWING NON-BINDING RESOLUTION: |
“RESOLVED, that the shareholders approve the compensation of the NEOs as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the SEC, including the CD&A, tabular disclosures, and other narrative executive compensation disclosures.”
Effect of Proposal
The say-on-pay resolution is non-binding, but the Board values your opinion as expressed through your votes and other communications. Therefore, the Board and the Compensation Committee (“Committee”) will carefully consider the outcome of the advisory vote and those opinions when making future compensation decisions. However, the Board believes that the Compensation Committee is in the best position to consider the extensive information and factors necessary to make independent, objective, and competitive compensation recommendations and decisions that are in the best interests of Deere and its shareholders. Therefore, the final decision regarding the compensation and benefits of our executive officers and whether and how to address shareholder concerns remains with the Board and the Committee.
| FAVORABLE SAY-ON-PAY RESULTS | ||
| 93.7% | 94.9% | 94.7% |
| 2021 | 2020 | 2019 |
Compensation Committee.Discussion and Analysis
We design our compensation plans to reward planning and behavior that:
| — | |
| — | |
| — | |
| — | Allocates capital in a disciplined approach by devoting research and investment dollars to the |
Our competitive base pay promotes stable planning and prudent risk taking. In addition, our benefits plans are designed to secure a healthy, loyal, and long-term focused employee base. Our business strategy emphasizes achieving superior operating and financial performance throughoutthrough the business cycle.delivery of innovations that address customer needs, unlock customer value, and support sustainability. This includes maintaining aggressive goals for operating margin and asset turns, while achieving sustained Shareholder Value Added (SVA) growth through disciplined expansion.capital allocation. Our at-risk pay is designed to motivate NEOs to execute this strategy.We have demonstrated our ability to operate profitably even with the additional challenges presented by the global pandemic in fiscal 2020. Compensation was reviewed in light of the 2020 business conditions and it was determined to not make adjustments to the 2020 compensation measures or performance goals applicable to the NEOs due to strong company performance while also protecting employees and delivering customer solutions.
29 DEERE & COMPANY2022 PROXY STATEMENT
Advisory Vote on Executive Compensation
Compensation Discussion and Analysis
Following isThe following section provides a detailed description of our compensation programs, including the underlying philosophy and strategy, the individual elements, the Board’s and the Compensation Committee’s (“Committee”) methodology and processes used to make compensation decisions, and the relationship between our performance and compensation delivered in fiscal 2020. We focus on2021, and the Board’s and the Committee’s methodology and processes used to make compensation of our named executive officers for fiscal 2020, as noted in the chart directly below:decisions.
| Name | Title at the Close of Fiscal | |
| John C. May | Chairman and Chief Executive Officer | |
| Ryan D. Campbell | Senior Vice President and Chief Financial Officer | |
| Rajesh Kalathur | President, John Deere Financial and Chief Information Officer | |
| Cory J. Reed | President, Worldwide Agriculture & Turf Division, Production & Precision Agriculture, Americas and Australia | |
30 DEERE & COMPANY2022 PROXY STATEMENT
Advisory Vote on Executive Compensation
Compensation Discussion and Analysis
Executive Summary
Our business strategy emphasizes achieving superior operating and financial performance throughoutthrough the business cycle.delivery of innovations that address customer needs, unlock customer value, and drive sustainable outcomes. This includes maintaining aggressive goals for operating margin and asset turns while realizing sustainable Shareholder Value Added growth through disciplined expansion.capital allocation. Deere’s compensation program is designed to motivate NEOs to execute this strategy.
| NET SALES & REVENUES | NET INCOME | SHAREHOLDER VALUE ADDED |
| $35.54 | $2.75 | $1.56 |
| BILLION | BILLION | BILLION |
| DOWN 9% | DOWN 15% | UP 3% |
| NET SALES & REVENUES | NET INCOME (attributable to Deere & Company) | SHAREHOLDER VALUE ADDED |
| $44.02 | $5.96 | $5.13 |
| BILLION | BILLION | BILLION |
| UP 24% | UP 117% | UP 205% |
In fiscal 2020,2021, net sales and revenues reached $35.54$44.02 billion while netdriven by strong demand for Deere products and services. Net income attributableattributed to Deere & Company totaled $2.751 billion, sixth highest in company history. Net income was negatively affected by impairment charges and employee-separation costsmore than doubled, reaching an all-time high of $211 million and $458 million after-tax, respectively.$5.96 billion. Shareholder Value Added, our measure of economic profit, increased to $1.556$5.13 billion, up 2.7%205%.
Since aligning the metrics of our compensation program with our strategy in 2002, Deere has shown an ability to operate profitably throughout the business cycle.
Financial Performance and Compensation Metrics
As outlined below, the metrics Deere uses to measure success inexecution of its business strategy are the same used in our compensation programs to ensure that employees are working in aligned, high-performance teams. Further details below illustrate how the company’s compensation plans and payouts are sensitive to fluctuations in business conditions. Despite the global pandemic driving uncertain market conditions,In 2021, Deere demonstrated the ability to drive strong businessreported our highest-ever financial results while also delivering differentiated solutions to our customers. Compensation was reviewed in lightfacing the continued challenges of the challenging business conditions. Due to strong company performancepandemic and the ability to meet customer needs, ita labor strike. Demand for products of all sizes and types, across all businesses and regions, was determined to make no changes to the compensation metrics, weightings or performance goals applicable to NEOs in fiscal 2020 as a result of the global pandemic. As part of the integration process, Wirtgen financials were excluded from the OROA and SVA compensation metrics for fiscal 2020. As we look ahead for fiscal 2021, Wirtgen financials will be included in the OROA and SVA compensation metrics.extremely strong.
DRIVERS OF ONE-YEAROROA, ROE, AND REVENUE GROWTH (STI) | DRIVERS OF THREE-YEARSVA (LTIC) | DRIVERS OF TSR (LTIC) ANDREVENUE GROWTH (LTI) | ||
—Operating margin focus — Disciplined asset management— Efficient use of equity— Near-term business execution |
—Margin management across the cycle with a long-term focus — Efficient use of long-term assets— Long-term investment decisions for capital and research and development— World-class distribution systems— Technology innovation |
—Market share — Successful execution of business strategy— Stock price appreciation over the long term— Market conditions |
31DEERE & COMPANY 2022 PROXY STATEMENT
Advisory Vote on Executive Compensation
Compensation Discussion and Analysis
Executive Summary
| 2019 | 2020 | % Change | Fiscal 2020 Actions and Results | |||||||
| STI | OROA (1) | 21.55% | 21.86% | 1% | The STI payout was 121% of target, resulting in an award of $2.2 million for the CEO and awards ranging from $0.8 million to $1.0 million for the other NEOs. | |||||
| ROE | 10.70% | 11.11% | 4% | |||||||
| Net Sales and Revenues | $39.26B | $35.54B | -9% | |||||||
| Payout as a % of Target | 69% | 121% | 76% | |||||||
| LTIC | 3-Year Accumulated SVA (1) | $4.68B | $4.98B | 6% | The LTIC payout for the 2018-2020 performance period was 159% of target. With TSR performance at the 95th percentile, there was an adjustment of 25% to the payout due to the TSR modifier. This resulted in an award of $1.6 million for the CEO (2) and awards of approximately $1.4 million for each of the other NEOs. | |||||
| 3-Year TSR as of 31 Oct. | 27.83% | 79.54% | +51.71 pts | |||||||
| TSR Performance Results as Compared to a Subset of the S&P Industrial Sector (3) | 88th percentile | 95th percentile | ||||||||
| TSR Modifier | 100% | 125% | 25% | |||||||
| Payout as a % of Target | 117% | 159% | 37% | |||||||
| LTI-Revenue Growth | Deere Growth Rate | 13.79% | 6.12% | -7.67pts | The LTI grant for the 2020-2022 performance period was received in December 2019 and was based solely on Revenue Growth. The CEO received an LTI award valued at $7.5 million, a 20% increase over the base-level award; LTI awards for the other NEOs were increased an average of 9%, valued at $1.8 million; adjustments reflect strong operating performance and rapid response to challenging business conditions. | |||||
| Revenue Growth Performance as Compared to a Subset of the S&P Industrial Sector (4) | 89th percentile | 84th percentile | ||||||||
| PSU Payout as a % of Target | 200% | 200% | 0% | |||||||
| LTI-TSR | Stock Price as of 31 Oct. | $174.14 | The TSR component of LTI was discontinued in fiscal 2019. TSR continues as part of the LTIC metrics as noted above. | |||||||
| 3-Year TSR as of 31 Oct. | 27.83% | |||||||||
| TSR Performance Results as Compared to S&P Industrial Sector | 88th percentile | |||||||||
| PSU Payout as a % of Target | 200% |
| 2021 | Fiscal 2021 Actions and Results | |||||||||
 | Short-Term Incentive (STI) | OROA | 38.06% | The STI payout was 175% of target, resulting in an award of $4.0 million for the CEO and awards of approximately $1.4 million for the other NEOs. | Page 37 | |||||
| ROE | 16.03% | |||||||||
| Net Sales and Revenues | $44.02B | |||||||||
| Payout as a % of Target | 175% | |||||||||
 | Cash (LTIC) | 3-Year Accumulated SVA | $7.96B | The payout for the 2019-2021 performance period due to accumulated SVA was 200%. Although the relative TSR was at the 95th percentile, no additional adjustment was made to the LTIC payout due to the 200% payout cap being reached based on SVA performance. This resulted in an award of $4.0 million for the CEO and awards of approximately $1.7 million for each of the other NEOs | Page 42 | |||||
| Accumulated SVA % of Target | 200% | |||||||||
| 3-Year TSR as of 31 Oct. | 165.19% | |||||||||
| TSR Performance Results as Compared to the Performance Peer Group (1) | 95th percentile | |||||||||
| TSR Modifier (2) | N/A | |||||||||
| Payout as a % of Target | 200% | |||||||||
| Equity (LTI) | Deere Annualized Revenue Growth Rate | 5.63% | For the PSUs ending in fiscal 2021 based upon Deere’s relative revenue growth, Deere performed at the 84th percentile, which equates to a 200% payout. The LTI grant for the 2021-2023 performance period was received in December 2020 and is based solely on relevant revenue growth. The CEO received an LTI award valued at $9.4 million, a 30% increase over the base-level award; LTI awards for the other NEOs were increased an average of 20%, valued at $2.2 million; adjustments reflect strong operating performance, execution of the Smart Industrial strategy, and responsiveness to the dynamic business conditions. | Page 46 | ||||||
| Revenue Growth Performance Results as Compared to Performance Peer Group (1) | 84th percentile | |||||||||
| PSU Payout as a % of Target | 200% |
| (1) |
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| (2) |
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Shareholder Outreach
At the February 20202021 Annual Meeting, Deere received a 94.9% For93.7% favorable Say on Pay Vote.vote for Say-on-Pay. As part of our ongoing annual review in 2020,2021, we invited our top shareholders to participate in discussions regarding executive compensation, sustainability, and governance issues. During the year, we met with shareholders representing over 40%45% of our outstanding shares to ensure changes to our program were understood and aligned with their expectations. We discussed our approach to executive compensation programs, as well as various sustainability and corporate governance topics important to investors. Discussions with shareholders did not indicate any significant issues with current compensation programs.
Our learnings included:
| 93.7% | ||
| FAVORABLE SAY-ON-PAY | ||
| >45% | ||
| OUTSTANDING SHARES ENGAGED |
| — | Deere has strong alignment between business strategy and compensation |
| — | Our shareholders understand how OROA, ROE, and SVA are linked to successful operating |
Advisory Vote on Executive CompensationCompensation Discussion and Analysis2020 Compensation Overview
| — | The STI and LTIC programs contribute to successful operating performance, drive the right employee behavior and promote the creation of long-term value throughout the business cycle; shareholders have expressed a view that Deere’s variable pay programs are |
| — | Shareholders appreciate the linkage between our strategy and ability to deliver sustainable outcomes to our |
| — | Topics of specific interest by shareholders included the impact of COVID-19 on Deere’s performance and compensation programs as well as Environmental, Social and Governance (ESG) focus and potential integration with |
32DEERE & COMPANY 2022 PROXY STATEMENT
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We regularly analyze our practices to ensure we remain a leader in executive compensation best practices and remain aware of shareholder concerns. In the next fiscal year, we will be conducting a study to further evaluate the potential integration of ESG to compensation. We recognize the value of the ongoing feedback and will continue regular shareholder engagement activities to gain their perspective firsthand.
Deere is committed to a compensation philosophy that incorporates the principles of paying for performance, supporting business strategies, and paying competitively. The Committee believes this philosophy continues to drive our NEOs and salaried employees to produce sustainable, positive results for Deere and our shareholders.
REVIEW OF PAY FOR PERFORMANCE RELATIVE TO COMPENSATION PEER GROUP
To ensure that total compensation for our NEOs aligns with the market, we compared our compensation and performance against the companies in our compensation peer group. As part of this comparison, we evaluated our peers’ mix of cash versus equity and short-term versus long-term components.
In addition, we reviewed the relationship between total realizable compensation and our performance for the three fiscal years ended with fiscal year 2020 — the most recent fiscal year-end for which we can obtain corresponding compensation information for our peer companies. This review helps the Committee understand whether total compensation delivered to our NEOs aligns with our performance relative to our peer group. For purposes of this review, we use TSR to measure performance.
The analysis, as shown in the following graphs, reveals that realizable pay for Deere’s CEO and other NEOs was aligned with Deere’s relative TSR over the relevant time period. Based on these results and the results of similar past comparisons of pay and performance alignment, we believe our pay programs ensure that compensation for our executives is aligned with performance and market norms.
For peer companies, total realizable pay includes cash- and equity-based long-term incentive plan and performance share plan payouts for performance cycles that are completed within the three-year period. Award values are then multiplied by a factor that reflects grant frequency and long-term incentive pay mix.
DEERE 3-YEAR PAY FOR PERFORMANCE
REALIZABLE PAY VS. TOTAL SHAREHOLDER RETURN
| CEO | OTHER NEOS | |
 |  |
Total realizable pay for Deere’s NEOs is defined as the sum of the following components: actual base salaries, STI awards, and LTIC awards paid over the three-year period from 2018-2020; the Black-Scholes value as of November 1, 2020, of any stock options granted over the three-year period; and the value as of November 1, 2020, of RSUs granted over the three-year period and of PSUs (reflecting actual performance for the 2018-2020 performance cycle and the in-process 2019-2021 and 2020-2022 performance cycles).
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Snapshot of Compensation Governance
To ensure that our compensation program meets Deere’s business objectives without compromising our core values, we regularly compare our compensation practices and governance against market best practices. Here are some of the best practices we have implemented.implemented:
 | WE DO: |  | WE DON’T: | |
— Use a combination of short-term and long-term incentives to ensure a strong connection between Deere’s operating performance and actual compensation delivered — Regularly evaluate our peer group and pay positioning under a range of performance scenarios — Annually review all our compensation plans, policies, and significant practices — Annually review risks associated with compensation — Include a “double-trigger” change in control provision in our executive Change in Control Severance Program, as well as our current equity plan, so participants will receive severance benefits only if both a change in control and a qualifying termination occur — Annually review and limit executive perquisites — Retain an independent compensation consultant who does not perform other significant services for Deere — Have an Executive Incentive Compensation Recoupment Policy to ensure accountability in the presentation of our financial statements — Enforce stock ownership requirements to ensure that directors and executives have interests aligned with our shareholders — Provide executive officers with benefits such as health care insurance, life insurance, disability, and retirement plans on the same basis as other full-time Deere employees | — Offer employment agreements to our U.S.-based executives — Provide tax gross-ups for executives, except for those available to all employees generally — Provide excise tax gross-ups upon a change in control to any employees — Offer above-market earnings on — Grant stock options with an exercise price less than the fair market value of Deere’s common stock on the date of grant — Re-price stock options without the prior approval of our shareholders — Cash out underwater stock options — Include reload provisions in any stock option grant — Permit directors or employees, or their respective related persons, to engage in short sales of Deere’s stock or to trade in instruments designed to hedge against price declines in Deere’s stock — Permit directors or officers to hold Deere securities in margin accounts or to pledge Deere securities as collateral for loans or other obligations | |||
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2021 Compensation Overview
Snapshot of Compensation Elements
The components of our 20202021 compensation program are:
| Total Direct Compensation | Total Indirect Compensation | ||||
| Short-Term Compensation | Long-Term Compensation | Other Compensation and Benefits | |||
| Base Salary | Short-term Incentive (STI) | (LTIC) | |||
Purpose | Based on level of responsibility, experience, and sustained individual performance | Annual cash award for profitability and efficient operations during the fiscal year | Cash award for sustained profitable growth and disciplined investment during a three-year period | Equity award for creating shareholder value as reflected by stock price and revenue growth | |
| Characteristics | Base salaries are intended to provide stable compensation to executive officers as a fixed cash component generally targeted at the compensation peer group | Variable cash compensation based on the achievement of performance objectives designed to align our executive officers in pursuing short-term goals. Payout levels are based on actual results and performance must meet a threshold level of performance to achieve a payout with a payout cap of 200% of target. A target STI award is designed to contribute to annual cash compensation and overall compensation at the compensation peer group | Long-term performance based cash compensation designed to align our executive officers in delivering long-term strategic objectives. Payout levels are based on actual results as compared to a three year performance goal with a payout cap of 200% of target. Additionally, a relative TSR modifier enables alignment with shareholders. A target LTIC award is designed to contribute to | Awarded in a combination of both performance and time-based equity including RSUs, PSUs, and stock options | Perquisites, retirement benefits, deferred compensation benefits, additional benefits payable upon a change in control |
| Metrics | - CEO: Increase to 2021 - Other NEOs: Various increases to align with market median | - Operating Return on Operating Assets (OROA), Return On Equity (ROE), and | - Shareholder Value Added (SVA) | - Revenue growth - LTI awards can be increased by up to | |
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As this table suggests, we compare each component of compensation to the median level for that component awarded by our peers. In addition, we strive to have each NEO’s total annual cash compensation and overall compensation at target compare favorablyaligned to the median levels for comparable executives.
35DEERE & COMPANY 2022 PROXY STATEMENT
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Compensation Discussion and Analysis2020
2021 Compensation Overview
2021 Target Direct Compensation Mix
Pay for performance is an essential element of our compensation philosophy. We believe compensation should motivate our executives to substantially contribute — both individually and collaboratively — to Deere’s long-term, sustainable growth. To that end, our performance-basedperformance based compensation program consists of threeshort-term and long-term components (STI, LTIC, and LTI), all driven by metrics that align with Deere’s business strategy and reflect the cyclical nature of the industries in which Deere operates.
To enhance the connection between pay and performance, as our NEOs assume greater responsibility, we award a larger portion of their total compensation in the form of “at risk”“at-risk” incentive awards and a larger portion of their incentive awards in the form of equity. This practice is apparent in the following charts, which illustrate the allocation of all fiscal 20202021 Direct Compensation components at target for our CEO and for our other NEOs as a group.
| CEO TARGET COMPENSATION MIX | NEO TARGET COMPENSATION MIX | |
 |  | |
 |  |
| (a) | |
| (b) | Variable pay that is metric driven |
| (c) | Variable pay that is stock price driven |
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As shown in the Target Direct Compensation Mix charts under 20202021 Compensation Overview, the majority of direct compensation for the CEO and NEOs is based on “at-risk,” variable pay. Our performance-based compensation programs fall into two categories: short-term incentives based on annual metrics and long-term incentives based on a three-year performance period. Long-term performance based incentives are awarded in the form of cash and equity (RSUs, PSUs, and stock options). The following information describes each direct compensation element, including the applicable performance metrics.
Base Salary
In determining salary levels for each of our NEOs, the Committee considers factors such as financial and operational performance, leadership, development of people, time in position, internal equity, and potential. as:
| — | Level of responsibility and time in position |
| — | Individual performance and potential |
| — | Internal equity |
| — | Base salaries for executives with similar roles and responsibilities at our peer companies |
The Committee also considers each NEO’s current salary as compared to the salary range and median salary practices of our peer group. The following increases reflect the Committee’s assessmentmagnitude of the NEO’s favorablebase salary increases for John May and Ryan Campbell reflect strong individual performance as well as competitive positioning as comparedbelow median base salary position relative to peers. The increase for John May includes consideration of his performance and expanded leadership responsibilities to CEO on November 4, 2019. Ryan Campbell, being new to the role of CFO in April 2019, received increases to reflect strong performance as well as to continue to strive for competitive positioning of his salary. their counterparts at our peer companies.
Deere has been implementing a multi-year planstrategy to deliver compensation atultimately bring the base salaries of Mr. May and Mr. Campbell into more alignment with the market competitive rates assuming continued favorable performance by the senior officer.
| Officer | Base Salary as of Apr. 1, 2019 | Fiscal 2020 Salary Increase % | Base Salary as of Dec. 1, 2019 | |||
| John C. May | $1,000,764 | 20% | $1,200,000 | |||
| Ryan D. Campbell | $567,768 | 20% | $681,322 | |||
| Mary K. W. Jones | $717,060 | 10% | $788,772 | |||
| Rajesh Kalathur | $724,476 | 10% | $796,932 | |||
| Cory J. Reed | $701,400 | 10% | $771,540 | |||
| James M. Field | $798,900 | 5% | $838,845 |
| Officer | Base Salary as of Dec. 1, 2019 | Fiscal 2021 Salary Increase % | Base Salary as of Dec. 1, 2020 | |||
| John C. May | $1,200,000 | 21% | $1,450,008 | |||
| Ryan D. Campbell | $681,322 | 25% | $851,664 | |||
| Marc A. Howze | $764,484 | 5% | $802,716 | |||
| Rajesh Kalathur | $796,932 | 3% | $820,848 | |||
| Cory J. Reed | $771,540 | 5% | $810,120 |
Short-Term Incentive (STI)
PERFORMANCE METRICS FOR STI
The Committee believes that operating margins efficient deploymentand the allocation of our assets (both fixedcapital for research and working capital), and growthinvestment in a disciplined approach are key drivers into creating long-term shareholder value. For this reason, the Committee has designed the STI program to support our Smart Industrial strategy and to motivate our executives and most other salaried employees to focus on profitability, asset optimization, and capital efficiency no matter where we are in the business cycle each fiscal year.efficiency.
| — | OROA (for our Equipment Operations segments) supports our strategic approach to sound investment of capital and asset utilization. ROE (for our financial service segment) effectively measures the efficient use of equity. |
| — | Net sales and revenues measure our growth. |
By consistently managing OROA results through all points in the business cycle, we have paid out more than half of cash flow from our operations to investors through dividends and net share repurchases since 2004.
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For fiscal 2020,2021, the performance results for these metrics are combined to determine STI awards as follows:
| Company Performance Factor Weighting: | Enterprise OROA/ROE Metric Weighting: | |||
| Enterprise OROA/ROE Metric(a) | 67% | Equipment Operations OROA(b) | 90% | |
| Net Sales and Revenues Metric | 33% | Financial Services ROE | 10% | |
| (a) | Appendix B, “Deere & Company Reconciliation of Variable Compensation Measures to Non-GAAP Measures” illustrates in detail how OROA and ROE are calculated. |
| (b) | Equipment Operations reflects the consolidated results of the Precision & Production Agriculture |
The emphasis on the OROA performance of the Equipment Operations in calculating STI reflects the critical position these operations have as drivers of our business: Equipment Operations’ net sales accounted for 88%90% of our net sales and revenues in fiscal 2020. The 50% weighting for the combined Equipment Operations reflects the importance of employees’ aligning with the overall business strategies, including working together to develop technology and drive synergies.2021.
Recognizing the complexity of the plan, for fiscal 2021, the Enterprise OROA/ROE metric weighting will be simplified to be 90% based upon Equipment operations OROA and 10% on Financial Services ROE.
OROA – Equipment Operations Metric
OROA goals are developed formulaically adjusted to reflect the cyclical nature of our end markets. As a smart industrial company, our business requires high investment in fixed assets, such as buildings and machinery, and significant expenses with longer-term payoffs, such as research and development.
Our long-term strategy will continue to focus on OROA performance, which is designed to enable management to respond promptly and purposefully to changing business conditions to drive sustained operational results. The Committee sets a range of OROA goals for a range of potential conditions rather than for a static forecast. This allows us to be agile, encourages us to prepare in advance for a variety of business conditions, and to quickly make necessary structural changes, such as those related to costs, capacity, and assets (especially inventory) as business conditions change during the year.
WHAT IS MID-CYCLE?
 | — We calculate mid-cycle sales for each product line by annually gathering historical information on the size of the industry (for example, the total number of tractors sold in the U.S. market) and our market share for every product line (in this example, the number of tractors sold by Deere). | |
— | At the peak of a typical business cycle, actual sales constitute 120% of mid-cycle sales; at the trough, actual sales constitute 80% of mid-cycle sales, generally speaking. OROA goals vary each year to reflect where we are on this spectrum. Deere desires to dampen the amplitude of the cycle as part of our strategy. |
| — | To maintain the rigor of the program, the specific goals for any year are formulaically determined based on where we are in the business cycle. This ensures that our employees are not unduly rewarded when the economy is strong and penalized for poor economic conditions. The Committee fixes threshold, target, and maximum OROA goals that are more ambitious at the peak of a business cycle, when it is easier to cover fixed costs and achieve a higher asset turnover (and thus a better OROA), and lower at the trough. |
| — | Our position in the business cycle is calculated by comparing |
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How do OROA goals work? For an example of how our multi-tiered OROA goals work in practice, assume we determined that mid-cycle sales are $30 billion. If actual sales for the year are $27 billion, that means we are at 90% of mid-cycle (27 ÷ 30 = .90). In that case, OROA goals would be lower than the goals for mid-cycle. On the other hand, if actual sales are $33 billion, that means we are at 110% of mid-cycle (33 ÷ 30 =1.1). In that case, OROA goals would be greater than the goals for mid-cycle. Both scenarios are illustrated below: |
 |
OROA GOALS INCREASED IN 2018 TO ENSURE THEIR RIGOR
To continue to improve operational performance and seize the benefits of our structural transformation, the Committee raised OROA goals for STI purposes to align more appropriately to the current business strategy. As the following charts show, the OROA goals implemented in fiscal 2018 are significantly more rigorous at mid-cycle and peak than they have been historically.historically, which is also exhibited by the payout levels since the increase in goals of 98.4% (2018), 68.7% (2019), and 121.2% (2020).
OROA GOAL
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OROA GOAL
| 2015 OROA Goals | 2016 OROA Goals | 2017 OROA Goals | Current OROA Goals* | ||||||||||||||||||||||||
| Trough | Mid-Cycle | Peak | Trough | Mid-Cycle | Peak | Trough | Mid-Cycle | Peak | Trough | Mid-Cycle | Peak | ||||||||||||||||
| Maximum | 12% | 20% | 28% | 13% | 24% | 36% | 16% | 26% | 36% | 17% | 35% | 48% | |||||||||||||||
| Target | 8% | 12% | 20% | 10% | 18% | 26% | 12% | 19% | 26% | 14% | 29% | 40% | |||||||||||||||
| Threshold | 4% | 8% | 12% | 8% | 12% | 16% | 8% | 12% | 16% | 12% | 20% | 28% | |||||||||||||||
* Current goals established in 2018.
ROE – Financial Services Metric
The ROE metric is the STI performance metric for the Financial Services business, a key differentiator for how we deliver value to our dealers and customers. ROE was selected because it effectively measures the efficient use of the segment’s equity. We have two distinct business models within Financial Services and we use different ROE goals for each.
Subsidized business: Historically, approximately 70% of Financial Services’ business has been subsidized by the Equipment Operations to reduce the interest rates that our customers and dealers would otherwise pay on financial products. The ROE goal for the subsidized business — 10% — is the same regardless of the business cycle as maximizing profitability is not the purpose of this segment. The goal is rigorous; however, our threshold goal, which is based on the implied after-tax cost of equity, represents upper-quartile performance compared to other financial institutions.
Non-subsidized business: The remaining offerings, which are non-subsidized, are intended to utilize equity to earn a profitable return. Consequently, this business has more traditional (and progressively more challenging) goals. The threshold goal equals the implied after-tax cost of equity for Financial Services; the ROE goals of 13% at target and 16% at maximum represent an even greater level of stretch both internally and compared to our peers.
ROE goals are weighted based on the actual mix of subsidized versus non-subsidized business in a fiscal year. The Committee approved the following ROE goals at the beginning of fiscal 2020:2021:
| Fiscal 2020 ROE Goals | Subsidized business | Non-subsidized business | Weighted Goals | |||||||||
| Fiscal 2021 ROE Goals | Subsidized business | Non-subsidized business | Weighted Goals | |||||||||
| % of Business | 72% | 28% | 74% | 26% | ||||||||
| Maximum | 10% | 16% | 12% | 10% | 16% | 12% | ||||||
| Target | 10% | 13% | 11% | 10% | 13% | 11% | ||||||
| Threshold | 10% | 10% | 10% | 10% | 10% | 10% | ||||||
Net Sales and Revenues – Corporate Metric Company wide net sales and revenues together account for one-third of the STI payout. This metric was added in 2017 to incorporate a growth factor into the incentive calculation. For 2021, our net sales and revenues target goal is $38,111M, which is an increase from the 2020 target goal of $36,388M. Net sales and revenues that fall more than 15% below target will result in no payout on that metric. Conversely, net sales and revenues that exceed target by at least 15% will result in a maximum (200%) payout on that metric. Points in between those levels are interpolated. | Net Sales and Revenues – Corporate Metric Company wide net sales and revenues together account for one-third of the STI payout. This metric was added in 2017 to incorporate a growth factor into the incentive calculation. For 2021, our net sales and revenues target goal is $38,111M, which is an increase from the 2020 target goal of $36,388M. Net sales and revenues that fall more than 15% below target will result in no payout on that metric. Conversely, net sales and revenues that exceed target by at least 15% will result in a maximum (200%) payout on that metric. Points in between those levels are interpolated. | |||||||||||
| Threshold | Target | Max | ||||||||||
| Fiscal 2021 Net Sales & Revenue Goals | $32,394M | $38,111M | $43,828M | |||||||||
40 Net Sales and Revenues – Corporate Metric
DEERE & COMPANYCompany wide net sales and revenues together account for one-third2022 PROXY STATEMENT
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For 2020, our net salesCompensation Discussion and revenues target goal is $36.39B. Net sales and revenues that fall more than 15% below target will result in no payout on that metric. Conversely, net sales and revenues that exceeds target by at least 15% will result in a maximum (200%) payout on that metric.Analysis
Direct Compensation Elements
APPROVAL OF STI AWARD RATES
At the beginning of the fiscal year, after review and consideration of Deere’s peer group data for target cash bonuses, the Committee approves target STI rates as a percentage of eachthe NEO’s base salary. TheFor 2021, John May’s target STI rates for fiscal 2020 are as follows:
rate was increased to 160% to improve his positioning versus peer group median. Regardless of the award amount reached by applying these payout rates, no individual award under the STI plan may exceed $5 million or 200% of target.
| 2020 Target Rate | 2021 Target Rate | |||
| CEO | 150% | 160% | ||
| Other NEOs | 100% | �� | 100% |
FISCAL 20202021 PERFORMANCE RESULTS AND PAYOUT AMOUNTS
The chart below shows OROAthe STI performance targets and actual results for the Agriculture & Turf Operations, the Construction & Forestry Operations, andfiscal 2021. OROA performance targets are based on Equipment Operations as a whole, based on actual sales volumes:being at 109% of Mid-Cycle.
Those results, together with ROE for Financial Services, are weighted to determine STI, as follows:
| Fiscal 2020 Performance Results for STI | Fiscal 2020 Performance Results | Performance as % of Target | Fiscal 2020 OROA/ROE Award Weighting | Weighted Award Results | Fiscal 2020 Award STI Weighting | Actual Performance Results | ||||||
| Equipment Operations OROA | 21.9% | 144% | 50% | 72% | ||||||||
| Agriculture & Turf Operations OROA | 25.9% | 200% | 25% | 50% | ||||||||
| Construction & Forestry Operations OROA | 8.9% | 0% | 15% | 0% | ||||||||
| Financial Services ROE | 11.1% | 134% | 10% | 13% | ||||||||
| Enterprise OROA/ROE Metric (1) | 136% | 67% | 91% | |||||||||
| Net Sales and Revenues | $35.54B | 92% | 33% | 30% | ||||||||
| Actual Performance as % of Target | 121% |
|
The amount of the STI award paid to a NEO is calculated as follows:
STI AWARD CALCULATIONS
| Base salary for the fiscal year | × | Target STI rate | × | Actual performance as a percentage of target | = | STI award amount |
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ActualBased on the 175.2% STI payout, actual STI awards paid to the NEOs are shown in the table to the right and detailed in the Fiscal 20202021 Summary Compensation Table under footnote (4)(5).
For fiscal 2020,2021, STI awards paid to the NEOs consisted of approximately 2% of the total amount of STI awards paid to all eligible employees.
| Officer | Fiscal 2020 STI Award Payout | ||
| John C. May | $ | 2,180,768 | |
| Ryan D. Campbell | $ | 814,495 | |
| Mary K. W. Jones | $ | 948,984 | |
| Rajesh Kalathur | $ | 958,801 | |
| Cory J. Reed | $ | 928,252 | |
| James M. Field | $ | 1,012,896 | |
| Officer | Fiscal 2021 STI Award Payout | |
| John C. May | $4,005,803 | |
| Ryan D. Campbell | $1,467,078 | |
| Marc A. Howze | $1,400,617 | |
| Rajesh Kalathur | $1,434,470 | |
| Cory J. Reed | $1,413,536 |
STI CHANGES FOR FY2022
With the emphasis in our Smart Industrial strategy to deliver strong margins, the Net Sales & Revenues metric in STI will be replaced with an Operating Return on Sales (OROS) metric for 2022. Similar to the current OROA metric, the OROS goals will be volume adjusted. In 2022, the performance results for STI will be based upon the following metrics and weightings.
| Company Performance Factor Weighting: | Enterprise OROA/ROE Metric Weighting: | |||
| Enterprise OROA/ROE Metric(a) | 67% | Equipment Operations OROA(b) | 90% | |
| Operating Return on Sales | 33% | Financial Services ROE | 10% |
| (a) | Appendix B, “Deere & Company Reconciliation of Variable Compensation Measures to Non-GAAP Measures” illustrates in detail how OROA and ROE are calculated. |
| (b) | Equipment Operations reflects the consolidated results of the Precision & Production Agriculture (PPA) operations, Small Ag & Turf (SAT) operations, and Construction and Forestry (C&F) operations. |
Long-Term Incentive Cash(LTI)
LTI is designed to reward the NEOs for creating sustained shareholder value, encourage the ownership of Deere stock, foster teamwork, and retain and motivate high-caliber executives while aligning their interests with those of our shareholders. The LTI awards tie a significant portion of compensation to the Company’s performance over time. LTI awards consist of a cash plan and an equity program under the John Deere 2020 Equity and Incentive Plan, which was approved at the Annual Meeting in February 2020. Over 50% of Deere’s long-term incentive is performance-based.
LONG-TERM INCENTIVE CASH (LTIC)
LTIC is a long-term cash award based on our performance against ambitious goals for Shareholder Value Added (SVA) over a three-year performance period.period with a modifier based on three-year relative TSR performance.
SHAREHOLDER VALUE ADDED PERFORMANCE METRIC
SVA, which essentially measures earnings in excess of our cost of capital, was selected as the LTIC performance metric because the Committee believes we should:
| — | |
| — |
We believe we can realize sustainable improvement in SVA through strong margins delivered with the revolution of the agriculture and construction industries through the rapid introduction of new technologies and a combinationdisciplined approach to the allocation of revenue growthcapital for research and high returns on invested capital. SVA incorporates both of these conceptsinvestment dollars to the most promising and therefore serves as a barometer of long-term value.profitable opportunities.
We demonstrate how SVA is calculated in Appendix B, “Deere & Company Reconciliation of Variable Compensation Measures to Non-GAAP Measures.”
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SETTING RIGOROUS SVA GOALS
Our SVA performance targets are intended to incentivize superior performance. Our goal for a maximum payout is calculated based on estimated enterprise SVA at mid-cycle sales levels for the first year of the performance period. We assume a compounded 7% annual growth rate for the remaining two years (our historical sales growth rate) to arrive at a cumulative three-year SVA goal, given limited visibility.
Once the maximum SVA goal is set, the target SVA goal is set at half of that amount. Our target goals are challenging to achieve. The threshold accumulated goal is set at $5 million.
The chart below details the threshold, target, and maximum accumulated SVA goals for each performance period that includes fiscal 2020.2021. The SVA goals at all levels have had no adjustments due to the global pandemic. The SVA goals have increased at a compounded annual growth rate of 9%12% since the LTIC plan was introduced in 2004. The SVA goals for the performance period ending in 2021 were lower than the prior year primarily due to commodity pressures at the start of the performance period. As displayed below, the subsequent years have increased SVA performance expectations as compared to the period ending in 2021.
| SVA Goals for LTIC | Fiscal 2019 through Fiscal 2021 | Fiscal 2020 through Fiscal 2022 | Fiscal 2021 through Fiscal 2023 | |||||
| Threshold SVA Required for Payout | $5 million | $5 million | $5 million | |||||
| SVA Goal for Target Payout | $3,335 million | $3,955 million | $5,250 million | |||||
| SVA Goal for Maximum Payout | $6,670 million | $7,910 million |
Advisory Vote on Executive CompensationCompensation Discussion and AnalysisDirect Compensation Elements
MODIFICATION OF AWARDS BASED ON RELATIVE TSR
(rTSR)
LTIC payouts may be modified based on relative TSR performance as compared to a subset of the S&P 500 Industrial SectorPerformance Peer Group. . If our TSR is at or below the 25th percentile of the comparator group, which comprises around 40 companies, the final LTIC payout for our senior executives will be reduced by 25%. If our TSR is between the 25th and 50th percentiles, the final LTIC payout for our senior executives will be reduced by up to 25%, as shown in the graph below. When performance is between the 50th and 75th percentile the LTIC payout will be increased.Beginning with the three-year performance period starting with fiscal 2018, which paid out in 2020, the TSR modifier was amended to include an upside opportunity when performance is between the 50th and 75th percentile and also to create a steeper reduction when TSR performance is below the 50th percentile. In addition, in 2018 the performance peer group for TSR purposes was amended from the S&P Industrials peer group to a subset of the S&P Industrial Sector. This smaller group of around 40 peer companies is more closely aligned by industry or related to agricultural and construction business cycles. The same smaller peer group is used as the comparator group for PSU metrics. The payout factor based on SVA performancePerformance at the 50th percentile will be multiplied by the modifier to calculate a final payout factor. The chart below shows how the modifier operates at different TSR rankings. The TSR modifier will apply a multiplicative percentagehave no adjustment to the payout factor.as the modifier will be 100%. Payout percentages are linearly interpolated for rTSR performance between the points as illustrated below.
| Performance Bend Points | Percent of Award Earned | |
| At or above 75th percentile | 125% | |
| 50th percentile | 100% | |
| At or below 25th percentile | 75% |
RELATIVE TSR MODIFIERPERFORMANCE FOR LTIC AWARDPERFORMANCE PERIOD ENDING FISCAL 2021
| Threshold 75% | Target 100% | Maximum 125% | Performance Results | LTIC rTSR Modifier | ||||||
| Relative TSR |  | 95th percentile | 200% | |||||||
Deere’s TSR during the performance period ending fiscal 2021 was 165.2%, which ranked at the 95th percentile as compared to the performance peer group. For the performance period ending fiscal 2021, the rTSR modifier will increase the LTIC payout by 125% up to the maximum LTIC payout of 200%.
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APPROVAL OF LTIC AWARD RATES
At the beginning of each performance period, after considering data for our peer group, the Committee approves target LTIC payout rates as a percentage of the median salary for each NEO’s salary grade. For the performance period that ends in 2020, the target rates were increased to align closer to peers and market changes.
Regardless of the amount calculated for each award using these payout rates, no employee can receive an award under the LTIC plan that exceeds $6 million or 200% of target.
| Effective with Performance Period Ending in 2021 | ||
| CEO | 135% | |
| Other NEOs | 105% |
FISCAL 20202021 PERFORMANCE RESULTS FOR LTIC
The following table shows our accumulated SVA, calculated as described in Appendix B, for the three-year performance period ended in 2020,2021, which resulted in a payout of 159%200%.
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The payout percentage for fiscal 20202021 was calculated as follows:
| Fiscal Year | SVA (in millions) | SVA (in millions) | ||
| 2018 | $1,885 | |||
| 2019 | $1,535 | $1,535 | ||
| 2020 | $1,556 | $1,556 | ||
| Accumulated SVA for 2018-2020 performance period | $4,975 | |||
| 2021 | $4,866 | |||
| Accumulated SVA for 2019-2021 performance period | $7,957 | |||
| SVA Goal for Target Payout | $3,900 | $3,335 | ||
| TSR Modifier | 125% | |||
| Actual Performance as % of Target (See table below) | 159% | |||
| Accum SVA % of Target for Current Year | 200% | |||
| rTSR Modifier (1) | N/A | |||
| Actual Performance as % of Target (See table on next page) | 200% | |||
| (1) | Due to payout being at 200% based upon accumulated SVA, there is no adjustment for rTSR even though it would have adjusted at 125%. |
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HISTORICAL ACCUMULATED SVA, LTIC GOALS, RELATIVE TSR PERFORMANCE AND LTIC PAYOUTS
The following table shows historical LTIC information and how SVA for fiscal 20202021 will affect LTIC awards for the performance periods ending in 2020, 2021, 2022, and 2022.2023. Maximum payout is based upon 200% of SVA goal at target.
| Year | 2017-2019 | 2018-2020 | 2019-2021 | 2020-2022 | 2021-2023 | |||||
| Accumulated SVA (Millions) | $4,684 | $4,975 | $7,957 | $6,422 | $5,128 | |||||
| SVA as a % of Target | 116.8% | 127.6% | 200.0% | In Process Performance Periods | ||||||
| rTSR Percentile | 88th | 95th | 95th | |||||||
| LTIC Modifier (2)(3) | 100.0% | 125.0% | N/A | |||||||
| LTIC Payout | 116.8% | 159.5% | 200.0% | |||||||
| (1) | The fiscal 2021 |
| (2) | The rTSR modifier for the period ending 2019 only allowed for downward adjustment. |
| (3) | For the performance period ending 2021, no upward adjustment from the rTSR modifier was applied due to the LTIC payout being at the 200% cap based upon the accumulated SVA. Had the cap not been hit, the payout would have been increased by 125% based upon rTSR performance. |
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CALCULATION OF LTIC AWARDS
The amount of the LTIC award paid to a NEO is calculated as follows:
| Median of actual salaries for the relevant salary grade (a) |  | Target LTIC rate | | Actual performance as a percent of target | | TSR Modifier |  | LTIC award amount |
| (a) | Median (or midpoint) is the basis of the LTIC calculation for all employees so that within a given salary structure and level, the employees receive the same LTIC payout. |
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ActualBased on the 200% payout, actual LTIC awards paid to the NEOs are shown in the table to the right and detailed in the Fiscal 20202021 Summary Compensation Table under footnote (4)(5).
The results for the performance period ended in 20202021 are also used to determine the LTIC awards for other eligible employees worldwide. LTIC awards paid to the NEOs for fiscal 20202021 consisted of approximately 8%6% of the total amount of LTIC awards paid to all eligible employees.
| Officer | Fiscal 2020 LTIC Award Payout | Fiscal 2021 LTIC Award Payout | ||||
| John C. May | $ | 1,560,484 | $ | 4,050,000 | ||
| Ryan D. Campbell | $ | 1,364,587 | $ | 1,711,510 | ||
| Mary K. W. Jones | $ | 1,364,587 | ||||
| Marc A. Howze | $ | 1,711,510 | ||||
| Rajesh Kalathur | $ | 1,364,587 | $ | 1,711,510 | ||
| Cory J. Reed | $ | 1,364,587 | $ | 1,711,510 | ||
| James M. Field | $ | 1,364,587 | ||||
Long-Term Incentive (LTI)LTI is designedMr. May’s 2021 LTIC award has increased from the prior year due to reward the NEOs2021 payout being based upon the median for creating sustained shareholder value,the CEO position. Due to encourageeligibility rules, the ownership2020 LTIC award of Deere stock, to foster teamwork, and to retain and motivate high-caliber executives while aligning their interests with those of our shareholders. $1,560,484, was based upon the median for his role as Chief Operating Officer. Mr. May was named CEO on November 4, 2019.
LONG-TERM INCENTIVE EQUITY (LTI)
LTI awards consist of the following three equity components awarded annually under the John Deere Omnibus2020 Equity and Incentive Plan (Omnibus Plan):Plan:
| — | Performance Stock Units (PSUs) |
| — | Restricted Stock Units (RSUs) |
| — | Market-priced stock options |
The John Deere 2020 Equity and Incentive Plan was approved by our shareholders at the Annual Meeting in February 2020. This plan will replace the Omnibus Plan for annual awards beginning in fiscal 2021.
FISCAL 20202021 LTI EQUITY AWARD OVERVIEW FOR NEOSNEOs
PSUs | RSUs | Stock Options | PSUs | RSUs | Stock Options | |||||||||||||
LTI Mix |  | 40% |  | 25% |  | 35% | ||||||||||||
| LTI Equity Mix |  | 40% |  | 25% |  | 35% | ||||||||||||
| Performance measurements | Revenue growth* | Stock price appreciation | Stock price appreciation | Revenue growth(1) | Stock price appreciation | Stock price appreciation | ||||||||||||
| Vesting period | Cliff vest on the third anniversary of the grant date | Cliff vest on the third anniversary of the grant date | Vest in approximately equal annual installments over three years | Cliff vest on the third anniversary of the grant date | Cliff vest on the third anniversary of the grant date | Vest in approximately equal annual installments over three years | ||||||||||||
| Conversion/ expiration | Converted to Deere common stock upon vesting | Converted to Deere common stock upon vesting | Expire 10 years from the grant date | Converted to Deere common stock upon vesting | Converted to Deere common stock upon vesting | Expire 10 years from the grant date | ||||||||||||
| Objective | Motivate and reward relative outperformance | Encourage ownership and retention while providing immediate alignment with shareholders | Reward for stock price appreciation | Motivate and reward relative outperformance | Encourage ownership and retention while providing immediate alignment with shareholders | Aligns the interest with shareholders, rewarding for stock price appreciation | ||||||||||||
| Based on Deere’s compounded annual growth rate as compared to the Performance Peer Group |
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APPROVAL OF LTI EQUITY AWARD VALUES
The Committee established LTI grants for the NEOs based on the following criteria:
| — | |
| — | |
| — | Current market practice |
| — | |
| — |
Awards granted in previous years are not a factor in determining the current year’s LTI award, nor is potential accumulated wealth.
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At the first Committee meeting of each fiscal year, after consideration of compensation peer group data on median values for long-term incentives, the Committee approves a dollar value for a base-level LTI equity award and the mix of awards to be delivered. The grant price is the closing price of Deere common stock on the NYSE on the grant date. The grant price is used to determine the number of PSUs, RSUs, and stock options to be awarded.
The Committee can increase (up to 20%30%) or decrease (down to $0) an individual NEO’s base-level award to distinguish that executive’s performance, deliver a particular LTI equity value, or reflect other adjustments as the Committee deems appropriate. The potential adjustment of up to 30% for fiscal 2021 was increased from a potential of up to 20% in fiscal 2020 as the Committee wants greater flexibility to take individual performance into account given the plan design is geared towards company performance. For fiscal 2020,2021, the Committee approved adjustments to base-level award values ranging up to 20%30% to recognize the accomplishments of the individual NEOs. LTI equity awards were approved for the NEOs as follows:
| Adjusted Award Values(a) | |||
| John C. May | $ | 7,500,000 | |
| Ryan D. Campbell | $ | 1,883,700 | |
| Mary K. W. Jones | $ | 1,973,400 | |
| Adjusted Award Values(a) | |
| John C. May | $9,425,000 |
| Ryan D. Campbell | $2,332,200 |
| Marc A. Howze | $2,332,200 |
| Adjusted Award Values(a) | |||
| Rajesh Kalathur | $ | 2,063,100 | |
| Cory J. Reed | $ | 1,973,400 | |
| James M. Field(b) | $ | 1,973,400 | |
| Adjusted Award Values(a) | |
| Rajesh Kalathur | $1,883,700 |
| Cory J. Reed | $2,063,100 |
| (a) | The amounts shown include PSUs valued at the grant price on the date of grant assuming a 100% payout. |
|
See the Fiscal 20202021 Grants of Plan-Based Awards table and footnotes for more information on LTI equity awards delivered, as well as the terms of the awards.
For fiscal 2020,2021, the number of RSUs and PSUs granted to the NEOs represented 8%11% and 54%60%, respectively, of the total RSUs and PSUs granted to all eligible salaried employees; stock options granted to the NEOs represented 30%37% of the total stock options granted to eligible salaried employees.
CONVERSIONSETTLEMENT OF PSUs TOINTO DEERE STOCKFor the PSU performance period ending in 2020, the actual number of shares to be issued was based on Deere’s revenue growth, as compared to a subset of companies in the S&P Industrial Sector.
For PSUs granted in fiscal 20202021 (December 2019)2020), the actual number of shares to be issued upon conversion will be based on Deere’s revenue growth for the three-year performance period ending in 20222023 and measured relative to a subset of the companies in the S&P Industrial SectorPerformance Peer Group as of the end of the performance period.
PERFORMANCE TARGETS FOR PERFORMANCE PERIOD ENDING IN 20202021
| Revenue Growth Payout % | | 100% of PSUs Awarded |  | Final Award |
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The number of PSUs that vest and convert to shares can range from 0%-200% of the number of PSUs awarded, depending on Deere’s relative performance during the performance period, as illustrated in the following table:
| Deere’s Revenue Growth Relative to | % of Target Shares Earned (Payout %) * | |
| Below 25th percentile | 0% | |
| At 25th percentile | 25% | |
| At 50th percentile | 100% | |
| At or above 75th percentile | 200% |
* Interim points are interpolated
| * | Interim points are interpolated |
These performance targets reflect the Committee’s belief that median levels of relative performance should lead to median levels of compensation.
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PSUs FOR PERFORMANCE PERIOD 2018-2020 PSUSENDED 2021
The performance period for PSUs granted in fiscal 20182019 ended on October 31, 2020.2021. The final number of shares earned was based on Deere’s annualized revenue growth relative to a subset of the S&P Industrial SectorPerformance Peer Group over the three-year performance period. The Committee made its final payout determination in December 20202021 following a review of the relative performances of Deere and the subset of the S&P Industrial Sector.Performance Peer Group. Deere’s annualized revenue growth was comparable to the 84th percentile. This resulted in an overall payout of 200% of target. This payout compared to an overall payout of PSUs relative to target for each of the five prior three-year performance periods ending in fiscal 20152016 through fiscal 20192020 of 0%, 33.5%, 100%, 200%, 200%, and 200%, respectively.
| Deere’s Revenue Growth Relative to the Subset of the S&P Industrial Sector | Revenue Growth for Fiscal 2018 through Fiscal 2020 | Performance Results for Performance Period Relative to Subset of the S&P Industrial Sector | % of Target Shares Earned |
| Revenue Growth | 6.12% | 84th percentile | 200% |
| Threshold 0% | Target 100% | Maximum 200% | Performance Results | % of Target Shares Earned | ||||||
| Annualized Revenue Growth |  | 84th percentile | 200% | |||||||
LTI REPORTED VERSUS REALIZABLE VALUE
The values for Stock and Option Awards included on the Summary Compensation Table are presented in accordance with SEC requirements. Although this allows for comparison across companies, the Committee feels the prescribed calculation does not fully represent the Committee’s annual decision and does not support a valid CEO pay-for-performance assessment. To calculate the realizable value, the stock units from the LTI equity awards granted in 2018,fiscal 2019, 2020, and 20202021 are valued using the fiscal year endyear-end stock price.price of $342.31. The value of PSUs also takes into consideration the current year payout and the current performance for the performance cycles in-process (2019-2021(2020-2022 and 2020-2022)2021-2023). The value of options is calculated using the Black-Scholes value as of fiscal year end. The following chart compares the LTI equity values reported on the Summary Compensation Table to Mr. May’s realizable LTI equity value for each of the grants in 2018,fiscal 2019, 2020, and 2020.
Table of Contents2021.
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REPORTED VS. REALIZABLE LTI EQUITY VALUE
(Thousands)
| (a) | See footnotes | |
| (b) | Realizable LTI Equity is calculated as: |
| – | The value of stock options that were granted in | |
| – | The value of RSUs that were granted in | |
| – | The value of PSUs granted in |
| (c) | Values reported based upon former CEO, Samuel R. Allen. |
Summary of Direct Compensation
The Committee believes each pay element included in Direct Compensation is consistent with our pay for performance compensation philosophy. The Committee reviews Direct Compensation for the NEOs in the aggregate (excluding the CEO)
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as well as for each NEO individually and compares this compensation to the market position data of our compensation peer group. This market position data takes into account the level of responsibility (including the level of sales volume) for each NEO’s respective operations.
A key element of these individual performance evaluations is a careful analysis of each NEO’s collaboration and contribution to the success of a high-performing team. Thus, while the market data for each position is a factor in reviewing Direct Compensation, the Committee also considers individual fulfillment of duties, teamwork, development, time in position, experience, and internal equity among NEOs other than the CEO. The Committee recognizes individual performance through adjustments to base salary and the equity component of LTI.
Direct Compensation for the CEO is higher than for the other NEOs due to the CEO’s breadth of executive and operating responsibilities for the entire global enterprise. The Committee does not target CEO compensation as a certain multiple of the compensation of the other NEOs. The relationship between the CEO’s compensation and that of the other NEOs is influenced by our organizational structure, which does not usually include a chief operating officer. The ratio of Mr. May’s Direct Compensation to that of the other NEOs is generally comparable to that found among the companies in our compensation peer group.
Other Compensation Matters
RULES RELATED TO STOCK OWNERSHIP, HOLDING REQUIREMENTS, AND
ANTI-HEDGING AND ANTI-PLEDGING POLICIES
NEOs are requiredexpected to hold a certain amountattain the applicable target ownership of Deere stock. The CEO is expected to hold stock equivalent to 6.0 times base salary and the other NEOs are expected to hold stock equivalent to 3.5 times base salary. These ownership levels must be achieved within five years of the date the NEO is first appointed as CEO or as an executive officer. NEOs who have not achieved the requisite ownership level may not transfer any of the stock they acquire through our equity incentive plan. Only vested RSUs and any common stock held personally by a NEO are included in determining whether the applicable ownership requirement has been met. Once a NEO achieves the appropriate ownership level, the number of shares held at that time becomes that individual’s fixed stock ownership requirement for three years, even if base salary increases or Deere’s stock price decreases. Each NEO, except Mr. Campbell, who was promoted to CFO on April 1, 2019, has achieved stockholdings in excess of the applicable multiple as of the date of this Proxy Statement.
Our Insider Trading Policy precludes all directors and employees, including our NEOs, and their related persons from engaging in short sales of Deere’s stock or trading in instruments designed to hedge against or offset price declines by any Deere securities. Our Insider Trading Policy also prohibits our directors and officers from holding Deere stock in margin accounts or pledging.pledging Deere stock as collateral for loans or other obligations.
| STOCK OWNERSHIP REQUIREMENTS |
| 6x |
CHAIRMAN & CEO |
FOR NEOS |
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LIMITATIONS ON DEDUCTIBILITY OF COMPENSATION
Prior to the Tax Cuts and Jobs Act (“Tax Reform”) that was signed into law December 22, 2017, Section 162(m) of the Internal Revenue Code generally limited to $1 million the U.S. federal income tax deductibility of compensation paid in one year to a company’s CEO or any of its three next-highest-paid executive officers (other than its Chief Financial Officer). to $1 million. Performance-based compensation was not subject to this limit on deductibility so long as such compensation met certain requirements, including shareholder approval of material terms. The Committee strived to provide the NEOs with incentive compensation programs that preserved the tax deductibility of compensation paid by Deere to the extent reasonably practicable and consistent with Deere’s other compensation objectives.
The Tax Reform includes a major overhaul of Section 162(m), which took effect for tax years beginning after December 31, 2017. Amongst other provisions, it retained the $1 million deduction limit, but repealed the performance-based compensation exemption. The Tax Reform also expanded the definition of “covered employees” to include the Chief Financial Officer and any executive who is subject to the limitation in tax years beginning after 2016. Once an individual becomes a covered employee,
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that individual will remain a covered employee for all future years. As a result, beginning with Deere’s fiscal 2019, compensation paid to our covered employees in excess of $1 million will not be deductible for tax purposes unless it qualifies for transition relief applicable to certain binding written performance-based compensation arrangements in place as of November 2, 2017. No assurance can be given that any future compensation will qualify for the transition relief. While the Committee will continue to consider the tax deductibility of compensation as one of many factors, the Committee believes shareholder interests are best served by not restricting the Committee’s discretion and flexibility in structuring compensation programs to attract, retain, and motivate key executives, even though such programs may result in non-deductible compensation expense.
RECOUPMENT OF PREVIOUSLY PAID INCENTIVE COMPENSATION
Deere’s Executive Incentive Compensation Recoupment Policy authorizes the Committee to determine whether to require recoupment of cash and equity incentive compensation paid to or deferred by certain executives under certain conditions. Under the policy, the Committee may require recoupment if the Committee determines an executive received incentive compensation that was artificially inflated because the executive engaged in misconduct that:
| — | |
| — |
The Committee is closely monitoring proposed rules and rule amendments issued by the SEC to implement provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act relating to recoupment of incentive-based compensation and will amend the Recoupment Policy if necessary when the final rules are adopted.
Indirect Compensation Elements
Perquisites
We offer our NEOs various perquisites that the Committee believes are reasonable in order to remain competitive. These perquisites, which are described in footnote (6)(7) to the Fiscal 20202021 Summary Compensation Table, constitute a small percentage of the NEOs’ total compensation. The Committee conducts an annual review of the perquisites offered to the NEOs. In addition to the items listed in footnote (6)(7), NEOs, as well as other selected employees, are provided indoor parking at no incremental cost to Deere. NEOs may also receive security services for specific security-related reasons identified by independent third-party security consultants.
The Board requires the CEO to use company-owned aircraft for all business and personal travel because the ability to travel safely and efficiently provides substantial benefits that justify the cost. The geographic location of Deere’s headquarters in the Midwest, more than 150 miles from a major metropolitan airport, makes personal and business travel challenging. Moreover, traveling by company aircraft allows the CEO to conduct business confidentially while in transit. Personal use of company aircraft by other NEOs is minimal and must be approved by the CEO. The Committee has limited the CEO’s annual personal usage of company aircraft to approximately 100 hours.
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Retirement Benefits
All NEOs are covered by the same defined benefit pension plans,plan, which includeincludes the same plan terms that apply to most qualifying U.S. salaried employees. We also maintain two additional defined benefit pension plans in which NEOs may participate: the Senior Supplementary Pension Benefit Plan (the “Senior Supplementary Plan”) and the John Deere Supplemental Pension Benefit Plan (the “Deere Supplemental Plan”).
The tax-qualified defined benefit pension plans have compensation limits imposed by the Internal Revenue Code. The Senior Supplementary Plan provides participants with the same benefit they would have received without those limits. This avoids the relative disadvantage that participants would experience compared to other qualified plan participants. The Deere Supplemental Plan is designed to reward career service at Deere above a specified grade level by utilizing a formula that takes into account only years of service above that grade level. We believe the defined benefit plans serve as important retention tools, provide a level of competitive income upon retirement, and reward long-term employment and service as an officer
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of Deere. In addition, the fact that the Senior Supplementary and Deere Supplemental Plans are unfunded (with benefit payments under these plans being made out of the general assets of Deere) and therefore at-risk (if Deere were to seek bankruptcy protection), creates a strong incentive for the NEOs to minimize risks that could jeopardize Deere’s long-term financial health. For additional information, see the Fiscal 20202021 Pension Benefits Table, along with the accompanying narrative and footnotes.
We also maintain a tax-qualified defined contribution plan, the John Deere Savings and Investment Plan (SIP), which is available to most of our U.S. employees, including the NEOs. We make matching contributions to participating SIP accounts on up to six percent of an employee’s pay. The actual amount of the company match varies based on two factors: the STI results for the most recently completed fiscal year (see the “Fiscal 20202021 Performance Results and Payout Amounts” in the STI section) and the pension option in which the employee participates (see the narrative preceding the Fiscal 2020 Pension Benefits Table). The following table illustrates Deere’s match for calendar 2020,2021, which is reported for our NEOs under the “All Other Compensation” column of the Fiscal 20202021 Summary Compensation Table:
| 300 | % | ||
| 100 | % |
Deferred Compensation Benefits
We also maintain certain deferred compensation plans that provide the NEOs with longer-term savings opportunities on a tax-efficient basis. Similar deferred compensation benefits are commonly offered by companies with which we compete for talent.
As of November 1, 2015, for the Defined Contribution Restoration Plan and as of November 1, 2016, for the John Deere Voluntary Deferred Compensation Plan, theThe investment options now parallel the investment options offered under our 401(k) plan, with certain limited exceptions. Funds deferred prior to these effective dates may remain invested under the previous options, although participants also may move these funds into the new options. Additionally, participants may change investment options at any time. These changes effectively ensure that participants cannot earn above-market interest on new deferrals.
See the “Nonqualified Deferred Compensation” section for additional details.
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Potential Payments upon Change in Control
Deere’s Change in Control Severance Program (the “CIC Program”) covers certain executives, including each of the NEOs, and is intended to facilitate continuity of management in the event of a change in control. The Committee believes the CIC Program:
| — | |
| — | |
| — | |
| — | |
| — |
For more information, see “Fiscal 20202021 Potential Payments upon Change in Control” and the corresponding table.
Other Potential Post-Employment Payments
Deere’s various plans and policies provide payments to NEOs upon certain types of employment terminations that are not related to a change in control. These events and amounts are explained in the section under Executive Compensation Tables entitled “Fiscal 20202021 Potential Payments upon Termination of Employment Other than Following a Change in Control.”
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Independent Review and Approval of Executive Compensation
The Committee is responsible for reviewing and approving goals and objectives related to incentive compensation for the majority of salaried employees. In particular, the Committee evaluates the NEOs’ performance in relation to established goals and ultimately approves compensation for the NEOs (except for the CEO). All substantive responsibilities related to the determination of compensation of the NEOs are undertaken exclusively by the members of the Committee, all of whom are independent under current NYSE listing standards.
The Committee periodically reviews the components of our compensation program to ensure the program is aligned with our business strategy, Deere’s performance, and the interests of our employees and shareholders. In addition, the Committee regularly reviews market practices for all significant elements of executive compensation and approves necessary adjustments to ensure Deere’s compensation remains competitive.
Generally, at the Board meeting in August, the full Board (in executive session without the CEO present) evaluates the CEO’s performance. The Committee considers the results of that evaluation when providing recommendations to the independent members of the Board for the CEO’s compensation, which they then approve. The CEO does not play a role in and is not present during discussions regarding his own compensation.
The CEO plays a significant role in setting the compensation for the other NEOs. In advance of the Committee meeting in December, the CEO evaluates each NEO’s individual performance and recommends changes to the NEOs’ base salaries and LTI awards. The CEO is not involved in setting the STI and LTIC awards because they are calculated using predetermined factors. The Committee has the discretion to accept, reject, or modify the CEO’s recommendations. No other executive officers play a substantive role in setting a NEO’s compensation.
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The Role of the Compensation Consultant
The Committee has retained Pearl Meyer, LLC (Pearl Meyer) as its compensation consultant. Pearl Meyer reviews our executive compensation program design and assesses our compensation approach relative to our performance and the market. The Committee has sole responsibility for setting and modifying the fees paid to Pearl Meyer, determining the nature and scope of its services, and evaluating its performance and can terminate Pearl Meyer’s engagement or hire another compensation consultant at any time.
Pearl Meyer periodically meets independently with the Chair of the Committee and regularly participates in executive sessions with the Committee (without any executives or other Deere personnel present) to review compensation data and discuss compensation matters. While the Committee values this expert advice, ultimately the Committee’s decisions reflect many factors and considerations. Management works with Pearl Meyer at the Committee’s direction to develop materials and analysis, such as competitive market assessments and summaries of current legal and regulatory developments, which are essential to the Committee’s compensation determinations.
During fiscal 2020,2021, Pearl Meyer performed the following specific services:
| — | Provided information on executive compensation trends and external developments, including the use of environmental, social, and governance criteria in incentive programs and the impact of COVID-19 on executive compensation |
| — | Provided a competitive evaluation of total compensation for the NEOs, as well as overall long-term incentive program share usage, dilution, and expense |
| — | Reviewed the peer groups used for market analyses and relative performance comparisons in our long-term incentive programs |
| — | Reviewed the competitiveness of actual pay delivered in relation to performance as compared to the peer group, as further discussed in the following section |
| — | Reviewed the competitiveness of our NEO perquisites and severance benefits |
| — | Provided recommendations on CEO total compensation |
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| — | Reviewed Committee agendas and supporting materials in advance of each meeting and raised questions or issues with management and the Committee Chair, as appropriate |
| — | Assisted with the onboarding of new members of the Committee |
| — | Provided guidance and recommendations on incentive plan design, including rigor of metrics and goals |
| — | Reviewed drafts and commented on this CD&A and the related compensation tables |
Pearl Meyer does not provide other significant services to Deere and has no other direct or indirect business relationships with Deere or any of its affiliates. Taking these and other factors into account, the Committee has determined that the work performed by Pearl Meyer does not raise any conflicts of interest. Additionally, based on its analysis of the factors derived from SEC and NYSE regulations and identified in the Committee’s charter as being relevant to compensation consultant independence, the Committee has concluded that Pearl Meyer is independent of Deere’s management.
Market Analysis
COMPENSATION PEER GROUP
Executive compensation is benchmarked against a peer group of leading U.S. based companies (with an emphasis on industrial manufacturing companies), large global operations, a diversified business and/or roughly comparable annual sales and market capitalizations. On at least an annual basis, the Compensation Committee works with its independent consultant, Pearl Meyer, to review the composition of the peer group and determine whether any changes should be made. For fiscal 2021, although the peer group remained at 16 companies, two companies were removed and replaced by two different companies. Howmet Aerospace, a spin-off from the split with Arconic, was removed due to company size. DuPont De Nemours, Inc. was removed due to its primary focus as a chemical company and no longer having an industrial focus. Archer Daniels Midland and Parker-Hannifin were added due to meeting revenue size criteria and having an industrial focus. The table below lists the companies included in the compensation peer group for the fiscal 2021 market analysis process.
| Company | Revenue (M)(1) | Market Capitalization (M)(1) | Employees (1) | ||||||||
| 3M Company | $ | 32,348 | $ | 87,384 | 96,163 | ||||||
| Archer Daniels Midland | $ | 64,322 | $ | 20,695 | 38,100 | ||||||
| Boeing Company | $ | 70,550 | $ | 79,581 | 161,100 | ||||||
| Caterpillar Inc. | $ | 50,969 | $ | 62,989 | 102,300 | ||||||
| Cummins Inc. | $ | 22,578 | $ | 24,104 | 61,615 | ||||||
| Eaton Corp. plc | $ | 20,874 | $ | 33,400 | 101,000 | ||||||
| Emerson Electric Co. | $ | 17,968 | $ | 34,074 | 88,000 | ||||||
| General Dynamics Corporation | $ | 38,838 | $ | 37,384 | 102,900 | ||||||
| Honeywell International Inc. | $ | 36,288 | $ | 100,364 | 113,000 | ||||||
| Illinois Tool Works Inc. | $ | 13,785 | $ | 51,597 | 45,000 | ||||||
| Johnson Controls International plc | $ | 23,745 | $ | 22,205 | 104,000 | ||||||
| Lockheed Martin Corporation | $ | 61,127 | $ | 109,106 | 110,000 | ||||||
| PACCAR Inc. | $ | 24,274 | $ | 23,933 | 27,000 | ||||||
| Parker Hannifin | $ | 14,216 | $ | 20,297 | 55,610 | ||||||
| United Technologies Corporation(2) | $ | 76,891 | $ | 97,757 | 243,200 | ||||||
| Whirlpool Corporation | $ | 19,984 | $ | 7,004 | 77,000 | ||||||
| 75th Percentile | $ | 53,509 | $ | 81,532 | 105,500 | ||||||
| Median | $ | 28,311 | $ | 35,729 | 98,582 | ||||||
| 25th Percentile | $ | 20,652 | $ | 23,501 | 60,114 | ||||||
| Deere & Company | $ | 38,880 | $ | 45,494 | 73,489 | ||||||
| Deere Percentile | 67th | 57th | 32nd | ||||||||
| (2) |
53 DEERE & COMPANY2022 PROXY STATEMENT
Advisory Vote on Executive Compensation
Compensation Discussion and Analysis
Compensation Methodology and Process
Market AnalysisPEER GROUPThe companies in the peer group for our fiscal 2020 market analysis process, listed in the chart below, are similar to Deere in terms of sales volume, products, services, market capitalization, and global presence.
| Company | Fiscal Year | Revenue* (MM) | Market Value 10/31/2020 (MM) | Employees* | ||||||
| 3M Company | Dec ‘19 | $ | 32,136 | $ | 92,268 | 96,163 | ||||
| Boeing Company | Dec ‘19 | $ | 76,559 | $ | 81,512 | 161,100 | ||||
| Caterpillar Inc. | Dec ‘19 | $ | 53,789 | $ | 85,044 | 102,300 | ||||
| Cummins Inc. | Dec ‘19 | $ | 23,571 | $ | 32,545 | 61,615 | ||||
| DuPont de Nemours, Inc. | Dec ‘19 | $ | 21,512 | $ | 41,741 | 35,000 | ||||
| Eaton Corp. plc | Dec ‘19 | $ | 21,390 | $ | 41,526 | 101,000 | ||||
| Emerson Electric Co. | Sep ‘20 | $ | 16,790 | $ | 38,718 | 83,500 | ||||
| General Dynamics Corporation | Dec ‘19 | $ | 39,350 | $ | 37,688 | 102,900 | ||||
| Honeywell International Inc. | Dec ‘19 | $ | 36,706 | $ | 115,743 | 113,000 | ||||
| Howmet Aerospace | Dec ‘19 | $ | 14,187 | $ | 7,523 | 41,700 | ||||
| Illinois Tool Works Inc. | Dec ‘19 | $ | 14,109 | $ | 62,000 | 45,000 | ||||
| Johnson Controls International plc | Sep ‘20 | $ | 22,317 | $ | 30,653 | 97,000 | ||||
| Lockheed Martin Corporation | Dec ‘19 | $ | 59,812 | $ | 97,961 | 110,000 | ||||
| PACCAR Inc. | Dec ‘19 | $ | 25,621 | $ | 29,567 | 27,000 | ||||
| Raytheon Technologies Corporation | Dec ‘19 | $ | 77,097 | $ | 82,497 | 243,200 | ||||
| Whirlpool Corporation | Dec ‘19 | $ | 20,423 | $ | 11,569 | 77,000 | ||||
| 75th Percentile | $ | 42,960 | $ | 83,133 | 104,675 | |||||
| Median | $ | 24,596 | $ | 41,634 | 96,582 | |||||
| 25th Percentile | $ | 21,148 | $ | 32,072 | 57,461 | |||||
| Deere & Company | Oct ‘20 | $ | 35,540 | $ | 70,794 | 69,200 | ||||
| Deere Percentile | 65th | 63rd | 30th | |||||||
Source: Factset Research Systems, Inc.
* Reflects employees and revenues for most recent reported fiscal year
Compensation paid by our compensation peer group is representative of the compensation we believe is required to attract, retain, and motivate executive talent. The Committee, in consultation with Pearl Meyer, periodically reviews the compensation peer group to confirm that it remains an appropriate point of reference for NEO compensation.
REVIEW OF PAY FOR PERFORMANCE RELATIVE TO PEER GROUPTo ensure that total compensation for our NEOs aligns
The relative performance metrics of TSR and revenue are measured against a peer group comprised of a subset of the S&P 500 Industrials. The peer group is developed by starting with the market, we compared our compensationS&P 500 Industrials and then removing companies that are not manufacturing and/or related to the agricultural or construction cycles. Industries removed include Air Freight & Logistics, Airlines, Commercial Services & Supplies, Professional Services, Trading Companies & Distributors. Within the relevant industries, qualitative discretion was applied to determine suitability and maintain consistency. Companies with significant U.S. government revenue are excluded since stock price and revenue are significantly driven by government actions. The performance against the companies in our peer group. As part of this comparison, we evaluate our peers’ mix of cash versus equity and short-term versus long-term components.
In addition, we reviewed the relationship between total realizable compensation and our performancegroup for the threeperformance period ending in fiscal years ended with fiscal year 2019 —2021 included the most recent fiscal year-end for which we can obtain corresponding compensation information for our peer companies. This review helps the Committee understand whether total compensation delivered to our NEOs aligns with our performance relative to our peer group. For purposes of this review, we use TSR to measure performance.
The analysis, as shown in the following graphs, reveals that realizable pay for Deere’s CEO and other NEOs was reasonably aligned with Deere’s relative TSR over the relevant time period. Based on these results and the results of similar past comparisons of pay and performance alignment, we believe our pay programs ensure that compensation for our executives is aligned with performance and market norms.39 companies listed below.
| ||||
| 3M Company | Acuity Brands, Inc. | |||
| General Electric Company | AMETEK, Inc. | |||
| Honeywell International Inc. | Eaton Corporation plc | |||
| Roper Technologies, Inc. | Emerson Electric Co. | |||
| Rockwell Automation Inc. | ||||
| Aerospace & Defense | Machinery | |||
| Howmet Aerospace | Caterpillar Inc. | |||
| (formerly Arconic, Inc.) | Cummins Inc. | |||
| Textron Inc. | Dover Corporation | |||
| The Boeing Company | Flowserve Corporation | |||
| TransDigm Group Incorporated | Fortive Corporation | |||
| Raytheon Technologies Corporation | Illinois Tool Works Inc. | |||
| (formerly United Technologies Corp.) | Ingersoll-Rand Plc | |||
| PACCAR Inc | ||||
| Parker-Hannifin Corporation | ||||
| Pentair plc | ||||
| Snap-on Incorporated | ||||
| Xylem Inc. | ||||
| Road & Rail | Construction & Engineering | |||
| CSX Corporation | Fluor Corporation | |||
| J.B. Hunt Transport Services, Inc. | Jacobs Engineering Group Inc. | |||
| Kansas City Southern | Quanta Services, Inc. | |||
| Norfolk Southern Corporation | ||||
| Ryder System, Inc. | ||||
| Union Pacific Corporation | ||||
| Building Products | ||||
| Allegion plc | ||||
| Fortune Brands Home & Security, Inc. | ||||
| Johnson Controls International plc | ||||
| Masco Corporation |
54 DEERE & COMPANY2022 PROXY STATEMENT
Advisory Vote on Executive CompensationCompensation Discussion and AnalysisCompensation Methodology and Process
DEERE 3-YEAR PAY FOR PERFORMANCEREALIZABLE PAY VS. TOTAL SHAREHOLDER RETURN
 |  |
“Total realizable pay” for Deere’s NEOs is defined as the sum of the following components:
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| |
| |
| |
| |
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For peer companies, total realizable pay includes cash- and equity-based long-term incentive plan and performance share plan payouts for performance cycles that are completed within the three-year period. Award values are then multiplied by a factor that reflects grant frequency and long-term incentive pay mix.
Advisory Vote on Executive Compensation
Compensation Discussion and Analysis
Risk Assessment of Compensation Policies and Practices
As shown in the adjacent diagram, management conducted a comprehensive risk assessment of Deere’s compensation policies and practices, as we have done each year since 2010.
The inquiries in the risk assessment questionnaire focus on: pay-for-performance comparison against our compensation peer group, balance of compensation components, program design and pay leverage, program governance, and factors that mitigate program risks.
Based on its most recent review, the Risk Assessment Team concluded that Deere’s compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the company. The Committee, along with its independent compensation consultant, reviewed the risk assessment and concurred with that conclusion. The Committee believes the following key factors support the Risk Assessment Team’s conclusion:
| — | |
| — |
In addition, Deere maintains stock ownership requirements that are designed to motivate our management team to focus on Deere’s long-term sustainable growth, a Recoupment Policy designed to prevent misconduct relating to financial reporting and anti-hedging and anti-pledging policies designed to prevent speculation in Deere securities. The Committee and management also have the ability to use negative discretion to determine appropriate payouts for formula-based awards.
Convened a Risk Assessment Team comprised of management personnel representing relevant areas of oversight. |
  |
Completed an inventory of Deere’s compensation programs globally for both executive and non-executive employees. |
|
Updated our existing detailed risk assessment questionnaire to take into account any relevant changes in our compensation structure or philosophy. |
|
Applied the updated questionnaire to the compensation programs that, due to their size, potential payout, or structure, could have a material adverse effect on Deere. |
55 DEERE & COMPANY2022 PROXY STATEMENT
Advisory Vote on Executive Compensation
Compensation Discussion and Analysis
Compensation Committee Report
The reports of the Compensation Committee and the Audit Review Committee that follow do not constitute soliciting material and will not be deemed filed or incorporated by reference by any general statement incorporating by reference this Proxy Statement or future filings into any filing under the Securities Act of 1933 or under the Securities Exchange Act of 1934, except to the extent that Deere specifically incorporates the information by reference, and will not otherwise be deemed filed under these statutes.
The Compensation Committee of the Board of Directors has reviewed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K and discussed it with Deere’s management. Based on the Compensation Committee’s review and discussions with management, the Compensation Committee recommendsrecommended to the Board of Directors that the Compensation Discussion and Analysis be included in Deere’s Proxy Statement.
Dmitri L. Stockton, Chair
Leanne G. Caret
Tamra A. Erwin
Charles O. Holliday, Jr.
Dipak C. Jain
Michael O. Johanns
56 DEERE & COMPANY2022 PROXY STATEMENT
Advisory Vote on Executive Compensation
Executive Compensation Tables
In this section, we provide tabular and narrative information regarding the compensation of our NEOs for fiscal 2020.2021. Fiscal year 20202021 is the first year Mary K. W. JonesMarc A. Howze met the criteria for inclusion. Therefore, data for only fiscal year 20202021 is included for Ms. Jones. Ryan D. Campbell and Cory J. Reed were included forMr. Howze. For fiscal 2019, John C. May held the first time in fiscal year 2019. Therefore, data is only reported for fiscal yearsrole of Chief Operating Officer. He was promoted to CEO on November 4, 2019 and 2020 for those individuals.elected as Chairman of the Board on May 1, 2020.
FISCAL 20202021 SUMMARY COMPENSATION TABLE
| Name and Position | Fiscal Year | Salary (1) | Stock Awards(2) | Option Awards(3) | Non-Equity Incentive Plan Compensation(4) | Change in Pension Value and Nonqualified Deferred Compensation Earnings(5) | All Other Compensation(6) | Total | |||||||||||||||
| John C. May Chairman and Chief Executive Officer | 2020 | $ | 1,199,245 | $ | 6,878,173 | $ | 2,624,979 | $ | 3,741,252 | $ | 834,610 | $ | 310,125 | $ | 15,588,384 | ||||||||
| 2019 | $ | 889,760 | $ | 1,876,726 | $ | 655,191 | $ | 1,421,607 | $ | 970,162 | $ | 192,246 | $ | 6,005,692 | |||||||||
| 2018 | $ | 644,930 | $ | 1,739,879 | $ | 600,568 | $ | 1,119,225 | $ | 1,606 | $ | 167,788 | $ | 4,273,996 | |||||||||
| Ryan D. Campbell Senior Vice President and Chief Financial Officer | 2020 | $ | 671,859 | $ | 1,727,552 | $ | 659,263 | $ | 2,179,082 | $ | 293,654 | $ | 85,601 | $ | 5,617,011 | ||||||||
| 2019 | $ | 486,928 | $ | 414,755 | $ | 144,873 | $ | 538,736 | $ | 266,736 | $ | 68,954 | $ | 1,920,982 | |||||||||
| Mary K. W. Jones Senior Vice President, General Counsel & Worldwide Public Affairs | 2020 | $ | 782,796 | $ | 1,809,670 | $ | 690,680 | $ | 2,313,571 | $ | 686,380 | $ | 113,996 | $ | 6,397,093 | ||||||||
| Rajesh Kalathur President, John Deere Financial and Chief Information Officer | 2020 | $ | 790,894 | $ | 1,891,788 | $ | 722,062 | $ | 2,323,388 | $ | 658,772 | $ | 125,737 | $ | 6,512,641 | ||||||||
| 2019 | $ | 721,732 | $ | 1,798,637 | $ | 627,860 | $ | 1,266,043 | $ | 872,056 | $ | 151,131 | $ | 5,437,459 | |||||||||
| 2018 | $ | 656,497 | $ | 1,739,879 | $ | 600,568 | $ | 1,130,603 | $ | 36,918 | $ | 172,386 | $ | 4,336,851 | |||||||||
| Cory J. Reed President, Worldwide Agriculture & Turf Division, Production & Precision Agriculture, Americas and Australia | 2020 | $ | 765,695 | $ | 1,809,670 | $ | 690,680 | $ | 2,292,839 | $ | 521,036 | $ | 112,749 | $ | 6,192,669 | ||||||||
| 2019 | $ | 669,999 | $ | 1,798,637 | $ | 627,860 | $ | 1,230,497 | $ | 640,851 | $ | 124,079 | $ | 5,091,923 | |||||||||
| James M. Field Former President, Worldwide Construction & Forestry and Power Systems | 2020 | $ | 835,516 | $ | 1,809,670 | $ | 690,680 | $ | 2,377,483 | $ | 962,315 | $ | 136,592 | $ | 6,812,256 | ||||||||
| 2019 | $ | 795,874 | $ | 5,798,425 | $ | 627,860 | $ | 1,316,986 | $ | 1,382,119 | $ | 165,877 | $ | 10,087,141 | |||||||||
| 2018 | $ | 724,217 | $ | 1,818,823 | $ | 627,864 | $ | 1,197,219 | $ | 24,692 | $ | 186,782 | $ | 4,579,597 | |||||||||
| Name and Position | Fiscal Year | Salary(2) | Stock Awards(3) | Option Awards(4) | Non-Equity Incentive Plan Compensation(5) | Change in Pension Value and Nonqualified Deferred Compensation Earnings(6) | All Other Compensation(7) | Total | ||||||||||||||||||||||||
| John C. May(1) Chairman and Chief Executive Officer | 2021 | $ | 1,429,174 | $ | 5,991,488 | $ | 3,298,699 | $ | 8,055,803 | $ | 741,736 | $ | 395,926 | $ | 19,912,826 | |||||||||||||||||
| 2020 | $ | 1,199,245 | $ | 6,878,173 | $ | 2,624,979 | $ | 3,741,252 | $ | 834,610 | $ | 310,125 | $ | 15,588,384 | ||||||||||||||||||
| 2019 | $ | 889,760 | $ | 1,876,726 | $ | 655,191 | $ | 1,421,607 | $ | 970,162 | $ | 192,246 | $ | 6,005,692 | ||||||||||||||||||
| Ryan D. Campbell Senior Vice President and Chief Financial Officer | 2021 | $ | 837,469 | $ | 1,482,168 | $ | 816,236 | $ | 3,178,588 | $ | 288,384 | $ | 146,883 | $ | 6,749,728 | |||||||||||||||||
| 2020 | $ | 671,859 | $ | 1,727,552 | $ | 659,263 | $ | 2,179,082 | $ | 293,654 | $ | 85,601 | $ | 5,617,011 | ||||||||||||||||||
| 2019 | $ | 486,928 | $ | 414,755 | $ | 144,873 | $ | 538,736 | $ | 266,736 | $ | 68,954 | $ | 1,920,982 | ||||||||||||||||||
| Marc A. Howze Group President, Lifecycle Solutions and Chief Administrative Officer | 2021 | $ | 799,530 | $ | 1,482,168 | $ | 816,236 | $ | 3,112,127 | $ | 420,001 | $ | 162,946 | $ | 6,793,008 | |||||||||||||||||
| Rajesh Kalathur President, John Deere Financial and Chief Information Officer | 2021 | $ | 818,855 | $ | 1,197,049 | $ | 659,263 | $ | 3,145,980 | $ | 330,179 | $ | 156,649 | $ | 6,307,975 | |||||||||||||||||
| 2020 | $ | 790,894 | $ | 1,891,788 | $ | 722,062 | $ | 2,323,388 | $ | 658,772 | $ | 125,737 | $ | 6,512,641 | ||||||||||||||||||
| 2019 | $ | 721,732 | $ | 1,798,637 | $ | 627,860 | $ | 1,266,043 | $ | 872,056 | $ | 151,131 | $ | 5,437,459 | ||||||||||||||||||
| Cory J. Reed President, Worldwide Agriculture & Turf Division, Production & Precision Agriculture, Americas and Australia | 2021 | $ | 806,905 | $ | 1,311,195 | $ | 722,065 | $ | 3,125,046 | $ | 318,543 | $ | 152,846 | $ | 6,436,600 | |||||||||||||||||
| 2020 | $ | 765,695 | $ | 1,809,670 | $ | 690,680 | $ | 2,292,839 | $ | 521,036 | $ | 112,749 | $ | 6,192,669 | ||||||||||||||||||
| 2019 | $ | 669,999 | $ | 1,798,637 | $ | 627,860 | $ | 1,230,497 | $ | 640,851 | $ | 124,079 | $ | 5,091,923 | ||||||||||||||||||
| (1) | For fiscal 2019, John C. May held the role of Chief Operating Officer. He was promoted to CEO on November 4, 2019 and elected as Chairman of the Board on May 1, 2020. Compensation reflects the change in responsibilities for the roles listed. |
| (2) | Includes amounts deferred by the NEO under the John Deere Voluntary Deferred Compensation Plan. Salary amounts deferred in fiscal |
| Represents the aggregate grant date fair value of PSUs and RSUs computed in accordance with FASB ASC Topic 718. The values in this column exclude the effect of estimated forfeitures. Assumptions made in the calculation of these amounts are included in Note 23, “Stock Option and Restricted Stock Awards,” of our consolidated financial statements filed with the SEC on Form 10-K for the fiscal year ended | |
| Represents the aggregate grant date fair value of stock options computed in accordance with FASB ASC Topic 718. The values in this column exclude the effect of estimated forfeitures. The assumptions made in valuing option awards reported in this column and a more detailed discussion of the binomial lattice option pricing model appear in Note 23, “Stock Option and Restricted Stock Awards,” of our consolidated financial statements filed with the SEC in the |
57 DEERE & COMPANY2022 PROXY STATEMENT
Advisory Vote on Executive Compensation
Executive Compensation Tables
| Non-equity incentive plan compensation includes cash awards under the STI and LTIC plans. Cash awards earned under the STI and LTIC plans for the performance period ended in fiscal |
The following table shows the awards earned under the STI and LTIC plans during fiscal 2021:
| STI (a) | LTIC (b) | ||||||||||||||
| Name | Target Award as % of Salary | Actual Performance as % of Target | Award Amount | Target Award as % of Median Salary | Actual Performance as % of Target | Award Amount | Total Non-Equity Incentive Plan Compensation | ||||||||
| John C. May | 160% | 175.2% | $4,005,803 | 135% | 200.0% | $4,050,000 | $8,055,803 | ||||||||
| Ryan D. Campbell | 100% | 175.2% | $1,467,078 | 105% | 200.0% | $1,711,510 | $3,178,588 | ||||||||
| Marc A. Howze | 100% | 175.2% | $1,400,617 | 105% | 200.0% | $1,711,510 | $3,112,127 | ||||||||
| Rajesh Kalathur | 100% | 175.2% | $1,434,470 | 105% | 200.0% | $1,711,510 | $3,145,980 | ||||||||
| Cory J. Reed | 100% | 175.2% | $1,413,536 | 105% | 200.0% | $1,711,510 | $3,125,046 | ||||||||
| STI (a) | LTIC (b | ||||||||||||||||
| Name | Fiscal Year | Target Award as % of Salary | Actual Performance as % of Target | Award Amount | Target Award as % of Median Salary | Actual Performance as % of Target | Award Amount | Total Non-Equity Incentive Plan Compensation | |||||||||
| John C. May(c) | 2020 | 150% | 121% | $2,180,768 | 105% | 159% | $1,560,484 | $3,741,252 | |||||||||
| Ryan D. Campbell | 2020 | 100% | 121% | $814,495 | 105% | 159% | $1,364,587 | $2,179,082 | |||||||||
| Mary K. W. Jones | 2020 | 100% | 121% | $948,984 | 105% | 159% | $1,364,587 | $2,313,571 | |||||||||
| Rajesh Kalathur | 2020 | 100% | 121% | $958,801 | 105% | 159% | $1,364,587 | $2,323,388 | |||||||||
| Cory J. Reed | 2020 | 100% | 121% | $928,252 | 105% | 159% | $1,364,587 | $2,292,839 | |||||||||
| James M. Field | 2020 | 100% | 121% | $1,012,896 | 105% | 159% | $1,364,587 | $2,377,483 | |||||||||
| (a) | Based on actual performance, as discussed in the CD&A under “Fiscal | |
| (b) | Based on actual performance, as discussed in the CD&A under “Fiscal | |
| The |
| Name | Fiscal Year | Change in Pension Value (a) | Nonqualified Deferred Compensation Earnings (b) | Total | |||||
| John C. May | 2020 | $834,610 | $0 | $834,610 | |||||
| Ryan D. Campbell | 2020 | $293,654 | $0 | $293,654 | |||||
| Mary W. Jones | 2020 | $686,380 | $0 | $686,380 | |||||
| Rajesh Kalathur | 2020 | $658,772 | $0 | $658,772 | |||||
| Cory J. Reed | 2020 | $521,036 | $0 | $521,036 | |||||
| James M. Field | 2020 | $962,315 | $0 | $962,315 |
| The following table provides details about each component of the “All Other Compensation” column in the Fiscal |
| Name | Personal Use of Company Aircraft (a) | Financial Planning (b) | Misc Perquisites (c) | Company Contributions to Defined Contribution Plans (d) | Total All Other Compensation | |||||||||||
| John C. May | $ | 139,711 | $ | 0 | $ | 5,343 | $ | 165,071 | $ | 310,125 | ||||||
| Ryan D. Campbell | $ | 0 | $ | 0 | $ | 0 | $ | 85,601 | $ | 85,601 | ||||||
| Mary K. W. Jones | $ | 0 | $ | 0 | $ | 340 | $ | 113,656 | $ | 113,996 | ||||||
| Rajesh Kalathur | $ | 0 | $ | 10,000 | $ | 340 | $ | 115,397 | $ | 125,737 | ||||||
| Cory J. Reed | $ | 0 | $ | 0 | $ | 3,003 | $ | 109,746 | $ | 112,749 | ||||||
| James M. Field | $ | 0 | $ | 3,265 | $ | 9,072 | $ | 124,255 | $ | 136,592 | ||||||
| Name | Personal Use of Company Aircraft (a) | Financial Planning (b) | Misc Perquisites (c) | Company Contributions to Defined Contribution Plans (d) | Total All Other Compensation | |||||||||||
| John C. May | $ | 80,707 | $ | 0 | $ | 2,257 | $ | 312,962 | $ | 395,926 | ||||||
| Ryan D. Campbell | $ | 0 | $ | 0 | $ | 531 | $ | 146,352 | $ | 146,883 | ||||||
| Marc A. Howze | $ | 0 | $ | 10,000 | $ | 2,268 | $ | 150,678 | $ | 162,946 | ||||||
| Rajesh Kalathur | $ | 0 | $ | 0 | $ | 756 | $ | 155,893 | $ | 156,649 | ||||||
| Cory J. Reed | $ | 0 | $ | 0 | $ | 531 | $ | 152,315 | $ | 152,846 | ||||||
| (a) | Per IRS regulations, the NEOs recognize imputed income on the personal use of Deere’s aircraft. For SEC disclosure purposes, the cost of personal use of Deere’s aircraft is calculated based on the incremental cost to Deere. To determine the incremental cost, we calculate the variable costs for fuel on a per-mile basis, plus any direct trip expenses such as on-board catering, landing/ramp fees, and crew expenses. Fixed costs that do not change based on usage, such as pilot salaries, depreciation of aircraft, and maintenance costs, are excluded. Mr. May’s personal usage of company aircraft in fiscal | |
| (b) | This column contains amounts Deere paid for financial planning assistance to the NEOs. Each year, the CEO may receive up to $15,000 of assistance and the other NEOs may receive up to $10,000. | |
| (c) | Miscellaneous perquisites include spousal attendance at company events, excess liability premiums, and travel costs associated with annual physicals. NEOs are provided healthcare plans consistent with salary employees. | |
| (d) | Deere makes contributions to the John Deere Savings and Investment Plan for all eligible employees. Deere also credits contributions to the John Deere Defined Contribution Restoration Plan for |
58 DEERE & COMPANY2022 PROXY STATEMENT
Advisory Vote on Executive Compensation
Executive Compensation Tables
The following table provides additional information regarding fiscal 20202021 grants of RSU, PSU, and stock option awards under the OmnibusJohn Deere 2020 Equity & Incentive Plan and the potential range of awards that were approved in fiscal 20202021 under the STI and LTIC plans for payout in future years. These awards are further described in the CD&A under “Direct Compensation Elements.”
FISCAL 20202021 GRANTS OF PLAN-BASED AWARDS
Estimated Future Payouts Under Non-Equity Incentive Plan Awards (2) | Estimated Future Payouts Under Equity Incentive Plan Awards (3) | All Other Stock Awards: Number of Shares of Stock or Units (4) | All Other Option Awards: Number of Securities Underlying Options (5) | Exercise or Base Price of Option Awards ($/Sh) (6) | Grant Date Fair Value of Stock and Option Awards (7) | ||||||||||||||||||||||
| Name | Grant Date (1) | Threshold | Target | Maximum | Threshold | Target | Maximum | ||||||||||||||||||||
| John C. May | 12/3/19-STI | $ | — | $ | 1,798,868 | $ | 3,597,736 | — | — | — | — | — | — | $ | — | ||||||||||||
| 12/3/19-LTIC | $ | 1,100 | $ | 2,025,000 | $ | 4,050,000 | — | — | — | — | — | — | $ | — | |||||||||||||
| 12/11/19 | $ | — | $ | — | $ | — | — | — | — | 11,048 | — | — | $ | 1,874,846 | |||||||||||||
| 12/11/19 | $ | — | $ | — | $ | — | 4,419 | 17,678 | 35,356 | — | — | — | $ | 5,003,327 | |||||||||||||
| 12/11/19 | $ | — | $ | — | $ | — | — | — | — | — | 73,275 | $ | 169.70 | $ | 2,624,979 | ||||||||||||
| $ | 1,100 | $ | 3,823,868 | $ | 7,647,736 | 4,419 | 17,678 | 35,356 | 11,048 | 73,275 | $ | 9,503,152 | |||||||||||||||
| Ryan D. Campbell | 12/3/19-STI | $ | — | $ | 671,859 | $ | 1,343,718 | — | — | — | — | — | — | $ | — | ||||||||||||
| 12/3/19-LTIC | $ | 400 | $ | 855,755 | $ | 1,711,510 | — | — | — | — | — | — | $ | — | |||||||||||||
| 12/11/19 | $ | — | $ | — | $ | — | — | — | — | 2,775 | — | — | $ | 470,918 | |||||||||||||
| 12/11/19 | $ | — | $ | — | $ | — | 1,110 | 4,440 | 8,880 | — | — | — | $ | 1,256,634 | |||||||||||||
| 12/11/19 | $ | — | $ | — | $ | — | — | — | — | — | 18,403 | $ | 169.70 | $ | 659,263 | ||||||||||||
| $ | 400 | $ | 1,527,614 | $ | 3,055,228 | 1,110 | 4,440 | 8,880 | 2,775 | 18,403 | $ | 2,386,815 | |||||||||||||||
| Mary K. W. Jones | 12/3/19-STI | $ | — | $ | 782,796 | $ | 1,565,592 | — | — | — | — | — | — | $ | — | ||||||||||||
| 12/3/19-LTIC | $ | 400 | $ | 855,755 | $ | 1,711,510 | — | — | — | — | — | — | $ | — | |||||||||||||
| 12/11/19 | $ | — | $ | — | $ | — | — | — | — | 2,907 | — | — | $ | 493,318 | |||||||||||||
| 12/11/19 | $ | — | $ | — | $ | — | 1,162 | 4,651 | 9,302 | — | — | — | $ | 1,316,352 | |||||||||||||
| 12/11/19 | $ | — | $ | — | $ | — | — | — | — | — | 19,280 | $ | 169.70 | $ | 690,680 | ||||||||||||
| $ | 400 | $ | 1,638,551 | $ | 3,277,102 | 1,162 | 4,651 | 9,302 | 2,907 | 19,280 | $ | 2,500,350 | |||||||||||||||
| Rajesh Kalathur | 12/3/19-STI | $ | — | $ | 790,894 | $ | 1,581,788 | — | — | — | — | — | — | $ | — | ||||||||||||
| 12/3/19-LTIC | $ | 400 | $ | 855,755 | $ | 1,711,510 | — | — | — | — | — | — | $ | — | |||||||||||||
| 12/11/19 | $ | — | $ | — | $ | — | — | — | — | 3,039 | — | — | $ | 515,718 | |||||||||||||
| 12/11/19 | $ | — | $ | — | $ | — | 1,215 | 4,862 | 9,724 | — | — | — | $ | 1,376,070 | |||||||||||||
| 12/11/19 | $ | — | $ | — | $ | — | — | — | — | — | 20,156 | $ | 169.70 | $ | 722,062 | ||||||||||||
| $ | 400 | $ | 1,646,649 | $ | 3,293,298 | 1,215 | 4,862 | 9,724 | 3,039 | 20,156 | $ | 2,613,850 | |||||||||||||||
| Cory J. Reed | 12/3/19-STI | $ | — | $ | 765,695 | $ | 1,531,390 | — | — | — | — | — | — | $ | — | ||||||||||||
| 12/3/19-LTIC | $ | 400 | $ | 855,755 | $ | 1,711,510 | — | — | — | — | — | — | $ | — | |||||||||||||
| 12/11/19 | $ | — | $ | — | $ | — | — | — | — | 2,907 | — | — | $ | 493,318 | |||||||||||||
| 12/11/19 | $ | — | $ | — | $ | — | 1,162 | 4,651 | 9,302 | — | — | — | $ | 1,316,352 | |||||||||||||
| 12/11/19 | $ | — | $ | — | $ | — | — | — | — | — | 19,280 | $ | 169.70 | $ | 690,680 | ||||||||||||
| $ | 400 | $ | 1,621,450 | $ | 3,242,900 | 1,162 | 4,651 | 9,302 | 2,907 | 19,280 | $ | 2,500,350 | |||||||||||||||
| James M. Field | 12/3/19-STI | $ | — | $ | 835,516 | $ | 1,671,032 | — | — | — | — | — | — | $ | — | ||||||||||||
| 12/3/19-LTIC | $ | 400 | $ | 855,755 | $ | 1,711,510 | — | — | — | — | — | — | $ | — | |||||||||||||
| 12/11/19 | $ | — | $ | — | $ | — | — | — | — | 2,907 | — | — | $ | 493,318 | |||||||||||||
| 12/11/19 | $ | — | $ | — | $ | — | 1,162 | 4,651 | 9,302 | — | — | — | $ | 1,316,352 | |||||||||||||
| 12/11/19 | $ | — | $ | — | $ | — | — | — | — | — | 19,280 | $ | 169.70 | $ | 690,680 | ||||||||||||
| $ | 400 | $ | 1,691,271 | $ | 3,382,542 | 1,162 | 4,651 | 9,302 | 2,907 | 19,280 | $ | 2,500,350 | |||||||||||||||
Estimated Future Payouts Under Non-Equity Incentive Plan Awards (2) | Estimated Future Payouts Under Equity Incentive Plan Awards (3) | All Other Stock Awards: Number of Shares of Stock or Units (4) | All Other Option Awards: Number of Securities Underlying Options (5) | Exercise or Base Price of Option Awards ($/Sh) (6) | Grant Date Fair Value of Stock and Option Awards (7) | |||||||||||||||||||||||
| Name | Grant Date (1) | Threshold | Target | Maximum | Threshold | Target | Maximum | |||||||||||||||||||||
| John C. May | 12/1/20-STI | $ | - | $ | 2,286,678 | $ | 4,573,356 | - | - | - | - | - | $ | - | $ | - | ||||||||||||
| 12/1/20-LTIC | $ | 1,100 | $ | 1,929,385 | $ | 3,858,770 | - | - | - | - | - | $ | - | $ | - | |||||||||||||
| 12/9/20 | $ | - | $ | - | $ | - | - | - | - | 9,246 | - | $ | - | $ | 2,356,158 | |||||||||||||
| 12/9/20 | $ | - | $ | - | $ | - | 3,698 | 14,794 | 29,588 | - | - | $ | - | $ | 3,635,330 | |||||||||||||
| 12/9/20 | $ | - | $ | - | $ | - | - | - | - | - | 52,578 | $ | 254.83 | $ | 3,298,699 | |||||||||||||
| $ | 1,100 | $ | 4,216,063 | $ | 8,432,126 | 3,698 | 14,794 | 29,588 | 9,246 | 52,578 | $ | - | $ | 9,290,187 | ||||||||||||||
| Ryan D. Campbell | 12/1/20-STI | $ | - | $ | 837,469 | $ | 1,674,938 | - | - | - | - | - | $ | - | $ | - | ||||||||||||
| 12/1/20-LTIC | $ | 400 | $ | 879,342 | $ | 1,758,684 | - | - | - | - | - | $ | - | $ | - | |||||||||||||
| 12/9/20 | $ | - | $ | - | $ | - | - | - | - | 2,287 | - | $ | - | $ | 582,796 | |||||||||||||
| 12/9/20 | $ | - | $ | - | $ | - | 915 | 3,660 | 7,320 | - | - | $ | - | $ | 899,372 | |||||||||||||
| 12/9/20 | $ | - | $ | - | $ | - | - | - | - | - | 13,010 | $ | 254.83 | $ | 816,236 | |||||||||||||
| $ | 400 | $ | 1,716,811 | $ | 3,433,622 | 915 | 3,660 | 7,320 | 2,287 | 13,010 | $ | - | $ | 2,298,404 | ||||||||||||||
| Marc A. Howze | 12/1/20-STI | $ | - | $ | 799,530 | $ | 1,599,060 | - | - | - | - | - | $ | - | $ | - | ||||||||||||
| 12/1/20-LTIC | $ | 400 | $ | 839,507 | $ | 1,679,014 | - | - | - | - | - | $ | - | $ | - | |||||||||||||
| 12/9/20 | $ | - | $ | - | $ | - | - | - | - | 2,287 | - | $ | - | $ | 582,796 | |||||||||||||
| 12/9/20 | $ | - | $ | - | $ | - | 915 | 3,660 | 7,320 | - | - | $ | - | $ | 899,372 | |||||||||||||
| 12/9/20 | $ | - | $ | - | $ | - | - | - | - | - | 13,010 | $ | 254.83 | $ | 816,236 | |||||||||||||
| $ | 400 | $ | 1,639,037 | $ | 3,278,074 | 915 | 3,660 | 7,320 | 2,287 | 13,010 | $ | - | $ | 2,298,404 | ||||||||||||||
| Rajesh Kalathur | 12/1/20-STI | $ | - | $ | 818,855 | $ | 1,637,710 | - | - | - | - | - | $ | - | $ | - | ||||||||||||
| 12/1/20-LTIC | $ | 400 | $ | 859,798 | $ | 1,719,596 | - | - | - | - | - | $ | - | $ | - | |||||||||||||
| 12/9/20 | $ | - | $ | - | $ | - | - | - | - | 1,847 | - | $ | - | $ | 470,671 | |||||||||||||
| 12/9/20 | $ | - | $ | - | $ | - | 739 | 2,956 | 5,912 | - | - | $ | - | $ | 726,378 | |||||||||||||
| 12/9/20 | $ | - | $ | - | $ | - | - | - | - | - | 10,508 | $ | 254.83 | $ | 659,263 | |||||||||||||
| $ | 400 | $ | 1,678,653 | $ | 3,357,306 | 739 | 2,956 | 5,912 | 1,847 | 10,508 | $ | - | $ | 1,856,312 | ||||||||||||||
| Cory J. Reed | 12/1/20-STI | $ | - | $ | 806,905 | $ | 1,613,810 | - | - | - | - | - | $ | - | $ | - | ||||||||||||
| 12/1/20-LTIC | $ | 400 | $ | 847,250 | $ | 1,694,500 | - | - | - | - | - | $ | - | $ | - | |||||||||||||
| 12/9/20 | $ | - | $ | - | $ | - | - | - | - | 2,023 | - | $ | - | $ | 515,521 | |||||||||||||
| 12/9/20 | $ | - | $ | - | $ | - | 809 | 3,238 | 6,476 | - | - | $ | - | $ | 795,674 | |||||||||||||
| 12/9/20 | $ | - | $ | - | $ | - | - | - | - | - | 11,509 | $ | 254.83 | $ | 722,065 | |||||||||||||
| $ | 400 | $ | 1,654,155 | $ | 3,308,310 | 809 | 3,238 | 6,476 | 2,023 | 11,509 | $ | - | $ | 2,033,260 | ||||||||||||||
| (1) | For the non-equity incentive plan awards, the grant date is the date the Committee approved the range of estimated potential future payouts for the performance periods noted under footnote (2) below. For equity awards, the grant date is seven calendar days after the first regularly scheduled Board meeting of the fiscal year. |
| (2) | These columns show the range of potential payouts under the STI and LTIC plans. The performance period for STI in this table covers fiscal |
| The range of the LTIC award covers the three-year performance period beginning in fiscal |
Advisory Vote on Executive CompensationExecutive Compensation Tables
59 DEERE & COMPANY2022 PROXY STATEMENT
Advisory Vote on Executive Compensation
Executive Compensation Tables
| (3) | Represents the potential payout range of PSUs granted in December |
| (4) | Represents the number of RSUs granted in December |
| (5) | Represents the number of options granted in December |
| (6) | The exercise price is the closing price of Deere common stock on the NYSE on the grant date. |
| (7) | Amounts shown represent the grant date fair value of equity awards granted to the NEOs in fiscal |
For additional information on the valuation assumptions, refer to Note 23, “Stock Option and Restricted Stock Awards,” of Deere’s consolidated financial statements filed with the SEC in the 20202021 Form 10-K.
OUTSTANDING EQUITY AWARDS AT FISCAL 20202021 YEAR-END
The following table itemizes outstanding options, RSUs, and PSUs held by the NEOs:
| Option Awards | Stock Awards | ||||||||||||||||||||||||
| Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable(1) | Number of Securities Underlying Unexercised Options Unexercisable(1) | Option Exercise Price | Market Value of Unexercised Options(2) | Option Expiration Date(3) | Number of Shares or Units of Stock That Have Not Vested(4) | Market Value of Shares or Units of Stock That Have Not Vested(5) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(6) | Equity Incentive Plan Awards: Market or Payout Value Unearned Shares, Units or Other Rights That Have Not Vested(7) | |||||||||||||||
| John C. May | 12/12/18 | - | 4,605 | $ | 148.14 | $ | 894,153 | 12/12/28 | 3,159 | $ | 1,081,357 | 10,108 | $ | 3,460,069 | |||||||||||
| 12/11/19 | - | 48,362 | $ | 169.70 | $ | 8,347,765 | 12/11/29 | 11,048 | $ | 3,781,841 | 35,356 | $ | 12,102,712 | ||||||||||||
| 12/9/20 | - | 52,578 | $ | 254.83 | $ | 4,599,523 | 12/9/30 | 9,246 | $ | 3,164,998 | 29,588 | $ | 10,128,268 | ||||||||||||
| - | 105,545 | $ | 13,841,441 | 23,453 | $ | 8,028,196 | 75,052 | $ | 25,691,049 | ||||||||||||||||
| Ryan D. Campbell | 12/12/18 | - | 1,019 | $ | 148.14 | $ | 197,859 | 12/12/28 | 698 | $ | 238,932 | 2,234 | $ | 764,721 | |||||||||||
| 12/11/19 | - | 12,146 | $ | 169.70 | $ | 2,096,521 | 12/11/29 | 2,775 | $ | 949,910 | 8,880 | $ | 3,039,713 | ||||||||||||
| 12/9/20 | - | 13,010 | $ | 254.83 | $ | 1,138,115 | 12/9/30 | 2,287 | $ | 782,863 | 7,320 | $ | 2,505,709 | ||||||||||||
| - | 26,175 | $ | 3,432,495 | 5,760 | $ | 1,971,705 | 18,434 | $ | 6,310,143 | ||||||||||||||||
| Marc A. Howze | 12/13/17 | 8,039 | - | $ | 151.95 | $ | 1,530,304 | 12/13/27 | - | $ | - | - | $ | - | |||||||||||
| 12/12/18 | 4,478 | 2,412 | $ | 148.14 | $ | 1,337,831 | 12/12/28 | 2,915 | $ | 997,834 | 9,688 | $ | 3,316,299 | ||||||||||||
| 12/11/19 | 3,277 | 8,155 | $ | 169.70 | $ | 1,973,278 | 12/11/29 | 2,798 | $ | 957,783 | 9,302 | $ | 3,184,168 | ||||||||||||
| 12/9/20 | - | 10,095 | $ | 254.83 | $ | 883,111 | 12/9/30 | 2,287 | $ | 782,863 | 7,320 | $ | 2,505,709 | ||||||||||||
| 15,794 | 20,662 | $ | 5,724,524 | 8,000 | $ | 2,738,480 | 26,310 | $ | 9,006,176 | ||||||||||||||||
60 DEERE & COMPANY2022 PROXY STATEMENT
| Option Awards | Stock Awards | |||||||||||||||||||||||
| Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable (1) | Number of Securities Underlying Unexercised Options Unexercisable (1) | Option Exercise Price | Intrinsic Value of Unexercised Options (2) | Option Expiration Date (3) | Number of Shares or Units of Stock That Have Not Vested (4) | Market Value of Shares or Units of Stock That Have Not Vested (5) | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested (6) | Equity Incentive Plan Awards: Market or Payout Value Unearned Shares, Units, or Other Rights That Have Not Vested (7) | ||||||||||||||
| John C. May | 12/13/17 | - | 5,076 | $ | 151.95 | $ | 375,421 | 12/13/27 | 2,823 | $ | 637,744 | 9,034 | $ | 2,040,871 | ||||||||||
| 12/12/18 | 4,743 | 9,209 | $ | 148.14 | $ | 1,085,047 | 12/12/28 | 3,159 | $ | 713,650 | 5,812 | $ | 1,312,989 | |||||||||||
| 12/11/19 | - | 73,275 | $ | 169.70 | $ | 4,118,788 | 12/11/29 | 11,048 | $ | 2,495,854 | 8,839 | $ | 1,996,818 | |||||||||||
| 4,743 | 87,560 | $ | 5,579,256 | 17,030 | $ | 3,847,248 | 23,685 | $ | 5,350,678 | |||||||||||||||
| Ryan D. Campbell | 12/10/14 | 2,625 | - | $ | 88.19 | $ | 361,528 | 12/10/24 | - | $ | – | – | $ | – | ||||||||||
| 12/9/15 | 6,116 | - | $ | 79.24 | $ | 897,034 | 12/9/25 | - | $ | – | – | $ | – | |||||||||||
| 12/14/16 | 5,672 | - | $ | 100.55 | $ | 711,042 | 12/14/26 | - | $ | – | – | $ | – | |||||||||||
| 12/13/17 | 2,485 | 1,225 | $ | 151.95 | $ | 274,392 | 12/13/27 | 681 | $ | 153,845 | 2,178 | $ | 492,032 | |||||||||||
| 12/12/18 | 1,048 | 2,037 | $ | 148.14 | $ | 239,920 | 12/12/28 | 698 | $ | 157,685 | 1,284 | $ | 290,068 | |||||||||||
| 12/11/19 | - | 18,403 | $ | 169.70 | $ | 1,034,433 | 12/11/29 | 2,775 | $ | 626,900 | 2,220 | $ | 501,520 | |||||||||||
| 17,946 | 21,665 | $ | 3,518,349 | 4,154 | $ | 938,430 | 5,682 | $ | 1,283,620 | |||||||||||||||
| Mary K. W. Jones | 12/10/14 | 27,800 | - | $ | 88.19 | $ | 3,828,755 | 12/10/24 | - | $ | – | – | $ | – | ||||||||||
| 12/9/15 | 30,918 | - | $ | 79.24 | $ | 4,534,743 | 12/9/25 | - | $ | – | – | $ | – | |||||||||||
| 12/14/16 | 23,463 | - | $ | 100.55 | $ | 2,941,322 | 12/14/26 | - | $ | – | – | $ | – | |||||||||||
| 12/13/17 | 9,835 | 4,845 | $ | 151.95 | $ | 1,085,733 | 12/13/27 | 2,694 | $ | 608,602 | 8,622 | $ | 1,947,796 | |||||||||||
| 12/12/18 | 4,348 | 8,441 | $ | 148.14 | $ | 994,601 | 12/12/28 | 2,895 | $ | 654,009 | 5,327 | $ | 1,203,423 | |||||||||||
| 12/11/19 | - | 19,280 | $ | 169.70 | $ | 1,083,729 | 12/11/29 | 2,907 | $ | 656,720 | 2,325 | $ | 525,241 | |||||||||||
| 96,364 | 32,566 | $ | 14,468,883 | 8,496 | $ | 1,919,331 | 16,274 | $ | 3,676,460 | |||||||||||||||
Advisory Vote on Executive Compensation
Executive Compensation Tables
| Option Awards | Stock Awards | Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||||||||||||
| Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable (1) | Number of Securities Underlying Unexercised Options Unexercisable (1) | Option Exercise Price | Intrinsic Value of Unexercised Options (2) | Option Expiration Date (3) | Number of Shares or Units of Stock That Have Not Vested (4) | Market Value of Shares or Units of Stock That Have Not Vested (5) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested (6) | Equity Incentive Plan Awards: Market or Payout Value Unearned Shares, Units, or Other Rights That Have Not Vested (7) | Grant Date | Number of Securities Underlying Unexercised Options Exercisable (1) | Number of Securities Underlying Unexercised Options Unexercisable (1) | Option Exercise Price | Intrinsic Value of Unexercised Options (2) | Option Expiration Date (3) | Number of Shares or Units of Stock That Have Not Vested (4) | Market Value of Shares or Units of Stock That Have Not Vested (5) | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested (6) | Equity Incentive Plan Awards: Market or Payout Value Unearned Shares, Units, or Other Rights That Have Not Vested (7) | ||||||||||||||||||||||||||||
| Rajesh Kalathur | 12/12/12 | 24,083 | – | $ | 86.36 | $ | 3,360,783 | 12/12/22 | – | $ | – | – | $ | – | 12/9/15 | 32,391 | - | $ | 79.24 | $ | 8,521,100 | 12/9/25 | - | $ | - | - | $ | - | |||||||||||||||||||||
| 12/11/13 | 20,086 | – | $ | 87.46 | $ | 2,780,907 | 12/11/23 | – | $ | – | – | $ | – | ||||||||||||||||||||||||||||||||||||
| 12/10/14 | 27,800 | – | $ | 88.19 | $ | 3,828,755 | 12/10/24 | – | $ | – | – | $ | – | ||||||||||||||||||||||||||||||||||||
| 12/9/15 | 32,391 | – | $ | 79.24 | $ | 4,750,788 | 12/9/25 | – | $ | – | – | $ | – | 12/14/16 | 24,580 | - | $ | 100.55 | $ | 5,942,461 | 12/14/26 | - | $ | - | - | $ | - | ||||||||||||||||||||||
| 12/14/16 | 24,580 | – | $ | 100.55 | $ | 3,081,349 | 12/14/26 | – | $ | – | – | $ | – | 12/13/17 | 15,379 | - | $ | 151.95 | $ | 2,927,546 | 12/13/27 | - | $ | - | - | $ | - | ||||||||||||||||||||||
| 12/13/17 | 10,303 | 5,076 | $ | 151.95 | $ | 1,137,431 | 12/13/27 | 2,823 | $ | 637,744 | 9,034 | $ | 2,040,871 | 12/12/18 | 8,957 | 4,413 | $ | 148.14 | $ | 2,596,053 | 12/12/28 | 3,027 | $ | 1,036,172 | 9,688 | $ | 3,316,299 | ||||||||||||||||||||||
| 12/12/18 | 4,545 | 8,825 | $ | 148.14 | $ | 1,039,785 | 12/12/28 | 3,027 | $ | 683,830 | 5,570 | $ | 1,258,319 | 12/11/19 | 6,853 | 13,303 | $ | 169.70 | $ | 3,479,127 | 12/11/29 | 3,039 | $ | 1,040,280 | 9,724 | $ | 3,328,622 | ||||||||||||||||||||||
| 12/11/19 | – | 20,156 | $ | 169.70 | $ | 1,132,969 | 12/11/29 | 3,039 | $ | 686,540 | 2,431 | $ | 549,187 | 12/9/20 | - | 10,508 | $ | 254.83 | $ | 919,240 | 12/9/30 | 1,847 | $ | 632,247 | 5,912 | $ | 2,023,737 | ||||||||||||||||||||||
| 143,788 | 34,057 | $ | 21,112,767 | 8,889 | $ | 2,008,114 | 17,035 | $ | 3,848,377 | 88,160 | 28,224 | $ | 24,385,527 | 7,913 | $ | 2,708,699 | 25,324 | $ | 8,668,658 | ||||||||||||||||||||||||||||||
| Cory J. Reed | 12/14/16 | 6,188 | – | $ | 100.55 | $ | 775,728 | 12/14/26 | – | $ | – | – | $ | – | 12/13/17 | 14,680 | - | $ | 151.95 | $ | 2,794,485 | 12/13/27 | - | $ | - | - | $ | - | |||||||||||||||||||||
| 12/13/17 | 9,835 | 4,845 | $ | 151.95 | $ | 1,085,733 | 12/13/27 | 2,694 | $ | 608,602 | 8,622 | $ | 1,947,796 | 12/12/18 | 8,957 | 4,413 | $ | 148.14 | $ | 2,596,053 | 12/12/28 | 3,027 | $ | 1,036,172 | 9,688 | $ | 3,316,299 | ||||||||||||||||||||||
| 12/12/18 | 4,545 | 8,825 | $ | 148.14 | $ | 1,039,785 | 12/12/28 | 3,027 | $ | 683,830 | 5,570 | $ | 1,258,319 | 12/11/19 | 6,555 | 12,725 | $ | 169.70 | $ | 3,327,921 | 12/11/29 | 2,907 | $ | 995,095 | 9,302 | $ | 3,184,168 | ||||||||||||||||||||||
| 12/11/19 | – | 19,280 | $ | 169.70 | $ | 1,083,729 | 12/11/29 | 2,907 | $ | 656,720 | 2,325 | $ | 525,241 | 12/9/20 | - | 11,509 | $ | 254.83 | $ | 1,006,807 | 12/9/30 | 2,023 | $ | 692,493 | 6,476 | $ | 2,216,800 | ||||||||||||||||||||||
| 20,568 | 32,950 | $ | 3,984,975 | 8,628 | $ | 1,949,152 | 16,517 | $ | 3,731,356 | 30,192 | 28,647 | $ | 9,725,266 | 7,957 | $ | 2,723,760 | 25,466 | $ | 8,717,267 | ||||||||||||||||||||||||||||||
| James M. Field (8) | 12/10/14 | 12,636 | – | $ | 88.19 | $ | 1,740,293 | 12/10/24 | – | $ | – | – | $ | – | |||||||||||||||||||||||||||||||||||
| 12/9/15 | 16,195 | – | $ | 79.24 | $ | 2,375,321 | 12/9/25 | – | $ | – | – | $ | – | ||||||||||||||||||||||||||||||||||||
| 12/14/16 | 24,580 | – | $ | 100.55 | $ | 3,081,349 | 12/14/26 | – | $ | – | – | $ | – | ||||||||||||||||||||||||||||||||||||
| 12/13/17 | 10,722 | 5,306 | $ | 151.95 | $ | 1,189,129 | 12/13/27 | 2,830 | $ | 639,325 | 9,444 | $ | 2,133,494 | ||||||||||||||||||||||||||||||||||||
| 12/12/18 | 4,545 | 8,825 | $ | 148.14 | $ | 1,039,785 | 12/12/28 | 2,903 | $ | 655,817 | 5,570 | $ | 1,258,319 | ||||||||||||||||||||||||||||||||||||
| 12/11/19 | – | 19,280 | $ | 169.70 | $ | 1,083,729 | 12/11/29 | 2,907 | $ | 656,720 | 2,325 | $ | 525,241 | ||||||||||||||||||||||||||||||||||||
| 68,728 | 33,411 | $ | 10,509,606 | 8,640 | $ | 1,951,862 | 17,339 | $ | 3,917,054 | ||||||||||||||||||||||||||||||||||||||||
| (1) | Options become vested and exercisable in three approximately equal annual installments on the first, second, and third anniversaries of the grant date. |
| (2) | The amount shown represents the number of options that have not been exercised (vested and unvested) multiplied by the difference between the closing price for Deere common stock on the NYSE as of |
| (3) | Options expire 10 years from the grant date. |
| (4) | RSUs vest three years after the grant date, at which time they are settled in Deere common stock. |
| (5) | The amount shown represents the number of RSUs that have not vested multiplied by the closing price for Deere common stock on the NYSE as of |
| (6) | For PSUs granted in fiscal |
| PSU Grant Date | December 12, 2018 | December 11, 2019 | |||
| Truncated performance period | 11/1/2018 - 10/31/2020 | 11/1/2019 - 10/31/2020 | |||
| Actual performance period ending date | 10/31/21 | 10/31/22 | |||
| Payout of shares (as a % of target) based on revenue growth | 115% | 50% |
| PSU Grant Date | December 11, 2019 | December 9, 2020 | ||
| Truncated performance period | 11/1/2019-10/31/2021 | 11/1/2020-10/31/2021 | ||
| Actual performance period ending date | 10/31/2022 | 10/31/2023 | ||
| Payout of shares (as a % of target) based on revenue growth | 200% | 200% |
| (7) | The amount shown represents the number of PSUs described in footnote (6) to this table multiplied by the closing price for Deere common stock on the NYSE as of NYSE as of |
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FISCAL 20202021 OPTION EXERCISES AND STOCK VESTED
The following table provides information regarding option exercises and vesting of RSUs and PSUs during fiscal 2020.2021. These options and stock awards were granted in prior fiscal years and are not related to performance solely in fiscal 2020:2021:
| Option Awards (1) | Stock Awards | Option Awards | Stock Awards | |||||||||||||||||
| Name | Number of Shares Acquired on Exercise (1) | Value Realized on Exercise (2) | Number of Shares Acquired on Vesting (3) | Value Realized on Vesting (4) | Number of Shares Acquired on Exercise (1) | Value Realized on Exercise (2) | Number of Shares Acquired on Vesting(3) | Value Realized on Vesting(4) | ||||||||||||
| John C. May | 13,187 | $ | 705,514 | 17,918 | $ | 3,090,855 | 39,336 | $ | 7,735,570 | 11,857 | $ | 3,032,665 | ||||||||
| Ryan D. Campbell | - | $ | – | 4,132 | $ | 712,770 | 26,446 | $ | 4,970,079 | 2,859 | $ | 731,246 | ||||||||
| Mary K. W. Jones | - | $ | – | 17,104 | $ | 2,950,440 | ||||||||||||||
| Marc A. Howze | 49,859 | $ | 9,683,771 | 12,385 | $ | 3,168,385 | ||||||||||||||
| Rajesh Kalathur | 27,526 | $ | 2,903,880 | 17,918 | $ | 3,090,855 | 71,969 | $ | 15,343,079 | 11,857 | $ | 3,032,665 | ||||||||
| Cory J. Reed | 2,957 | $ | 312,732 | 4,510 | $ | 777,975 | 6,188 | $ | 1,760,177 | 11,316 | $ | 2,894,293 | ||||||||
| James M. Field | 28,833 | $ | 2,873,155 | 17,867 | $ | 3,082,058 | ||||||||||||||
| (1) | Represents the total number of shares that were exercised before any withholding of shares to pay the exercise price and taxes. |
| (2) | Value realized on exercise is based on the market price upon exercise minus the exercise price (the grant price). |
| (3) | Represents the number of RSUs and PSUs that vested during fiscal |
The three-year performance period for PSUs granted in fiscal | |
The following table shows the number of RSUs and PSUs that vested during fiscal |
| Name | RSUs | PSUs | |||
| John C. May | 4,266 | 13,652 | |||
| Ryan D. Campbell | 984 | 3,148 | |||
| Mary K. W. Jones | 4,072 | 13,032 | |||
| Rajesh Kalathur | 4,266 | 13,652 | |||
| Cory J. Reed | 1,074 | 3,436 | |||
| James M. Field | 4,215 | 13,652 |
| Name | RSUs | PSUs | ||
| John C. May | 2,823 | 9,034 | ||
| Ryan D. Campbell | 681 | 2,178 | ||
| Marc A. Howze | 2,941 | 9,444 | ||
| Rajesh Kalathur | 2,823 | 9,034 | ||
| Cory J. Reed | 2,694 | 8,622 |
| (4) | Represents the number of RSUs and PSUs vested multiplied by the closing price |
Pension Benefits
The NEOs are eligible to participate in pension plans that provide benefits based on years of service and pay. Pension benefits are provided under a qualified defined benefit pension plan called the John Deere Pension Plan for Salaried Employees (the “Salaried Plan”) and two nonqualified pension plans called the Senior Supplementary Pension Benefit Plan (the “Senior Supplementary Plan”) and the John Deere Supplemental Pension Benefit Plan (the “Deere Supplemental Plan”).
In 1996, we introduced a new pension option under the Salaried Plan known as the “Contemporary Option.” At that time, participants could elect to remain in the existing Salaried Plan option, known as the “Traditional Option,” or convert to the new Contemporary Option. New employees hired between January 1, 1997, and October 31, 2014, automatically participated in the Contemporary Option. For new employees hired on or after November 1, 2014, pension benefits under the Salaried Plan are calculated based on a cash balance methodology instead of the Traditional or Contemporary Option formula. None of the current NEOs participates in the Traditional or cash balance plan.
SALARIED PLAN
The Salaried Plan is a qualified plan subject to certain IRS limitations on benefits and is subject to the Employee Retirement Income Security Act of 1974. Deere makes contributions to and benefits are paid from a tax-exempt pension trust. Pension benefits provided by the Salaried Plan under the Contemporary Option are summarized on the following page.
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Under the Contemporary Option, “Career“Career Average Pay” is used in computing retirement benefits. Career Average Pay is calculated using salary plus STI (up to IRS limits). For participants hired before January 1, 1997, the transition to Career Average Pay includes salary and STI awards from 1992 until retirement. Deere makes additional contributions to the 401(k) retirement savings accounts of salaried employees participating in this option.
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The formula for calculating benefits under the Contemporary Option is:
| Career Average Pay |  | Years of Service | | 1.5% |
Early retirement eligibility under the Contemporary Option is the earlier of:
1. Age 55 with 10 or more years of service; or
2. Age 65 with five or more years of service
Pension payments are reduced by 4% for each year the employee is under the unreduced benefits age upon retirement. Mr. FieldHowze is the only NEO currently eligible to retire early with reduced benefits under the Contemporary Option.benefits.
Eligibility to retire with unreduced benefits under the Contemporary Option occurs at age 67 for all participating employees who were hired on or after January 1, 1997. For participants hired before this date, the eligibility age to retire with unreduced benefits is based on years of service as of January 1, 1997, and ranges from ages 60 to 67.
SENIOR SUPPLEMENTARY PLAN
The Senior Supplementary Plan is an unfunded, nonqualified excess defined benefit plan that provides additional pension benefits in an amount comparable to those the participant would have received under the Salaried Plan in the absence of IRS limitations. Benefit payments for the Senior Supplementary Plan are made from the assets of Deere and are at-risk in the event Deere seeks bankruptcy protection.
The Senior Supplementary Plan uses the same formula as the Salaried Plan to calculate the benefit payable, except that eligible earnings include only amounts above qualified plan IRS limits.
DEERE SUPPLEMENTAL PLAN
The Deere Supplemental Plan is an unfunded, nonqualified supplemental retirement plan for certain employees, including all the NEOs. Benefit payments for the Deere Supplemental Plan are made from the assets of Deere and are at-risk in the event Deere seeks bankruptcy protection. The Deere Supplemental Plan was closed to new participants effective November 1, 2014, although benefits will continue to accrue for employees who were already participating in the plan as of that date.
The formula for calculating benefits is:
| Career Average Pay | | Years of Service | | 0.5% |
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FISCAL 20202021 PENSION BENEFITS TABLE
| Name | Plan Name (1) | Assumed Retirement Age (2) | Number of Years of Credited Service (3) | Present Value of Accumulated Benefit (4) | |||||
| John C. May | Salaried Plan | 65 | 23.6 | $ | 750,634 | ||||
| Contemporary Option | Supplementary Plan | 65 | 23.6 | $ | 1,896,321 | ||||
| Supplemental Plan | 65 | 19.8 | $ | 810,931 | |||||
| TOTAL | $ | 3,457,886 | |||||||
| Ryan D. Campbell | Salaried Plan | 65 | 13.0 | $ | 397,915 | ||||
| Contemporary Option | Supplementary Plan | 65 | 13.0 | $ | 316,562 | ||||
| Supplemental Plan | 65 | 8.8 | $ | 192,609 | |||||
| TOTAL | $ | 907,086 | |||||||
| Mary K. W. Jones | Salaried Plan | 65 | 23.3 | $ | 715,632 | ||||
| Contemporary Option | Supplementary Plan | 65 | 23.3 | $ | 1,840,124 | ||||
| Supplemental Plan | 65 | 16.9 | $ | 662,849 | |||||
| TOTAL | $ | 3,218,605 | |||||||
| Rajesh Kalathur | Salaried Plan | 65 | 23.4 | $ | 722,955 | ||||
| Contemporary Option | Supplementary Plan | 65 | 23.4 | $ | 1,727,970 | ||||
| Supplemental Plan | 65 | 14.8 | $ | 565,144 | |||||
| TOTAL | $ | 3,016,069 | |||||||
| Cory J. Reed | Salaried Plan | 65 | 22.4 | $ | 639,957 | ||||
| Contemporary Option | Supplementary Plan | 65 | 22.4 | $ | 998,316 | ||||
| Supplemental Plan | 65 | 15.5 | $ | 424,934 | |||||
| TOTAL | $ | 2,063,207 | |||||||
| James M. Field | Salaried Plan | 65 | 26.5 | $ | 955,103 | ||||
| Contemporary Option | Supplementary Plan | 65 | 26.5 | $ | 3,364,779 | ||||
| Supplemental Plan | 65 | 21.7 | $ | 1,242,576 | |||||
| TOTAL | $ | 5,562,458 | |||||||
| Name | Plan Name (1) | Assumed Retirement Age (2) | Number of Years of Credited Service (3) | Present Value of Accumulated Benefit (4) | ||||||
| John C. May | Salaried Plan | 65 | 24.6 | $ | 784,444 | |||||
| Supplementary Plan | 65 | 24.6 | $ | 2,432,682 | ||||||
| Supplemental Plan | 65 | 20.8 | $ | 982,496 | ||||||
| TOTAL | $ | 4,199,622 | ||||||||
| Ryan D. Campbell | Salaried Plan | 65 | 14.0 | $ | 425,829 | |||||
| Supplementary Plan | 65 | 14.0 | $ | 515,113 | ||||||
| Supplemental Plan | 65 | 9.8 | $ | 254,528 | ||||||
| TOTAL | $ | 1,195,470 | ||||||||
| Marc A. Howze | Salaried Plan | 65 | 20.5 | $ | 789,036 | |||||
| Supplementary Plan | 65 | 20.5 | $ | 1,491,663 | ||||||
| Supplemental Plan | 65 | 15.8 | $ | 629,483 | ||||||
| TOTAL | $ | 2,910,182 | ||||||||
| Rajesh Kalathur | Salaried Plan | 65 | 24.4 | $ | 758,817 | |||||
| Supplementary Plan | 65 | 24.4 | $ | 1,951,800 | ||||||
| Supplemental Plan | 65 | 15.8 | $ | 635,631 | ||||||
| TOTAL | $ | 3,346,248 | ||||||||
| Cory J. Reed | Salaried Plan | 65 | 23.4 | $ | 671,402 | |||||
| Supplementary Plan | 65 | 23.4 | $ | 1,217,143 | ||||||
| Supplemental Plan | 65 | 16.5 | $ | 493,205 | ||||||
| TOTAL | $ | 2,381,750 | ||||||||
| (1) | Benefits are provided under the Salaried Plan, the Senior Supplementary Plan, and the Deere Supplemental Plan. | ||
| (2) | The assumed retirement age is the earliest age at which the NEO could retire without any benefit reduction due to age, or, if earlier, normal retirement age. | ||
| (3) | Years and months of service credit under each plan as of October 31, | ||
| (4) | The actuarial present value of the accumulated benefit is shown as of October 31, | ||
The actuarial present value is calculated by estimating expected future payments starting at an assumed retirement age, weighting the estimated payments by the estimated probability of surviving to each post-retirement age, and discounting the weighted payments at an assumed discount rate to reflect the time value of money. The actuarial present value represents an estimate of the amount that, if invested today at the discount rate, would be sufficient on an average basis to provide estimated future payments based on the current accumulated benefit. Actual benefit present values will vary from these estimates depending on many factors, including actual retirement age. | |||
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The following assumptions were used to calculate the present value of the accumulated benefit:
Each of the NEOs continues as an executive until the earliest age at which he could retire without any benefit reduction due to age or normal retirement age, whichever is earlier, as defined in the Salaried Plan. | |||
– | Other assumptions relate to those used for financial accounting: | ||
| ● | Present value amounts were determined based on financial accounting discount rates equal to | ||
| ● | Benefits subject to a lump sum distribution were determined using an interest rate of | ||
| ● | The mortality table used for the Salaried Plan was the PRI2012WC table (with mortality projection scale | ||
| ● | Pensionable earnings are calculated for the most recently completed fiscal year using base pay as an estimate (assuming one base pay increase of 3.5% – 4.5%, depending on age), with no future increase, and the STI bonus at target. Pensionable earnings for prior years are calculated based on actual base pay and actual STI earned for prior years. |
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Nonqualified Deferred Compensation
The Fiscal 20202021 Nonqualified Deferred Compensation Table below shows information about three programs:
(1) the John Deere Voluntary Deferred Compensation Plan (“Deferred Plan”), a nonqualified deferred compensation plan;
(2) the John Deere Defined Contribution Restoration Plan (DCRP), a nonqualified savings plan; and
(3) deferred RSUs.
DEFERRED PLAN
Under the Deferred Plan, through fiscal 2008, NEOs could defer any of their base salary, STI, and LTIC in 5% increments up to 95%. For deferrals elected after 2008, up to 70% of base salary can be deferred while STI and LTIC awards can be deferred up to 95%. On the first day of each calendar quarter, the balance in each account under the Deferred Plan is credited with interest. For deferrals made through calendar 2009, interest is credited at the prime rate (as determined by the Federal Reserve Statistical Release for the prior month) plus 2% as of the last day of the preceding quarter. For deferrals made after December 31, 2009, through January 1, 2016, the deferred amounts earn interest based on the Moody’s “A” rated Corporate Bond Rate.
During fiscal 2020, amounts deferred under the Deferred Plan were credited with interest at the following rates:
| Deferrals through calendar 2009 Prime plus 2% | Deferrals 2009-2016 Moody’s “A” Corporate Bond Rate | |||
| November 2019 | 6.75% | 3.40% | ||
| February 2020 | 6.75% | 3.09% | ||
| May 2020 | 5.25% | 3.12% | ||
| August 2020 | 5.25% | 2.68% |
NEOs must elect to defer salary before the beginning of the calendar year in which deferral occurs. An election to defer STI must be made before the beginning of the fiscal year upon which the award is based. An election to defer LTIC must be made before the close of the fiscal year preceding the calendar year of payment. Participants may elect to receive the deferred funds in a lump sum or in equal annual installments, but distribution must be completed within 10 years following retirement. All deferral elections and associated distribution schedules are irrevocable. This plan is unfunded and participant accounts are at-risk in the event Deere seeks bankruptcy protection.
As of January 1, 2016, the earnings rate described above is no longer available for new deferrals under the Deferred Plan. Instead, theThe investment options under the Deferred Plan now parallel the investment options offered under our 401(k) plan (with certain limited exceptions). Funds deferred prior to January 1, 2016, may remain invested under the previous options,
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although participants also may move these funds into the new options. Minimal above-market amounts may be reported in future years for prior years’ deferrals. Additionally, as of November 1, 2016, participants may change investment options at any time. These changes effectively ensure that Deferred Plan participants cannot earn above-market interest on new deferrals.
DCRP
The DCRP is designed to allow executives participating in our Contemporary Option to defer employee contributions and receive employer matching contributions on up to 6% of eligible earnings that are otherwise limited by tax regulations. For DCRP purposes, eligible earnings include base salary, STI, and commission compensation. (Nonecompensation (none of the NEOs receives commission compensation.)compensation). The DCRP deferral percentage selected by the employee by October 31 each year is used during the following calendar year to calculate the DCRP employee contribution. This plan is unfunded and participant accounts are at-risk in the event Deere seeks bankruptcy protection.
Until November 1, 2015, two investment options were available under the DCRP:DCRP. The only option held by any of the prime rate (as determined by the Federal Reserve Statistical Release for the prior month) plus 2% or a rate of return based onNEOs is the S&P 500 Index for the prior month. Participants could choose either investment option for any portion of their accounts and could change investment options between the first and 10th day of any month. During fiscal 2019,2021, the annualized ratesrate of return under the two options wereS&P 500 Index for the prior month was as follows:
EARNINGS FOR DCRP
| Prime plus 2% | S&P 500 Index | |||
| November 2019 | 7.00% | -1.80% | ||
| December 2019 | 6.78% | 51.27% | ||
| January 2020 | 6.75% | 27.77% | ||
| February 2020 | 6.75% | 38.32% | ||
| March 2020 | 6.75% | -0.33% | ||
| April 2020 | 5.85% | -228.82% | ||
| May 2020 | 5.25% | 49.58% | ||
| June 2020 | 5.25% | 68.49% | ||
| July 2020 | 5.25% | 76.06% | ||
| August 2020 | 5.25% | 39.80% | ||
| September 2020 | 5.25% | 68.87% | ||
| October 2020 | 5.25% | -9.27% |
As of November 1, 2015, the investment options described above are no longer available for new deferrals under the DCRP. Instead, the investment options under the DCRP now parallel the investment options offered under our 401(k) plan, with certain limited exceptions. Funds deferred prior to November 1, 2015, may remain invested under the previous options, although participants may move these funds into the new options. Minimal above-market amounts may be reported in future years for prior years’ deferrals. Additionally, as of November 1, 2015, participants may change investment options at any time. These changes effectively ensure that DCRP participants cannot earn above-market interest on new deferrals.
| S&P 500 Index | |||
| November 2020 | 18.96% | ||
| December 2020 | 45.73% | ||
| January 2021 | 49.47% | ||
| February 2021 | 31.97% | ||
| March 2021 | 28.37% | ||
| April 2021 | 8.37% | ||
| May 2021 | 70.78% | ||
| June 2021 | 7.73% | ||
| July 2021 | 20.34% | ||
| August 2021 | 35.45% | ||
| September 2021 | 24.74% | ||
| October 2021 | -2.19% |
Distribution options under the DCRP consist of a lump-sum distribution one year following the date of separation, or, in the case of retirement, five annual installments beginning one year following the retirement date.
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DEFERRED RESTRICTED STOCK UNITSThere are two scenarios under which deferred RSUs can appear in the Fiscal 2020 Nonqualified Deferred Compensation Table. First, certain RSUs are required to be held for a defined period of time after they vest. The following tranches of RSUs have vested but remain subject to restriction:
Second, forFor RSUs granted starting in December 2003, NEOs may elect deferral of settlement for a minimum of five years. If a deferral election is made, the RSUs will be settled in shares of Deere common stock five or more years after the originally scheduled conversion date.
Deferred RSUs will not be settled in Deere common stock until either the period elected or the restriction period expires.
FISCAL 20202021 NONQUALIFIED DEFERRED COMPENSATION TABLE
| Name | Beginning Balance | Executive Contributions in Last FY (1) | Registrant Contributions in Last FY (2) | Aggregate Earnings in Last Fiscal Year (3) | Aggregate Balance at Last FYE (4) | Beginning Balance | Executive Contributions in Last FY (1) | Registrant Contributions in Last FY (2) | Aggregate Earnings in Last Fiscal Year (3) | Aggregate Balance at Last FYE (4) | |||||||||||||||||||||||||
| John C. May | Deferred Plan | $ | 61,172 | $ | – | $ | – | $ | 5,977 | $ | 67,149 | Deferred Plan | $ | 67,149 | $ | - | $ | - | $ | 28,841 | $ | 95,990 | |||||||||||||
| DCRP Plan | $ | 1,999,800 | $ | 94,243 | $ | 142,671 | $ | 159,126 | $ | 2,395,840 | DCRP Plan | $ | 2,395,840 | $ | 199,497 | $ | 284,462 | $ | 927,512 | $ | 3,807,311 | ||||||||||||||
| TOTAL | $ | 2,060,972 | $ | 94,243 | $ | 142,671 | $ | 165,103 | $ | 2,462,989 | TOTAL | $ | 2,462,989 | $ | 199,497 | $ | 284,462 | $ | 956,353 | $ | 3,903,301 | ||||||||||||||
| Ryan D. Campbell | DCRP Plan | $ | 273,609 | $ | 41,374 | $ | 63,201 | $ | 13,785 | $ | 391,969 | DCRP Plan | $ | 391,968 | $ | 82,018 | $ | 117,852 | $ | 151,440 | $ | 743,278 | |||||||||||||
| TOTAL | $ | 273,609 | $ | 41,374 | $ | 63,201 | $ | 13,785 | $ | 391,969 | TOTAL | $ | 391,968 | $ | 82,018 | $ | 117,852 | $ | 151,440 | $ | 743,278 | ||||||||||||||
| Mary K. W. Jones | Deferred Plan | $ | 2,251,918 | $ | 125,537 | $ | – | $ | 127,028 | $ | 2,504,483 | ||||||||||||||||||||||||
| DCRP Plan | $ | 1,879,612 | $ | 59,281 | $ | 91,256 | $ | 91,928 | $ | 2,122,077 | |||||||||||||||||||||||||
| Deferred RSUs | $ | 2,474,874 | $ | – | $ | – | $ | 699,839 | $ | 3,174,713 | |||||||||||||||||||||||||
| Marc A. Howze | DCRP Plan | $ | 1,413,201 | $ | 85,874 | $ | 122,178 | $ | 372,666 | $ | 1,993,919 | ||||||||||||||||||||||||
| TOTAL | $ | 6,606,404 | $ | 184,818 | $ | 91,256 | $ | 918,795 | $ | 7,801,273 | TOTAL | $ | 1,413,201 | $ | 85,874 | $ | 122,178 | $ | 372,666 | $ | 1,993,919 | ||||||||||||||
| Rajesh Kalathur | DCRP Plan | $ | 2,009,686 | $ | 60,408 | $ | 92,997 | $ | 165,807 | $ | 2,328,898 | DCRP Plan | $ | 2,328,898 | $ | 89,559 | $ | 127,393 | $ | 937,143 | $ | 3,482,993 | |||||||||||||
| TOTAL | $ | 2,009,686 | $ | 60,408 | $ | 92,997 | $ | 165,807 | $ | 2,328,898 | TOTAL | $ | 2,328,898 | $ | 89,559 | $ | 127,393 | $ | 937,143 | $ | 3,482,993 | ||||||||||||||
| Cory J. Reed | Deferred Plan | $ | – | $ | 123,050 | $ | – | $ | 1,655 | $ | 124,705 | Deferred Plan | $ | 124,704 | $ | 229,284 | $ | - | $ | 68,515 | $ | 422,503 | |||||||||||||
| DCRP Plan | $ | 920,767 | $ | 56,763 | $ | 87,346 | $ | 225,933 | $ | 1,290,809 | DCRP Plan | $ | 1,290,809 | $ | 87,009 | $ | 123,815 | $ | 495,429 | $ | 1,997,062 | ||||||||||||||
| TOTAL | $ | 920,767 | $ | 179,813 | $ | 87,346 | $ | 227,588 | $ | 1,415,514 | TOTAL | $ | 1,415,513 | $ | 316,293 | $ | 123,815 | $ | 563,944 | $ | 2,419,565 | ||||||||||||||
| James M. Field | DCRP Plan | $ | 3,697,347 | $ | 66,142 | $ | 101,855 | $ | 150,224 | $ | 4,015,568 | ||||||||||||||||||||||||
| Deferred RSUs | $ | 4,511,938 | $ | – | $ | – | $ | 1,275,876 | $ | 5,787,814 | |||||||||||||||||||||||||
| TOTAL | $ | 8,209,285 | $ | 66,142 | $ | 101,855 | $ | 1,426,100 | $ | 9,803,382 | |||||||||||||||||||||||||
| (1) | The amounts in this column represent employee compensation deferrals that are included in the Fiscal |
| (2) | The amounts in this column associated with the DCRP represent Deere’s contributions during the fiscal year as included in the Fiscal |
| (3) | For rates of return on account balances under the Deferred Plan and DCRP, see the applicable earnings charts in the narrative preceding this table. For the deferred RSU accounts, the earnings represent the change in the intrinsic value of the RSUs. |
| (4) | Of the aggregate balance, the following amounts were reported as compensation in the Summary Compensation Table in prior years: |
Advisory Vote on Executive CompensationExecutive Compensation Tables
Fiscal 20202021 Potential Payments upon Change in Control
The Change in Control (CIC) Program includes a “double trigger” approach, under which participants will receive severance benefits only if both a change in control and qualifying termination occur. A “qualifying termination” is either:
Deere’s termination of an executive’s employment within the six months preceding or the 24 months following a change in control for reasons other than death, disability, or “cause” (defined as an executive’s willful and continued nonperformance of duties after written demand; willful conduct that is demonstrably and materially injurious to Deere; or illegal activity); or | |
An executive’s termination of his or her own employment for “good reason” (defined as material reductions or alterations in an executive’s authority, duties, or responsibilities; change in office location of at least 50 miles from the executive’s current residence; material reductions in an executive’s participation in certain Deere compensation plans; or certain other breaches of the covenants in the CIC Program) within 24 months following a change in control. |
66 DEERE & COMPANY2022 PROXY STATEMENT
Advisory Vote on Executive Compensation
Executive Compensation Tables
The CIC Program defines the following as “change in control” events:
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Deere is completely liquidated or all, or substantially all, of Deere’s assets are sold or disposed. |
Benefits provided under the CIC program and other benefit plans are described in the footnotes to the following table. Although not reflected in the table, the CIC Program provides that Deere will pay the executive’s reasonable legal fees and expenses if the executive must enforce the program terms. Under the CIC Program, the executive agrees: (a) not to disclose or use for his or her own purposes confidential and proprietary Deere information and (b) for a period of two years following termination of employment, not to induce Deere employees to leave Deere or to interfere with Deere’s business.
In addition, the John Deere Omnibus Equity and Incentive Plan (Omnibus Plan), the John Deere 2020 Equity and Incentive Plan, the LTIC plan, and the Deferred Plan each contain change in control provisions that may trigger payments. Under the Omnibus Plan and John Deere 2020 Equity and Incentive Plan, unless the Board or the Committee determines otherwise, all then-outstanding equity awards would vest and restriction periods would end only if there is both a change in control and a qualifying termination. All outstanding RSUs would be cashed out as of the date of the change in control and the executive would have the right to exercise all outstanding options. Unvested PSUs are cashed out at a target award level and the change of control price described in the Omnibus Plan and John Deere 2020 Equity and Incentive Plan. Such potential payments are disclosed in the following table adjacent to “Change in Control and Qualifying Termination.” The LTIC plan provides for payment upon a change in control based on actual performance results to date for all performance periods then in progress. Under the Deferred Plan, in the event of certain changes in control, the Committee may elect to terminate the plan within 12 months and distribute all account balances or the Committee may decide to keep the Deferred Plan in effect and modify it to reflect the impact of the change in control.
The following table includes estimated potential payments that would have been due to each NEO if a change in control event had occurred and, if applicable, the NEO experienced a qualifying termination as of the end of fiscal 2020.2021. Although the calculations are intended to provide reasonable estimates of the potential payments, they are based on numerous assumptions, as described in the footnotes, and may not represent the actual amount each NEO would receive if a change in control occurred. The payments listed represent the incremental amounts due to NEOs beyond what the NEOs would have received without the change in control. Not included in this table are the following payments to which the NEOs are already entitled and which are reported elsewhere in this Proxy Statement:
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67 DEERE & COMPANY2022 PROXY STATEMENT
Advisory Vote on Executive Compensation
Executive Compensation Tables
| Name | Salary (1) | STI (2) | LTIC (3) | Stock Awards (4) | Stock Options (5) | Welfare Benefits (6) | Defined Contribution Plans (7) | Total Payments (8) | ||||||||||||||||
| John C. May | ||||||||||||||||||||||||
| –Change in Control only | $ | — | $ | — | $ | 2,310,603 | $ | — | $ | — | $ | — | $ | — | $ | 2,310,603 | ||||||||
| –Change in Control and | ||||||||||||||||||||||||
| Qualifying Termination | $ | 3,600,000 | $ | 5,396,604 | $ | 2,310,603 | $ | 10,003,069 | $ | 5,210,393 | $ | 53,487 | $ | 165,071 | $ | 26,739,227 | ||||||||
| Ryan D. Campbell | ||||||||||||||||||||||||
| –Change in Control only | $ | — | $ | — | $ | 976,449 | $ | — | $ | — | $ | — | $ | — | $ | 976,449 | ||||||||
| –Change in Control and | ||||||||||||||||||||||||
| Qualifying Termination | $ | 1,362,644 | $ | 1,343,718 | $ | 976,449 | $ | 2,439,828 | $ | 1,283,451 | $ | 32,693 | $ | 85,601 | $ | 7,524,384 | ||||||||
| Mary K. W. Jones | ||||||||||||||||||||||||
| –Change in Control only | $ | — | $ | — | $ | 976,449 | $ | — | $ | — | $ | — | $ | — | $ | 976,449 | ||||||||
| –Change in Control and | ||||||||||||||||||||||||
| Qualifying Termination | $ | 1,577,544 | $ | 1,565,592 | $ | 976,449 | $ | 4,990,578 | $ | 2,098,522 | $ | 34,701 | $ | 113,656 | $ | 11,357,042 | ||||||||
| Rajesh Kalathur | ||||||||||||||||||||||||
| –Change in Control only | $ | — | $ | — | $ | 976,449 | $ | — | $ | — | $ | — | $ | — | $ | 976,449 | ||||||||
| –Change in Control and | ||||||||||||||||||||||||
| Qualifying Termination | $ | 1,593,864 | $ | 1,581,788 | $ | 976,449 | $ | 5,221,232 | $ | 2,194,710 | $ | 34,749 | $ | 115,397 | $ | 11,718,189 | ||||||||
| Cory J. Reed | ||||||||||||||||||||||||
| –Change in Control only | $ | — | $ | — | $ | 976,449 | $ | — | $ | — | $ | — | $ | — | $ | 976,449 | ||||||||
| –Change in Control and | ||||||||||||||||||||||||
| Qualifying Termination | $ | 1,543,080 | $ | 1,531,390 | $ | 976,449 | $ | 5,068,065 | $ | 2,128,385 | $ | 33,191 | $ | 109,746 | $ | 11,390,306 | ||||||||
| James M. Field | ||||||||||||||||||||||||
| –Change in Control only | $ | — | $ | — | $ | 976,449 | $ | — | $ | — | $ | — | $ | — | $ | 976,449 | ||||||||
| –Change in Control and | ||||||||||||||||||||||||
| Qualifying Termination | $ | 1,677,690 | $ | 1,671,033 | $ | 976,449 | $ | 3,211,762 | $ | — | $ | 38,784 | $ | 124,255 | $ | 7,699,973 | ||||||||
| Name | Salary (1) | STI (2) | LTIC (3) | Stock Awards (4) | Stock Options (5) | Welfare Benefits (6) | Defined Contribution Plans (7) | Total Payments (8) | |||||||||||||||||
| John C. May | |||||||||||||||||||||||||
| –Change in Control only | $ | — | $ | — | $ | 5,165,015 | $ | — | $ | — | $ | — | $ | — | $ | 5,165,015 | |||||||||
| –Change in Control and Qualifying Termination | $ | 4,350,024 | $ | 6,860,035 | $ | 5,165,015 | $ | 20,873,721 | $ | 13,841,441 | $ | 58,378 | $ | 312,962 | $ | 51,461,576 | |||||||||
| Ryan D. Campbell | |||||||||||||||||||||||||
| –Change in Control only | $ | — | $ | — | $ | 2,182,710 | $ | — | $ | — | $ | — | $ | — | $ | 2,182,710 | |||||||||
| –Change in Control and Qualifying Termination | $ | 1,703,328 | $ | 1,674,938 | $ | 2,182,710 | $ | 5,126,777 | $ | 3,432,495 | $ | 33,886 | $ | 146,352 | $ | 14,300,486 | |||||||||
| Marc A. Howze | |||||||||||||||||||||||||
| –Change in Control only | $ | — | $ | — | $ | 2,182,710 | $ | — | $ | — | $ | — | $ | — | $ | 2,182,710 | |||||||||
| –Change in Control and Qualifying Termination | $ | 1,605,432 | $ | 1,599,060 | $ | 2,182,710 | $ | 4,503,088 | $ | — | $ | 37,311 | $ | 150,678 | $ | 10,078,279 | |||||||||
| Rajesh Kalathur | |||||||||||||||||||||||||
| –Change in Control only | $ | — | $ | — | $ | 2,182,710 | $ | — | $ | — | $ | — | $ | — | $ | 2,182,710 | |||||||||
| –Change in Control and Qualifying Termination | $ | 1,641,696 | $ | 1,637,710 | $ | 2,182,710 | $ | 7,043,028 | $ | 4,072,343 | $ | 35,224 | $ | 155,893 | $ | 16,768,604 | |||||||||
| Cory J. Reed | |||||||||||||||||||||||||
| –Change in Control only | $ | — | $ | — | $ | 2,182,710 | $ | — | $ | — | $ | — | $ | — | $ | 2,182,710 | |||||||||
| –Change in Control and Qualifying Termination | $ | 1,620,240 | $ | 1,613,810 | $ | 2,182,710 | $ | 7,082,394 | $ | 4,060,141 | $ | 34,915 | $ | 152,315 | $ | 16,746,525 | |||||||||
| (1) | In the event of a change in control and qualifying termination, the CIC Program provides for a lump-sum payment of three times the annual base salary for the CEO and two times annual base salary for senior officers. |
| (2) | In the event of a change in control and qualifying termination, the CIC Program provides for a lump-sum payment of three times (CEO) and two times (senior officers) the target STI bonus amount for the fiscal year in which the termination occurs. In addition, the NEO is entitled to a prorated STI award for the current year. Since the change in control calculations in this table are made as of the end of the fiscal year, the prorated award for the current year is equal to the STI earned for the current fiscal year as reported in the Fiscal |
| (3) | The LTIC plan contains a change in control provision that entitles participants, as of the date of a change in control, to a lump-sum LTIC payment based on actual performance results to date for all performance periods then in progress. The payout for the three-year performance period ended with fiscal |
| (4) | Vesting of RSUs and PSUs does not accelerate unless there is both a change in control and a qualifying termination. In such cases, the vesting and restriction requirements no longer apply. Unvested RSUs will be cashed out and unvested PSUs will be cashed out at a target award level. |
For purposes of the table, all unvested PSUs and RSUs are valued based on the closing price for Deere common stock on the NYSE as of | |
| (5) | Vesting of outstanding stock options granted after February 24, 2010, does not accelerate in the event of a change in control only. Instead, outstanding stock options will continue to vest over the three-year vesting period, subject to continued employment conditions. |
In the event of a change in control and qualifying termination, all outstanding stock options vest and can be exercised immediately. Since Mr. | |
| (6) | In the event of a change in control and qualifying termination, the CIC Program provides for continuation of health care, life, accidental death and dismemberment, and disability insurance for three full years for the CEO and two full years for the senior officers at the same premium cost and coverage. This benefit will be discontinued if the NEO receives similar benefits from a subsequent employer during this three-year period. |
| (7) | In the event of a change in control and qualifying termination, the CIC Program includes a cash payment equal to Deere’s contributions on behalf of each of the NEOs under our defined contribution plans for the plan year preceding termination (or, if greater, for the plan year immediately preceding the change in control). |
| (8) | The amounts set forth under “Deferred Compensation” and “Accumulated Pension Benefit” in the Termination table would also be payable upon a change in control and qualifying termination. |
68 DEERE & COMPANY2022 PROXY STATEMENT
Advisory Vote on Executive Compensation
Executive Compensation Tables
FISCAL 20202021 POTENTIAL PAYMENTS UPON TERMINATION OF EMPLOYMENT OTHER THAN FOLLOWING A CHANGE IN CONTROL
The following table summarizes the estimated payments to be made to the NEOs under our plans or established practices in the event of termination of employment due to death, disability, retirement, termination without cause, termination for cause, or voluntary separation. Although the calculations are intended to provide reasonable estimates of the potential payments, they are based on numerous assumptions, as described in the footnotes, and may not represent the actual amounts the NEOs would receive.
The amounts shown assume the termination event occurred at the end of fiscal 20202021 and the NEO was actively employed until that time.
| Name | Salary (1) | STI (2) | LTIC (3) | Stock Awards (4) | Stock Options (5) | Deferred Compensation (6) | Accumulated Pension Benefit (7) | Total Payments | ||||||||||||||||
| John C. May | ||||||||||||||||||||||||
| Death | $ | – | $ | 2,180,768 | $ | 1,560,484 | $ | 9,197,926 | $ | 5,579,256 | $ | 2,462,989 | $ | 2,238,457 | $ | 23,219,880 | ||||||||
| Disability | $ | 15,418,085 | $ | 2,180,768 | $ | 1,560,484 | $ | 9,197,926 | $ | 5,579,256 | $ | 2,462,989 | $ | 7,535,731 | $ | 43,935,239 | ||||||||
| Retirement (9) | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | ||||||||
| Termination Without Cause | $ | 1,200,000 | $ | 2,180,768 | $ | 1,560,484 | $ | – | $ | – | $ | 2,462,989 | $ | 4,072,550 | $ | 11,476,791 | ||||||||
| Termination For Cause | $ | – | $ | 2,180,768 | $ | 1,560,484 | $ | – | $ | – | $ | 2,462,989 | $ | 4,072,550 | $ | 10,276,791 | ||||||||
| Voluntary Separation | $ | – | $ | 2,180,768 | $ | 1,560,484 | $ | – | $ | – | $ | 2,462,989 | $ | 4,072,550 | $ | 10,276,791 | ||||||||
| Ryan D. Campbell | ||||||||||||||||||||||||
| Death | $ | – | $ | 814,495 | $ | 1,364,587 | $ | 1,720,531 | $ | 3,518,349 | $ | 391,969 | $ | 610,419 | $ | 8,420,350 | ||||||||
| Disability | $ | 9,588,500 | $ | 814,495 | $ | 1,364,587 | $ | 1,720,531 | $ | 3,518,349 | $ | 391,969 | $ | 3,544,607 | $ | 20,943,038 | ||||||||
| Retirement (9) | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | ||||||||
| Termination Without Cause | $ | 397,438 | $ | 814,495 | $ | 1,364,587 | $ | – | $ | – | $ | 391,969 | $ | 1,112,531 | $ | 4,081,020 | ||||||||
| Termination For Cause | $ | – | $ | 814,495 | $ | 1,364,587 | $ | – | $ | – | $ | 391,969 | $ | 1,112,531 | $ | 3,683,582 | ||||||||
| Voluntary Separation | $ | – | $ | 814,495 | $ | 1,364,587 | $ | – | $ | – | $ | 391,969 | $ | 1,112,531 | $ | 3,683,582 | ||||||||
| Mary K. W. Jones | ||||||||||||||||||||||||
| Death | $ | – | $ | 948,984 | $ | 1,364,587 | $ | 8,770,504 | $ | 14,468,883 | $ | 4,626,560 | $ | 1,910,531 | $ | 32,090,049 | ||||||||
| Disability | $ | 12,004,974 | $ | 948,984 | $ | 1,364,587 | $ | 8,770,504 | $ | 14,468,883 | $ | 4,626,560 | $ | 6,134,576 | $ | 48,319,068 | ||||||||
| Retirement (9) | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | ||||||||
| Termination Without Cause | $ | 788,772 | $ | 948,984 | $ | 1,364,587 | $ | 3,174,713 | $ | – | $ | 4,626,560 | $ | 3,476,589 | $ | 14,380,205 | ||||||||
| Termination For Cause | $ | – | $ | 948,984 | $ | 1,364,587 | $ | 3,174,713 | $ | – | $ | 4,626,560 | $ | 3,476,589 | $ | 13,591,433 | ||||||||
| Voluntary Separation | $ | – | $ | 948,984 | $ | 1,364,587 | $ | 3,174,713 | $ | – | $ | 4,626,560 | $ | 3,476,589 | $ | 13,591,433 | ||||||||
| Rajesh Kalathur | ||||||||||||||||||||||||
| Death | $ | – | $ | 958,801 | $ | 1,364,587 | $ | 5,307,304 | $ | 21,112,767 | $ | 2,328,898 | $ | 1,808,001 | $ | 32,880,358 | ||||||||
| Disability | $ | 12,283,823 | $ | 958,801 | $ | 1,364,587 | $ | 5,307,304 | $ | 21,112,767 | $ | 2,328,898 | $ | 5,881,493 | $ | 49,237,673 | ||||||||
| Retirement (9) | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | ||||||||
| Termination Without Cause | $ | 796,932 | $ | 958,801 | $ | 1,364,587 | $ | – | $ | – | $ | 2,328,898 | $ | 3,290,754 | $ | 8,739,972 | ||||||||
| Termination For Cause | $ | – | $ | 958,801 | $ | 1,364,587 | $ | – | $ | – | $ | 2,328,898 | $ | 3,290,754 | $ | 7,943,040 | ||||||||
| Voluntary Separation | $ | – | $ | 958,801 | $ | 1,364,587 | $ | – | $ | – | $ | 2,328,898 | $ | 3,290,754 | $ | 7,943,040 | ||||||||
| Cory J. Reed | ||||||||||||||||||||||||
| Death | $ | – | $ | 928,252 | $ | 1,364,587 | $ | 5,680,507 | $ | 3,984,975 | $ | 1,415,514 | $ | 1,271,559 | $ | 14,645,394 | ||||||||
| Disability | $ | 12,681,241 | $ | 928,252 | $ | 1,364,587 | $ | 5,680,507 | $ | 3,984,975 | $ | 1,415,514 | $ | 4,587,772 | $ | 30,642,848 | ||||||||
| Retirement (9) | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | ||||||||
| Termination Without Cause | $ | 739,393 | $ | 928,252 | $ | 1,364,587 | $ | – | $ | – | $ | 1,415,514 | $ | 2,315,703 | $ | 6,763,449 | ||||||||
| Termination For Cause | $ | – | $ | 928,252 | $ | 1,364,587 | $ | – | $ | – | $ | 1,415,514 | $ | 2,315,703 | $ | 6,024,056 | ||||||||
| Voluntary Separation | $ | – | $ | 928,252 | $ | 1,364,587 | $ | – | $ | – | $ | 1,415,514 | $ | 2,315,703 | $ | 6,024,056 | ||||||||
| James M. Field | ||||||||||||||||||||||||
| Death | $ | – | $ | 1,012,896 | $ | 1,364,587 | $ | 11,656,730 | $ | 10,509,606 | $ | 4,015,568 | $ | 3,268,695 | $ | 31,828,082 | ||||||||
| Disability | $ | 8,476,395 | $ | 1,012,896 | $ | 1,364,587 | $ | 11,656,730 | $ | 10,509,606 | $ | 4,015,568 | $ | 8,173,627 | $ | 45,209,409 | ||||||||
| Retirement | $ | – | $ | 1,012,896 | $ | 1,364,587 | $ | 11,656,730 | $ | 10,509,606 | $ | 4,015,568 | $ | 5,938,909 | $ | 34,498,296 | ||||||||
| Termination Without Cause | $ | 838,845 | $ | 1,012,896 | $ | 1,364,587 | $ | 5,787,814 | $ | – | $ | 4,015,568 | $ | 5,938,909 | $ | 18,958,619 | ||||||||
| Termination For Cause | $ | – | $ | 1,012,896 | $ | 1,364,587 | $ | 5,787,814 | $ | – | $ | 4,015,568 | $ | 5,938,909 | $ | 18,119,774 | ||||||||
| Voluntary Separation (8) | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | $ | – | ||||||||
Advisory Vote on Executive CompensationExecutive Compensation Tables
| Name | Salary (1) | STI (2) | LTIC (3) | Stock Awards (4) | Stock Options (5) | Deferred Compensation (6) | Accumulated Pension Benefit (7) | Total Payments | ||||||||||||||||||||||||
| John C. May | ||||||||||||||||||||||||||||||||
| Death | $ | - | $ | 4,005,803 | $ | 4,050,000 | $ | 33,719,247 | $ | 13,841,441 | $ | 3,903,301 | $ | 2,740,109 | $ | 62,259,901 | ||||||||||||||||
| Disability | $ | 20,749,258 | $ | 4,005,803 | $ | 4,050,000 | $ | 33,719,247 | $ | 13,841,441 | $ | 3,903,301 | $ | 9,131,906 | $ | 89,400,956 | ||||||||||||||||
| Retirement (9) | ||||||||||||||||||||||||||||||||
| Termination Without Cause | $ | 1,450,008 | $ | 4,005,803 | $ | 4,050,000 | $ | - | $ | - | $ | 3,903,301 | $ | 4,990,258 | $ | 18,399,370 | ||||||||||||||||
| Termination For Cause | $ | - | $ | 4,005,803 | $ | 4,050,000 | $ | - | $ | - | $ | 3,903,301 | $ | 4,990,258 | $ | 16,949,362 | ||||||||||||||||
| Voluntary Separation | $ | - | $ | 4,005,803 | $ | 4,050,000 | $ | - | $ | - | $ | 3,903,301 | $ | 4,990,258 | $ | 16,949,362 | ||||||||||||||||
| Ryan D. Campbell | ||||||||||||||||||||||||||||||||
| Death | $ | - | $ | 1,467,078 | $ | 1,711,510 | $ | 8,281,848 | $ | 3,432,495 | $ | 743,278 | $ | 808,237 | $ | 16,444,446 | ||||||||||||||||
| Disability | $ | 12,839,926 | $ | 1,467,078 | $ | 1,711,510 | $ | 8,281,848 | $ | 3,432,495 | $ | 743,278 | $ | 4,261,789 | $ | 32,737,924 | ||||||||||||||||
| Retirement (9) | ||||||||||||||||||||||||||||||||
| Termination Without Cause | $ | 532,290 | $ | 1,467,078 | $ | 1,711,510 | $ | - | $ | - | $ | 743,278 | $ | 1,473,686 | $ | 5,927,842 | ||||||||||||||||
| Termination For Cause | $ | - | $ | 1,467,078 | $ | 1,711,510 | $ | - | $ | - | $ | 743,278 | $ | 1,473,686 | $ | 5,395,552 | ||||||||||||||||
| Voluntary Separation | $ | - | $ | 1,467,078 | $ | 1,711,510 | $ | - | $ | - | $ | 743,278 | $ | 1,473,686 | $ | 5,395,552 | ||||||||||||||||
| Marc A. Howze | ||||||||||||||||||||||||||||||||
| Death | $ | - | $ | 1,400,617 | $ | 1,711,510 | $ | 11,744,656 | $ | 5,724,524 | $ | 1,993,919 | $ | 1,825,724 | $ | 24,400,950 | ||||||||||||||||
| Disability | $ | 6,676,350 | $ | 1,400,617 | $ | 1,711,510 | $ | 11,744,656 | $ | 5,724,524 | $ | 1,993,919 | $ | 4,696,647 | $ | 33,948,223 | ||||||||||||||||
| Retirement | $ | - | $ | 1,400,617 | $ | 1,711,510 | $ | 11,744,656 | $ | 5,724,524 | $ | 1,993,919 | $ | 3,322,141 | $ | 25,897,367 | ||||||||||||||||
| Termination Without Cause | $ | 702,377 | $ | 1,400,617 | $ | 1,711,510 | $ | - | $ | - | $ | 1,993,919 | $ | 3,322,141 | $ | 9,130,564 | ||||||||||||||||
| Termination For Cause | $ | - | $ | 1,400,617 | $ | 1,711,510 | $ | - | $ | - | $ | 1,993,919 | $ | 3,322,141 | $ | 8,428,187 | ||||||||||||||||
| Voluntary Separation (8) | ||||||||||||||||||||||||||||||||
| Rajesh Kalathur | ||||||||||||||||||||||||||||||||
| Death | $ | - | $ | 1,434,470 | $ | 1,711,510 | $ | 11,377,357 | $ | 24,385,527 | $ | 3,482,993 | $ | 1,943,834 | $ | 44,335,691 | ||||||||||||||||
| Disability | $ | 11,595,423 | $ | 1,434,470 | $ | 1,711,510 | $ | 11,377,357 | $ | 24,385,527 | $ | 3,482,993 | $ | 6,009,295 | $ | 59,996,575 | ||||||||||||||||
| Retirement (9) | ||||||||||||||||||||||||||||||||
| Termination Without Cause | $ | 820,848 | $ | 1,434,470 | $ | 1,711,510 | $ | - | $ | - | $ | 3,482,993 | $ | 3,542,366 | $ | 10,992,187 | ||||||||||||||||
| Termination For Cause | $ | - | $ | 1,434,470 | $ | 1,711,510 | $ | - | $ | - | $ | 3,482,993 | $ | 3,542,366 | $ | 10,171,339 | ||||||||||||||||
| Voluntary Separation | $ | - | $ | 1,434,470 | $ | 1,711,510 | $ | - | $ | - | $ | 3,482,993 | $ | 3,542,366 | $ | 10,171,339 | ||||||||||||||||
| Cory J. Reed | ||||||||||||||||||||||||||||||||
| Death | $ | - | $ | 1,413,536 | $ | 1,711,510 | $ | 11,441,027 | $ | 9,725,266 | $ | 2,419,565 | $ | 1,431,273 | $ | 28,142,177 | ||||||||||||||||
| Disability | $ | 12,834,550 | $ | 1,413,536 | $ | 1,711,510 | $ | 11,441,027 | $ | 9,725,266 | $ | 2,419,565 | $ | 4,869,098 | $ | 44,414,552 | ||||||||||||||||
| Retirement (9) | ||||||||||||||||||||||||||||||||
| Termination Without Cause | $ | 810,120 | $ | 1,413,536 | $ | 1,711,510 | $ | - | $ | - | $ | 2,419,565 | $ | 2,609,335 | $ | 8,964,066 | ||||||||||||||||
| Termination For Cause | $ | - | $ | 1,413,536 | $ | 1,711,510 | $ | - | $ | - | $ | 2,419,565 | $ | 2,609,335 | $ | 8,153,946 | ||||||||||||||||
| Voluntary Separation | $ | - | $ | 1,413,536 | $ | 1,711,510 | $ | - | $ | - | $ | 2,419,565 | $ | 2,609,335 | $ | 8,153,946 | ||||||||||||||||
| (1) | Our NEOs do not have employment agreements. However, we have severance guidelines that provide compensation if termination is initiated by Deere for reasons other than cause. Our severance guidelines provide for payment of one-half month of salary plus another one-half month of salary for each complete year of employment, up to a maximum of one year’s salary. We may elect to pay severance in either a lump sum or via salary continuance, unless the amount of severance exceeds two times the applicable limit under Section 401(a)(17) of the Internal Revenue Code, in which case severance will be paid in a lump sum. |
Under our Long-Term Disability Plan, if disabled before age 62, NEOs receive monthly benefits until age 65 equal to 60% of their salary plus the average of the three STI awards received immediately prior to the start of disability. The amount shown for disability represents the present value of the monthly benefit from the time of the disability, assumed to be October 31, | |
| (2) | Under all termination events, the amount of STI earned for the fiscal year ended |
69 DEERE & COMPANY2022 PROXY STATEMENT
Advisory Vote on Executive Compensation
Pay Ratio Disclosure
| (3) | Under all termination events, the amount of LTIC earned for the performance period ended |
| (4) | In the event of death, disability, or retirement, the most recent RSU and PSU awards are prorated based on the number of months the NEO remains employed in the year of grant. The remaining units are forfeited. All unvested and non-forfeited RSUs will vest on the date of separation from service, while PSUs that are not forfeited will continue to convert to shares at the end of the three-year performance period based on the performance metrics. When applicable restrictions lapse, vested RSUs will be converted to shares of common stock. Restrictions on vested RSUs will lapse as provided in the following table: |
| Type of Separation from Service | Fiscal Year of RSU Award | Lapse of Restrictions | |||
| Death | |||||
| After 2012 | Third anniversary of grant date | ||||
| Disability or Retirement | |||||
| After 2012 | Third anniversary of grant date |
In the event of termination with or without cause or voluntary separation, any vested RSUs will be cashed out. All unvested PSUs and RSUs will be forfeited. The amounts shown in the table correspond to vested RSUs that must be held until retirement, including RSUs that vest as a result of the termination of employment. | ||
The value of PSUs for each outstanding tranche represents actual achievement relative to the | ||
All amounts shown in the table are based on the closing price for Deere common stock on the NYSE as of | ||
| (5) | In the event of death, all outstanding stock options vest immediately and the heirs must exercise those options within one year. In the event of disability or retirement, vesting accelerates for all outstanding stock options, but occurs no sooner than six months following the grant date. These options expire within five years. In the event of retirement, the most recent stock option awards granted to the NEOs are prorated based on the number of months the NEOs remain actively employed in the year of grant. The remaining options are forfeited. The amount shown in this table represents the number of stock options multiplied by the difference between the closing price for Deere common stock on the NYSE as of | |
These outstanding stock options are reported in the Outstanding Equity Awards at Fiscal | ||
| (6) | In all cases, balances held in the U.S. nonqualified deferred compensation plans are payable to the employee. These amounts are reported in the Fiscal | |
| (7) | The present value of the accumulated pension benefit was calculated using the following assumptions: | |
| - | ||
| - | ||
| - | ||
| - | ||
| - |
Following are additional explanations related to the various scenarios:
| Following are additional explanations related to the various scenarios: | ||
| - | Death: This amount represents the present value of the accrued survivor benefit as of October 31, | |
| - | Disability: This amount assumes service through age 65 and includes service credit for time on long-term disability | |
| - | Retirement: For the NEOs eligible to retire, this amount represents the present value of the accrued benefits if they were to retire as of October 31, | |
| - | Termination Without Cause, Termination For Cause, and Voluntary Separation: This amount represents the present value of the accrued benefit as of October 31, | |
| (8) | Since Mr. | |
| (9) | Since Messrs. May, Campbell, Kalathur, and Reed | |
Advisory Vote on Executive Compensation
Pay Ratio Disclosure
Our Company strives to establish fair and competitive employee compensation programs in each local market within our global operations to effectively attract, retain, and motivate our talented workforce. Presented below is the ratio of annual total compensation of our CEO to the annual total compensation of our median employee (excluding our CEO). The ratio shown below is a reasonable estimate calculated in a manner consistent with Item 402 of Regulation S-K under the Securities Exchange Act of 1934. Per SEC guidelines, the median employee is only required to be determined once every three years provided there have been no changes to the employee population or compensation arrangement that cause Deere to reasonably believe there will be a significant change in the pay ratio disclosure. There have not been changes in our employee population or our employee compensation arrangements in 2020 that we believe would significantly impact the pay ratio disclosure.
70 DEERE & COMPANY2022 PROXY STATEMENT
Advisory Vote on Executive Compensation
Equity Compensation Plan Information
Our median employee was identified using the Company’s global full-time, part-time, temporary, and seasonal employees employed as of September 1, 2018.August 31, 2021. As of that date, we had 73,36174,309 employees globally, with 29,15228,424 employees located in the U.S. and 44,20945,885 located outside the U.S. As permitted under the “5% de minimis exemption” of the pay ratio disclosure rule, we excluded all employees in 2830 countries(1), which totaled 1,263,2,952, or 2%4%, of our total employee population.
After the exclusions, 29,15228,424 employees in the U.S. and 42,94642,933 employees located outside the U.S. were considered for identifying the median employee. To identify the median employee, we used annualized base pay as of September 1, 2018,August 31, 2021, as our consistently applied compensation measure. For salaried employees, this included annualized base salary. For hourly employees, this included annual hourly wages excluding overtime, bonuses, or other earnings. Base pay was annualized for permanent employees not employed a full year in 2018.2021. Base pay paid in foreign currencies was converted to U.S. dollars based on exchange rates in effect on October 26, 2018,August 29, 2021, which is considered the October spotAugust year-to-date average exchange rate.
Using this methodology, we identified our median employee to be a full-time, hourly employee located in the U.S. The annual total compensation was calculated in accordance with the SEC rules applicable to the Summary Compensation Table. The annual total compensation of our median employee for fiscal 20202021 was $70,743.$82,240. Mr. May’s annual total compensation as presented in the Fiscal 20202021 Summary Compensation Table was $15,588,384.$19,912,826. Calculated in this manner, the ratio of the CEO’s total compensation to our median employee’s total compensation for fiscal 20202021 was about 220242 to 1.
| (1) | The countries and approximate number of employees excluded from the calculation are as follows: Australia (365), Austria |
Equity Compensation Plan Information
The following table shows the total number of outstanding options and shares available for future issuances under our equity compensation plans as of November 1, 2020:October 31, 2021:
| Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights (a) | Weighted-Average Exercise Price of Outstanding Options, Warrants, and Rights (b) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column a) (c) | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights (a) | Weighted-Average Exercise Price of Outstanding Options, Warrants, and Rights (b) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column a) (c) | |||||||||
| Equity Compensation Plans Approved by Security Holders | 5,320,748 | (1) | 107.30 | 18,536,593 | (2) | 3,736,149 | (1) | 127.82 | 17,745,774 | (2) | |||||
| Equity Compensation Plans Not Approved by Security Holders | 0 | 0 | (3) | 0 | 0 | 0 | (3) | ||||||||
| Total | 5,320,748 | 18,536,593 | 3,736,149 | 17,745,774 | |||||||||||
| (1) | This amount includes |
| (2) | This amount includes |
| (3) | Deere currently has no equity compensation plans that have not been approved by stockholders. |
71 DEERE & COMPANY2022 PROXY STATEMENT
Item 3 – Ratification of Independent Registered Public Accounting Firm
The Audit Review Committee is directly responsible for the appointment, oversight, compensation, and retention of the independent registered public accounting firm that audits Deere’s financial statements and our internal control over financial reporting. The Audit Review Committee has approved the selection of Deloitte & Touche LLP to serve as the independent registered public accounting firm for fiscal 2021.2022. Deloitte & Touche and its predecessors have acted as our independent registered public accounting firm since 1910. Benefits of a long-term engagement by an auditor include audit quality, enabled by understanding and expertise of the company’s global business and accounting practices, and audit efficiency and effectiveness related to familiarity with the company and the avoidance of time and expense related to new auditor onboarding. The Audit Review Committee believes that the continued retention of Deloitte & Touche to serve as the independent registered public accounting firm for Deere is in the best interests of the company and its shareholders. The Audit Review Committee and the Board are requesting that shareholders ratify this appointment as a means of soliciting shareholders’ opinions and as a matter of good corporate practice. The current Deloitte & Touche lead auditor for Deere, Doug Alkema,Claudine Hollack, was appointed in 2016.2021.
The affirmative vote of a majority of the shares present in person or by proxy and entitled to vote at the meeting is required to ratify the selection of Deloitte & Touche LLP. If the shareholders do not ratify the selection, the Audit Review Committee will consider any information submitted by the shareholders in connection with the selection of the independent registered public accounting firm for the next fiscal year. Even if the selection is ratified, the Audit Review Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Review Committee believes such a change would be in the best interests of Deere and its shareholders.
We expect a representative of Deloitte & Touche LLP to attend the Annual Meeting. This representative will have an opportunity to make a statement and to respond to appropriate questions.
 | THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FORTHE RATIFICATION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. |
72 DEERE & COMPANY 2022 PROXY STATEMENT
Ratification of Independent Registered Public Accounting Firm
Item 3 – Ratification of Independent Registered Public Accounting Firm
Pre-approval of Services by the Independent Registered Public Accounting Firm
The Audit Review Committee has adopted a policy for pre-approval of audit and permitted non-audit services provided by Deere’s independent registered public accounting firm. The Audit Review Committee will consider annually and, if appropriate, approve the provision of audit services by its independent registered public accounting firm. The Audit Review Committee will consider and, if appropriate, pre-approve the provision of defined audit and non-audit services. The Audit Review Committee also will consider on a case-by-case basis and, if appropriate, approve specific services that are not otherwise pre-approved.
Any proposed engagement that has not been pre-approved may be presented to the Audit Review Committee for consideration at its next regular meeting or, if earlier consideration is required, to the Audit Review Committee or one or more committee members. The member or members who have delegated authority to approve services between regular meetings will report any specific approvals to the Audit Review Committee at its next regular meeting. The Audit Review Committee regularly reviews summary reports detailing all services being provided to Deere by its independent registered public accounting firm. All of the audit and non-audit services provided to us by Deloitte & Touche LLP in 2020fiscal 2021 were approved in accordance with theirthis policy.
Fees Paid to the Independent Registered Public Accounting Firm
The following table summarizes the aggregate fees billed for professional services by Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, Limited, and their respective affiliates for the fiscal years 20202021 and 2019:2020:
| Plan Category | 2020 | 2019 | 2021 | 2020 | ||||||||
| Audit Fees (1) | $ | 18,843,000 | $ | 20,045,000 | $ | 18,841,000 | $ | 18,843,000 | ||||
| Audit-Related Fees (2) | $ | 902,000 | $ | 1,028,000 | $ | 1,149,000 | $ | 902,000 | ||||
| Tax Fees (3) | $ | 72,000 | $ | 1,061,000 | $ | 133,000 | $ | 72,000 | ||||
| All Other Fees | $ | — | $ | — | $ | — | $ | — | ||||
| Total | $ | 19,817,000 | $ | 22,134,000 | $ | 20,122,000 | $ | 19,817,000 | ||||
| (1) | Audit fees include amounts charged in connection with the audit of Deere’s annual financial statements and |
| (2) | Audit-related fees reflect fees charged for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements. These services included audits of financial statements of employee benefit plans, various attestation services, and other consultations. |
| (3) | Tax fees in fiscal |
73 DEERE & COMPANY 2022 PROXY STATEMENT
Ratification of Independent Registered Public Accounting Firm
Audit Review Committee Report
TO THE BOARD OF DIRECTORS:
The Audit Review Committee consists of the following members of the Board of Directors: Alan C. Heuberger, Clayton M. Jones, Gregory R. Page, Sherry M. Smith (Chair), and Sheila G. Talton. Each of the members is independent as defined under the rules of the New York Stock Exchange (NYSE). The Audit Review Committee is responsible for assisting the Board of Directors in fulfilling its oversight responsibilities pertaining to the accounting, auditing, and financial reporting processes of Deere. Management is responsible for establishing and maintaining Deere’s internal control over financial reporting and for preparing financial statements in accordance with accounting principles generally accepted in the United States. The Audit Review Committee is responsible for oversight of certain risks to the company. The Audit Review Committee is directly responsible for the appointment, oversight, compensation, and retention of Deloitte & Touche LLP, the independent registered public accounting firm for Deere. Deloitte & Touche LLP is responsible for performing an independent audit of Deere’s annual consolidated financial statements and internal control over financial reporting and expressing opinions on (i) the conformity of Deere’s financial statements with accounting principles generally accepted in the United StatesStates; and (ii) Deere’s internal control over financial reporting.
All members of the Audit Review Committee are financially literate under the applicable NYSE rules, and four members of the Audit Review Committee — Mr. Heuberger, Mr. Jones, Mr. Page, and Ms. Smith — are “audit committee financial experts” within the meaning of that term as defined by the Securities and Exchange Commission in Regulation S-K under the Securities Exchange Act of 1934. The Audit Review Committee has a written charter describing its responsibilities that has been approved by the Board of Directors and is available on Deere’s website at www.JohnDeere.com/corpgov. Members of the Audit Review Committee rely on the information provided and the representations made to them by management, which has primary responsibility for establishing and maintaining appropriate internal control over financial reporting and for Deere’s financial statements and reports, and by the independent registered public accounting firm, which is responsible for performing an audit in accordance with Standards of the Public Company Accounting Oversight Board (United States) (PCAOB) and expressing opinions on (i) the conformity of Deere’s financial statements with accounting principles generally accepted in the United StatesStates; and (ii) Deere’s internal control over financial reporting.
In this context, we havethe Audit Review Committee has reviewed and discussed with management Deere’s audited financial statements as of and for the fiscal year ended November 1, 2020. We haveOctober 31, 2021. The Audit Review Committee has also discussed with Deloitte & Touche LLP the matters required to be discussed by applicable requirements of the PCAOB and the Securities and Exchange Commission. We haveThe Audit Review Committee has discussed the scope of and plans for the annual audit with Deloitte & Touche LLP. We haveThe Audit Review Committee has received and reviewed the written disclosures and the letter from Deloitte & Touche LLP required by applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the Audit Review Committee concerning independence and havehas discussed with them their independence. We haveThe Audit Review Committee has concluded that Deloitte & Touche LLP’s provision of audit and non-audit services to Deere is compatible with their independence.
On at least a quarterly basis, the Audit Review Committee meets in executive session with Deere management and the Deere internal audit staff, as well as separately with Deloitte & Touche LLP.
Based on the reviews and discussions referred to above and exercising our business judgment, we recommendthe Audit Review Committee recommended to the Board of Directors that the financial statements referred to above be included in Deere’s Annual Report on Form 10-K for the fiscal year ended November 1, 2020,October 31, 2021, for filing with the SEC. We haveThe Audit Review Committee has selected Deloitte & Touche LLP as Deere’s independent registered public accounting firm for fiscal 20212022 and havehas approved submitting the selection of the independent registered public accounting firm for ratification by the shareholders.
Audit Review Committee
Sherry M. Smith (Chair)
Alan C. Heuberger
Clayton M. Jones
Gregory R. Page
Sheila G. Talton
74 DEERE & COMPANY 2022 PROXY STATEMENT
Item 4 - Approval of Deere & Company Nonemployee Director Stock Ownership Plan
Summary of the Proposal
The Board has approved the Deere & Company Nonemployee Director Stock Ownership Plan in the form attached hereto as Appendix C (for purposes of this section of the Proxy Statement, the “Plan”), subject to approval by the shareholders of the Company. The Plan succeeds the 2012 Deere & Company Nonemployee Director Stock Ownership Plan (the “Predecessor Plan”) under which grants can no longer be made after March 10, 2022. The description of the Plan which follows is qualified in its entirety by reference to the text of the Plan as set forth in Appendix C. The Plan provides for annual awards to each nonemployee director of shares or units of Company common stock which will be subject to certain restrictions until the director’s retirement, resignation with the Board’s consent, death, or disability. The number of shares of common stock reserved for all awards under the Plan is 500,000. No awards may be granted under the Plan after March 10, 2032.
The affirmative vote of a majority of the shares present in person or by proxy and entitled to vote at the meeting is required to approve the Deere & Company Nonemployee Director Stock Ownership Plan.
| THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE DEERE & COMPANY NONEMPLOYEE DIRECTOR STOCK OWNERSHIP PLAN. |
75 DEERE & COMPANY2022 PROXY STATEMENT
Approval of Deere & Company Nonemployee Director Stock Ownership Plan
Item 4 — Approval of Deere & Company Nonemployee Director Stock Ownership Plan
Description of the Plan
Establishment
Subject to shareholder approval, the Plan will become effective on February 23, 2022.
Purpose
The purpose of the Plan is to further the growth, development, and financial success of the Company by strengthening the Company’s ability to attract and retain the services of experienced and knowledgeable nonemployee directors. The Plan is designed to enable nonemployee directors to participate in the Company’s growth while linking their personal interests to those of Company shareholders.
Operation
Eligibility and the amount and timing of awards under the Plan are determined pursuant to Plan provisions. The Plan provides for annual awards to nonemployee directors of restricted stock units (“RSUs”) or shares of restricted common stock of the Company in an amount recommended by the Corporate Governance Committee and approved by the Board. In fiscal 2021, each nonemployee director received RSU awards equivalent to $160,000 under the Predecessor Plan. The number of RSUs or shares awarded in any year will be based on the fair market value of the common stock as of the date one week following the annual meeting of shareholders. The award is subject to risks of forfeiture and other terms and conditions (the “Restrictions”). Pro rata awards will be made to nonemployee directors elected by the Board between annual meetings. In the year of retirement or resignation from the Board with consent of the Board, the last award made to the nonemployee director will be prorated.
Restrictions on restricted shares remain in effect during a nonemployee director’s service on the Board. Restricted shares are held by the Company, and the shares are non-transferable and subject to forfeiture as provided in the Plan. Recipients of restricted stock receive dividends and are entitled to vote the restricted stock. Subject to proration of a nonemployee director’s last award in the year of retirement or resignation with consent of the Board, in the event of a nonemployee director’s death, total and permanent disability, retirement, or resignation with consent of the Board, the Restrictions attached to any award of restricted shares will lapse and the shares covered by such award will be delivered to the participant or the decedent’s beneficiary. If a nonemployee director’s service terminates other than by reason of death, total and permanent disability, retirement, or resignation with consent of the Board, all of the director’s outstanding restricted shares are automatically forfeited.
Restrictions on awards of RSUs remain in effect until the awards are settled by delivery of the corresponding shares of common stock. Recipients of RSUs receive dividend equivalents but are not entitled to vote the underlying shares until the RSUs are settled in shares. Subject to proration of a nonemployee director’s last award in the year of retirement or resignation with consent of the Board, settlement of RSUs occurs upon a nonemployee director’s termination of service on the Board or, if later, the first day of a calendar month specified by the director (but not later than 10 years following termination of service on the Board). However, if a nonemployee director’s service terminates other than by reason of death, total and permanent disability, retirement, or resignation with consent of the Board, all of the director’s unsettled RSUs are automatically forfeited.
In the event of a change of control of the Company and a “qualifying termination” of a nonemployee director’s service on the Board, unless otherwise determined by the Corporate Governance Committee or the Board in writing prior to the occurrence of such change of control, the Restrictions will lapse and the shares covered by awards pursuant to the Plan will be delivered to the participant. For purposes of awards under the Plan, a change of control is defined, generally, to include: (i) the acquisition by a third party or persons acting as a group of 30% or more of the combined voting power of the Company’s outstanding stock; (ii) a change in a majority of the incumbent Board of Directors of the Company (other than through election of nominees who are approved by a vote of at least two-thirds of the directors then in office); (iii) any merger, consolidation, or similar business combination transaction of the Company (other than certain transactions that do not result in a substantial change in proportional ownership of the Company); or (iv) the complete liquidation or a sale of all or substantially all of the Company’s assets. A nonemployee director generally will be considered to have experienced a “qualifying termination” if within six months preceding or within 24 calendar months following a change of control of the Company, the nonemployee director’s service terminates: (i) upon the nonemployee director’s resignation from the Board at the request of the Company or another party to the transaction constituting the change of control; (ii) because the nonemployee director is not appointed to the
76DEERE & COMPANY2022 PROXY STATEMENT
Approval of Deere & Company Nonemployee Director Stock Ownership Plan
Item 4 — Approval of Deere & Company Nonemployee Director Stock Ownership Plan
Board as constituted following consummation of the transaction constituting the change of control; or (iii) as a result of the Company’s failure to nominate the nonemployee director for re-election to the Board.
The lapse of Restrictions and delivery of shares in the event of a change of control may have the incidental effect of increasing the net cost of such change of control by a relatively small amount and thus could theoretically render more difficult or discourage such a change of control, even if such change of control would be beneficial to shareholders generally.
The total number of shares which may be granted under the Plan is 500,000. Shares awarded and later forfeited may become available for subsequent award grants. It is anticipated that at the time of shareholder approval, ten nonemployee directors will participate in the Plan.
Administration
The Plan is administered by and under the direction of the Board, which is authorized to interpret the Plan (however, the Board does not have authority to determine eligibility under the Plan). The determinations of the Board are final, binding, and conclusive upon all persons.
Federal Income Tax Consequences
RSUs are not taxable to the participant at the time of the grant. Dividend equivalents received on the units are taxable to the participant as compensation during the period of the Restrictions and also are deductible by the Company as compensation during such period. The participant is taxed when the RSUs are settled by delivery of the corresponding shares of common stock on the then-current fair market value of the stock, and the Company is entitled to a tax deduction at the same time and in the same amount.
One-twelfth of a participant’s restricted stock award is taxable to the participant at the time of grant based on the fair market value of the stock at that time, and the Company is entitled to a deduction at the same time and in the same amount. The remaining eleven-twelfths of the award are not taxable to the participant at the time of the grant, unless the participant elects, under Internal Revenue Code Section 83(b), to be taxed on the value of the stock at that time. If this election is made, the Company is entitled to a corresponding deduction and dividends on the stock are taxable to the participant and are no longer deductible by the Company. If such an election is not made, dividends received on the stock are taxable to the participant as compensation during the period that the restricted shares remain subject to a substantial risk of forfeiture (as defined in Section 83 of the Internal Revenue Code) and are deductible by the Company as compensation during such period. If such an election is not made, the participant is taxed when the substantial risk of forfeiture lapses which, under the terms of the Plan, occurs with respect to one-twelfth of the number of shares included in the award as of each month following the month during which the award is made, on the then-current fair market value of the stock, and the Company is entitled to a tax deduction at the same time and in the same amount.
Amendment
The Board may at any time amend or terminate the Plan, but may not amend the amount, price, or timing of awards more than once every six months, except to conform with changes in laws and regulations. The Board may not materially increase the maximum number of shares that may be issued under the Plan, may not materially increase total benefits under the Plan, and may not materially change eligibility requirements without such further approval of the shareholders as is required by law. Subject to the terms of the Plan, no amendment or termination of the Plan may materially impair the rights of a participant under an award without the participant’s consent. The Plan provides for adjustment of awards and the maximum number of shares available for awards in the event of a stock dividend or split; a merger, reorganization, consolidation, or recapitalization; or similar events.
Plan Benefits
The number of RSUs and shares that will be received in the future under the Plan by any participant is not determinable at this time. As described above, under the Plan, annual awards are made in an amount recommended by the Corporate Governance Committee and approved by the Board. For fiscal 2021, each nonemployee director received annual awards of RSUs under the Predecessor Plan equivalent to $160,000 based on the market value of the Company’s common stock on the date of grant. The table on the next page shows the restricted units granted in fiscal 2021 under the Predecessor Plan to the individuals and groups indicated.
77DEERE & COMPANY 2022 PROXY STATEMENT
Approval of Deere & Company Nonemployee Director Stock Ownership Plan
Item 4 — Approval of Deere & Company Nonemployee Director Stock Ownership Plan
| Name and Position | Dollar Value (1) | Number of Restricted Stock Units | |||
| John C. May Chairman and Chief Executive Officer (2) | None | None | |||
| Ryan D. Campbell Senior Vice President and Chief Financial Officer (2) | None | None | |||
| Marc A. Howze Group President, Lifecycle Solutions & Chief Administrative Officer (2) | None | None | |||
| Rajesh Kalathur President, John Deere Financial and Chief Information Officer (2) | None | None | |||
| Cory J. Reed President, Worldwide Agriculture & Turf Division, Production & Precision Agriculture, Americas and Australia(2) | None | None | |||
| Executive Group(2) | None | None | |||
| Non-Executive Director Group | $ 1,600,000 | 4,600 | |||
| Non-Executive Officer Employee Group(2) | None | None |
| (1) | Represents the fair market value based on the mean of the high and low sales prices of Company common stock on the grant date, without giving effect to the diminution in value attributable to the restrictions on the units. |
| (2) | Employees of the Company are not eligible to participate in the Plan. |
78DEERE & COMPANY 2022 PROXY STATEMENT
SHAREHOLDER PROPOSAL
We expect the following proposal to be presented by shareholders at the Annual Meeting, although if the proposal is not properly presented by or on behalf of the proponent, it will not be voted on. Following SEC rules, other than minor formatting changes, we are reprinting the proposal and supporting statement as it was submitted to us and we take no responsibility for its content. Upon request to our Corporate Secretary at the address listed under the “2023 Requirements and Proposals and Nominations” section below, we will provide the name, address, and shareholdings of the sponsor and any cosponsors of this proposal.
Item 5 - Shareholder Proposal Regarding Special Shareholder Meeting Improvement
“Proposal 5 – Special Shareholder Meeting Improvement
Shareholders ask our board to take the steps necessary to amend the appropriate company governing documents to give all shareholders the right to be part of the 25% of shares that are currently required to call for a special shareholder meeting.
The current 100% disenfranchisement of all shares owned for less than one continuous year can block the introduction of new business concepts from shareholders who see emerging opportunities for the company and has the conviction to buy stock in our company. If such shareholders must wait a year for the opportunity to call for a special meeting to introduce these ideas then the opportunity window may well have past.
Shareholders who made their decision to buy Deere stock less than a year ago can be the most informed shareholders. Management now excludes such shareholders from having any formal input in calling for a special shareholder meeting. Such recent shareholders can be the most attuned shareholders to emerging Deere opportunities.
The shareholders who own 25% of shares for one year could determine that they own 40% of shares outstanding. Thus our current 25% threshold to call special meeting could in practice equal a 40% threshold of all shares outstanding. And this 40% of all shares outstanding could be more than the shares needed to approve a ballot item at a special shareholder meeting.
This proposal is more important because Deere shareholders have absolutely no right to act by written consent to express new ideas to management.
79 DEERE & COMPANY2022 PROXY STATEMENT
Shareholder Proposals
Item 5 – Shareholder Proposal Regarding Special Shareholder Meeting Improvement
Plus Deere shareholders do not have an independent board chair which is another means to bring new ideas to management that is now closed. Also shareholder engagement is a toothless way to introduce new ideas to management. And management can abruptly discontinue or curtail any shareholder engagement program on a whim.
Please vote yes: Special Shareholder Meeting Improvement – Proposal 5”
Deere’s Response — Statement of Opposition
The Board has given careful consideration to this shareholder proposal and has concluded for the reasons described below that adoption of this resolution is unnecessary and is not in the best interests of Deere and its shareholders.
The one-year holding requirement to call a special meeting of shareholders protects the Company and our broader shareholder base against abuses by shareholders with narrow short-term interests.
In order to expand the ability of our shareholders to participate in Deere’s governance, we submitted to shareholders a resolution to amend our bylaws in 2015 to add the right to permit holders of record of at least twenty-five percent (25%) of the voting power of the Company’s outstanding capital stock who have held such shares in a net long position continuously for at least one year to call a special meeting of shareholders by following certain simple procedures. The Board submitted the resolution in 2015 after careful consideration and engagement with a number of our shareholders. Over 99% of the shareholder votes were in favor of the resolution, which included the one-year holding period as well as other procedural protections. Based on this vote, the special meeting bylaws were adopted.
The Board believes that the current special meeting right, including the nominal one-year holding period and other procedural protections, strikes an appropriate balance by ensuring that shareholders have a meaningful right to call a special meeting, while also protecting the Company and its broader shareholder base against the risk that shareholders will use special meetings as a means to advance narrow and short-term oriented interests, which may not be in the long-term interests of the Company or other shareholders.
In addition, Deere’s one-year holding requirement to call a special meeting is consistent with the lowest holding period that enables a shareholder to present a proposal at a meeting of shareholders under Rule 14a-8 of the Exchange Act. In adopting the relevant holding periods under Rule 14a-8, the Commission indicated that the holding period should be calibrated such that a shareholder has some meaningful “economic stake or investment interest” in a company before the shareholder may draw on company and shareholder resources and command the time and attention of other shareholders to consider and vote on the proposal. The Board believes the Commission’s reasoning is equally applicable to Deere’s nominal one-year holding requirement for calling a special meeting. Moreover, under that same Rule, shareholders with minimal holdings are already able to present proposals, such as this one, at annual meetings.
Furthermore, at our 2018 annual meeting of shareholders, this shareholder presented a related proposal to decrease the percentage of shareholders entitled to call a special meeting from the current 25% to 10%. Even though that proposal did not include the removal of the one-year holding requirement, it made reference to such requirement as excluding participation from certain shareholders. Over 71% of the shareholder votes were against the proposal, indicating that our shareholders do not consider Deere’s bylaws relating to calling a special meeting of shareholders unreasonable, overly restrictive or burdensome.
The one-year holding requirement to call a special meeting of shareholders protects the Company and our broader shareholder base from the financial and administrative burdens associated with conducting a special meeting of shareholders.
80 DEERE & COMPANY2022 PROXY STATEMENT
Shareholder Proposals
Item 5 – Shareholder Proposal Regarding Special Shareholder Meeting Improvement
The Board recognizes the importance of providing shareholders with the right to call special meetings in appropriate circumstances. Given the size of the Company and our large number of shareholders, a special shareholder meeting is a significant undertaking that requires a substantial commitment of time and financial resources of the Company. Among other costs, the Company is required to prepare, print, and distribute legal disclosure documents to shareholders, solicit proxies, and tabulate votes for each special shareholder meeting called.
In addition to the financial burden, special meetings require substantial time, effort and attention from the Board and management. Special meetings require the Board and management to divert their time and focus away from management of the Company in order to prepare for, and conduct, the special meeting, detracting from their primary focus of operating our businesses and maximizing long-term shareholder value. If the nominal one-year holding requirement is eliminated, as requested by this shareholder, the Company could be subject to regular disruptions by special-interest shareholder groups with agendas that are not in the best interests of the Company or its shareholders. Such diversions could potentially operate against the best interests of our shareholders overall, in order to serve the narrow short-term interests of certain shareholders.
We are committed to sound corporate governance practices and active shareholder engagement.
The Board has consistently demonstrated its commitment to sound principles of corporate governance, working to ensure that its practices provide Deere shareholders with a meaningful voice. Shareholders are enabled to communicate with directors and to promote the consideration of shareholder views. In addition to the right to call special meetings, the Company has adopted numerous other corporate governance measures to foster shareholder participation and Board accountability. Some of these measures are:
| — | The right of shareholders to nominate directors and have such nominees included in the Company’s proxy materials—commonly referred to as “proxy access”; |
| — | The opportunity to cast a vote with respect to all of our directors annually—our Board is de-classified and directors serve one-year terms; |
| — | A majority voting standard for the election of directors; |
| — | All of our directors (other than our CEO) are independent; |
| — | The right of shareholders to submit proposals for inclusion in the Company’s proxy materials, subject to the procedures described in the Company bylaws; |
| — | An annual advisory vote on the “say-on-pay” to express their views on executive compensation; |
| — | No supermajority voting provisions in Company bylaws; and |
| — | Additional avenues for shareholder participation, including: |
| ● | The ability to recommend director nominees to the Corporate Governance Committee to be considered in the same manner as recommendations from other sources (previously described under “How We Identify and Evaluate Director Nominees”); | |
| ● | The Company’s robust outreach and engagement with shareholders (previously described under “Shareholder Outreach”); and | |
● | Mechanisms for shareholders to communicate directly with the Board, the Chair, any committee of the Board, or the independent Presiding Director (previously described under “Communication with the Board”). |
We maintain frequent and open communication with a broad range of shareholders to provide feedback or raise important matters with the Board and management on an ongoing basis. As previously described in our “Shareholder Outreach” section on page 21, since our last Annual Shareholders’ Meeting, we engaged with shareholders representing nearly 45% of our outstanding shares. During this shareholder outreach, our shareholders did not identify the one-year holding requirement required to call a special meeting as a concern.
81 DEERE & COMPANY2022 PROXY STATEMENT
Shareholder Proposals
Item 5 – Shareholder Proposal Regarding Special Shareholder Meeting Improvement
Given:
| 1. | The potential abuse by shareholders with special or short-term interests enabled by eliminating the one-year holding requirement; |
| 2. | The substantial Company resources required by special meetings; and |
| 3. | The Company’s existing corporate governance measures which foster shareholder participation and Board accountability, |
| The Board believes that adoption of Item 5 is not necessary or in the best interests of Deere’s shareholders. | |
 | FOR THE REASONS STATED, DEERE’S BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE |
82 DEERE & COMPANY2022 PROXY STATEMENT
Voting and Meeting Information
Why am I receiving this Proxy Statement?
You are receiving this Proxy Statement because you owned shares of Deere common stock at the close of business on December 31, 2020,2021, the record date, which entitles you to vote, either online during the Annual Meeting or by proxy. This Proxy Statement describes the matters on which you are asked to vote so you can make an informed decision.
This Proxy Statement, together with our Annual Report for the fiscal year ended November 1, 2020,October 31, 2021, a proxy card, and a voter instruction card, will be mailed or can be accessed online on or about January 8, 2021.7, 2022. We refer to these documents collectively as Deere’s Proxy Solicitation Materials.
What is “Notice and Access” and why did Deere elect to use it?
We make the Proxy Solicitation Materials available to shareholders electronically under the Notice and Access regulations of the U.S. Securities and Exchange Commission (SEC).SEC. Specifically, most of our shareholders receive a Notice of Electronic Availability (“Notice”) instead of a full set of Proxy Solicitation Materials in the mail. The Notice explains how to access and review the Proxy Solicitation Materials and how to vote online. We believe this method of delivery expedites distribution of Proxy Solicitation Materials and also allows us to conserve natural resources and reduce the costs of printing and distributing these materials.
If you received a Notice but would prefer to receive printed copies of the Proxy Solicitation Materials in the mail, please follow the instructions in the Notice for requesting such materials.
How do I vote?
You can vote either online during the Annual Meeting or by proxy without attending the meeting. To ensure a quorum, we urge you to vote by proxy even ifwhether or not you plan to participate in the virtual only Annual Meeting. If you attend the virtual meeting and vote during the meeting, that vote will override your proxy vote.
To vote your shares, follow the instructions in the Notice, votervoting instruction form, or proxy card. Telephone and internet voting are available to all registered and most beneficial shareholders.
83 DEERE & COMPANY2022 PROXY STATEMENT
Additional Information
Voting and Meeting Information
Shareholders voting by proxy may use one of the following three options:
BY INTERNET | BY MAIL | BY TELEPHONE | |||||
| (available for most shareholders) |
|
| |||||
You can vote your shares online at www.proxyvote.com. You will need the 16-digit control number on the Notice of Internet Availability or proxy card. |  | You can vote by mail by marking, dating, and signing your proxy card or voting instruction form and returning it in the postage-paid envelope. |  | In the U.S. or Canada, you can vote your shares by calling 1-800-690-6903. |  |
Instructions to vote online during the virtual Annual Meeting can be found at www.virtualshareholdermeeting.com/DE2021.DE2022. Have your Notice, proxy card or voting instruction form available when you access the virtual meeting website.
If your shares are held in “street name” by a bank, broker, or other holder of record, the information sent by your holder of record will explain the voting options available to you.
The telephone and internet voting facilities for shareholders will close at 11:59 p.m. Eastern Standard Time on February 23, 2021.22, 2022.
If you hold shares through one of our employee savings plans, your vote must be received by the plan administrator by February 19, 2021,18, 2022, or your plan shares will not be voted.
Can I change my proxy vote?
Yes. At any time before your shares are voted by proxy at the meeting,Annual Meeting, you may change your vote by:
| — | |
| — | |
| — |
If you hold your shares in “street name,” please refer to the information sent by your bank, broker, or other holder of record for information about revoking or changing your proxy.
How many votes do I have?
You will have one vote for each share of Deere common stock that you owned at the close of business on December 31, 2020.2021.
How many shares are entitled to vote?
There were 314,421,344308,196,591 shares of Deere common stock outstanding as of December 31, 2020,2021, and entitled to vote at the meeting.Annual Meeting.
How many votes must be present to hold the meeting?
Under our by-laws,bylaws, a majority of the votes that can be cast must be present online at the virtual Annual Meeting or represented by proxy to constitute a quorum for the Annual Meeting. Abstentions and shares represented by “broker non-votes” (explained on the following page) will be counted as present and entitled to vote for purposes of determining a quorum.
How many votes are needed for the proposals to pass?
In an uncontested election, nominees for director who receive a majority of “for” votes cast (meaning the number of shares voted “for” a nominee exceeds the number of shares voted “against” that nominee) will be elected. If an incumbent director nominee does not receive a majority of votes cast in an uncontested election, our bylaws require the director to promptly tender a written resignation to the Board. After receiving a recommendation from the Corporate Governance Committee, the
84 DEERE & COMPANY2022 PROXY STATEMENT
Additional Information
Voting and Meeting Information
Board will determine whether to accept or reject the resignation and will publicly disclose its decision and the rationale behind it within 90 days of the date the election results are certified.
If the number of nominees exceeds the number of directors to be elected (i.e., a contested election), the nominees who receive the most votes will be elected as directors.
Each of the other proposals will pass if the affirmative vote of a majority of the shares present virtually or by proxy is cast in favor of the proposal.
What if I abstain from voting or vote “abstain”?
If you abstain from voting or vote “abstain” your shares will:
| — | Be counted as present for purposes of determining whether there are enough votes to constitute a quorum; |
| — | Have no effect on the outcome of the election of directors; or |
| — | Count as a vote against any other proposal to be considered at the meeting. |
What if I don’t return my proxy card and don’t attend the Annual Meeting?
If your shares are registered in your own name with our transfer agent and you do not vote, your shares will not be voted at all.
If you hold your shares in “street name” and you do not give your bank, broker, or other holder of record specific voting instructions, your record holder may vote your shares on the ratification of the independent registered public accounting firm, but may not vote your shares on any other matter that comes before the Annual Meeting. If you do not provide voting instructions on these other matters, the votes will be considered “broker non-votes.” Broker non-votes will be counted as present for purposes of determining whether there is a quorum, but will not affect the outcome of any proposal.
What happens if a nominee for director declines or is unable to accept election?
If you vote by proxy and unforeseen circumstances make it necessary for the Board to substitute another person for a nominee, the designated proxy will vote your shares for that other person.
Is my vote confidential?
Yes. The tabulator, the proxy solicitation agent, and the inspectors of voting must comply with confidentiality guidelines that prohibit disclosure of votes to Deere. The tabulator of the votes and at least one of the inspectors of voting will be independent of Deere and our officers and directors. The only time your voting records will be disclosed is (i) as required by law, (ii) to the inspectors of voting, or (iii) if the election is contested.
Virtual Meeting Information
The virtual Annual Meeting will afford our shareholders the same rights and opportunities as an in-person meeting. If you plan to attend the virtual meeting, you must be a holder of Deere shares as of the record date, December 31, 2020.2021. To participate in the virtual meeting, visit www.virtualshareholdermeeting.com/DE2021DE2022 and enter the 16-digit control number included in your Notice of Internet Availability of proxy materials, proxy card, or the instructionsvoting instruction form that accompanied your proxy materials. You may begin to log into the meeting platform beginning at 9:45 a.m. Central Time on February 24, 2021.23, 2022. The meeting will begin promptly at 10 a.m. Central Time on February 24, 2021.23, 2022.
The virtual meeting platform is supported across browsers and devices running the most updated version of applicable software and plug-ins. Participants should give themselves plenty of time to log in and ensure they have a strong WiFiinternet connection and they can hear streaming audio prior to the start of the meeting.
85 DEERE & COMPANY2022 PROXY STATEMENT
Additional Information
Annual Report
If you encounter technical difficulties with the virtual meeting platform on the meeting day, please call the technical support number that will be posted on the meeting website. Technical support will be available starting at 9:45 a.m. Central Time and until the end of the meeting.
Additional InformationAnnual Report
If you wish to submit a question during the meeting, log into the virtual meeting platform at www.virtualshareholdermeeting.com/ DE2021,www.virtualshareholdermeeting. com/DE2022, type your question into the “Ask a Question” field, and click “Submit.” Questions relevant to meeting matters will be answered during the meeting, subject to time constraints. Responses to questions relevant to meeting matters that we do not have time to respond to during the meeting will be posted to our Investor Relations website followinganswered within a week of the meeting. Questions regarding personal matters or matters not relevant to meeting matters will not be answered.
Although the live webcast is available only to Deere shareholders as of the record date, a replay of the meeting will be made available on our website at www.JohnDeere.com/stock after the meeting, and will remain available for approximately 30 days following the meeting.
| Annual Report |
Will I receive a copy of Deere’s Annual Report?
We have either mailed the Annual Report to you with this Proxy Statement or sent you a Notice with the web address for accessing the Annual Report online.
How can I receive a copy of Deere’s 10-K?
There are three ways to obtain, free of charge, a copy of our Annual Report on Form 10-K for the fiscal year ended November 1, 2020:October 31, 2021:
| 1. | Visit the Investor Relations section of our website at www.JohnDeere.com/stockand look under “SEC Filings.” |
| 2. | Write to our Shareholder Relations Department at One John Deere Place, Moline, Illinois 61265-8098. |
| 3. | Search the SEC’s EDGAR database at www.sec.gov. |
| Householding Information |
What is “householding”?
If two or more shareholders reside at the same address and appear to be members of the same family, we will send single copies of either the Proxy Solicitation Materials or the Notice, as applicable, to that address unless one of the shareholders notifies us that he or she wishesthey wish to receive individual copies. This procedure reduces printing and distribution costs related to the Annual Meeting. We do not rely on householding when we mail dividend checks.
If Proxy Solicitation Materials were delivered to an address that you share with another shareholder and you prefer to receive separate copies, please contact our Shareholder Relations Department at One John Deere Place, Moline, Illinois 61265-8098 or by phone at (309) 765-4491.
A number of brokerage firms have instituted householding. They will have their own procedures for shareholders who wish to receive individual copies of the Proxy Solicitation Materials.
How do I revoke my consent to the householding program?
To revoke your consent to householding, please contact Broadridge Investor Communication Solutions, Inc. either by calling (800) 542-1061 or by writing to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717.
86 DEERE & COMPANY2022 PROXY STATEMENT
Additional Information
Electronic Delivery of Proxy Statement and Annual Report
| Electronic Delivery of Proxy Statement and Annual Report |
Can I access Deere’s Proxy Solicitation Materials electronically?
Most shareholders can elect to view future proxy statements and annual reports online instead of receiving copies in the mail. You can choose this option and save us the costs of printing and mailing these documents by:
— | |
— |
| IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON FEBRUARY |
If you choose to receive future proxy statements and annual reports electronically, you will receive an e-mail message next year containing the internet address to access these documents as well as voting instructions.
| Information not Incorporated into |
The information on our website (www.JohnDeere.com), or other websites referenced in this Proxy Statement, is not and shall not be deemed to be a part of this Proxy Statement by reference or otherwise incorporated into any other filings we make with the SEC, except to the extent we specifically incorporate it by reference.
| Other Matters |
We do not know of any other matters that will be considered at the Annual Meeting. If any other appropriate business should properly come before the meeting, the Board will have discretionary authority to vote according to its best judgment.
Proposals for Inclusion in 20222023 Proxy Statement
Next year’s Annual Meeting of shareholders will be held on February 23, 2022.22, 2023. If you intend to present a proposal at next year’s Annual Meeting and you wish to have the proposal included in the proxy statement for that meeting, the Corporate Secretary must receive your proposal in writing, at the address on the following page, no later than September 10, 2021.9, 2022.
Director Nominations for Inclusion in 20222023 Proxy Statement
In 2016, our Board amended the company’s bylaws to permit a shareholder or a group of up to 20 shareholders that has owned at least 3% of our outstanding common stock for at least three years to nominate and include in our proxy statement candidates for our Board, subject to certain requirements. Any such nomination must be received at the address on the following page no earlier than the close of business on August 11, 2021,10, 2022, and no later than the close of business on September 10, 2021.9, 2022. Any such notice must meet the other requirements set forth in our bylaws.
Other Proposals and Nominations
If you would like to present a proposal at next year’s Annual Meeting or if you would like to nominate one or more directors without inclusion in the proxy statement, you must provide written notice to the Corporate Secretary at the address on the following page between October 27, 2021,26, 2022, and November 26, 2021.25, 2022. Directors may be nominated at the Annual Meeting of
87 DEERE & COMPANY2022 PROXY STATEMENT
Additional Information
Cost of Solicitation
shareholders only by or at the direction of, or authorization by, the Board, or by any shareholder entitled to vote at the meeting who provides the requisite notice.
Notice of a proposal must include for each matter: (1) a brief description of the business to be brought before the meeting; (2) the reasons for bringing the matter before the meeting; (3) your name and address; (4) the class and number of Deere shares you own, either beneficially or of record; (5) whether and the extent to which you (or someone on your behalf) have entered into any derivative or other instrument, transaction, agreement, or arrangement with respect to Deere’s stock; (6) any material interest you may have in the proposal; and (7) any other information related to you that is required to be disclosed in connection with the solicitation of proxies with respect to such business under federal securities laws then in effect.
Notice of a nomination must include: (1) your name and address; (2) the name, age, business address, residence address, and principal occupation of the nominee; (3) the class, series, and number of Deere shares that you and the nominee own, either beneficially or of record; (4) whether and the extent to which you or the nominee (or anyone on behalf of either of you) has entered into any derivative or other instrument, transaction, agreement, or arrangement with respect to Deere’s stock; (5) a description of all agreements or arrangements between you and the nominee regarding the nomination; (6) the nominee’s consent to be elected and to serve; (7) a completed certification of director eligibility; and (8) any other information related to you that is required to be disclosed in the solicitation of proxies for election of directors under federal securities laws then in effect. We may require any nominee to furnish other information, within reason, that may be needed to determine the nominee’s eligibility.
Where to Send All Proposals and Nominations
Proponents must submit shareholder proposals and recommendations for nomination as a director in writing to the following address:
Corporate Secretary
Deere & Company
One John Deere Place
Moline, Illinois 61265-8098
The Corporate Secretary will forward the proposals and recommendations to the Corporate Governance Committee for consideration.
| Cost of Solicitation |
Deere pays for the Annual Meeting and the solicitation of proxies. In addition to soliciting proxies by mail, Deere has made arrangements with banks, brokers, and other holders of record to send proxy materials to you. We will reimburse them for their expenses in doing so.
We have retained Georgeson Inc.,LLC, a proxy soliciting firm, to assist in the solicitation of proxies for an estimated fee ofnot to exceed $20,000 plus reimbursement of certain out-of-pocket expenses. In addition to their usual duties, directors, officers, and certain other employees of Deere may solicit proxies personally or by telephone, fax, or e-mail. They will not receive special compensation for these services.
For the Board of Directors,
Todd E. Davies
Corporate Secretary
Moline, Illinois
January 8, 20217, 2022
88 DEERE & COMPANY2022 PROXY STATEMENT
| Appendix A |
Director Independence Categorical Standards of Deere & Company Corporate Governance Policies
NYSE STANDARDS OF INDEPENDENCE
A director may not be considered independent if the director does not meet the criteria for independence established by the New York Stock Exchange (NYSE) and applicable law. A director is considered independent under the NYSE criteria if the Board finds that the director has no material relationship with the company. Under the NYSE rules, a director will not be considered independent if, within the past three years:
| — | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — | |
| — |
89 DEERE & COMPANY2022 PROXY STATEMENT
Appendices
Appendix A
In addition, in determining the independence of any director who will serve on the Compensation Committee, the Board must consider all factors specifically relevant to determining whether the director has a relationship to Deere that is material to that director’s ability to be independent from management in connection with the duties of a Compensation Committee member, including but not limited to:
| — | |
| — |
CATEGORICAL STANDARDS OF INDEPENDENCE
The Board has established the following additional categorical standards of independence to assist it in making independence determinations:
Business Relationships. Any payments by Deere to a business employing, or 10% or more owned by, a director or an immediate family member of a director for goods or services, or other contractual arrangements must be made in the ordinary course of business and on substantially the same terms as those prevailing at the time for comparable transactions with non-affiliated persons. The following relationships are not considered material relationships that would impair a director’s independence:
| — | |
| — | |
| — |
Relationships with Not-for-Profit Entities. A director’s independence will not be considered impaired solely for the reason that the director or an immediate family member is an officer, director, or trustee of a foundation, university, or other not-for-profit organization that receives from Deere or its foundation during any of the prior three fiscal years contributions in an amount not exceeding the greater of $1 million or 2% of the not-for profit organization’s aggregate annual charitable receipts during the entity’s fiscal year. (Anyyear (any automatic matching of employee charitable contributions by Deere or its foundation is not included in Deere’s contributions for this purpose.)purpose). All contributions by Deere in excess of $100,000 to not-for-profit entities with which the director is affiliated shall be reported to the Corporate Governance Committee and may be considered in making independence determinations.
For purposes of these standards, “Deere” shall mean Deere & Company and its direct and indirect subsidiaries, and “immediate family member” shall have the meaning set forth in the NYSE independence rules, as may be amended from time to time.
90 DEERE & COMPANY2022 PROXY STATEMENT
Appendices
Appendix B
| Appendix B |
Deere & Company Reconciliation of Variable Compensation Measures to Non-GAAP Measures
SHORT-TERM INCENTIVE:
INCENTIVE
As described in the CD&A under Short-Term Incentive (STI), Operating Return on Operating Assets (OROA) and Return on Equity (ROE) are the metrics used to measure performance for the STI program. The OROA and ROE calculations for Fiscal 2020fiscal 2021 are summarized below. The Equipment Operations OROA calculation excludes the assets from our captive Financial Services operations. ROE is based solely on the Financial Services segment.
| (Millions of $) OROA Calculation for Equipment Operations: | Equipment Operations | Agriculture & Turf Operations | Construction & Forestry Operations | |||
| Operating Profit (1) | $3,289 | $2,969 | $320 | |||
| Average Identifiable Assets With Inventories at Standard Cost (1)(2) | $15,046 | $11,455 | $3,591 | |||
| OROA With Inventories at Standard Cost | 21.9% | 25.9% | 8.9% | |||
| ROE Calculation for Financial Services: | ||||||
| Net Income Attributable to Deere & Company | $566 | |||||
| Average Equity | $5,099 | |||||
| ROE | 11.1% |
| (Millions of $) OROA Calculation for Equipment Operations: | Equipment Operations | |
| Operating Profit | $6,868 | |
| Average Identifiable Assets With Inventories at Standard Cost (1) | $18,045 | |
| Operating Return On Assets With Inventories at Standard Cost (1) | 38.1% | |
| ROE Calculation for Financial Services: | ||
| Net Income Attributable to Deere & Company | $881 | |
| Average Equity | $5,497 | |
| Return on Equity | 16.0% |
| (1) |
|
Average Identifiable Assets with Inventories at LIFO were |
91 DEERE & COMPANY2022 PROXY STATEMENT
Appendices
Appendix B
LONG-TERM INCENTIVE CASH:
CASH
As described in the CD&A under Long-Term Incentive Cash (LTIC), Shareholder Value Added (SVA) is the metric used to measure performance for the LTIC program. The computation of SVA is summarized as follows for the performance period ended with fiscal 2020:2021:
| (Millions of $) | Fiscal Year 2018 | Fiscal Year 2019 | Fiscal Year 2020 | Total SVA for Three-Year Performance Period Ending 2019 | Fiscal Year 2019 | Fiscal Year 2020 | Fiscal Year 2021 | Total SVA for Three-Year Performance Period Ending 2021 | |||||||||||||||||||
| SVA Calculation for Equipment Operations: | |||||||||||||||||||||||||||
| Operating Profit (1) | $ | 3,568 | $ | 3,378 | $ | 3,289 | $ | 3,378 | $ | 3,289 | $ | 6,277 | |||||||||||||||
| Average Identifiable Assets | |||||||||||||||||||||||||||
| With Inventories at LIFO (1)(2) | $ | 13,566 | $ | 14,460 | $ | 13,629 | $ | 14,299 | $ | 13,629 | $ | 13,929 | |||||||||||||||
| With Inventories at Standard Cost (1)(2) | $ | 14,615 | $ | 15,677 | $ | 15,046 | $ | 15,677 | $ | 15,046 | $ | 15,295 | |||||||||||||||
| Less Estimated Cost of Assets (2)(3) | $ | (1,753) | $ | (1,880) | $ | (1,806) | $ | (1,880 | ) | $ | (1,806 | ) | $ | (1,836 | ) | ||||||||||||
| SVA | $ | 1,815 | $ | 1,498 | $ | 1,483 | $ | 1,498 | $ | 1,483 | $ | 4,441 | |||||||||||||||
| SVA Calculation for Financial Services: | |||||||||||||||||||||||||||
| Net Income Attributable to Deere & Company | $ | 530 | $ | 539 | $ | 566 | $ | 539 | $ | 566 | $ | 881 | |||||||||||||||
| Operating Profit | $ | 792 | $ | 694 | $ | 746 | $ | 694 | $ | 746 | $ | 1,144 | |||||||||||||||
| Average Equity | $ | 4,793 | $ | 5,040 | $ | 5,099 | $ | 5,040 | $ | 5,099 | $ | 5,497 | |||||||||||||||
| Less Cost of Equity | $ | (722) | $ | (657) | $ | (673) | $ | (657 | ) | $ | (673 | ) | $ | (719 | ) | ||||||||||||
| SVA | $ | 70 | $ 37 | $ | 73 | $ | 37 | $ | 73 | $ | 425 | ||||||||||||||||
| Deere Enterprise SVA | $ | 1,885 | $ | 1,535 | $ | 1,556 | $ | 4,976 | $ | 1,535 | $ | 1,556 | $ | 4,866 | $ | 7,957 | |||||||||||
| Effect of Goodwill Exclusion (2) | $ | (25) | $ | (20) | $ | – | |||||||||||||||||||||
| Deere Reported SVA | $ | 1,860 | $ | 1,515 | $ | 1,556 | |||||||||||||||||||||
| Effect of Excluding Goodwill (5) | $ | 106 | $ | 123 | $ | 132 | |||||||||||||||||||||
| Effect of Including Wirtgen (5) | $ | 130 | |||||||||||||||||||||||||
| Deere Reported SVA (5) | $ | 1,641 | $ | 1,679 | $ | 5,128 | |||||||||||||||||||||
| (1) | On December 1, 2017, the Company acquired the stock and certain assets of substantially all of Wirtgen Group Holding GmbH’s operations (Wirtgen), the leading manufacturer worldwide of |
| (2) | When goodwill from an acquisition exceeds $50 million, goodwill is excluded for two years to allow time for integration of the new business. Goodwill for LTIC purposes for the fiscal years |
| (3) | For purposes of determining SVA, the equipment segments are assessed a pretax cost of assets – which on an annual basis is generally 12% of the segment’s average identifiable operating assets during the applicable period with inventory at standard cost (believed to more closely approximate the current cost of inventory and the company’s investment in the asset). |
| (4) |
|
For SVA, Financial Services is assessed an annual pretax cost of average equity of approximately 13% | |
| (5) | Beginning with fiscal year 2021, reported SVA includes Wirtgen and excludes goodwill. For fiscal years 2020 and 2019, |
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VOTE BY TELEPHONE AND INTERNET24 HOURS A DAY, 7 DAYS A WEEK C
VOTE BY TELEPHONE - 1-800-690-6903Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. Eastern Time on February 23, 2021 for shares held directly and by 11:59 P.M. Eastern Time on February 19, 2021 for shares held in an employee savings plan. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY INTERNETBefore The Meeting - Go to www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 P.M. Eastern Time on February 23, 2021 for shares held directly and by 11:59 P.M. Eastern Time on February 19, 2021 for shares held in an employee savings plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
During The Meeting - Go to www.virtualshareholdermeeting.com/DE2021
You may attend the meeting via the Internet and vote during the meeting. Have available the information that is printed in the box marked by the arrow below and follow the instructions.
VOTE BY MAILMark, sign, and date your proxy card and return it in the postage-paid envelope we have provided or return it to Deere & Company c/o Broadridge,Nonemployee Director Stock Ownership Plan
ARTICLE 1. ESTABLISHMENT, PURPOSE, AND DURATION
1.1 Establishment of the Plan51 Mercedes Way, Edgewood, NY 11717.Deere & Company, a Delaware corporation, hereby establishes an incentive compensation plan to be known as the “Deere & Company Nonemployee Director Stock Ownership Plan” (the “Plan”), as set forth in this document. The Plan provides for the grant of Awards to Nonemployee Directors, subject to the terms and provisions set forth herein.
The Plan shall become effective upon approval by the stockholders of Deere (the “Effective Date”), and shall remain in effect as provided in Section 1.3 herein. Each amendment to the Plan shall become effective as of the date set forth in such amendment.
1.2 Purpose of the Plan
The purpose of the Plan is to further the growth, development, and financial success of the Company by strengthening Deere’s ability to attract and retain the services of experienced and knowledgeable Nonemployee Directors. The Plan is designed to enable Nonemployee Directors to participate in the Company’s growth while linking their personal interests to those of Deere’s stockholders.
1.3 Duration of the Plan
The Plan shall commence on the Effective Date and shall remain in effect, subject to the right of the Board of Directors to terminate the Plan at any time pursuant to Article 10 herein, until all Shares subject to it have been acquired according to the Plan’s provisions. However, in no event may an Award be granted under the Plan on or after March 10, 2032.
ARTICLE 2. DEFINITIONS
2.1 Definitions
Whenever used in the Plan, the following terms shall have the meaning set forth below:
| (a) | “Annual Meeting” means an annual meeting of the stockholders of Deere. |
| (b) | “Award” means a grant of Restricted Stock or Restricted Stock Units under the Plan. |
| (c) | “Beneficial Owner” shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act. |
| (d) | “Board” or “Board of Directors” means the Board of Directors of Deere, and includes a committee of the Board of Directors designated by the Board to administer part or all of the Plan. |
| (e) | “Code” means the Internal Revenue Code of 1986, as amended from time to time. |
| (f) | “Committee” means the Corporate Governance Committee of the Board. |
| (g) | “Company” means Deere and any and all of its subsidiaries. |
| (h) | “Deere” means Deere & Company, a Delaware corporation, or any successor thereto as provided in Section 11.7 herein. |
| (i) | “DGCL” means the General Corporation Law of the State of Delaware, as amended from time to time. |
| (j) | “Director” means any individual who is a member of the Board of Directors. |
| (k) | “Disability” means a permanent and total disability, within the meaning of Code Section 22(e)(3). |
| (l) | “Employee” means any full-time, nonunion, salaried employee of the Company. |
| (m) | “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor Act thereto. |
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| (n) | “Fair Market Value” as it relates to common stock of Deere on any given date means (i) the closing price of the common stock of Deere on the New York Stock Exchange at the conclusion of regular trading hours on such date, as reported by the New York Stock Exchange (or, if not so reported, as reported by a successor reporting service selected by Deere, or if not reported by any successor service, as reported on any domestic stock exchanges on which the common stock is then listed); or (ii) if Deere common stock is not listed on any domestic stock exchange, the closing price of Deere common stock as reported in the domestic over-the-counter market on such date or the last previous date reported (or, if not so reported, by the system then regarded as the most reliable source of such quotations) or, if there are no reported sales on such date, the mean of the closing bid and asked prices as so reported; or (iii) if the common stock is listed on a domestic exchange or quoted in the domestic over-the-counter market, but there are not reported sales or quotations, as the case may be, on the given date, the value determined pursuant to (i) or (ii) above using the reported closing prices or quotations on the last previous date on which so reported; or (iv) if none of the foregoing clauses applies, the fair value as determined in good faith by the Board or the Committee. |
| (o) | “Nonemployee Director” means any individual who is a member of the Board, but who is not an Employee. |
| (p) | “Participant” means a Nonemployee Director who has received an Award under the Plan. |
| (q) | “Restricted Stock” or “Restricted Share” means Shares granted to a Nonemployee Director pursuant to Article 6. |
| (r) | “Restricted Stock Units” or “RSUs” means a right granted to a Nonemployee Director pursuant to Article 7 to receive Shares, subject to the terms and conditions of the Plan. Each Restricted Stock Unit corresponds to one Share. |
| (s) | “Section 409A” means Section 409A of the Code, including the rules, regulations, and guidance thereunder (or any successor provisions thereto). |
| (t) | “Separation Date” means the date of a Nonemployee Director’s termination of service as a member of the Board or such later date as constitutes the Eligible Director’s separation from service with the Company for purposes of Section 409A. |
| (u) | “Shares” means the shares of common stock of Deere, $1.00 par value. |
ARTICLE 3. ADMINISTRATION
3.1 The Board of Directors
The Plan shall be administered by the Board, subject to the restrictions set forth in the Plan.
3.2 Administration by the Board
The Board shall have the full power, discretion, and authority to interpret and administer the Plan in a manner which is consistent with the Plan’s provisions. However, in no event shall the Board have the power to determine Plan eligibility (all such determinations are automatic pursuant to the provisions of the Plan). Any action taken by the Board with respect to the administration of the Plan which would result in any Nonemployee Director ceasing to be a “nonemployee director” within the meaning of Rule 16b-3 under the Exchange Act shall be null and void.
3.3 Decisions Binding
All determinations and decisions made by the Board pursuant to the provisions of the Plan and all related orders or resolutions of the Board of Directors shall be final, conclusive, and binding on all persons, including Deere, its stockholders, Employees, Nonemployee Directors, and their estates and beneficiaries.
ARTICLE 4. SHARES SUBJECT TO THE PLAN
4.1 Number of Shares
Subject to adjustment as provided in Section 4.3 herein, the total number of Shares available for grant under the Plan (whether in the form of Restricted Stock or as Shares underlying Restricted Stock Units) may not exceed 500,000.
4.2 Lapsed Awards
If any Shares or Restricted Stock Units granted under this Plan terminate, expire, or lapse for any reason, such Shares and the Shares underlying such Restricted Stock Units again shall be available for grant under the Plan.
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4.3. Adjustments in Authorized Shares
In the event of any merger, reorganization, consolidation, recapitalization, liquidation, stock dividend, split-up, Share combination, or other change in the corporate structure of Deere affecting the Shares, the Board shall make such adjustments in the number and type of shares authorized by the Plan and to outstanding Awards to prevent dilution or enlargement of rights. The Board’s determination as to what adjustments shall be made, and the extent thereof, shall be final.
ARTICLE 5. PARTICIPATION
5.1 Participation
Persons participating in the Plan shall include, and be limited to, all Nonemployee Directors.
5.2 Awards Generally
Awards under the Plan shall consist of Restricted Shares and Restricted Stock Units. The Board shall determine from time to time in its discretion whether annual Awards for any year shall consist of Restricted Shares, Restricted Stock Units, or a combination thereof.
ARTICLE 6. RESTRICTED STOCK
6.1 Annual Awards
If the Board shall determine to make annual Awards entirely or partially in the form of Restricted Shares, an annual Award of Restricted Shares will be made automatically to each Nonemployee Director as of the date one week following the date of the Annual Meeting in an amount recommended by the Committee and approved by the Board. The number of Restricted Shares will be based on the Fair Market Value on the grant date of Deere common stock. Although the period of service shall run from the date of the Annual Meeting, the grant date shall be one week following the Annual Meeting to permit the dissemination to the market of information coming out of such meeting.
6.2 Partial Awards
Upon the effective date of any amendment in the amount of any Award, upon recommendation of the Committee and approval by the Board, each Nonemployee Director shall receive a partial Award calculated as if the Nonemployee Director were serving a partial term as provided in Section 6.3, below, provided that the Fair Market Value shall be determined as of the grant date one week following the effective date of the Award. Restricted Shares previously granted to the Nonemployee Director for the same period shall be deducted from such Award.
6.3 Partial Terms
A Nonemployee Director who is elected by the Board to fill a vacancy between Annual Meetings shall automatically be granted a pro rata portion of the number of Restricted Shares awarded to Nonemployee Directors as of the date one week following the date of the most recent Annual Meeting. Such prorated number of shares shall be determined by multiplying the number of Restricted Shares awarded as of the date one week following the date of the most recent Annual Meeting by a fraction, the numerator of which is the number of days remaining until the next Annual Meeting, and the denominator of which is 365, and rounding the resulting number down to the nearest whole Share.
6.4 Custody and Transferability
Restricted Shares awarded to a Nonemployee Director may not be voluntarily or involuntarily sold, pledged, assigned, transferred, gifted, or otherwise alienated or hypothecated, including but not limited to transfers related to estate planning, dissolution of marriage, collection, execution, attachment, and any other voluntary or involuntary transfer, other than by will or by the laws of descent and distribution, until such time as the restrictions with respect to such Shares have lapsed as provided herein. At the time Restricted Shares are awarded to a Nonemployee Director, shares representing the appropriate number of Restricted Shares shall be registered in the name of the Nonemployee Director but shall be held by Deere in custody for the account of such person. As Restrictions lapse on Shares upon death, Disability, retirement, or resignation as contemplated by Section 6.8, certificates or book entries therefore will be provided to the Participant.
6.5 Other Restrictions
Deere may impose such other restrictions on any Restricted Shares granted pursuant to the Plan as it may deem advisable including, without limitation, restrictions intended to achieve compliance with the Securities Act of 1933, as amended, with the requirements of any stock exchange upon which such Shares or Shares of the same class are then listed, and with any blue sky
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or securities laws applicable to such Shares. Shares delivered upon death, disability, retirement, or resignation as contemplated by Section 6.8 may bear such legends, if any, as the Board shall specify.
6.6 Voting Rights
Participants shall have full voting rights in any Restricted Shares granted hereunder.
6.7 Dividend Rights
Participants shall have full dividend rights in any Restricted Shares granted hereunder, with such dividends being paid to Participants. If all or part of a dividend is paid in Shares, the dividend Shares shall be held by Deere subject to the same restrictions as the Restricted Stock that is the basis for the dividend.
6.8 Termination of Service from Board
The restrictions provided for in Sections 6.4 and 6.5 shall remain in effect until, and shall lapse only upon, the termination of a Nonemployee Director’s service as a Director by reason of death, Disability, retirement, or resignation from the Board with the consent of the Board, and the Shares shall thereafter be delivered to the Nonemployee Director or the decedent’s beneficiary as designated pursuant to Section 11.3; provided, however, that if a Nonemployee Director’s service on the Board terminates by reason of retirement or resignation, an Award granted to such Nonemployee Director in the 12 months prior to such retirement or resignation shall be subject to proration as provided for in Article 8.
In the event the Nonemployee Director’s service as a Director is terminated for any other reason, including, without limitation, any involuntary termination on account of (a) fraud or intentional misrepresentation, or (b) embezzlement, misappropriation, or conversion of assets or opportunities of the Company, all Restricted Shares awarded to such Nonemployee Director prior to the date of termination shall be immediately forfeited and returned to Deere.
6.9 Tax Withholding
To the extent required by applicable Federal, state or local law, a Nonemployee Director must make arrangements satisfactory to the Company for the payment of any withholding or similar tax obligations that arise in connection with the Plan.
ARTICLE 7. RESTRICTED STOCK UNITS (RSUS)
7.1 Annual Awards
Unless the Board shall determine to make annual Awards hereunder entirely or partially in the form of Restricted Shares, an annual Award of Restricted Stock Units will be made to each Nonemployee Director automatically as of the date one week following the date of the Annual Meeting in an amount recommended by the Committee and approved by the Board. The number of Restricted Stock Units will be based on the Fair Market Value on the grant date of Deere common stock. Although the period of service shall run from the date of the Annual Meeting, the grant date shall be one week following the Annual Meeting to permit the dissemination to the market of information coming out of such meeting.
7.2 Partial Awards
Upon the effective date of any amendment in the amount of any Award, upon recommendation of the Committee and approval by the Board, each Nonemployee Director shall receive a partial Award calculated as if the Nonemployee Director were serving a partial term as provided in Section 7.3, below, provided that the Fair Market Value shall be determined as of the grant date one week following the effective date of the Award. RSUs previously granted to the Nonemployee Director for the same period shall be deducted from such Award.
7.3 Partial Terms
A Nonemployee Director who is elected by the Board to fill a vacancy between Annual Meetings shall automatically be granted a pro rata portion of the number of RSUs awarded to Nonemployee Directors as of the date one week following the date of the most recent Annual Meeting. Such prorated number of RSUs shall be determined by multiplying the number of RSUs awarded as of the date one week following the date of the most recent Annual Meeting by a fraction, the numerator of which is the number of days remaining until the next Annual Meeting, and the denominator of which is 365 and rounding the resulting number down to the nearest whole RSU.
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7.4 Settlement of RSUs; Election of Settlement Date
| (a) | RSUs will be settled exclusively by delivery of Shares to Nonemployee Directors (or to a Nonemployee Director’s beneficiary or beneficiaries designated in accordance with Section 11.3). A Nonemployee Director may elect the settlement date for an annual Award of RSUs by making an irrevocable deferral election in writing on a form provided by Deere and delivered to Deere not later than the close of business on the last business day of the calendar year immediately preceding the calendar year of the Annual Meeting in respect of which the Award will be made (so that, for example, a deferral election relating to the annual Award of RSUs to be made following the 2022 Annual Meeting must be made by the close of business on the last business day of 2021); provided, however, that in the case of any person who is newly elected or appointed to the Board as a Nonemployee Director, and who does not have any rights or interests under any other deferred compensation plan, program, or arrangement of Deere that is required to be aggregated with RSUs under the Plan for purposes of Section 409A, such election may be made no later than 30 days after the date of such election or appointment. | ||
| A Nonemployee Director may designate on such deferral election form one of the following dates as the settlement date for such Award of RSUs: | |||
| (A) | such Nonemployee Director’s Separation Date; or | ||
| (B) | the later to occur of (A) or the first day of a calendar month specified by such Nonemployee Director but no later than 10 years following the Nonemployee Director’s Separation Date. | ||
| If a Nonemployee Director fails to designate one of the foregoing alternatives as the settlement date for an Award of RSUs, such Nonemployee Director shall be deemed to have designated alternative (A). Notwithstanding any election made by a Nonemployee Director on any election Form or any other provision of the Plan, in the event of such Nonemployee Director’s death, all RSUs held by such Nonemployee Director will be paid in Shares to such Nonemployee Director’s beneficiary (or if no beneficiary has been designated, to such Nonemployee Director’s estate) as soon as administratively practicable, and in any event, within 90 days following the date of such Nonemployee Director’s death. | |||
| (b) | Notwithstanding anything else herein to the contrary, to the extent that a Nonemployee Director is a “specified employee” (as defined by Section 409A) as of his or her Separation Date, no settlement of RSUs pursuant to alternative (A) of Section 7.4(a) (whether such alternative (A) was elected by the Nonemployee Director or applies by default, and including where alternative (A) applies because it is the later of the two dates specified in alternative (B)) may be made before the first business day that is more than six (6) months after such Nonemployee Director’s Separation Date, or, if earlier, the date of the Participant’s death, and any settlement of RSUs that would be made but for application of this provision shall instead be made on the first business day after the end of such six-month period (or, if earlier, the date of the Participant’s death). | ||
| (c) | In the event the Nonemployee Director’s service as a Director is terminated for any reason other than death, retirement, or resignation with the consent of the Board, including, without limitation, any involuntary termination on account of (i) fraud or intentional misrepresentation, or (ii) embezzlement, misappropriation, or conversion of assets or opportunities of the Company, all RSUs awarded to such Nonemployee Director prior to the date of termination and not previously settled by delivery of Shares shall be immediately forfeited and returned to Deere. | ||
7.5 Stockholder Rights
Restricted Stock Units shall not confer on a Nonemployee Director any rights as a stockholder of Deere (including without limitation voting rights) until Shares have been issued to such Nonemployee Director in settlement of such Restricted Stock Units.
7.6 Dividend Equivalents
Until a Nonemployee Director’s Restricted Stock Units convert to Shares, if Deere pays a regular or ordinary dividend on its common stock, the Nonemployee Director will be paid a dividend equivalent for his or her RSUs. Deere will pay the dividend equivalent on the same day as Deere pays the corresponding dividend on its common stock. If Deere pays a dividend in Shares, Nonemployee Directors holding RSUs will receive additional RSUs equal to the number of Shares paid with respect to the corresponding number of Shares, and such additional RSUs shall be subject to the same terms and conditions, and shall be settled at the same time, as the RSUs to which they relate.
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7.7 Tax Withholding
To the extent required by applicable Federal, state or local law a Nonemployee Director must make arrangements satisfactory to the Company for the payment of any withholding or similar tax obligations that arise in connection with the Plan.
7.8 Nontransferability
The RSUs awarded to a Nonemployee Director may not be voluntarily or involuntarily sold, pledged, assigned, transferred, gifted, or otherwise alienated or hypothecated, including, but not limited to transfers related to estate planning, dissolution of marriage, collection, execution, attachment, and any other voluntary or involuntary transfer, other than by will or by the laws of descent and distribution. Shares delivered in settlement of RSUs shall not be subject to any such restrictions, except for any restrictions that may be imposed under applicable securities laws or policies of Deere.
ARTICLE 8. PRORATION IN YEAR OF RETIREMENT OR RESIGNATION
In the year of a Nonemployee Director’s termination of service on the Board due to retirement or resignation with the consent of the Board, such Nonemployee Director will earn a portion of the Award granted to such Nonemployee Director in the 12 months prior to such retirement or resignation based upon the number of months from the month of the grant and through the month in which the retirement or resignation becomes effective, and any portion of the Award not earned pursuant to the foregoing provision will be forfeited and returned to Deere. The provisions of this Article 8 shall apply to all types of Awards under this Plan. The following schedule illustrates the application of these principles on the assumption that grants are made in March:
| Month of Retirement/Resignation | Portion of Award Earned | Portion of Award Forfeited | |||
| March | 1/12 | 11/12 | |||
| April | 2/12 | 10/12 | |||
| May | 3/12 | 9/12 | |||
| June | 4/12 | 8/12 | |||
| July | 5/12 | 7/12 | |||
| August | 6/12 | 6/12 | |||
| September | 7/12 | 5/12 | |||
| October | 8/12 | 4/12 | |||
| November | 9/12 | 3/12 | |||
| December | 10/12 | 2/12 | |||
| January | 11/12 | 1/12 | |||
| February | 12/12 | n/a |
ARTICLE 9. CHANGE OF CONTROL
9.1 Change of Control
| (a) | In the event that: | |||
| (i) | a “Change of Control” as defined in paragraph (b) of this Article 9 occurs; and | |||
| (ii) | a Qualifying Termination occurs; | |||
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| then, unless otherwise determined by the Committee or the Board in writing at or after the making of an Award, but prior to the occurrence of such Change of Control, all restrictions and vesting requirements applicable to any Award shall terminate and all Awards granted hereunder shall be settled by delivery of unrestricted Shares within 90 days following the occurrence of the later of the Change of Control or Qualifying Termination, provided, however, that no Award that provides for a deferral of compensation within the meaning of Section 409A shall be settled upon the occurrence of a Change of Control unless the event or circumstances constituting the Change of Control also constitute a “change in the ownership” of Deere, a “change in the effective control” of Deere, or a “change in the ownership of a substantial portion of the assets” of Deere, in each case as determined under Section 409A; and provided, further, that to the extent that the original terms of an Award do not provide for the Award to be settled upon the occurrence of a Change of Control, the Committee may subsequently provide for such a settlement only to the extent permitted under Section 409A. This Article 9 shall not preclude Directors from participating on the same terms as stockholders generally in any Change of Control transaction in which shares of common stock of Deere are cancelled or exchanged for other consideration. | |||
| (b) | For purposes of paragraph (a) of this Article 9, a “Change of Control” means a change in control of a nature that would be required to be reported in response to Schedule 14A of Regulation 14A promulgated under the Exchange Act whether or not Deere is then subject to such reporting requirement, provided that, without limitation, such a Change of Control shall be deemed to have occurred if: | ||
| (i) | any “person” (as defined in Sections 13(d) and 14(d) of the Exchange Act) (other than a Director or group of Directors, Deere, or any employee benefit plan of Deere including its trustee, or any corporation or similar entity which becomes the beneficial owner of securities of Deere in connection with a transaction excepted from the provisions of clause (iii) below) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of Deere (not including the securities beneficially owned or any securities acquired directly from Deere) representing thirty percent (30%) or more of the combined voting power of Deere’s then outstanding securities; | ||
| (ii) | there shall cease to be a majority of the Board comprised as follows: individuals who upon approval of the Plan by the stockholders constitute the Board and any new director(s) whose appointment or election by the Board or nomination for election by Deere’s stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of such period or whose appointment or election or nomination for election was previously so approved but excluding, for this purpose, any such new director whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board; | ||
| (iii) | there is consummated a merger, consolidation, or similar business combination transaction of Deere (including, for the avoidance of doubt, any business combination structured as a forward or reverse triangular merger involving any direct or indirect subsidiary of Deere) with any other company, other than a merger, consolidation, or similar business combination transaction which would result in the voting securities of Deere outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least sixty percent (60%) of the combined voting power of the voting securities of Deere or such surviving entity or parent outstanding immediately after such merger, consolidation, or similar business combination transaction; or | ||
| (iv) | the stockholders of Deere approve a plan of complete liquidation of Deere or there is consummated an agreement for the sale or disposition by Deere of all or substantially all of Deere’s assets. | ||
| (c) | For purposes of paragraph (a) of this Article 9, a Nonemployee Director shall be considered to have experienced a Qualifying Termination if within six (6) months preceding or within twenty-four (24) calendar months following a Change of Control of Deere, the Nonemployee Director’s service on the Board terminates: | ||
| (i) | upon the Nonemployee Director’s resignation from the Board at the request of Deere or another party to the transaction or series of transactions constituting the Change of Control; | ||
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| (ii) | because the Nonemployee Director is not appointed to the Board as constituted following consummation of the transaction or series of transactions constituting the Change of Control; or | ||
| (iii) | as a result of Deere’s failure to nominate the Nonemployee Director for re-election to the Board; |
provided, however, that in any such case the Nonemployee Director is willing and able to continue to serve on the Board; and provided, further, that a Nonemployee Director’s termination of service on the Board shall not be considered a Qualifying Termination if it results from (i) the Nonemployee Director’s removal from the Board for cause by vote of the stockholders of Deere pursuant to Section 141(k) of the DGCL; or (ii) the Nonemployee Director’s removal from the Board by the Delaware Court of Chancery pursuant to Section 225(c) of the DGCL.
For purposes of the Plan, a Nonemployee Director’s service on the Board will be considered to have terminated upon (and only upon) such Nonemployee Director’s “separation from service” from Deere as determined under the default provisions in Treasury Regulation Section 1.409A-1(h). For purposes of this Article 9, the “Board” shall be understood to include the board of directors or similar governing body of the surviving entity of the transaction or series of transactions that constitute a Change of Control, whether or not such surviving entity is Deere.
ARTICLE 10. AMENDMENT, MODIFICATION, AND TERMINATION
10.1 Amendment, Modification, and Termination
Subject to the terms set forth in this Section 10.1 and Section 10.2, the Board may terminate, amend, or modify the Plan at any time and from time to time; provided, however, that the provisions set forth in the Plan regarding the amount, the price, or the timing of Awards to Nonemployee Directors may not be amended more than once every six (6) months, other than to comport with changes in laws and regulations.
Without such approval of the stockholders of Deere as may be required by the Code, by any national securities exchange or system on which the Shares are then listed or reported, or by a regulatory body having jurisdiction with respect hereto, no such termination, amendment, or modification may:
| (a) | Materially increase the total number of Shares which may be available for grants of Awards under the Plan, except as provided in Section 4.3 herein; or |
| (b) | Materially modify the requirements with respect to eligibility to participate in the Plan; or |
| (c) | Materially increase the total benefits accruing to Nonemployee Directors under the Plan. |
10.2 Awards Previously Granted
Unless required by law, no termination, amendment, or modification of the Plan shall materially affect, in an adverse manner, any Award previously granted under the Plan, without the consent of the Nonemployee Director holding the Award; provided, however, that no such consent shall be required if the Board determines in its sole discretion that any such termination, amendment, or modification is necessary or advisable to comply with any law, regulation, ruling, judicial decision, or accounting standards or to ensure that Restricted Stock Units are not subject to federal, state, or local income tax prior to settlement.
ARTICLE 11. MISCELLANEOUS
11.1 Gender and Number
Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular, and the singular shall include the plural.
11.2 Severability
In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.
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11.3 Beneficiary Designation
Each Nonemployee Director under the Plan may from time to time name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under the Plan is to be paid in the event of his or her death. Each designation will revoke all prior designations by the same Nonemployee Director, and will be effective only when filed by the Nonemployee Director in writing with Deere during his or her lifetime. In the absence of any such designation, benefits remaining unpaid at the Nonemployee Director’s death shall be paid to the Nonemployee Director’s estate.
11.4 No Right of Nomination
Nothing in the Plan shall be deemed to create any obligation on the part of the Board to nominate any Nonemployee Director for reelection by Deere’s stockholders.
11.5 Shares Available
The Shares made available pursuant to Awards under the Plan may be either authorized but unissued Shares, or Shares which have been or may be reacquired by Deere, as determined from time to time by the Board.
11.6 Additional Compensation
Shares and RSUs granted under the Plan shall be in addition to any annual retainer, attendance fees, or other compensation payable to each Nonemployee Director as a result of his or her service on the Board.
11.7 Successors
All obligations of Deere under the Plan, with respect to Awards granted hereunder, shall be binding on any successor to Deere, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of Deere.
11.8 Requirements of Law
The granting of Awards under the Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.
11.9 Governing Law
To the extent not preempted by Federal law, the Plan, and all agreements hereunder, shall be construed in accordance with and governed by the laws of the State of Delaware.
11.10 Securities Law Compliance
Transactions under the Plan are intended to be exempt from Section 16(b) of the Exchange Act by virtue of Rule 16b-3 (including any successor provision). To the extent any provision of the Plan or action by the Board fails to comply with the requirements of Rule 16b-3, it shall be deemed null and void to the extent permitted by law and deemed advisable by the Board.
11.11 Plan Unfunded
Restricted Stock Units awarded under the Plan shall constitute an unsecured promise of Deere to deliver Shares on the applicable settlement date, subject to the terms and conditions of the Plan. The Plan is unfunded, and Deere shall not be required to reserve or otherwise set aside funds or Shares for the payment of its obligations hereunder. As a holder of RSUs, a Nonemployee Director has only the rights of a general unsecured creditor of Deere. The Plan does not confer on any Nonemployee Director or beneficiary of a Nonemployee Director any interest whatsoever in any specific asset of Deere.
101 DEERE & COMPANY 2022 PROXY STATEMENT
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102 DEERE & COMPANY 2022 PROXY STATEMENT
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103 DEERE & COMPANY 2022 PROXY STATEMENT
 DEERE & COMPANY SHAREHOLDER RELATIONS ONE JOHN DEERE PLACE MOLINE, IL 61265 | VOTE BY TELEPHONE AND INTERNET VOTE BY TELEPHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. Eastern Time on February 22, 2022 for shares held directly and by 11:59 P.M. Eastern Time on February 18, 2022 for shares held in an employee savings plan. Have your proxy card in hand when you call and then follow the instructions. VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 P.M. Eastern Time on February 22, 2022 for shares held directly and by 11:59 P.M. Eastern Time on February 18, 2022 for shares held in an employee savings plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/DE2022 You may attend the meeting via the Internet and vote during the meeting. Have available the information that is printed in the box marked by the arrow below and follow the instructions. VOTE BY MAIL Mark, sign, and date your proxy card and return it in the postage-paid envelope we have provided or return it to Deere & Company, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. Your telephone or Internet vote authorizes the named proxies to vote in the same manner as if you marked, signed, and returned the proxy card.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
Dear Shareholders: It is a pleasure to invite you to the The enclosed Notice of Meeting and Proxy Statement covers the formal business of the meeting, which includes election of the named directors,
The Notice of the Annual Report are available on Detach Proxy Card Here
D65047-P64238-Z81429
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