UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant þ
Filed by a party other than the Registrant ¨
Check the appropriate box:
¨ | |
¨ |
þ |
¨ |
¨ |
The TJX Companies, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
þ | |
¨ |
1) | Title of each class of securities to which transaction applies: |
2) | Aggregate number of securities to which transaction applies: |
3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
4) | Proposed maximum aggregate value of transaction: |
5) | Total fee paid: |
¨ | |
¨ | |
1) | Amount Previously Paid: |
2) | Form, Schedule or Registration Statement No.: |
3) | Filing Party: |
4) | Date Filed: |
![]() |
Framingham, Massachusetts 01701
April 27, 2009
Dear Stockholder:
We cordially invite you to attend our 20092012 Annual Meeting on Tuesday,Wednesday, June 2, 2009,13, 2012, at 11:00 a.m. (local time), to be held at our offices, 770 Cochituate Road, Framingham, Massachusetts. Please enter through the Northeast Entrance.
The proxy statement accompanying this letter describes the business we will consider at the meeting. Your vote is important regardless of the number of shares you own. Please read the proxy statement and vote your shares. Instructions for Internet and telephone voting are attached to your proxy card. If you prefer, you can vote by mail by completing and signing your proxy card and returning it in the enclosed envelope.
We hope that you will be able to join us on June 2nd.
Sincerely, | ||||
![]() | ![]() ![]() | |||
Bernard Cammarata | Carol Meyrowitz | |||
Chairman of the Board |
Printed on Recycled Paper
PROPOSAL 2 RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | ||
The TJX Companies, Inc.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
June 2, 200913, 2012
The Annual Meeting of Stockholders of The TJX Companies, Inc. will be held at our offices, 770 Cochituate Road, Framingham, Massachusetts, on Tuesday,Wednesday, June 2, 2009,13, 2012, at 11:00 a.m. (local time) to vote on:
Election of directors
Ratification of appointment of independent registered public accounting firm
Approval of the material terms of executive officer performance goals under our cash incentive plans
Advisory approval of TJX’s executive compensation (the “say-on-pay vote”)
Any other business properly brought before the meeting
Stockholders of record at the close of business on April 13, 200916, 2012 are entitled to notice of, and entitled to vote at, the Annual Meeting and any adjournments.
To attend the Annual Meeting, you must demonstrate that you were a TJX stockholder as ofat the close of business on April 13, 200916, 2012 or hold a valid proxy for the Annual Meeting from such a stockholder. If you are not a stockholder of record but hold shares through a broker, trustee or nominee, you will need to bring proof of your beneficial ownership as of April 13, 2009,16, 2012, such as a brokerage account statement showing your ownership on that date or similar evidence of such ownership. All stockholders will need to have their photographs takencheck in upon arrival and receive visitor badges for building security. Please allow additional time for these procedures.
By Order of the Board of Directors
Ann McCauley
Secretary
Framingham, Massachusetts
April 27, 2009
PLEASE VOTE ON THE INTERNET, BY TELEPHONE OR BY MAIL
ANNUAL MEETING OF STOCKHOLDERS
June 2, 200913, 2012
The Board of Directors of The TJX Companies, Inc., or TJX, is soliciting your proxy for the 20092012 Annual Meeting. A majority of the shares outstanding and entitled to vote at the meeting is required for a quorum for the meeting.
You may vote on the Internet, using the procedures and instructions described on the proxy card and other enclosures. You may vote by telephone using the toll-free telephone number on the proxy card. BothThe process for Internet and telephone voting provideincludes easy-to-follow instructions and have proceduresis designed to authenticate your identity and permit you to confirm that your voting instructions are accurate.accurately reflected. Street name holders (who hold their shares through a third party, like a bank or broker) may vote by Internet or telephone if their bankbanks or broker makesbrokers make those methods available, in which case the bankbanks or brokerbrokers will enclose the relevant instructions with the proxy statement. All stockholders of record may vote by signing and returning the enclosed proxy card.
You may revoke your proxy at any time before it is voted at the annual meeting by voting later by telephone or Internet, returning a later-dated proxy card, or delivering a written revocation to the Secretary of TJX.
Stockholders of record at the close of business on April 13, 200916, 2012 are entitled to vote at the meeting. Each of the 413,278,040741,678,724 shares of common stock outstanding on the record date is entitled to one vote.
This proxy statement, the proxy card and the Annual Report andForm 10-Kto Stockholders for our fiscal year ended January 31, 200928, 2012 (fiscal 2012) are being first mailed to stockholders on or about the date of the notice of meeting. Our address is 770 Cochituate Road, Framingham, Massachusetts 01701.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting To Be Held on June 2, 2009:13, 2012: This proxy statement and Annual Report andForm 10-K for our fiscal year ended January 31, 20092012 are available athttp://bnymellon.mobular.net/bnymellon/tjx.
We seek nominees who have established strong professional reputations, sophistication and experience in the retail and consumer industries. We also seek nominees with experience in substantive areas that are important to our business such as international operations and growth; marketing and brand management; sales, buying and distribution; accounting, finance and capital structure; strategic planning and leadership of complex organizations; human resources and development practices; and strategy and innovation. Our nominees hold or have held senior executive positions in large, complex organizations or in businesses related to important substantive areas, and in these positions have also gained experience in core management skills and substantive areas relevant to our business. Our nominees also have experience working with or serving on boards of directors and board committees of other public companies, and each of our nominees has an understanding of corporate governance practices and trends. In addition, most of our nominees have significant prior service on our Board, which has provided them with significant exposure to both our business and the industry in which we compete. We believe that all our nominees possess the professional and personal qualifications necessary for board service, and we have highlighted particularly noteworthy attributes for each director in the individual biographies below.
The individuals listed below have been nominated and are standing for election at this year’s Annual Meeting. If elected, they will hold office until our 20102013 Annual Meeting of Stockholders and until their successors are duly elected and qualified. AllOther than Mr. Abdalla, who was elected by the Board in January 2012, all of our current directors were elected to the Board by our stockholders. We do not anticipate that any nominee will become unavailable to serve.
Your Board of Directors unanimously recommends that you vote FOR the election of each of the nominees as directors.
Zein Abdalla, 53
Director since 2012
Mr. Abdalla has been CEO of PepsiCo Europe, a division of PepsiCo, Inc., a leading global food, snack and beverage company, since November 2009, prior to which he served as President, PepsiCo Europe Region starting in January 2006. Mr. Abdalla previously held a variety of senior positions at PepsiCo since he joined that company in 1995, including as General Manager of PepsiCo’s European Beverage Business, General Manager of Tropicana Europe and Franchise Vice President for Pakistan and the Gulf region. Mr. Abdalla’s executive experience with a large global company has given him expertise in corporate management, including in emerging markets, operations, brand management, distribution and global strategy.
José B. Alvarez, 4549
Director since 2007
Mr. Alvarez has been a member of the faculty of the Harvard Business School since February 2009. From 2001 through 2008, Mr. Alvarez was an executive with Ahold, NV, a Dutch supermarket retail company, and Stop &Shop/Giant-Landover, its U.S. subsidiary. From August 2008 through December 2008, Mr. Alvarez was the Global Executive Vice President for Business Development for Ahold. PriorAhold, a global supermarket retail company. From 2001 to this appointment, Mr. Alvarez wasAugust 2008, he held various executive positions with Stop & Shop/Giant-Landover, Ahold’s U.S. subsidiary, including President and Chief Executive Officer of Stop &Shop/Giant-Landover beginning in April 2006. Mr. Alvarez also served as from 2006 to 2008 and Executive Vice President, Supply Chain and Logistics from 2004 to 2006, Senior Vice President, Logistics from 2002 to 20042006. Previously, he served in executive positions at Shaw’s Supermarkets, Inc. and Vice President, Strategic Initiatives prior to 2002. Mr. Alvarez began his career in supermarket retail management at the Jewel Food Stores subsidiary of American Stores Company in 1990. Mr. Alvarez is also a director of United Rentals, Inc.
Alan M. Bennett, 5861
Director since 2007
Mr. Bennett served as Interimthe Chief Executive Officer of H&R Block Inc., a tax services provider, from July 2010 to May 2011 and was previously Interim Chief Executive Officer from November 2007 through August 2008. He
was Senior Vice President and Chief Financial Officer and a Member of the Office of the Chairman of Aetna, Inc., a diversified healthcare benefits company, from 2001 to April 2007, and previously held other senior financial management positions at Aetna after joining in 1995. Mr. Bennett held various senior management roles in finance and sales/marketing at Pirelli Armstrong Tire Corporation, formerly Armstrong Rubber Company, from 1981 to 1995 and began his career with Ernst & Ernst (now Ernst & Young LLP). Mr. Bennett is also a director of Halliburton Company and H&R Block Inc.
Bernard Cammarata, 6972
Director since 1989
Mr. Cammarata has been Chairman of the Board of TJX since 1999. Mr. Cammarata served as Acting Chief Executive Officer of TJX from September 2005 to January 2007. He also led TJX and its former TJX subsidiary and T.J. Maxx Division from the organization of the business in 1976 until 2000, including serving as Chief Executive Officer and President of TJX, Chairman and President of TJX’s T.J. Maxx Division and Chairman of The Marmaxx Group.
David T. Ching, 5659
Director since 2007
Mr. Ching has been Senior Vice President and Chief Information Officer for Safeway Inc., a food and drug retailer, since 1994. Previously, Mr. Ching was the General Manager for British American Consulting
2
Michael F. Hines, 5356
Director since 2007
Mr. Hines served as Executive Vice President and Chief Financial Officer of Dick’s Sporting Goods, Inc., a sporting goods retailer, from 1995 to March 2007. From 1990 to 1995, he held management positions with Staples, Inc., an office products retailer, most recently as Vice President, Finance. Mr. Hines spent 12 years in public accounting, the last eight years with the accounting firm Deloitte & Touche LLP.
Amy B. Lane, 5659
Director since 2005
Ms. Lane was a Managing Director and Group Leader of the Global Retailing Investment Banking Group at Merrill Lynch & Co., Inc., from 1997 until her retirement in 2002. Ms. Lane previously served as a Managing Director at Salomon Brothers, Inc., where she founded and led the retail industry investment banking unit.
Ms. Lane is a director of GNC Holdings, Inc. and was also a director of Borders Group, Inc.
Carol Meyrowitz, 5558
Director since 2006
Ms. Meyrowitz has been Chief Executive Officer of TJX since January 2007, a director since September 2006 and also served as President sincefrom October 2005.2005 to January 2011. She served as Senior Executive Vice President of TJX from 2004 until January 2005, Executive Vice President of TJX from 2001 to 2004 and President of The Marmaxx Group from 2001 to January 2005. From January 2005 until October 2005, she was employed in an advisory role for TJX and consulted for Berkshire Partners LLC, a private equity firm. From 1987 to 2001, she held various senior management positions with The Marmaxx Group and with Chadwick’s of Boston and Hit or Miss, former divisions of TJX. Ms. Meyrowitz is also a director of Amscan Holdings, Inc. and Staples, Inc.
John F. O’Brien, 6669
Director since 1996
Mr. O’Brien is the retired Chief Executive Officer and President of Allmerica Financial Corporation (now known as The Hanover Insurance Group, Inc.), an insurance and diversified financial services company, holding those positions from 1995 to 2002. Mr. O’Brien previously held executive positions at Fidelity Investments, an asset management firm, including Group Managing Director of FMR Corporation, Chairman of Institutional Services Company and Chairman of Brokerage Services, Inc. Mr. O’Brien serves as our Lead Director. Mr. O’Brien is also non-executive Chairman and a director of Cabot Corporation, a director of LKQ Corporation and a director of a family of mutual funds35 registered investment companies managed by BlackRock, Inc., an investment management advisory firm.
Willow B. Shire, 6164
Director since 1995
Ms. Shire has been an executive consultant with Orchard Consulting Group since 1994, specializing in leadership development and strategic problem solving. Previously, she was Chairperson for the Computer
3
Fletcher H. Wiley, 66
Independence Determination. Our Corporate Governance Principles provide that at least two-thirds of the members of our Board will be independent directors. The Board evaluates any relationships of each director and nominee with TJX and makes an affirmative determination whether or not each director and nominee is independent. To assist it in making its independence determination, the Board has adopted categorical standards, which are more rigorous than the requirements of the New York Stock Exchange, and are postedavailable in our Corporate Governance Principles on our website atwww.tjx.com.
As part of the Board’s annual review of director independence, the Board considered the recommendation of our Corporate Governance Committee and reviewed any transactions and relationships between each non-management director or any member of his or her immediate family and TJX. The purpose of this review was to determine whether there were any relationshipsuch relationships or transaction wastransactions and if so, whether they were inconsistent with a determination that the director was independent.
As a result of this review, our Board unanimously determined that teneight directors of our12-member 10-member Board (83.3%(80%) are independent, with the independent directors beingindependent: Zein Abdalla, José B. Alvarez, Alan M. Bennett, David A. Brandon, David T. Ching, Michael F. Hines, Amy B. Lane, John F. O’Brien Robert F. Shapiro,and Willow B. ShireShire. The same determination was made previously with respect to David A. Brandon and Fletcher H. Wiley.Wiley, who each served on the Board until June 2011. Each of these directors met our categorical standards of independence. In addition, the Board considered a business relationship of Mr. Alvarez, a business relationship of Mr. Ching, a charitable relationship of Mr. O’Brien and a business relationship of Mr. Wiley, each of which fell below our categorical standards. Our other two directors are not independent. Bernard Cammarata, is theas Chairman, of TJX, and Carol Meyrowitz, is theas Chief Executive Officer, are employed by TJX.
Board Expertise and Diversity. Our directors possess a wide range of talents and experience. Our Board reflects a range of talents, ages, skills, diversity and expertise to provide sound and prudent guidance with respect to our operations and interests. All of our directors are financially literate, and three members of our Audit Committee are audit committee financial experts.
4
The Corporate Governance Committee’s process for identifying and evaluating candidates, including candidates recommended by shareholders,stockholders, includes actively seeking to identify qualified individuals by various means which may include reviewing lists of possible candidates, such as chief executive officers of public companies or leaders of finance or other industries,industries; considering proposals from sources, such as the Board of Directors, management, employees, shareholdersAssociates, stockholders and industry contacts,contacts; and engaging an outsidea third-party search firm to expand our search and assist in compiling information about possible candidates. During fiscal 2012, Mr. Abdalla was recommended to the Corporate Governance Committee by a third-party search firm.
The Corporate Governance Committee has adopted a policy with respect to submission by shareholdersstockholders of candidates for director nominees which is available on our website atwww.tjx.com. Any shareholderstockholder may submit in writing one candidate for consideration for each shareholderstockholder meeting at which directors are to be elected by not later than the 120th calendar day before the first anniversary of the date that we released our proxy statement to shareholdersstockholders in connection with the previous year’s annual meeting. Recommendations should be sent to the Secretary of TJX,c/o Office of the Secretary of The TJX Companies, Inc., 770 Cochituate Road, Framingham, Massachusetts 01701. A recommendation must include specified information about, and consents and agreements of, the candidate.candidate, as described in the policy. The Corporate Governance Committee evaluates candidates for the position of director recommended by shareholdersstockholders or others in the same manner.manner as candidates from other sources. The Corporate Governance Committee will determine whether to interview any candidates and may seek additional information about candidates from third-party sources.
Board Expertise and Diversity. We seek to have a Board that represents diversity as to experience, gender and ethnicity/race, but we do not have a formal policy with respect to diversity. We also seek to have a Board that reflects a range of talents, ages, skills, viewpoints, professional experience, educational background and expertise to provide sound and prudent guidance with respect to our operations and interests. All of our directors are financially literate, and two members of our Audit Committee are audit committee financial experts.
Majority Voting.Voting. Our by-laws provide for the election of directors in an uncontested election by a majority of the shares properly cast at the meeting. Our Corporate Governance Principles, available atwww.tjx.com, require any nominee for director to provide the Secretary of the Company an irrevocable contingent resignation at or prior to the distribution of proxy solicitation materials for the meeting at which such director is expected to be nominated to stand for election. Such resignation will beelection, effective only if such director fails to receive the requisite majority vote in an uncontested election, as provided in the by-laws, and the Board accepts such resignation. Our Corporate Governance Principles provide procedures for the consideration of such resignation by the Board. Within 90 days of the date of the annual meeting of shareholders,stockholders, the Board, with the recommendation of the Corporate Governance Committee, will act upon such resignation. In making its decision, the Board will consider the best interests of TJX and its shareholders,stockholders, and take what it deems to be appropriate action. Such action may include accepting or rejecting the resignation or taking further measures to address those concerns that were the basis for the underlying shareholderstockholder vote.
Chairman; Lead Director.Policies Relating to Board Service. Our Board annually electsIt is our policy that no director shall be nominated who has attained the Chairmanage of 75 prior to or on the Boarddate of Directors. Because our Chairman, Mr. Cammarata, is not an independent director, consistent withhis or her election. Under our Corporate Governance Principles, directors who are CEOs of public companies should not serve on more than two boards of public companies besides their own and no director should serve on more than five boards of public companies. Under our independent directors have elected John F. O’Brien as Lead Director. In this role, among other duties, Mr. O’Brien meets at least quarterly with our Chief Executive Officer and with senior officers as necessary, attends quarterly management business review meetings, schedules meetingsAudit Committee Charter, members of the independent directors, presides at meetingsAudit Committee should not serve on more than two audit committees of other companies. When a director’s principal occupation or business association changes during his or her tenure as a director, our Corporate Governance Principles provide that the director is required to tender his or her resignation from the Board, at which the Chairman is not present, including meetings of the independent directors and of the non-management directors, serves as a liaison between the independent directors and the ChairmanCorporate Governance Committee will recommend to the Board any action to be taken with respect to the resignation.
Board Committees and Company management, approves meeting schedules and agendas, attends the meetings of each Meetings
Board committee and undertakes other responsibilities designated by the independent directors.
The Board of Directors has five standing committees: Audit, Corporate Governance, Executive, Executive Compensation and Finance. Each committee’s charter is available on our website atwww.tjx.com.
All members of the Audit, Corporate Governance, FinanceExecutive Compensation and Executive CompensationFinance Committees are independent directors. While each committee has designated responsibilities, the committees act on behalf of the entire Board. The committees regularly report on their activities to the entire Board.
5
Corporate | Executive | |||||||||||||||||||
Name** | Audit | Governance | Executive | Compensation | Finance | |||||||||||||||
José B. Alvarez | X | X | ||||||||||||||||||
Alan M. Bennett | X | X | ||||||||||||||||||
David A. Brandon | X | * | X | |||||||||||||||||
Bernard Cammarata | X | * | ||||||||||||||||||
David T. Ching | X | X | ||||||||||||||||||
Michael F. Hines | X | * | X | |||||||||||||||||
Amy B. Lane | X | X | * | |||||||||||||||||
Carol Meyrowitz | ||||||||||||||||||||
John F. O’Brien | X | X | ||||||||||||||||||
Robert F. Shapiro | X | X | X | |||||||||||||||||
Willow B. Shire | X | * | X | |||||||||||||||||
Fletcher H. Wiley | X | X | ||||||||||||||||||
Number of meetings during fiscal 2009 | 14 | 5 | 1 | 9 | 4 |
Name | Audit | Corporate Governance | Executive | Executive Compensation | Finance | |||||||||||||||
José B. Alvarez | X | X | ||||||||||||||||||
Alan M. Bennett | X | X | * | X | ||||||||||||||||
David A. Brandon** | X | * | X | |||||||||||||||||
Bernard Cammarata | X | * | ||||||||||||||||||
David T. Ching | X | X | ||||||||||||||||||
Michael F. Hines | X | * | X | |||||||||||||||||
Amy B. Lane | X | X | X | * | ||||||||||||||||
Carol Meyrowitz | ||||||||||||||||||||
John F. O’Brien | X | X | ||||||||||||||||||
Willow B. Shire | X | * | X | |||||||||||||||||
Fletcher H. Wiley** | X | X | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Number of meetings during fiscal 2012 | 11 | 3 | 0 | 7 | 4 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
* | Chair. Mr. Bennett replaced Mr. Brandon as Chair of the Executive Compensation Committee in June 2011. | |
** |
Audit Committee. The Audit Committee is responsible for the annual appointment of the independent registered public accounting firm and oversight of the financial reporting process. Each member of the Audit Committee is a non-employee director and meets the independence standards adopted by the Board in compliance with New York Stock Exchange listing standards. The Audit Committee operates under the terms of a written charter which is reviewed by members of the committee annually. Specifically, the Audit Committee’s responsibilities include:
reviewing with management, internal auditors and the independent registered public accounting firm our quarterly and annual financial statements, including the accounting principles and procedures applied in their preparation and any changes in accounting policies;
monitoring our system of internal financial controls and accounting practices;
overseeing the internal and external audit process, including the scope and implementation of the annual audit;
overseeing our compliance and ethics programs;
selecting or terminating the independent registered public accounting firm, approving their compensation and evaluating the performance of the independent registered public accounting firm, including the lead audit and reviewing partners;
establishing and maintaining procedures for receipt, retention and treatment of complaints, including the confidential and anonymous submission of complaints by employees, regarding accounting or auditing matters;
pre-approving all work by the independent registered public accounting firm; and
reviewing other matters as the Board deems appropriate.
Executive Compensation Committee. The Executive Compensation Committee, or the ECC, is responsible for overseeing executive compensation and benefits. Each member of the ECC is a non-employee director and meets the independence standards adopted by the Board in compliance with New York Stock Exchange
6
committee annually.
approving the compensation, including awards of stock options, bonuses and other awards and incentives, of our executive officers and other Associates in such categories as are from time to time identified by the ECC;
determining the compensation of the Chief Executive Officer, including awards of stock options, bonuses and other awards and incentives, based on the evaluation by the Corporate Governance Committee of the performance of the Chief Executive Officer and such other factors as the Committee deems relevant;
determining the performance goals and performance criteria under our incentive plans;
approving the terms of employment of our executive officers;
reviewing other matters that the Board or the ECC deems appropriate, such as our succession plan for the CEO and other executive officers; and
overseeing the administration of our incentive plans.
The ECC also reviewed our compensation policies and practices for our Associates to confirm that they do not give rise to risks which are reasonably likely to have a material adverse effect on the Company.
Corporate Governance Committee. The Corporate Governance Committee is responsible for recommending nominees for directors to the Board and for our corporate governance practices. Each member of the Corporate Governance Committee is a non-employee director and meets the independence standards adopted by the Board in compliance with New York Stock Exchange listing standards. The Corporate Governance Committee operates under the terms of a written charter which is reviewed by the members of the committee annually. Specifically, the Corporate Governance Committee’s responsibilities include:
recommending director nominees to the Board;
developing and reviewing corporate governance principles;
reviewing our policies with respect to corporate public responsibility, including charitable and political contributions and political advocacy;
reviewing practices and policies with respect to directors, including retirement policies, the size of the Board and the meeting frequency of the Board, and reviewing the functions, duties and composition of the committees of the Board and compensation for committee members;
recommending processes for the annual evaluations of the performance of the Board, the Chairman, the Lead Director and each committee and its chair;
establishing performance objectives for the Chief Executive Officer and annually evaluating the performance of the Chief Executive Officer against such objectives; and
overseeing the maintenance and presentation to the Board of management’s plans for succession to senior management positions.
Executive Committee. The Executive Committee meets at such times as it determines to be appropriate and has the authority to act for the Board on specified matters during the intervals between meetings of the Board.
Finance Committee. The Finance Committee is responsible for reviewing and making recommendations to the Board relating to our financial activities and condition. The Finance Committee operates under the terms of a written charter which is reviewed by the members of the committee annually. Specifically, the Finance Committee’s responsibilities include:
reviewing and making recommendations | ||
approving our cash investment policies, foreign exchange risk management policies and capital investment criteria and agreements for borrowing by us and our subsidiaries from banks and other financial institutions; and
reviewing investment policies, performance and actuarial status of our pension and other retirement benefit plans.
Board Leadership Structure and Role in Risk Oversight
Board Leadership Structure. Our Board annually elects a Chairman of the Board of Directors. The Board has attainedchosen to separate the ageroles of 75 prior to or on the date of his or her election or re-election. UnderChairman and Chief Executive Officer. Consistent with our Corporate Governance Principles, because our current Chairman, Bernard Cammarata, is not independent, our independent directors have elected a Lead Director, John F. O’Brien. In this role, among other duties, Mr. O’Brien meets at least quarterly with full-time jobs should not serve on more than three boards of public companies in
7
Board’s Role in Risk Oversight. It is management’s responsibility to manage risk and bring to the Board’s attention risks that are material to TJX. The Board has oversight responsibility for the directorsystems established to report and monitor the most significant risks applicable to TJX. The Board administers its risk oversight role directly and through its committee structure and the committees’ regular reports to the Board at Board meetings. The Board reviews strategic, financial and execution risks and exposures associated with the annual plan and multi-year plans, any major litigation and other matters that may present material risk to the Company’s operations, plans, prospects or reputation, acquisitions and divestitures and senior management succession planning and receives regular reports from our Chief Compliance Officer and Director of Enterprise Risk. The Audit Committee reviews risks associated with financial and accounting matters, including financial reporting, accounting, disclosure, internal controls over financial reporting, ethics and compliance programs, compliance with orders and data security. The ECC reviews risks related to executive compensation and the design of compensation programs, plans and arrangements. The Corporate Governance Committee deals with risks related to board and CEO evaluations and management succession. The Finance Committee is requiredresponsible for risks related to tender his or her resignation fromfinancing, investment, capital structure, liquidity, and investment performance, asset allocation strategies and funding of our benefit plans.
Compensation Program Risk Assessment. As part of our regular enterprise risk assessment process overseen by the Board and described above, we review the Corporate Governance Committee will recommendrisks associated with our compensation plans and arrangements. In fiscal 2012, the ECC reviewed TJX’s employee compensation policies and practices and determined that they do not give rise to risks that are reasonably likely to have a material adverse effect on TJX. The ECC’s assessment considered (a) what risks could be created or encouraged by our executive and broad-based compensation plans and arrangements worldwide, (b) how those potential risks are monitored, mitigated and managed and (c) whether those potential risks are reasonably likely to have a material adverse effect on TJX. The assessment was led by our Chief Compliance Officer and Director of Enterprise Risk, whose responsibilitiesinclude leadership of our enterprise risk management process, and included consultation with and input by, among others, executive officers, senior human resources and financial executives, the ECC’s independent compensation consultant and internal and external legal counsel. This process included:
a review of our compensation programs and practices, including our historical compensation practices;
analysis of programs or program features and practices that could potentially encourage excessive or unreasonable risk-taking of a material nature;
a review of business risks that these program features could potentially encourage;
identification of factors that mitigate risks to the business and incentives for executives to take excessive risk, including, among others, a review of compensation design and elements of the compensation programs, the balance among these program elements, role of compensation consultants and other advisors, authority and discretion of the Board, any actionthe ECC and other Board committees in compensation, controls and procedures, program and cultural elements and potential for individual or group influences; and
consideration of the balance of potential risks and rewards related to be taken with respect to the resignation.our compensation programs and its role in implementation of our corporate strategy.
Codes of Conduct and Ethics and Other Policies
Global Code of Conduct.Conduct for Associates. We have a Global Code of Conduct for our associatesAssociates designed to ensure that our business is conducted with integrity. Our Global Code of Conduct covers professional conduct, including employment policies, ethical business dealings, conflicts of interest, confidentiality, intellectual property rights and the protection of confidential information, as well as adherence to laws and regulations applicable to the conduct of our business. Information concerning ourWe have a Code of Conduct ishelpline to allow Associates to voice their concerns. We also have procedures for Associates to report complaints regarding accounting and auditing matters. Information about the helpline and procedures are available on our website atwww.tjx.com.www.tjx.com
Code of Ethics for TJX Executives and Director Code of Business Conduct and Ethics for Directors.. We have a Code of Ethics for TJX Executives governing our Chairman, Chief Executive Officer, President, Vice Chairman, Chief Administrative Officer, Chief Financial Officer, Principal Accounting Officer and other senior operating, financial and legal executives. The Code of Ethics for TJX Executives is designed to ensure integrity in our financial reports and public disclosures. We also have a Director Code of Business Conduct and Ethics for Directors which promotes honest and ethical conduct, compliance with applicable laws, rules and regulations and the avoidance of conflicts of interest. Both of these codes of conduct are published on our website atwww.tjx.com.We intend to disclose any future amendments to, or waivers from, the Code of Ethics for TJX Executives or the Director Code of Business Conduct and Ethics for Directors within four business days of the waiver or amendment through a website posting or by filing a Current Report onForm 8-K with the Securities and Exchange Commission, or SEC.
Stock Ownership Guidelines.Guidelines for Directors and Executives. Our Corporate Governance Principles provide that at the time of his or her election, a director must ownis expected to acquire initially at least $10,000 of our common stock. Over time, a director must increase his or her stock ownershipoutright and to hold shares of our common stock (or their equivalent) equal to at least $200,000 (including awards under the Deferred Stock Program for Non-Employee Directors under our Stock Incentive Plan). Our Stock Ownership Guidelines included in our Corporate Governance Principles provide that our Chief Executive Officer and President will attain stock ownership with a fair market value ofequal to at least five times his or herthe annual retainer paid to the directors within five years of initial election to the Board. Our Chief Executive Officer is expected to attain stock ownership with a fair market value equal to at least five times annual base compensation and our Vice ChairmanPresident, our Chief Financial Officer and each Senior Executive Vice President willis expected to attain stock ownership with a fair market value of at least three times his or her annual base compensation. ForSuch ownership guidelines for our executive officers such ownership guidelines are reduced by 50% at age 62. Executives are expected to make steady progress toward these ownership guidelines and to attain them within five years from their respective dates of hire as or promotion to the above positions. It is expected that individualsexecutives who have not yet achieved the stock ownership levels provided by these guidelines will make steady progress towards meeting such levels and will retain 50% of their shares (on an after-tax basis) resulting from the exercise of stock options and vesting of restricted and deferred stock or vestingstock.
Board Annual Performance Reviews. We have a comprehensive review process for evaluating the performance of performance-based restricted stock. Once an executive satisfiesour Board and sustainsour directors. Our Corporate Governance Committee oversees the target stock ownership level,annual performance evaluation of the executiveentire Board, our Chairman, our Lead Director, each of our committees and its chair, and each of our individual directors.
Sustainability. As part of our continued commitment to corporate responsibility, TJX has long pursued solutions to sustainability challenges that are good for the environment as well as the Company’s profitability.
We continue to be committed to environmentally sound business practices throughout our operations, including energy and water conservation as well as recycling and waste reduction. We have discussed our efforts with stockholder groups over the years and understand the importance to our business, stockholders, Associates, customers and communities of strong, sustainable business practices. Our corporate social responsibility report, which highlights efforts we have made in these initiatives, is permitted to sell all future shares obtained through option exercises, the vestingavailable on our websiteat www.tjx.com.
Online Availability of deferred stock or the vestingInformation. The current versions of performance-based restricted stock.
Communications with Directors.the Board
Security holders and other interested parties may communicate directly with the Board, the non-management directors or the independent directors as a group, specified individual directors or the Lead Director by writing to such individual or groupc/o Office of the Secretary, The TJX Companies, Inc., 770 Cochituate Road, Framingham, Massachusetts 01701. The Secretary will forward such communications to the relevant group or individual at or prior to the next meeting of the Board.
8
Under the Corporate Governance Committee’s charter, the Committee is responsible for reviewing and approving or ratifying any transaction in which TJX and any of our directors, director nominees, executive officers, 5% shareholdersstockholders and their immediate family members are participantsis a participant and in which such persons haveperson has a direct or indirect material interest as provided under SEC rules. In the course of reviewing potential related person transactions, the Corporate Governance Committee considers the nature of the related person’s interest in the transaction; the presence of standard prices, rates or charges or terms otherwise consistent with arms-length dealings with unrelated third parties; the materiality of the transaction to each party; the reasons for TJX entering into the transaction with the related person; the potential effect of the transaction on the status of a director as an independent, outside or disinterested director or committee member; and any other factors the Committee may deem relevant. Our General Counsel’s office is primarily responsible for the implementation of processes and procedures for screening potential transactions and providing information to the Corporate Governance Committee.
In April 2012, we acquired two office buildings in Marlborough, Massachusetts intended to be used as part of our corporate headquarters for an aggregate purchase price of approximately $62.5 million from affiliates of FMR LLC, which, with its related funds, beneficially owns more than 5% of our outstanding stock. We employ Charles Barios, the brother-in-law of our CEO, as a Manager of Technical Services. He received compensation from us consistent with other Associates at his level and with his responsibilities that totaled approximately $145,436 for fiscal 2012, including salary and incentive compensation, and he participates in company benefit plans generally available to Associates. Our Corporate Governance Committee discussed and approved these transactions, consistent with our review process described above.
We operate in accordance with a written charter adopted by the Board and reviewed annually by the Committee. We are responsible for overseeing the quality and integrity of TJX’s accounting, auditing and financial reporting practices. The Audit Committee is composed solely of members who are independent, as defined by the New York Stock Exchange and TJX’s Corporate Governance Principles. Further, the Board has determined that threetwo of our members (Mr. Hines and Ms. Lane and Mr. Shapiro)Lane) are audit committee financial experts as defined by the rules of the SEC.
The Audit Committee met 1411 times during fiscal 2009,2012, including four meetings held with TJX’s Chief Financial Officer, Corporate Controller, Corporate Internal Audit and PricewaterhouseCoopers LLP, (PwC),or PwC, TJX’s independent registered public accounting firm, prior to the public release of TJX’s quarterly and annual earnings announcements in order to discuss the financial information contained in the announcements.
We took numerous actions to discharge our oversight responsibility with respect to the audit process. We received the written disclosures and the letter from PwC pursuant to Rule 3526, Communication with Audit Committees Concerning Independence, of the Public Company Accounting Oversight Board (“PCAOB”)(PCAOB) concerning any relationships between PwC and the CompanyTJX and the potential effects of any disclosed relationships on PwC’s independence and discussed with PwC its independence. We discussed with management, the internal auditors and PwC, TJX’s internal control over financial reporting and management’s assessment of the effectiveness of internal control over financial reporting and the internal audit function’s organization, responsibilities, budget and staffing. We reviewed with both PwC and our internal auditors their audit plans, audit scope and identification of audit risks.
We discussed and reviewed with PwC communications required by the Standards of the PCAOB (United States), as described in PCAOB AU Section 380, “Communication with Audit Committees,” and, with and without management present, discussed and reviewed the results of PwC’s examination of TJX’s financial statements. We also discussed the results of the internal audit examinations.
The aggregate fees that TJX paid for professional services rendered by PwC for fiscal 2012 and fiscal 2011 were:
In thousands | 2012 | 2011 | ||||||
Audit | $ | 4,967 | $ | 4,377 | ||||
Audit Related | 295 | 415 | ||||||
Tax | 318 | 488 | ||||||
All Other | 22 | 12 | ||||||
|
|
|
| |||||
Total | $ | 5,602 | $ | 5,292 | ||||
|
|
|
|
Audit fees were for professional services rendered for the audits of TJX’s consolidated financial statements including financial statement schedules and statutory and subsidiary audits, assistance with review of documents filed with the SEC, and opinions on the effectiveness of internal control over financial reporting with respect to fiscal years ended January 31, 20092012 and January 26, 2008 were:
In thousands | 2009 | 2008 | ||||||
Audit | $ | 3,710 | $ | 3,404 | ||||
Audit Related | 330 | 541 | ||||||
Tax | 525 | 505 | ||||||
All Other | 15 | — | ||||||
Total | $ | 4,580 | $ | 4,450 |
9fiscal 2011.
Tax fees were for services related to tax compliance, planning and advice, including assistance with tax audits and appeals, tax services for employee benefit plans, and requests for rulings and technical advice from tax authorities.
All other fees were for services related to training for TJX’s internal audit department in fiscal 2012 and fiscal 2011.
We pre-approve all audit services and all permitted non-audit services by PwC, including engagement fees and terms. We have delegated the authority to take such action between meetings to the Audit Committee chair, who reports the decisions made to the full Audit Committee at its next scheduled meeting.
Our policies prohibit TJX from engaging PwC to provide any services relating to bookkeeping or other services related to accounting records or financial statements, financial information system design and implementation, appraisal or valuation services, fairness opinions orcontribution-in-kind reports, actuarial
services, internal audit outsourcing, any management function, legal services or expert services not related to the audit, broker-dealer, investment adviser, or investment banking services or human resource consulting. In addition, we evaluate whether TJX’s use of PwC for permitted non-audit services is compatible with maintaining PwC’s independence. We concluded that PwC’s provision of non-audit services, which we approved in advance, was compatible with their independence.
We reviewed and discussed the audited financial statements of TJX as of and for the fiscal year ended January 31, 20092012 with management and PwC. Management has the responsibility for the preparation of TJX’s financial statements, and PwC has the responsibility for the audit of those statements.
Based on these reviews and discussions with management and PwC, we recommended to the Board that TJX’s audited financial statements be included in its Annual Report onForm 10-K for the fiscal year ended January 31, 20092012 for filing with the SEC. We also have selected PwC as the independent registered public accounting firm for fiscal 2010,2013, subject to ratification by TJX’s shareholders.
Audit Committee
Michael F. Hines,Chair
José B. Alvarez
David T. Ching
Amy B. LaneRobert F. ShapiroFletcher H. Wiley
10
The following table shows, as of April 13, 200916, 2012, the number of shares of our common stock beneficially owned by each director, each director nominee, each executive officer named in the Summary Compensation Table and all directors and executive officers as a group:
Percentage of | ||||||||
Number of | Outstanding | |||||||
Name | Shares(1)(2) | Common Stock | ||||||
José B. Alvarez | 350 | * | ||||||
Arnold S. Barron | 277,131 | * | ||||||
Alan M. Bennett | 2,000 | * | ||||||
David A. Brandon | 7,000 | * | ||||||
Bernard Cammarata(3)(4) | 1,610,847 | * | ||||||
Donald G. Campbell(4) | 693,600 | * | ||||||
David T. Ching | 1,000 | * | ||||||
Ernie L. Herrman | 411,847 | * | ||||||
Michael F. Hines | 1,800 | * | ||||||
Amy B. Lane | 11,135 | * | ||||||
Carol Meyrowitz | 588,716 | * | ||||||
Jeffrey G. Naylor | 480,337 | * | ||||||
John F. O’Brien | 89,779 | * | ||||||
Robert F. Shapiro | 15,000 | * | ||||||
Willow B. Shire | 75,999 | * | ||||||
Nirmal K. Tripathy | 15,000 | * | ||||||
Fletcher H. Wiley | 50,000 | * | ||||||
All Directors, Nominees and Executive Officers as a Group (19 persons) | 4,701,102 | 1.1 | % |
Name | Shares(1) | |||
Zein Abdalla | 1,654 | |||
José B. Alvarez | 28,827 | |||
Alan M. Bennett | 32,127 | |||
Bernard Cammarata(2)(3) | 3,048,994 | |||
David T. Ching | 32,088 | |||
Ernie L. Herrman | 683,180 | |||
Michael F. Hines | 40,294 | |||
Amy B. Lane(3) | 55,093 | |||
Carol Meyrowitz | 565,208 | |||
Jeffrey G. Naylor | 156,062 | |||
John F. O’Brien | 124,208 | |||
Jerome Rossi | 154,270 | |||
Willow B. Shire | 134,656 | |||
Paul Sweetenham | 0 | |||
All Directors, Nominees and Executive Officers as a Group (18 Persons)(4) | 5,559,579 |
The total number of shares beneficially owned by each individual and by the group above each constitutes less than 1% of the outstanding shares. Reflects sole voting and investment power except as indicated in footnotes below.
(1) | Includes shares of common stock |
nominees and executive officers as a group, 657,848. Includes performance-based restricted shares that are subject to forfeiture restrictions: Mr. Herrman, | ||
(2) | Excludes |
(3) | Includes shares owned by trusts or a charitable foundation of which the |
11
(4) | Includes 16,000 shares owned jointly and over which an executive officer and spouse share voting and dispositive power. |
Name and Address of Beneficial Owner | Number of Shares | Percentage of Class Outstanding | ||||||
FMR LLC 82 Devonshire Street Boston, MA 02109 | 95,850,314 | 12.71 | % |
The amounts above are based on ownership of FMR LLC at December 31, 2011, as follows:
Percentage of | ||||||||
Number of | Class | |||||||
Name and Address of Beneficial Owner | Shares | Outstanding | ||||||
FMR LLC 82 Devonshire Street Boston, MA 02109 | 24,897,461 | (1) | 6.02 | % | ||||
PRIMECAP Management Company 225 South Lake Avenue #400 Pasadena, CA 91101 | 22,220,999 | (2) | 5.38 | % | ||||
Barclays Global Investors, N.A 400 Howard Street San Francisco, CA 94105 | 21,593,439 | (3) | 5.22 | % |
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors and executive officers to file reports of holdings and transactions in our common stock with the SEC and the New York Stock Exchange. To facilitate compliance, we have undertaken the responsibility to prepare and file these reports on behalf of our officers and directors. Based on our records and other information, all reports were timely filed, except that in April 2008, Mr. Tripathy filed a Form 4 relating to the withholding of shares in connection with the vesting of restricted stock one day late. The failure to report this transaction was inadvertent and was corrected promptly upon discovery.
12filed.
Compensation Committee Report
Executive Summary
Over the last 10 years, our management has led TJX’s excellent performance through weak and discussions, we recommendedstrong economies, more than doubling sales and earnings. We believe our compensation program has been a key component to the Board that the Compensation Discussionachieving this success and Analysis be included in this proxy statementis critical to motivating our management to achieve our business goals, encouraging long-term strategy, rewarding them for performance and in the Annual Report onForm 10-Kretaining them. The fiscal 2012 compensation of our named executive officers reflects our strong performance for the fiscal year.
Our Performance
Fiscal 2012 was another successful year ended January 31, 2009.for TJX.
Our fiscal 2012 net sales reached $23.2 billion, a 6% increase over last year.
Our U.S. businesses continued to exceed our expectations in fiscal 2012, posting significant comparable store sales increases on top of significant increases in the prior two years and Analysis
Our total stockholder return for fiscal 2012 was 43%.
Our performance continued to reflect strong execution by our philosophy that all of our associates are important to our success, with our executive officers and senior executives setting the directionmanagement of our business model.
For the third consecutive fiscal year, we increased customer traffic.
We delivered another year of double digit earnings growth, with a 14% increase in adjusted earnings per share* in fiscal 2012, on top of 23% and having overall responsibility for driving48% increases in the prior two years.
Our three- and five-year growth through fiscal 2012 surpassed that of our results. We have achieved significant success in our business over many years. But, like other retailers, we operate in a highly-competitive and challenging economic environment. Accordingly, we have adopted a total compensation approach weighted toward performance-based incentive compensationpeer group.
Our market capitalization continued to accomplish several goals:grow.
Compound Annual Adjusted EPS* Growth Rates | ||
![]() | ![]() |
* | All share and share-based numbers in this proxy statement reflect the two-for-one stock split effected February 2, 2012. Adjusted earnings per share of TJX and several of the peer group members discussed in this Compensation Discussion and Analysis exclude from diluted earnings per share from continuing operations (EPS) computed in accordance with U.S. generally accepted accounting principles (GAAP) the positive and negative effects of items that affect comparability between periods. TJX fiscal 2007 adjusted EPS of $0.83 excludes costs of $0.01 per share related to the Computer Intrusion from GAAP EPS of $0.82. TJX fiscal 2008 adjusted EPS of $0.97 excludes a $0.13 per share charge for a provision for Computer Intrusion related costs from GAAP EPS of $0.84. TJX fiscal 2009 adjusted EPS of $0.96 excludes a $0.04 per share benefit from the 53rd week, $0.01 per share benefit from tax adjustments and $0.02 per share benefit for a reduction in |
As a result of our performance-based compensation program, our executives’ fiscal 2012 compensation reflects our outstanding performance.
We exceeded our corporate pre-tax income-based target for fiscal 2012 under our short-term cash incentive plan, resulting in a 117.95% payout of corporate short-term award opportunities for our named executive officers.
Our performance for the cumulative fiscal 2010-2012 period substantially exceeded the business plan-based targets for that three year period under our long-term cash incentive plan and resulted in a 138.70% payout of award opportunities for our named executive officers.
We satisfied all of the performance-based vesting conditions ending in fiscal 2012 for performance-based restricted stock awards held by our named executive officers.
Our stock price rose to $33.69 at fiscal year-end (on a post-split basis), a 41% increase over last fiscal year end.
Our CEO’s earned compensation over the last five fiscal years is correlated with our strong performance:
* | Total compensation consists of base salary, short- and long-term |
Our Compensation Committee of our Board of Directors implements this compensation philosophy by providingProgram
We have a total compensation packageapproach focused on performance-based incentive compensation that seeks to:
attract and retain very talented individuals in the highly competitive retail environment, maintaining an extremely high talent level in our company and providing for succession broadly across our management;
reward objective achievement of the short- and long-term financial objectives reflected in our business plans; and
enhance shareholder value by directly aligning the interests of our management and shareholders.
Our compensation program for our executives is heavily weighted to incentive compensation that is competitive with our peers butat risk. Base salary is weighted toward performance-based incentive compensation. Thethe only one of the four principal elements of our compensation program that is fixed. Each of the other elements is variable: short- and long-term cash incentive plan awards are earned solely on the achievement of objective performance goals, vesting of performance-based restricted stock requires achievement of objective performance goals, and stock options have value only to the extent the value of our stock increases. As shown in the following charts, performance-based compensation (equity incentives, short-term cash incentives and long-term cash incentives) constituted a significant portion of our named executive officers’ (NEOs) direct annual compensation include:
Fiscal 2012 Compensation Elements*
![]() |
* | Consists of fiscal 2012 salary, target cash incentive awards under short-term | |
(MIP) and long-term (LRPIP) plans, performance-based restricted stock awards (grant date fair value) with performance periods ending in fiscal 2012 and | ||
Elements of Compensation Philosophy
Incentive compensation philosophy for our key associates, including our named executive officers, has reflected pay for performance. Total compensation for our executives is a combination of base salary, short-term and long-term cash incentives, and long-term equity-based incentives. We design our compensation so thatcomprises a substantial portion of each executive’snamed executive officer’s compensation opportunity is equity-based and cash incentive compensation. Theopportunity. These incentives directly tie the amount of each named executive officer’s incentive compensation is directly tied to objective performance achieved by TJX and is thereforeits stock and thereby directly linkedlink executive compensation with the interests of shareholders.
Element |
13
Objectives | Form | |||||
Salary | • | Attract and retain talented individuals. | Cash | |||
Provide compensation for performance of primary roles and responsibilities. | ||||||
Short-Term Cash Incentives (MIP) | • | Reward achievement of financial goals for the current fiscal year, either for a single division or for a blend of divisional goals. | Cash | |||
• | Provide an incentive to achieve our short-term financial objectives and balance our long-term performance goals. | |||||
Long-Term Cash Incentives (LRPIP) | • | Reward achievement of multi-year financial goals, typically over three fiscal years, weighted and aggregated to reflect the | Cash | |||
• | Provide an incentive to achieve our long-term financial objectives and balance our short-term performance goals. | |||||
• | Provide an additional retention incentive. | |||||
Equity Incentives (Options and PBRS) | • | Align the | Equity | |||
• | Provide an important retention incentive. | |||||
Health, Retirement and Other Benefits | • | Provide health and welfare, deferred compensation and retirement benefits, as well as limited perquisites, to maintain our competitive position and promote retention. | Insurance/Cash |
Our incentive compensation program is consistent and transparent to our Associates. The targets that must be achieved to earn incentive awards and performance-based restricted stock are clear, objective and directly reflect our targeted operating performance. The incentive compensation targets for all of our divisions are derived from our Board-approved business plans, which, in turn, form the basis for our corporate incentive targets.
Our compensation program aligns the interests of our Associates, our businesses and our stockholders and is designed to drive outstanding performance. The incentive plan targets are derived from our business plans, focusing all of our executives and other key Associates on the same objectives. For our short-term cash incentive plan, the ECC selected an annual operating profit goal measure based on pre-tax income. Annual performance for divisional level Associates is measured based on targets taken from the divisional business plans and annual performance for our executives and other corporate Associates is measured against an aggregation of those divisional targets. For our long-term cash incentive plan, the ECC selected an operating goal and approved a
target that is the weighted aggregation of multi-year divisional profit targets, designed to measure results over the long term. The weighting and aggregation of the long term divisional goals, based on adjusted pre-tax income measures, adds focus on performance division by division and encourages growth and performance of the smaller divisions. The business plans that underlie our incentive targets also are the basis for the projections of performance that we give to investors at the beginning of each fiscal year. As a result, our incentive targets across the company drive the performance that we need to achieve our projections and align the interests of our Associates and those of our stockholders.
We believe that our approach to compensation serves to align management’s interests with those of shareholders and has contributed to our strong overall performance over many years in all types of business environments. As of the end of fiscal 2012, our total stockholder return significantly exceeded the performance of the general market (S&P 500) and our industry index (Dow Jones U.S. Apparel Retailers Index) over the past three- and five-year fiscal periods.
TJX Total Shareholder Return Growth v. Market and Retail Indexes
We maintain shareholder friendly pay practices.
Our named executive officers receive limited perquisites, all of which are shown and quantified in the Summary Compensation Table.
Our short- and long-term bonuses are earned by our executives based solely on achievement of objective Board-approved metrics. The bonus payouts for our named executive officers can be decreased but not increased under our bonus plans and are subject to limits on maximum payout.
All of our restricted stock awards have performance-based vesting conditions in addition to time-based vesting conditions. None of these awards vest based on time alone.
We do not provide tax gross-ups on regular compensation or golden parachute tax gross-ups. Severance benefits are payable to our named executive officers following a change of control only upon involuntary terminations of employment or termination by the executive for “good reason.”
We have not offered a primary Supplemental Executive Retirement Plan (SERP) benefit to new participants for many years. Only vested participants still have this benefit.
Our executive officers are subject to and are in compliance with published stock ownership guidelines.
Our stockholders showed strong approval for our executive compensation program. At our last annual meeting, 97% of our stockholders voting on the proposal approved our advisory “say on pay” proposal on the compensation of our executive officers. The ECC views these results as demonstrating stockholders’ support for our approach to executive compensation, including the focus on incentive components linked to our performance, and was mindful of this support when acting on compensation matters during the remainder of fiscal 2012 and in considering compensation for fiscal 2013.
How Compensation Decisions Are Made
The Executive Compensation Committee (ECC), an independent committee of our Board of Directors, is responsible for compensation design and for approving compensation for our executive officers. The ECC has the authority, without Board or management approval, to retain and terminate its compensation consultants and to determine their fees and terms of engagement. The ECC reviews and approves compensation matters at various meetings during the year.
The ECC has used the same principle of compensation design for many years: establish a program of total compensation competitive with our peers, heavily weighted toward objective, performance-based incentives. In determining totalthe overall level of executive compensation and the allocation of its components, the ECC considers various factors, such as company and divisional performance, individual performance and responsibility, market data, retention and succession planning.
The ECC reviews our overall corporate and divisional performance as well as the individual performance of the executives, including both quantitative and qualitative performance factors. In setting targets and evaluating performance, the ECC reviews various metrics of corporate performance, including adjusted EPS. Our named executive officers play a limited role in the executive compensation process. Our named executive officers participate in our strategic planning process and recommend to the Board for its review and approval the annual and multi-year business plans for TJX and its divisions. These approved plans are the basis for the short- and long-term incentive performance targets and the restricted stock performance criteria, all of which are approved by the ECC. Additionally, our CEO provides an annual self-assessment and annual performance reviews of the other named executive officers and makes recommendations to the ECC regarding the base salaries and other elements of compensation for those executives. The Corporate Governance Committee of the Board provides the ECC with a review of the performance of our CEO for the year, including her achievement of performance objectives set by the Corporate Governance Committee in addition to those provided in our incentive plans, but does not make compensation recommendations. The ECC then considers these performance reviews and recommendations in establishing base salaries, cash incentive opportunities and equity grants.
The ECC also consults with and reviews data from a compensation consultant to assess the overall competitiveness of our executives’ individual compensation and our compensation programs overall. For fiscal 2012 compensation, as discussed below under “ECC Compensation Consultant and Peer Group Information,” the ECC reviewed peer group data provided by Pearl Meyer & Partners, LLC (PM&P), its independent compensation consultant, with respect to the named executive officers. The ECC also receives advice from PM&P on other matters, such as contracts with executives and plan targets.
The ECC considers the effects on retention and succession at the executive officer and other management levels when determining the levels and design of compensation. The ECC takes into account individual performance, contractual obligations, historical compensation practices that inbelieved successful and the ECC’s estimation have proven successful for TJX, compensation practices at peer group companies, compensation programs for TJX as a whole and any special considerationslimitation on income tax deductions imposed by Section 162(m) of the Internal Revenue Code (Section 162(m)). The ECC also considers matters such as recruitment, new hires, promotions, organizational changes, relocations and transitional roles. In addition
The ECC uses all of this information to base salarydetermine the overall level and appropriate mix of short-term versus long-term incentive opportunities and cash versus equity-based compensation and opportunities to provide a competitive mix and encourage achievement of our executive officers receiveshort- and long-range goals and also encourage employee retention and succession. The ECC separately determines individual compensation components at its various meetings throughout the year. The ECC also uses this information to determine the appropriate level of retirement benefits, deferred compensation opportunities and limited perquisites. The availability of these benefits helpsThese help us maintain our competitive position in the market for executive talent but does not form part of the basis for the ECC’s determination of an executive officer’s total compensation for any year.
ECC Compensation Consultant and BenchmarkingPeer Group Information
The ECC is advised by Frederic W. Cook & Co., Inc., or Cook, anengaged PM&P to serve as the independent compensation consultant engaged by and reporting to the ECC. Cook does not perform any servicesECC for TJX other than its work for the ECC. In general, Cook advisesfiscal 2012. PM&P advised the ECC with respect to the design and competitive positioning of base salary, annual bonus and long-term cash and equity incentives for senior management, including our named executive officers.
terms of employment agreements. PM&P did not perform any services for TJX other than work for the elementsECC and for the Corporate Governance Committee with respect to compensation of that compensation againstdirectors. PM&P reported to the ECC, which determined the scope of PM&P’s engagement and fees.
The ECC uses a group of 12 peer companies that are large, publicly traded retailers selected by the ECC. The peer group included Circuit City Stores, Inc., Dillard’s, Inc., Macy’s, Inc., The Gap, Inc., Kohl’s Corporation, Limited Brands, Inc., Nike, Inc., OfficeMax Incorporated, J.C. Penney Company, Inc., Ross Stores, Inc., Staples, Inc. and Target Corporation. Substantially the same peer group has been used over a number of years, andto provide context for its compensation decision-making for our named executive officers. Each year, the ECC considers revisions each year to reflect changes in the peer group and TJX within fiscal 2011 it substantially revised the advicepeer group. In June 2011, advised by PM&P, the ECC reviewed the composition of its peer group, including considerations of the ECC’s compensation consultantfollowing pre-determined criteria:
industry similarity;
companies with revenues approximately one-third to three times our annual revenue (generally between $7B and $65B at that time);
companies with market capitalization approximately one-fourth to four times our management. market capitalization (generally between $5B and $74B at that time); and
similar levels of complexity in terms of global operations and brand and/or product line diversity.
The ECC determined that the following peer group of 17 large, publicly traded consumer-oriented companies used in fiscal 2011 continued to be an appropriate peer group for TJX for fiscal 2012:
Fiscal 2012 Peer Group Companies
Amazon.com, Inc. | Kimberly-Clark Corporation | Nordstrom, Inc. | ||
Bed Bath & Beyond Inc. | Kohl’s Corporation | Ross Stores, Inc. | ||
Best Buy Co., Inc. | Limited Brands, Inc. | Staples, Inc. | ||
Costco Wholesale Corporation | Lowe’s Companies, Inc. | Target Corporation | ||
The Gap, Inc. | Macy’s, Inc. | YUM! Brands, Inc. | ||
J. C. Penney Company, Inc. | Nike, Inc. |
Although the ECC uses peer group data to provide context for its own determinations, it does not calibratetarget compensation or any element of compensation for our named executive officers withby reference to any specified level at the peer group.
Total Compensation Design
Compensation for all management employees of TJX and its divisions, including the named executive officers. Using the comparative benchmarking data provided by the Hay Group, TJX’s compensation consultant, and in the case of our named executive officers the ECC’sincludes base salary, incentive compensation consultant, the ECC assesses the overall competitiveness(both equity and cash) and other benefits, each of our compensation programs. For each management level, the ECC then assesses the appropriate mix of short-term versus long-term incentives and cash versus equity-based compensation to provide a competitive mix and at the same time encourage long-range goals and employee retention.which is described further below. The ECC then separately reviewsevaluates and determines individualbalances the portion of total compensation components, including base salary, short-term and long-term cash incentive awards and equity grants, at its various meetings throughout the year described below.
Base Salary
Each of our named executive officers receives a base salary in cash during the fiscal year. Base salary levels are determinedcontributes to our overall compensation approach by providing competitive, fixed compensation to attract and retain talented individuals at a level that reflects the ECC taking into account Companyexecutive’s responsibilities, performance, contractual obligations, individual performanceexperience and responsibilities, past base salary, the limitation on income tax deductions imposed by Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), peer group data, the advice of Cook and recommendations by the supervising executive officers. The performance review of the Chief Executive Officer is performed each year by the Corporate Governance Committee as provided in its
14
Incentive Compensation
A significant portion of each named executive officer’s compensation is equity-basedequity and cash incentive compensation granted under awards requiring an increase in the value of our stock or achievement of performance goals, at levels specified by the ECC, based on performance measures approved by our stockholders.
Short-Term Cash Incentives.Incentives (MIP) Our. The annual cash incentive awards are made under our Management Incentive Plan or MIP. The strategic purpose of our MIP is(MIP) are designed to motivate our named executive officers and other key associatesAssociates to achieve or exceed a performance target established for the annual targets for each of our divisions.fiscal year. Each MIP award has performance targets anda target award opportunity based on achievement of this target. The actual payout of a MIP awards are paid in cash in an amountaward is determined by measurement of actual performance against performance targets. If performance meets the performance targets,target. If the targeted performance is met, participants are eligible to receive their target MIP awards. If performance exceeds the performance targets,target, participants are eligible to be paid more than their target MIP awards based on the extent to which performance exceeds the performance targets (but under the terms of the MIP, not more than two times the target award, and not more than a pre-established maximum, of $5 million per award under current plan terms, for officersany participant whose compensation is expected to be subject to the limits on deductibility under Code Section 162(m)). If performance does not meet the performance targets, thetarget, participants are paid no MIP awards or are paid awardseligible to receive a payout below their MIP target awards, based on the extent to which performance falls below the performance targets.
15
Adjusted Pre-Tax | Weighted | |||||||||||||||
Income | % Above | Contribution to | ||||||||||||||
Fiscal 2009 | Performance | Actual Adjusted | or Below | Corporate | ||||||||||||
Division (Figures in 000’s) | Target | Pre-Tax Income | Target | MIP Target Award | ||||||||||||
Marmaxx | $ | 1,448,412 | $ | 1,361,044 | −6.03 | % | 45.40% | |||||||||
Canada | C$ | 290,596 | C$ | 276,888 | −4.70 | % | 7.64% | |||||||||
HomeGoods | $ | 95,898 | $ | 38,517 | −59.84 | % | 0.00% | |||||||||
Europe | £ | 89,843 | £ | 104,787 | 16.63 | % | 15.54% | |||||||||
A.J. Wright | $ | 1,002 | $ | (244 | ) | NA | 4.31% | |||||||||
Total Corporate MIP Award: 72.89% |
Long-Term Cash Incentives.Incentives (LRPIP) Our. The long-term cash incentive awards are made under our Long Range Performance Incentive Plan or LRPIP. The strategic purpose of our LRPIP is(LRPIP) are designed to motivate our named executive
16
2009-2011 were: Ms. Meyrowitz, $1,400,000 target, $2,100,000 maximum; Mr. Barron, Mr. Campbell, Mr. Herrman and Mr. Naylor, $700,000 target, $1,050,000 maximum; and Mr. Tripathy, $300,000 target, $450,000 maximum. The ECC generally reviews long-term and short-term cash compensation together as part of its overall review of compensation of our named executive officers and establishes LRPIP award levels by position, based on responsibilities, peer group data and input from the ECC’s compensation consultant.
Cumulative | Cumulative | |||||||||||||||
3-Year Adjusted | 3-Year | % Above | Weighted | |||||||||||||
Fiscal 2007-2009 | Pre-Tax Income | Actual Adjusted | or Below | Contribution to | ||||||||||||
Division (Figures in 000’s) | Performance Target | Pre-Tax Income | Target | LRPIP Target Award | ||||||||||||
Marmaxx | $ | 3,837,089 | $ | 3,942,706 | 2.75 | % | 67.68% | |||||||||
Canada | C$ | 644,370 | C$ | 762,610 | 18.35 | % | 12.75% | |||||||||
HomeGoods | $ | 166,046 | $ | 168,920 | 1.73 | % | 10.26% | |||||||||
Europe | £ | 166,875 | £ | 238,618 | 42.99 | % | 15.00% | |||||||||
A.J. Wright | $ | 40,357 | $ | (17,535 | ) | −143.45 | % | 0.00% | ||||||||
Total LRPIP Award: 105.69% |
17
Other Elements of Compensation
Retirement Benefits. All of our U.S. named executive officers participate in a broad-based pension plan for U.S. Associates under which benefits are accrued based on compensation and service. They are also eligible to participate in our 401(k) plan. As a resident of the U.K., Mr. Sweetenham participated in our retirement plan for U.K. Associates under which participants may defer earnings, receive an employer match and invest their funds to purchase benefits at retirement. We also maintain a Supplemental Executive Retirement Plan, or SERP. Ms. Meyrowitz and Mr. Rossi participate in our primary SERP benefit program. Mr. Herrman and Mr. Naylor participate in our alternative SERP benefit program, each discussed below under “Pension Benefits.”
Deferred Compensation. Our U.S. named executive officers can defer compensation under our Executive Savings Plan, or ESP, an elective deferred compensation plan, intended to help us compete for and retain talent by providing participants with additional opportunities for personal financial planning and by rewarding and encouraging retention. Amounts deferred are notionally invested in mutual funds or other market investments. Participants in the ESP (other than those eligible for our primary SERP benefit) receive an employer match, subject to a vesting schedule, that is similarly notionally invested. Mr. Naylor and Mr. Herrman received this match for fiscal 2012, a portion of which is based on our performance under MIP. Mr. Sweetenham was eligible for a similar performance-based deferred compensation benefit in the U.K., which was forfeited in connection with his departure from TJX. Some of our named executive officers also have amounts previously deferred under our General Deferred Compensation Plan, or GDCP, now closed to new deferrals. Under this plan, deferrals are credited to an account that earns notional interest until distributed at an annually adjusted rate based on U.S. Treasury securities. Our deferred compensation plans for named executive officers are discussed below under “Nonqualified Deferred Compensation Plans.”
Perquisites. We provide limited perquisites and other personal benefits to our named executive officers. These benefits, which are all included below as part of All Other Compensation detailed in footnote 5 of the Summary Compensation Table, generally consist of automobile allowances, financial and tax planning services, payment of insurance premiums and payment of legal fees associated with employment agreement negotiations. None of these perquisites is grossed up for taxes.
Fiscal 2012 Compensation
Fiscal 2012 Base Salary. Ms. Meyrowitz and Mr. Herrman’s salaries were set at the end of fiscal 2011 in connection with their employment agreements and reflected the new roles they assumed in fiscal 2012, including the mutual expectation that Ms. Meyrowitz would retain responsibility for all executive functions associated with her role as Chief Executive Officer but that, with Mr. Herrman taking on the role of President, she would be able to delegate more of her day-to-day responsibilities. During fiscal 2012, the ECC approved salary increases for Mr. Rossi and Mr. Naylor based on various factors including assessment of individual performance, our fiscal 2011 performance, responsibilities, contractual agreements and peer group review. The overall salary earned by each named executive officer during fiscal 2012 is reflected in the Summary Compensation Table. The base salaries for our named executive officers as of the end of fiscal 2012 were as follows:
Name | Salary | |||
Carol Meyrowitz | $ | 1,320,000 | ||
Ernie L. Herrman | $ | 1,100,000 | ||
Jeffrey G. Naylor | $ | 830,000 | ||
Jerome Rossi | $ | 780,000 | ||
Paul Sweetenham | £ | 525,045 |
Fiscal 2012 MIP. The MIP award opportunities for all of our named executive officers other than Mr. Sweetenham were based solely on our corporate MIP target. Mr. Sweetenham’s award opportunity was based on both corporate and TJX Europe targets. For both optionsfiscal 2012, the target MIP award opportunities (as a percentage of salary earned during the fiscal year) were as follows:
Name | % of Salary | Goals | ||||
Carol Meyrowitz | 150 | % | Corporate | |||
Ernie L. Herrman | 80 | % | Corporate | |||
Jeffrey G. Naylor | 65 | % | Corporate | |||
Jerome Rossi | 50 | % | Corporate | |||
Paul Sweetenham | 55 | % | 75% TJX Europe; 25% Corporate |
For fiscal 2012, the ECC approved MIP performance targets based on Board-approved divisional pre-tax income plans, a metric intended to focus the executives on targets that drive the performance the company needs to achieve its publicly announced performance projections for the fiscal year. For corporate Associates, the MIP performance target was consolidated divisional pre-tax income excluding capitalized inventory costs, and intercompany, imputed, direct and fixture interest income and expense and did not include the former A.J. Wright division. For TJX Europe, the MIP performance target was TJX Europe divisional pre-tax income excluding capitalized inventory costs, and intercompany, imputed, direct and fixture interest income and expense. In setting the targets, the ECC believed that they were challenging but reasonably achievable. The table below shows these performance targets as well as the performance at or below which the award payout is zero and at or above which the award payout is the maximum under the terms of the award.
Fiscal 2012 MIP Targets
(Amounts in 000’s)
Threshold (% of Target) | Target | Maximum (% of Target) | ||||||||||
Corporate | $
| 2,112,977 (80%) |
| $
| 2,641,221 (100%) |
| $
| 3,018,538 (114.3%) |
| |||
TJX Europe | £
| 78,347 (75%) |
| £
| 104,463 (100%) |
| £
| 125,355 (120%) |
| |||
Payout (%) | 0% | 100% | 200% |
The MIP awards for fiscal 2012 for our named executive officers were earned as follows:
Fiscal 2012 MIP Results
(Amounts in 000’s)
MIP Target | Actual Performance | Amount Above Target | % of Target | MIP Award Payout Percentage | ||||||||||||||||
Corporate | $ | 2,641,221 | $ | 2,708,956 | $ | 67,735 | 102.6 | % | 117.95 | % | ||||||||||
TJX Europe | £ | 104,463 | £ | 45,142 | — | 43.2 | % | 0 | % |
Based on these results, the named executive officers earned awards equal to 117.95% of their award opportunities, other than Mr. Sweetenham, who earned a fiscal 2012 MIP award of 29.49% of his target award opportunity (117.95% of 25% of his target award).
Completion of Fiscal 2010-2012 LRPIP Award Cycle. Fiscal 2012 completed the performance cycle for the fiscal 2010-2012 LRPIP awards. Our LRPIP award target for our named executive officers was based on our Board-approved business plans for the covered fiscal years at the time of grant to reflect overall company performance objectives and was intended to motivate achievement of long-term business goals. The target was based on an aggregate of weighted cumulative pre-tax income targets for each of our divisions for fiscal years 2010, 2011 and 2012, excluding capitalized inventory costs, but including intercompany, imputed, direct and fixture interest income and expense, and automatically adjusted during fiscal 2011 to exclude the A.J. Wright division. Actual divisional performance for the cycle was compared to each divisional target resulting in divisional payout percentages, based on a pre-established formula (payout ranging from 0% to 150% for performance ranging from 33% to 133% of the divisional performance target). These percentages were then weighted according to pre-established weightings designed to make performance at the smaller divisions more meaningful to the LRPIP award and intended to promote focus on their performance. The resulting weighted divisional percentages were added together to determine the overall award payout percentage. In setting the targets, the ECC believed that they were challenging but reasonably achievable.
For the fiscal 2010-2012 LRPIP cycle, our named executive officers’ target award opportunities were: Ms. Meyrowitz, $1,423,333; Mr. Herrman, Mr. Naylor and Mr. Sweetenham, $700,000; and Mr. Rossi, $375,000. Their actual awards for this cycle, shown in the Summary Compensation Table, were earned on the following basis:
Fiscal 2010-2012 LRPIP Results
(Amounts in 000’s)
Divisions | Cumulative 3-Year Performance Target | Cumulative 3-Year Actual Performance | Unweighted Contribution to Target Award | Divisional Weightings* | Weighted Contribution to Target Award | |||||||||||||||
In the US: | ||||||||||||||||||||
Marmaxx | $ | 3,708,378 | $ | 6,135,242 | 150.00 | % | 68.4 | % | 102.63 | % | ||||||||||
HomeGoods | $ | 117,739 | $ | 566,526 | 150.00 | % | 10.5 | % | 15.79 | % | ||||||||||
TJX Canada | C$ | 670,485 | C$ | 1,066,012 | 150.00 | % | 10.5 | % | 15.79 | % | ||||||||||
TJX Europe | £ | 321,905 | £ | 198,947 | 42.70 | % | 10.5 | % | 4.49 | % | ||||||||||
|
| |||||||||||||||||||
Total LRPIP Award: 138.70% |
* | Measures may not foot due to rounding. |
Grant of Fiscal 2012-2014 LRPIP Award Opportunities. The ECC established the following LRPIP target award opportunities for the fiscal 2012-2014 cycle for our named executive officers: Ms. Meyrowitz, $1,320,000; Mr. Herrman, $1,100,000; Mr. Naylor and Mr. Sweetenham, $700,000; and Mr. Rossi, $375,000. The minimum level for any payout is 33.33% of the performance target and the maximum payout level is 133.33% of the performance target. Consistent with our past disclosure practice, we plan to disclose the performance targets, which are based on business targets for future periods, after the completion of the performance cycle.
Equity-Based Compensation
Grant of Performance-Based Restricted Stock Awards. The ECC granted performance-based restricted stock awards in fiscal 2012 to our named executive officers, as shown in the Grant of Plan Based Awards table, other than our CEO and our President, who each were granted restricted stock awards in connection with their new employment agreements at the end of fiscal 2011. The ECC determined the number of shares granted in fiscal 2012 based on factors including the level of responsibility of the executives, the potential value of each grant and the executive’s total compensation. The performance condition for full vesting of these awards is achievement of a payout of not less than 67% of the target corporate LRPIP payout for the performance period, linking the vesting with our corporate performance. Performance below this target level reduces the number of shares that would otherwise vest, pro rata, with no shares vesting if performance is below the minimum threshold. Vesting of these performance-based restricted stock awards is also subject to satisfaction of the service requirements specified in the awards. The ECC believes these awards perform an important retention function.
Allocation of Performance-Based Restricted Stock Awards to Years of Intended Compensation. Under SEC rules, the entire value of our performance-based restricted stock awards is shown in the Summary Compensation Table in the year of grant. As a result, the equity compensation of our named executive officers shown in the Summary Compensation Table for a particular year sometimes reflects awards intended by the ECC valuesto compensate the executives for service and performance in different years. For example, performance-based restricted stock awards for Ms. Meyrowitz reflected in the Summary Compensation Table for fiscal 2011 valued at approximately $5,725,000 (based on the grant date fair value) were intended by the ECC to compensate Ms. Meyrowitz for service and performance in fiscal 2012.
Satisfaction of Performance-Based Vesting Conditions for Restricted Stock Awards. During fiscal 2012, each named executive officer held performance-based restricted stock awardawards with performance-based vesting criteria that were satisfied based on the closing price of our common stock on the datefiscal 2012 MIP performance or fiscal 2010-2012 LRPIP performance.
The fiscal 2012 portion of the award andheld by Ms. Meyrowitz fully vested upon ECC certification of achievement of a fiscal 2012 MIP payout of 117.95% of the corporate MIP target awards (as described under “Fiscal 2012 MIP” above). The performance condition for full vesting was achievement of a payout of not less than 67% of the corporate MIP target payout, which required us to achieve 93% of the targeted performance reflected in the case of optionfiscal 2012 plan.
The awards uses the Black-Scholes option pricing formula.
Grant of Stock Options in Fiscal 2012. The ECC determined the number of stock options granted to our named executive officers and other Associates in September 2011 by setting a fixed dollar value by executive and/or position and dividing this value by the stock price on the grant date. All options arewere granted with an exercise price equal to the closing stock price on the New York Stock Exchange on the grant date, and in general, have a maximum term of ten years, vest over three years and, to the extent vested, are exercisable for a limited period following termination of employment.
Related Policies and Considerations
Employment Agreements.The performance-based restricted stock granted to our named executive officers in fiscal 2009 had both service-basedECC reviewed and performance-based vesting conditions. Ms. Meyrowitz’s award had a one-year service condition as well as a conditionapproved, after consultation with its independent compensation consultant, individual employment agreements for full vesting of achievement of a level of performance resulting in an MIP award for fiscal 2009 of 67% of the targeted MIP award for the year. The awards for Mr. Naylor, Mr. Herrman and Mr. Tripathy had a three-year service condition as well as a condition for full vesting of achievement of a level of performance resulting in an LRPIP award for fiscal2009-2011 of 67% of the targeted LRPIP award for the period. At the time the ECC made these awards, we believed this performance was reasonably achievable. Performance below these target levels results in a pro rata reduction in the number of shares vested. We believe these awards perform an important retention function.
Each of the notional investments. Of our named executive officers, Mr. Naylor,employment agreements with Ms. Meyrowitz, Mr. Herrman, and Mr. Tripathy were eligibleNaylor, described in our proxy statement for an ESP match in fiscal 2009, although of these named executive officers only Mr. Naylor elected to participate in ESP.
18
19
and solicitation. We seek to achieve these objectives in a manner consistent with our shareholder-friendly pay practices, taking into account contractual obligations and current market practice, among other considerations, such as foreign status. These provisions are described under “Potential Payments upon Termination or Change of Control.”
Stock Ownership Guidelines.Guidelines. We have stock ownership guidelines that apply to all of our executive officers, which are summarized in more detailofficers. As described above under “Stock Ownership Guidelines”Guidelines for Directors and Executives” in the “Corporate Governance” section.Governance,” our Chief Executive Officer is expected to attain stock ownership with a fair market value equal to at least five times annual base compensation and our President, our Chief Financial Officer and each Senior Executive Vice President is expected to attain stock ownership with a fair market value of at least three times annual base compensation. These guidelines are designed to align our executives’ interests with those of our shareholdersstockholders and to encourage a long-term focus. Also, ourOur policies also prohibit our executivesexecutive officers from engaging in hedging transactions with respect to TJX stock.
Tax and Accounting Considerations.Considerations. We generally structure U.S. incentive compensation arrangements to qualifywith a view towards qualifying them as performance-based compensation exempt from the deduction limitations under Section 162(m) of the Code,, but we view the availability of a tax deduction as only one relevant consideration. We are seeking stockholder approval of the performance goals under MIP and LRPIP, consistent with Section 162(m), and we continue to emphasize performance-based compensation for executives and thus generally minimize the effect of Section 162(m) of the Code.. However, the ECC believes that its primary responsibility is to provide a compensation program that attracts, retains and rewards the executive talent necessary for our success. Consequently, the ECC authorizes compensation that is not performance-based in excess of $1 million.
Equity Grant Practices.Practices. All of our equity awards are made under our stockholder approvedstockholder-approved SIP. Virtually all of our stock options and other equity-based awards are granted at the same regularly scheduled ECC meetings held onat approximately the same datestimes each year. The specific dates of the meetings are setscheduled by the Board, along with its determination of all regularly scheduled Board and committee meetings, generally about two years in advance. In limited circumstances, typically at regularly scheduled ECC meetings and in connection with new hires or promotions, the ECC approves or grants stock options and stock awards at other times during the year at pre-scheduled ECC meetings.year. The ECC does not have any programs, plans or practices of timing these equity grants in coordination with the release of material non-public information. The exercise price of each stock option grant is the closing stock price on the New York Stock Exchange on the grant date. The SIP prohibits, without stockholder approval, any repricing requiring stockholder approval under applicable NYSE rules.
20
Executive Vice President, Group President (starting in September 2008) assisted the ECC in its administration of the MIP, LRPIP, SIP, SERP, GDCP and ESP and advised the ECC regarding the general design and structure of these incentive plans. Mr. Cammarata, Ms. Meyrowitz, Mr. Campbell (through September 2008) and Mr. Herrman regularly attended ECC meetings at the request of the ECC, although the ECC met in executive session at all regularly scheduled meetings.
21
José B. Alvarez
The following table provides information concerning compensation for our principal executive officer, our principal financial officer and fourour three other most highly paid executive officers during fiscal 20092012 (collectively, our named executive officers):
Change in | ||||||||||||||||||||||||||||||||||||
Pension | ||||||||||||||||||||||||||||||||||||
Value and | ||||||||||||||||||||||||||||||||||||
Nonqualified | ||||||||||||||||||||||||||||||||||||
Non-Equity | Deferred | All Other | ||||||||||||||||||||||||||||||||||
Name and | Fiscal | Stock | Option | Incentive Plan | Compensation | Compensation | ||||||||||||||||||||||||||||||
Principal Position | Year(4) | Salary | Bonus | Awards(5) | Awards(5) | Compensation(6) | Earnings(7) | (8),(9) | Total | |||||||||||||||||||||||||||
Carol Meyrowitz | 2009 | $ | 1,503,366 | — | $ | 2,438,982 | $ | 838,749 | $ | 2,258,393 | $ | 1,636,542 | $ | 43,040 | $ | 8,719,072 | ||||||||||||||||||||
President and Chief | 2008 | $ | 1,400,000 | — | $ | 2,578,770 | $ | 797,304 | $ | 2,305,830 | $ | 1,492,146 | $ | 55,034 | $ | 8,629,084 | ||||||||||||||||||||
Executive Officer | 2007 | $ | 1,076,731 | — | $ | 3,135,084 | $ | 1,048,938 | $ | 2,017,580 | $ | 268,076 | $ | 38,837 | $ | 7,585,246 | ||||||||||||||||||||
Donald G. Campbell(1) | 2009 | $ | 609,885 | — | $ | 388,306 | $ | 655,430 | $ | 926,200 | $ | 193,565 | $ | 42,429 | $ | 2,815,815 | ||||||||||||||||||||
Vice Chairman | 2008 | $ | 773,558 | — | $ | 770,409 | $ | 696,536 | $ | 985,209 | $ | 242,165 | $ | 39,166 | $ | 3,507,043 | ||||||||||||||||||||
2007 | $ | 740,769 | — | $ | 513,032 | $ | 991,458 | $ | 897,333 | $ | 145,379 | $ | 37,989 | $ | 3,325,960 | |||||||||||||||||||||
Ernie L. Herrman | 2009 | $ | 897,019 | — | $ | 522,534 | $ | 540,489 | $ | 1,092,175 | $ | 89,367 | $ | 43,160 | $ | 3,184,744 | ||||||||||||||||||||
Senior Executive Vice President, | 2008 | $ | 757,211 | — | $ | 800,168 | $ | 597,340 | $ | 934,392 | $ | 51,447 | $ | 67,138 | $ | 3,207,696 | ||||||||||||||||||||
Group President | ||||||||||||||||||||||||||||||||||||
Arnold S. Barron(2) | 2009 | $ | 766,442 | — | $ | 147,609 | $ | 515,646 | $ | 1,047,093 | $ | 536,853 | $ | 41,967 | $ | 3,055,610 | ||||||||||||||||||||
Senior Executive | 2008 | $ | 723,558 | — | $ | 800,168 | $ | 597,340 | $ | 934,262 | $ | 439,911 | $ | 43,106 | $ | 3,538,345 | ||||||||||||||||||||
Vice President, Group President | 2007 | $ | 672,673 | — | $ | 451,687 | $ | 768,413 | $ | 728,728 | $ | 325,623 | $ | 41,769 | $ | 2,988,893 | ||||||||||||||||||||
Jeffrey G. Naylor(3) | 2009 | $ | 741,154 | — | $ | 446,765 | $ | 515,646 | $ | 1,036,955 | $ | 68,053 | $ | 52,253 | $ | 2,860,826 | ||||||||||||||||||||
Senior Executive | 2008 | $ | 683,654 | — | $ | 415,001 | $ | 614,183 | $ | 896,171 | $ | 60,863 | $ | 74,886 | $ | 2,744,758 | ||||||||||||||||||||
Vice President, Chief Administrative and Business Development Officer | 2007 | $ | 627,596 | — | $ | 340,098 | $ | 832,594 | $ | 668,120 | $ | 48,684 | $ | 44,957 | $ | 2,562,049 | ||||||||||||||||||||
Nirmal K. Tripathy(3) | 2009 | $ | 654,327 | — | $ | 68,999 | $ | 121,093 | $ | 489,873 | $ | 0 | $ | 137,934 | $ | 1,472,226 | ||||||||||||||||||||
Executive Vice President, | 2008 | $ | 396,635 | $ | 100,000 | $ | 372,609 | $ | 34,917 | $ | 621,047 | $ | 0 | $ | 411,674 | $ | 1,936,882 | |||||||||||||||||||
Chief Financial Officer |
Name and | Fiscal Year | Salary(1) | Bonus | Stock Awards(2) | Option Awards(2) | Non-Equity Incentive Plan Compensation(3) | Change in Pension Value and Nonqualified Deferred Compensation Earnings(4) | All Other Compensation(5) | Total | |||||||||||||||||||||||||||
Carol Meyrowitz(6) | 2012 | $ | 1,320,000 | — | — | $ | 708,954 | $ | 4,309,576 | $ | 4,700,459 | $ | 48,660 | $ | 11,087,649 | |||||||||||||||||||||
Chief Executive | 2011 | $ | 1,575,000 | — | $ | 12,559,150 | $ | 947,524 | $ | 4,127,571 | $ | 3,826,370 | $ | 43,495 | $ | 23,079,110 | ||||||||||||||||||||
2010 | $ | 1,475,000 | — | $ | 7,692,000 | $ | 1,168,840 | $ | 4,409,361 | $ | 2,565,940 | $ | 50,971 | $ | 17,362,112 | |||||||||||||||||||||
Ernie L. Herrman(7) | 2012 | $ | 1,100,000 | — | — | $ | 591,537 | $ | 2,008,860 | $ | 432,987 | $ | 310,681 | $ | 4,444,065 | |||||||||||||||||||||
President | 2011 | $ | 987,021 | — | $ | 4,664,150 | $ | 631,755 | $ | 1,839,085 | $ | 250,167 | $ | 294,210 | $ | 8,666,388 | ||||||||||||||||||||
2010 | $ | 925,000 | — | $ | 772,500 | $ | 779,390 | $ | 1,747,180 | $ | 190,998 | $ | 41,280 | $ | 4,456,348 | |||||||||||||||||||||
Jeffrey G. Naylor(8) | 2012 | $ | 823,078 | — | $ | 1,488,000 | $ | 443,227 | $ | 1,601,933 | $ | 272,302 | $ | 243,994 | $ | 4,872,534 | ||||||||||||||||||||
Senior Executive Vice | 2011 | $ | 773,656 | — | $ | 1,419,200 | $ | 473,925 | $ | 1,506,429 | $ | 178,511 | $ | 239,892 | $ | 4,591,613 | ||||||||||||||||||||
2010 | $ | 740,000 | — | $ | 643,750 | $ | 584,666 | $ | 1,543,680 | $ | 114,886 | $ | 115,375 | $ | 3,742,357 | |||||||||||||||||||||
Jerome Rossi | 2012 | $ | 773,943 | — | $ | 595,200 | $ | 443,227 | $ | 976,558 | $ | 649,987 | $ | 43,473 | $ | 3,482,388 | ||||||||||||||||||||
Senior Executive Vice | 2011 | $ | 730,290 | — | $ | 842,650 | $ | 473,925 | $ | 1,018,251 | $ | 744,267 | $ | 43,559 | $ | 3,852,942 | ||||||||||||||||||||
2010 | $ | 700,000 | — | $ | 309,000 | $ | 584,666 | $ | 1,090,900 | $ | 873,736 | $ | 43,347 | $ | 3,601,649 | |||||||||||||||||||||
Paul Sweetenham(9) | 2012 | $ | 838,864 | — | $ | 1,240,000 | $ | 320,443 | $ | 1,122,305 | — | $ | 1,168,166 | $ | 4,689,778 | |||||||||||||||||||||
Senior Executive Vice | 2011 | $ | 812,035 | — | $ | 1,419,200 | $ | 342,652 | $ | 830,100 | — | $ | 354,696 | $ | 3,758,683 | |||||||||||||||||||||
2010 | $ | 734,349 | — | $ | 515,000 | $ | 350,922 | $ | 969,251 | — | $ | 310,987 | $ | 2,880,509 | ||||||||||||||||||||||
(1) | ||
(2) | Reflects the |
(3) | Reflects |
22
(4) | ||
The table below provides additional details about the amounts listed under All Other Compensation for fiscal 2012. Perquisites and other personal benefits are valued on an aggregate incremental cost basis. All figures shown |
Automobile Benefit | Reimbursement for Financial, Tax Planning and Legal Services | Employer Contributions or Credits Under Savings Plans(a) | Company Paid Amounts for Life Insurance(b) | Paid or Accrued Termination Payments(c) | Total All Other Compensation | |||||||||||||||||||
Carol Meyrowitz | $ | 35,904 | $ | 6,638 | $ | 4,983 | $ | 1,135 | — | $ | 48,660 | |||||||||||||
Ernie L. Herrman | $ | 35,904 | $ | 1,500 | $ | 272,142 | $ | 1,135 | — | $ | 310,681 | |||||||||||||
Jeffrey G. Naylor | $ | 35,904 | $ | 1,500 | $ | 205,455 | $ | 1,135 | — | $ | 243,994 | |||||||||||||
Jerome Rossi | $ | 35,904 | $ | 1,500 | $ | 4,934 | $ | 1,135 | — | $ | 43,473 | |||||||||||||
Paul Sweetenham | $ | 35,434 | $ | 11,184 | $ | 67,109 | $ | 2,035 | $ | 1,052,404 | $ | 1,168,166 |
Company- | ||||||||||||||||
Employer | Paid | |||||||||||||||
Financial | Contributions or | Amounts | ||||||||||||||
Automobile | and Tax | Credits under | for Life | |||||||||||||
Name | Benefit | Planning | Savings Plans(a) | Insurance | ||||||||||||
Carol Meyrowitz | $ | 36,594 | $ | 1,500 | $ | 3,731 | $ | 1,215 | ||||||||
Donald G. Campbell | $ | 36,594 | $ | 1,500 | $ | 3,120 | $ | 1,215 | ||||||||
Ernie L. Herrman | $ | 36,594 | $ | 1,500 | $ | 3,732 | $ | 1,334 | ||||||||
Arnold S. Barron | $ | 35,529 | $ | 1,500 | $ | 3,723 | $ | 1,215 | ||||||||
Jeffrey G. Naylor | $ | 36,594 | $ | 1,500 | $ | 12,944 | $ | 1,215 | ||||||||
Nirmal K. Tripathy(b) | $ | 29,731 | $ | 0 | $ | 2,418 | $ | 1,215 |
(a) |
(b) | Reflects company-paid amounts under our management life insurance program or, for Mr. Herrman, payment in lieu of participation in that program. |
Reflects amounts accrued at the end of fiscal 2012 with respect to Mr. |
(6) | Consistent with SEC reporting rules, Ms. Meyrowitz’s stock awards and total compensation reported above for fiscal 2012 do not include the value of 240,000 shares of performance-based restricted stock with service and performance conditions relating to fiscal 2012 and intended by the ECC as compensation for fiscal 2012 which were granted at the end of fiscal 2011 and reported in the 2011 proxy statement. |
(7) | Mr. Herrman’s stock awards and total compensation for fiscal 2012 do not include his award of 110,000 shares of performance-based restricted stock granted at the end of fiscal 2011 and reported in the 2011 proxy statement. |
(8) | Mr. Naylor served as Senior Executive Vice President, Chief Financial and Administrative Officer through the end of fiscal 2012 and, as of the beginning of fiscal 2013, serves as Senior Executive Vice President, Chief Administrative Officer. |
(9) | Mr. Sweetenham was generally paid in U.K. pounds sterling. The amounts shown in the table are converted from pounds sterling at the average annual exchange rate of $1.5977 per pound for fiscal 2012, $1.5466 per pound for fiscal 2011 and $1.5895 per pound for fiscal 2010. The equity awards granted Mr. Sweetenham during fiscal 2012 were forfeited in connection with his |
Total compensation for our named executive officers is composedconsists of base salary, short-term and long-term cash incentives, long-term equity-basedequity incentives, retirement and deferred compensation benefits and limited perquisites. During fiscal 2009, each of our named executive officers had an employment agreement that provided for a base salary of not less than the amount of such officer’s base salaryMr. Sweetenham also received termination-related payments in connection with his departure, as of the effective date of the employment agreement.further described below. Our named executive officers were entitled under their employment agreements to participationparticipate in our SIP, MIP and LRPIP and received cash and equity incentives only pursuant to our MIP or LRPIPthese plans during fiscal 20092012. Ms. Meyrowitz’s agreement provides for target awards during the term of the agreement of at least 150% of her base salary for MIP and in the caseat least 100% of Mr. Tripathy, the payment made in connectionher base salary for LRPIP and for an automobile allowance commensurate with his separation. Our named executive officers other than Mr. Tripathy also participated in our tax-qualified defined benefit plan; her position.
Ms. Meyrowitz Mr. Campbell and Mr. BarronRossi participated in our primary SERP benefit and Mr. Herrman and Mr. Naylor participated in our alternative SERP benefit. All of our U.S. named executive officers participated in our tax-qualified defined benefit plan and were eligible to make deferrals to our 401(k) plan and our ESP, although onlyESP. Mr. Naylor and Mr. Herrman and Mr. Tripathy were eligible forreceived matching contributionscredits under the ESP during all or part of fiscal 2012. Mr. Sweetenham, as a resident of the U.K., participated in a retirement plan for U.K. Associates under which they may defer salary and of thesebonus and receive an employer match. Our named executive officers only Mr. Naylor electedwere entitled to make deferrals to the ESP during fiscal 2009. The employment agreements of our named executive officers entitled them toreceive an automobile benefit and participationto participate in employee benefit and fringe benefit plans and programs made available to executives generally. For our executives, all other compensation items including perquisites comprise a small portion of overall total compensation.
23
The following table reports potential payouts under our cash incentive plans and all other stock and option awards that were granted during fiscal 20092012 to our named executive officers.
All Other | All Other | |||||||||||||||||||||||||||||||||||||||||||
Stock | Option | |||||||||||||||||||||||||||||||||||||||||||
Awards: | Awards: | Grant Date | ||||||||||||||||||||||||||||||||||||||||||
Estimated Future Payouts | Estimated Future Payouts | Number of | Number of | Exercise or | Fair Value | |||||||||||||||||||||||||||||||||||||||
Under Non-Equity Incentive | Under Equity Incentive | Shares of | Securities | Base Price | of Stock | |||||||||||||||||||||||||||||||||||||||
Name and | Grant | Plan Awards ($) | Plan Awards (# of Shares) | Stock or | Underlying | of Option | and Option | |||||||||||||||||||||||||||||||||||||
Award Type | Date | Threshold | Target | Maximum | Threshold | Target | Maximum | Units | Options | Awards(1) | Awards(2) | |||||||||||||||||||||||||||||||||
Carol Meyrowitz | ||||||||||||||||||||||||||||||||||||||||||||
MIP(3) | 04/01/08 | — | $ | 1,503,366 | $ | 3,006,732 | ||||||||||||||||||||||||||||||||||||||
LRPIP(4) | 04/01/08 | — | $ | 1,400,000 | $ | 2,100,000 | ||||||||||||||||||||||||||||||||||||||
Stock Options | 09/08/08 | 102,630 | 102,630 | 102,630 | — | $ | 35.03 | $ | 1,073,510 | |||||||||||||||||||||||||||||||||||
Stock Awards | 04/01/08 | — | 25,000 | 25,000 | — | $ | 851,000 | |||||||||||||||||||||||||||||||||||||
02/02/08 | — | 35,000 | 35,000 | — | $ | 1,123,500 | ||||||||||||||||||||||||||||||||||||||
Donald G. Campbell | ||||||||||||||||||||||||||||||||||||||||||||
MIP(3)(5) | 04/01/08 | — | $ | 335,437 | $ | 670,873 | ||||||||||||||||||||||||||||||||||||||
LRPIP(4)(5) | 04/01/08 | — | $ | 351,000 | $ | 526,500 | ||||||||||||||||||||||||||||||||||||||
Stock Options | 09/08/08 | 68,430 | 68,430 | 68,430 | — | $ | 35.03 | $ | 715,778 | |||||||||||||||||||||||||||||||||||
Ernie L. Herrman | ||||||||||||||||||||||||||||||||||||||||||||
MIP(3) | 04/01/08 | — | $ | 493,361 | $ | 986,722 | ||||||||||||||||||||||||||||||||||||||
LRPIP(4) | 04/01/08 | — | $ | 700,000 | $ | 1,050,000 | ||||||||||||||||||||||||||||||||||||||
Stock Options | 09/08/08 | 68,430 | 68,430 | 68,430 | — | $ | 35.03 | $ | 715,778 | |||||||||||||||||||||||||||||||||||
Stock Awards | 04/01/08 | — | 12,188 | 12,188 | — | $ | 414,880 | |||||||||||||||||||||||||||||||||||||
Arnold S. Barron | ||||||||||||||||||||||||||||||||||||||||||||
MIP(3) | 04/01/08 | $ | 421,543 | $ | 843,086 | |||||||||||||||||||||||||||||||||||||||
LRPIP(4) | 04/01/08 | — | $ | 700,000 | $ | 1,050,000 | ||||||||||||||||||||||||||||||||||||||
Stock Options | 09/08/08 | — | 51,330 | 51,330 | 51,330 | — | $ | 35.03 | $ | 536,912 | ||||||||||||||||||||||||||||||||||
Jeffrey G. Naylor | ||||||||||||||||||||||||||||||||||||||||||||
MIP(3) | 04/01/08 | — | $ | 407,635 | $ | 815,270 | ||||||||||||||||||||||||||||||||||||||
LRPIP(4) | 04/01/08 | — | $ | 700,000 | $ | 1,050,000 | ||||||||||||||||||||||||||||||||||||||
Stock Options | 09/08/08 | 51,330 | 51,330 | 51,330 | — | $ | 35.03 | $ | 536,912 | |||||||||||||||||||||||||||||||||||
Stock Awards | 04/01/08 | — | 12,188 | 12,188 | — | $ | 414,880 | |||||||||||||||||||||||||||||||||||||
Nirmal K. Tripathy | ||||||||||||||||||||||||||||||||||||||||||||
MIP(3) | 04/01/08 | — | $ | 294,447 | $ | 588,894 | ||||||||||||||||||||||||||||||||||||||
LRPIP(4) | 04/01/08 | — | $ | 300,000 | $ | 450,000 | ||||||||||||||||||||||||||||||||||||||
Stock Options | 09/08/08 | 25,670 | 25,670 | 25,670 | — | $ | 35.03 | $ | 268,508 | |||||||||||||||||||||||||||||||||||
Stock Awards | 04/01/08 | — | 7,800 | 7,800 | — | $ | 265,512 |
Name and Award Type | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($) | Estimated Future Payouts Under Equity Incentive Plan Awards (#) | All Other Stock Awards: Number of Shares of Stock or Units | All Other Option Awards: Number of Securities Underlying Options | Exercise or Base Price of Options Awards(1) | Grant Date Fair Value of Stock and Option Awards(2) | |||||||||||||||||||||||||||||||||||||
Threshold | Target | Maximum | Threshold | Target | Maximum | |||||||||||||||||||||||||||||||||||||||
Carol Meyrowitz | ||||||||||||||||||||||||||||||||||||||||||||
MIP(3) | — | $ | 1,980,000 | $ | 3,960,000 | |||||||||||||||||||||||||||||||||||||||
LRPIP(4) | — | $ | 1,320,000 | $ | 1,980,000 | |||||||||||||||||||||||||||||||||||||||
Stock Options | 09/07/11 | 108,320 | $ | 26.555 | $ | 708,954 | ||||||||||||||||||||||||||||||||||||||
Stock Awards(5) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Ernie L. Herrman | ||||||||||||||||||||||||||||||||||||||||||||
MIP(3) | — | $ | 880,000 | $ | 1,760,000 | |||||||||||||||||||||||||||||||||||||||
LRPIP(4) | — | $ | 1,100,000 | $ | 1,650,000 | |||||||||||||||||||||||||||||||||||||||
Stock Options | 09/07/11 | 90,380 | $ | 26.555 | $ | 591,537 | ||||||||||||||||||||||||||||||||||||||
Stock Awards(5) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
Jeffrey G. Naylor | ||||||||||||||||||||||||||||||||||||||||||||
MIP(3) | — | $ | 535,000 | $ | 1,070,000 | |||||||||||||||||||||||||||||||||||||||
LRPIP(4) | — | $ | 700,000 | $ | 1,050,000 | |||||||||||||||||||||||||||||||||||||||
Stock Options | 09/07/11 | 67,720 | $ | 26.555 | $ | 443,227 | ||||||||||||||||||||||||||||||||||||||
Stock Awards | 04/04/11 | 0 | 60,000 | 60,000 | — | $ | 1,488,000 | |||||||||||||||||||||||||||||||||||||
Jerome Rossi | ||||||||||||||||||||||||||||||||||||||||||||
MIP(3) | — | $ | 386,970 | $ | 773,940 | |||||||||||||||||||||||||||||||||||||||
LRPIP(4) | — | $ | 375,000 | $ | 562,500 | |||||||||||||||||||||||||||||||||||||||
Stock Options | 09/07/11 | — | 67,720 | $ | 26.555 | $ | 443,227 | |||||||||||||||||||||||||||||||||||||
Stock Awards | 04/04/11 | 0 | 24,000 | 24,000 | $ | 595,200 | ||||||||||||||||||||||||||||||||||||||
Paul Sweetenham | ||||||||||||||||||||||||||||||||||||||||||||
MIP(3) | — | $ | 461,375 | $ | 922,750 | |||||||||||||||||||||||||||||||||||||||
LRPIP(4) | — | $ | 700,000 | $ | 1,050,000 | |||||||||||||||||||||||||||||||||||||||
Stock Options | 09/07/11 | 48,960 | $ | 26.555 | $ | 320,443 | ||||||||||||||||||||||||||||||||||||||
Stock Awards | 04/04/11 | 0 | 50,000 | 50,000 | — | $ | 1,240,000 |
(1) | All option awards were granted with an exercise price equal to the closing price on the New York Stock Exchange on the date of grant. | |
(2) | Reflects the aggregate fair market value of stock and | |
(3) | Reflects | |
(4) | Reflects award opportunities |
(5) | Ms. Meyrowitz and Mr. | |
Non-Equity Incentive Plan amounts above reflect short-term cash incentive compensation. Short-term cash incentives are granted under our MIP and long-term cash incentives are granted under our LRPIP. AsOur MIP and LRPIP are discussed above in “Compensation Discussion and Analysis,Analysis.” MIP awards are based on actual performance against targets for aggregate adjusted pre-tax income for our divisions for the fiscal year set by the ECC. The target award for each named executive officer is set as a percentage of base salary; if our performance meets the targeted performance, the named executive officer receives his or her target award. If our performance exceeds the targeted performance, the named executive officer can earn
24
The restricted stock grantsawards have both service-based and performance-based vesting conditions, except that awards fully vest upon a change of control and for Ms. Meyrowitz in the event of certain early terminations of employment.control. Forperformance-based restricted stock granted to our named executive officers in fiscal 2009,2012, the service-based conditions are satisfied by three years of continuous employment (one yearthrough the scheduled vesting date (or, for Ms. Meyrowitz)Mr. Naylor, through the end of fiscal 2013), and the performance-based conditions are tied to the corporate performance target under our MIP,LRPIP for the fiscal 2012-2014 cycle, with full vesting subject to achievement of a payout of at least 67% of the target payout under LRPIP for the cycle. If the LRPIP payout is less than 67% for the cycle, a prorated portion of the unvested award will be forfeited. If no LRPIP payout is achieved for the cycle, the entire unvested award will be forfeited. When a participant’s shares of restricted stock vest, the participant is entitled to any dividends paid on the shares while they were restricted.
After the close of fiscal 2012, the ECC modified the service-based condition applicable to Mr. Rossi’s award in connection with his new employment agreement. As modified, the caseservice-based condition would be satisfied by Mr. Rossi’s continued employment through fiscal 2014 (to correspond with the term of Ms. Meyrowitz,his new agreement), with any additional service condition waived, and our LRPIP, inhe would be entitled to the case of Mr. Naylor, Mr. Herrman and Mr. Tripathy. Our fiscal 2009 grants of equity and non-equity incentive plan compensation reflect our general approachaward to long-term compensation, with long-term cash incentive awards making up a larger share of our named executive officers’ total compensation relative to stock option incentives.
25the extent the original performance-based conditions are met.
The following table provides information on outstanding option and stock awards for named executive officersheld as of January 31, 2009:
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Equity | Equity | |||||||||||||||||||||||||||||||||||
Incentive | Incentive | |||||||||||||||||||||||||||||||||||
Equity Incentive | Market | Plan Awards: | Plan Awards: | |||||||||||||||||||||||||||||||||
Plan Awards: | Number of | Value of | Number of | Market or | ||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Shares or | Shares or | Unearned | Payout Value | ||||||||||||||||||||||||||||||
Securities | Securities | Securities | Units of | Units of | Shares, | of Unearned | ||||||||||||||||||||||||||||||
Underlying | Underlying | Underlying | Stock That | Stock That | Units or | Shares, Units or | ||||||||||||||||||||||||||||||
Unexercised | Unexercised | Unexercised | Option | Option | Have Not | Have Not | Other Rights | Other Rights | ||||||||||||||||||||||||||||
Options | Options | Unearned | Exercise | Expiration | Vested | Vested | That Have | That Have | ||||||||||||||||||||||||||||
Name | Exercisable(1) | Unexercisable(1) | Options | Price | Date | (2),(4) | (2),(3) | Not Vested(4) | Not Vested(3) | |||||||||||||||||||||||||||
Carol Meyrowitz | 85,000 | 42,500 | 0 | $ | 27.0000 | 09/06/16 | 160,000 | $ | 3,107,200 | |||||||||||||||||||||||||||
40,000 | 80,000 | $ | 29.2300 | 09/10/17 | ||||||||||||||||||||||||||||||||
— | 102,630 | $ | 35.0300 | 09/08/18 | ||||||||||||||||||||||||||||||||
Donald G. Campbell | 24,800 | — | 0 | $ | 19.8500 | 09/04/12 | 20,000 | $ | 388,400 | |||||||||||||||||||||||||||
225,000 | — | $ | 20.1400 | 09/09/13 | ||||||||||||||||||||||||||||||||
150,000 | — | $ | 21.7500 | 09/08/14 | ||||||||||||||||||||||||||||||||
75,000 | — | $ | 21.4300 | 09/07/15 | ||||||||||||||||||||||||||||||||
56,667 | 28,333 | $ | 27.0000 | 09/06/16 | ||||||||||||||||||||||||||||||||
26,667 | 53,333 | $ | 29.2300 | 09/10/17 | ||||||||||||||||||||||||||||||||
— | 68,430 | $ | 35.0300 | 09/08/18 | ||||||||||||||||||||||||||||||||
Ernie L. Herrman | 40,000 | — | 0 | $ | 20.1400 | 09/09/13 | 15,938 | $ | 309,516 | 28,126 | $ | 546,207 | ||||||||||||||||||||||||
137,500 | — | $ | 21.7500 | 09/08/14 | ||||||||||||||||||||||||||||||||
75,000 | — | $ | 21.4300 | 09/07/15 | ||||||||||||||||||||||||||||||||
42,500 | 21,250 | $ | 27.0000 | 09/06/16 | ||||||||||||||||||||||||||||||||
20,000 | 40,000 | $ | 29.2300 | 09/10/17 | ||||||||||||||||||||||||||||||||
— | 68,430 | $ | 35.0300 | 09/08/18 | ||||||||||||||||||||||||||||||||
Arnold S. Barron | 97,500 | — | 0 | $ | 21.7500 | 01/31/14 | 15,938 | $ | 309,516 | 15,938 | $ | 309,516 | ||||||||||||||||||||||||
75,000 | — | $ | 21.4300 | 01/31/14 | ||||||||||||||||||||||||||||||||
42,500 | 21,250 | $ | 27.0000 | 01/31/14 | ||||||||||||||||||||||||||||||||
20,000 | 40,000 | $ | 29.2300 | 01/31/14 | ||||||||||||||||||||||||||||||||
— | 51,330 | $ | 35.0300 | 01/31/14 | ||||||||||||||||||||||||||||||||
Jeffrey G. Naylor | 75,000 | — | 0 | $ | 22.8200 | 02/02/14 | 15,938 | $ | 309,516 | 28,126 | $ | 546,207 | ||||||||||||||||||||||||
150,000 | — | $ | 21.7500 | 09/08/14 | ||||||||||||||||||||||||||||||||
75,000 | — | $ | 21.4300 | 09/07/15 | ||||||||||||||||||||||||||||||||
42,500 | 21,250 | $ | 27.0000 | 09/06/16 | ||||||||||||||||||||||||||||||||
20,000 | 40,000 | $ | 29.2300 | 09/10/17 | ||||||||||||||||||||||||||||||||
— | 51,330 | $ | 35.0300 | 09/08/18 | ||||||||||||||||||||||||||||||||
Nirmal K. Tripathy | 10,000 | 20,000 | 0 | $ | 29.2300 | 07/31/09 | 16,667 | $ | 323,673 | 18,000 | $ | 349,560 | ||||||||||||||||||||||||
— | 25,670 | $ | 35.0300 | 07/31/09 |
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options Exercisable(1) | Number of Securities Underlying Unexercised Options Unexercisable(1) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested(3) | Market Value of Shares or Units of Stock That Have Not Vested(2)(3) | Equity Incentive Plan Awards: | ||||||||||||||||||||||||||||
Number of Unearned Shares, Units or Other Rights That Have Not Vested(3) | Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(2)(3) | |||||||||||||||||||||||||||||||||||
Carol Meyrowitz | 127,014 | 63,506 | — | $ | 18.870 | 09/17/19 | ||||||||||||||||||||||||||||||
58,274 | 116,546 | $ | 20.565 | 09/09/20 | ||||||||||||||||||||||||||||||||
0 | 108,320 | $ | 26.555 | 09/07/21 | ||||||||||||||||||||||||||||||||
240,000 | $ | 8,084,400 | 240,000 | $ | 8,084,400 | |||||||||||||||||||||||||||||||
Ernie L. Herrman | 60,000 | 0 | — | $ | 14.615 | 09/10/17 | ||||||||||||||||||||||||||||||
136,860 | 0 | $ | 17.515 | 09/08/18 | ||||||||||||||||||||||||||||||||
84,694 | 42,346 | $ | 18.870 | 09/17/19 | ||||||||||||||||||||||||||||||||
38,854 | 77,706 | $ | 20.565 | 09/09/20 | ||||||||||||||||||||||||||||||||
0 | 90,380 | $ | 26.555 | 09/07/21 | ||||||||||||||||||||||||||||||||
60,000 | $ | 2,021,100 | 180,000 | $ | 6,063,300 | |||||||||||||||||||||||||||||||
Jeffrey G. Naylor | 0 | 31,766 | — | $ | 18.870 | 09/17/19 | ||||||||||||||||||||||||||||||
0 | 58,292 | $ | 20.565 | 09/09/20 | ||||||||||||||||||||||||||||||||
0 | 67,720 | $ | 26.555 | 09/07/21 | ||||||||||||||||||||||||||||||||
50,000 | $ | 1,684,250 | 110,000 | $ | 3,705,350 | |||||||||||||||||||||||||||||||
Jerome Rossi | 0 | 31,766 | — | $ | 18.870 | 09/17/19 | ||||||||||||||||||||||||||||||
29,148 | 58,292 | $ | 20.565 | 09/09/20 | ||||||||||||||||||||||||||||||||
0 | 67,720 | $ | 26.555 | 09/07/21 | ||||||||||||||||||||||||||||||||
24,000 | $ | 808,440 | 48,000 | $ | 1,616,880 | |||||||||||||||||||||||||||||||
Paul Sweetenham(4) | 0 | 19,066 | — | $ | 18.870 | 09/17/19 | ||||||||||||||||||||||||||||||
0 | 42,144 | $ | 20.565 | 09/09/20 | ||||||||||||||||||||||||||||||||
0 | 48,960 | $ | 26.555 | 09/07/21 | ||||||||||||||||||||||||||||||||
40,000 | $ | 1,347,400 | 100,000 | $ | 3,368,500 |
(1) | All option awards have a ten-year maximum term and vest in equal annual installments over three years, beginning on the first anniversary of the grant date, and upon a change of control and certain employment terminations. | |
(2) | ||
Market values reflect the closing price of our common stock on the New York Stock Exchange on January |
26
(3) | The following table shows the scheduled vesting dates for |
Name | Number of Unvested Shares | Vesting Date(a) | ||||
Carol Meyrowitz | 240,000 | 03/6/2012 | ||||
240,000 | 03/2013(b) | |||||
Ernie L. Herrman | 60,000 | 09/06/12 | ||||
70,000 | 09/06/13 | |||||
110,000 | 09/06/14 | |||||
Jeffrey G. Naylor | 50,000 | 04/15/12 | ||||
50,000 | 04/15/13 | |||||
60,000 | 03/2014(b)(c) | |||||
Jerome Rossi | 24,000 | 09/06/12 | ||||
24,000 | 09/06/13 | |||||
24,000 | 03/2014(b)(d) |
(a) | The restricted stock awards have both service-based and performance-based vesting conditions, except that awards fully vest upon a change of control and, for Ms. Meyrowitz, in the event of her death or disability. Each of Ms. Meyrowitz’s stock awards has performance-based vesting conditions that will be satisfied if MIP performance, as certified by the ECC, for the fiscal year immediately preceding the vesting date results in a payout of at least 67% of the corporate MIP target award payout and service-based vesting conditions that will be satisfied by continued employment through the end of such fiscal year or earlier involuntary termination. Each other stock award shown above has performance-based vesting conditions that will be satisfied if LRPIP performance, as certified by the ECC, for the cycle most recently completed prior to the vesting date results in a payout of at least 67% of the LRPIP target award payout and service-based vesting conditions that will be satisfied by continued employment through the vesting date (except as described below for certain awards held by Mr. |
(b) | Expected date of ECC certification of applicable performance results. |
(c) | Service-based vesting condition will be satisfied by continued employment through fiscal 2013. In addition to the service- and performance-based vesting conditions, Mr. Naylor’s right to receive and retain the value of the award is subject to his compliance with non-competition, non-solicitation and related restrictions through the end of the two year period following the vesting date (in addition to the restrictions set forth in Mr. Naylor’s employment agreement). |
(d) | Service-based vesting condition will be satisfied by continued employment through fiscal 2014, as modified by the ECC following the close of fiscal 2012 in connection with Mr. Rossi’s new employment agreement. Prior to the modification, the service-based vesting condition would have been satisfied by continued employment through September 6, 2014. |
(4) | Mr. Sweetenham’s unvested options and restricted stock awards were forfeited upon his |
The following table provides information relating to option exercises and stock award vesting of performance-based restricted stock for our named executive officers during fiscal 2009:
Option Awards | Stock Awards | |||||||||||||||
Number of | Number of | |||||||||||||||
Shares | Value | Shares | Value | |||||||||||||
Acquired | Realized | Acquired | Realized | |||||||||||||
Name | on Exercise | on Exercise(1) | on Vesting | on Vesting(2) | ||||||||||||
Carol Meyrowitz | 225,000 | $ | 2,490,750 | 142,500 | $ | 4,850,700 | ||||||||||
Donald G. Campbell | 100,200 | $ | 1,261,370 | 43,750 | $ | 1,426,438 | ||||||||||
Ernie L. Herrman | 126,800 | $ | 1,718,450 | 18,750 | $ | 638,813 | ||||||||||
Arnold S. Barron | 123,333 | $ | 1,639,236 | 18,750 | $ | 638,813 | ||||||||||
Jeffrey G. Naylor | 0 | $ | 0 | 18,750 | $ | 575,438 | ||||||||||
Nirmal K. Tripathy | 0 | $ | 0 | 8,333 | $ | 255,740 |
Option Awards | Stock Awards | |||||||||||||||
Name | Number of Shares Acquired on Exercise | Value Realized on Exercise(1) | Number of Shares Acquired on Vesting | Value Realized on Vesting(2) | ||||||||||||
Carol Meyrowitz | 136,840 | $ | 2,086,228 | 350,000 | $ | 8,914,500 | ||||||||||
Ernie L. Herrman | 287,500 | $ | 4,196,709 | 46,376 | $ | 1,195,213 | ||||||||||
Jeffrey G. Naylor | 315,342 | $ | 3,543,549 | 38,376 | $ | 983,287 | ||||||||||
Jerome Rossi | 324,320 | $ | 3,811,848 | 29,600 | $ | 762,882 | ||||||||||
Paul Sweetenham | 184,830 | $ | 1,625,492 | 32,200 | $ | 830,599 |
(1) | Represents the stock price on the New York Stock Exchange on exercise date minus the option exercise price multiplied by the number of shares acquired on exercise. | |
(2) | Represents the fair market value of the shares on the vesting date, calculated as the stock price on the New York Stock Exchange on vesting |
In the U.S., we have a tax-qualified defined benefit plan, or Retirement Plan, and a non-qualifiednonqualified Supplemental Executive Retirement Plan, or SERP. We do not have a policy of granting extra years of credited service for purposes of these plans. Our Retirement Plan was closed to new participants as of February 1, 2006, although participants employed prior to that date continue to accrue benefits. Consistent with industry practices, weWe have not offered primary SERP benefits to any new participants in a number ofmany years and do not currently intend to do so in the future, although we continue to offer an alternative SERP benefit.
Under our Retirement Plan, participants accrue a benefit payable as an annuity at retirement or, if vested, onfollowing an earlier termination of employment. The amount accrued each year onceOnce participation commences after an initial one-year eligibility period, the amount accrued each year, expressed as a life annuity payable commencing at age 65, is 1% of eligible compensation (base salary and MIP awards) up to a periodically adjusted limit ($86,00099,000 in calendar
27
Under our SERP, the primary benefit provides participants who retire at or after age 55 with at least ten years of service a benefit equal to the value of an annuity commencing at age 65 providing annual payments up to a maximum of 50% of the participant’s final average earnings, less other employer-provided retirement benefits and social security benefits. This benefit, before offsets, accrues at the rate of 2.5% of final average earnings for each year of service not in excess of 20.20 until age 65. In view of his continued service beyond age 65, Mr. Rossi is entitled to additional retirement benefit accruals based on his earnings and service after age 65 if more favorable than his primary benefit under existing SERP terms. Under her employment agreement, Ms. Meyrowitz is entitled to specified interest rate assumptions if more favorable than her primary benefit under existing SERP terms. In determining final average earnings, the primary SERP includes base salary and MIP, but not LRPIP, and uses the highest average of five years over the preceding ten years. The alternative benefit provides participants whose Retirement Plan benefits are affected by Internal Revenue Code benefit restrictions
with the amount of the benefits lost by reason of those restrictions. Participants who are eligible for the primary benefit are eligible to receive the alternative benefit in lieu of the primary benefit if it provides a greater benefit at the time of retirement or other termination of employment. Benefits under SERP benefit isare payable in installments, or in certain other forms of actuarially equivalent value. The alternative benefit provides participants whose regular pension benefits are affected by Internal Revenue Service benefit restrictions with the amount of the benefits lost by reason of those restrictions.
Pension Benefits for Fiscal 2012
The following table provides information on pension benefits for our named executive officers eligible for these benefits as of January 31, 2009:
Number of | Present | |||||||||||||
Years | Value of | Payments | ||||||||||||
Credited | Accumulated | During Last | ||||||||||||
Name | Plan Name | Service(1) | Benefit(3) | Fiscal Year | ||||||||||
Carol Meyrowitz | Retirement Plan | 22 | $ | 253,781 | — | |||||||||
SERP | 20 | $ | 6,050,443 | — | ||||||||||
Donald G. Campbell | Retirement Plan | 34 | $ | 408,752 | — | |||||||||
SERP | 20 | $ | 3,133,886 | — | ||||||||||
Ernie L. Herrman | Retirement Plan | 18 | $ | 137,922 | — | |||||||||
SERP(2) | 18 | $ | 284,662 | — | ||||||||||
Arnold S. Barron | Retirement Plan | 28 | $ | 528,137 | — | |||||||||
SERP | 20 | $ | 3,446,162 | — | ||||||||||
Jeffrey G. Naylor | Retirement Plan | 4 | $ | 45,509 | — | |||||||||
SERP(2) | 4 | $ | 148,068 | — |
Name | Plan Name(1) | Number of Years of Credited Service | Present Value of Accumulated Benefit(2) | Payments Made During Last Fiscal Year | ||||||||||
Carol Meyrowitz(3) | Retirement Plan | 25 | $ | 480,870 | — | |||||||||
SERP (Primary) | 20 | $ | 16,916,123 | — | ||||||||||
Ernie L. Herrman(3) | Retirement Plan | 21 | $ | 314,605 | — | |||||||||
SERP (Alternative) | 21 | $ | 982,131 | — | ||||||||||
Jeffrey G. Naylor(3) | Retirement Plan | 7 | $ | 157,725 | — | |||||||||
SERP (Alternative) | 7 | $ | 601,551 | — | ||||||||||
Jerome Rossi(3) | Retirement Plan | 15 | $ | 415,578 | — | |||||||||
SERP (Primary) | 20 | $ | 5,569,319 | — |
(1) | Participants in our Retirement Plan and our alternative SERP benefit program begin to accrue credited service after one year of service with TJX. Participants under our primary SERP benefit began to accrue credited service immediately and are eligible to be credited with a maximum of 20 years of service. | |
(2) | ||
The underlying valuation methodology and other material assumptions utilized in calculating the present value of the accumulated pension benefits are disclosed in Note |
(3) | Ms. Meyrowitz, Mr. Naylor, Mr. Herrman and Mr. Rossi are fully vested in their Retirement Plan and SERP benefits. For purposes of SERP, Mr. Rossi receives credit for his years of service with Marshalls prior to its acquisition by TJX. Instead of these plans, Mr. Sweetenham participated in our U.K. retirement plan, which is not included above because it is a defined contribution plan. |
We have an Executive Savings Plan, or ESP, which is a nonqualified deferred compensation plan available to key employees. Under the ESP, our U.S. named executive officers and other eligible employeesAssociates can elect to defer up to 20% of base salary and up to 100% of any MIP and LRPIP awards, our directors can elect to defer retainers and meeting fees, and employeesfees. Our U.S. named executive officers not eligible for primary SERP benefits (currently Mr. Herrman and Mr. Naylor) are eligible to receive matching credits.credits on base salary deferrals of up to 10% of base salary, with an enhanced level of matching credits for a period of up to 15 years. For participants atcalendar 2011, the Vice President level or higher, wepotential match 25%for Mr. Herrman and Mr. Naylor was 100% of their eligible deferrals, plus, if our MIP performance resulted in a payout of between 90% and 125% of the first 10%target corporate award opportunities for fiscal 2012, an additional match ranging from 50% to 150% of their deferred base salary if we meet our annualeligible deferrals. Mr. Herrman and Mr. Naylor earned this additional performance-based match at 142.5% based on fiscal 2012 MIP performance target (and up to a 50% match if those performance targets are exceeded). If we do not meet the target, participants receive only a 10% matching credit (or, after the attainment of age 50, up to a 25% matching credit). Because the required performance
28
Under the ESP, amounts deferred are generally distributed uponfollowing termination of employment unless the participant has irrevocably elected an earlier distribution date, which may be no earlier than January 1st of the second year following the year of the deferral. Vested employer matching credits are distributed before age 55 upon death disability or separation from service due to disability, at age 55 if a participant has separated for any other reason, or upon a separation from service after attaining age 55. Distributions are generally made in a lump sum payment; however, a participant may irrevocably elect to be paid in annual installments over a period of not more than ten years in the event that theirhis or her employment terminates after age 55. Amounts vested under the ESP prior to January 1, 2005 (and earnings on those amounts) can be distributed at the participant’s request prior to termination of employment in a lump sum distribution of 85% of the vested account, with the remaining 15% forfeited.
Through December 31, 2007, we offered eligible employees includingAssociates (including our U.S. named executive officersofficers) and directors the opportunity to participate in the General Deferred Compensation Plan, or GDCP, another nonqualified deferred compensation plan. Under the GDCP, participants could defer all or a portion of base salary and MIP and LRPIP awards and, in the case of directors, retainers and meeting fees, and bewhich deferrals are credited amounts on deferralswith notional interest at an annually adjusted rate based on a rate foran average yield of Treasury securities that is adjusted annually.during the prior year. For calendar 2008,2011, this rate was 4.58%3.13%. No further deferrals were permitted beginning with fiscal 2009 compensation, but previously deferred amounts continue to be credited with notional interest amounts. GDCP participants who receive a benefit under our Retirement Plan may be eligible to receive a retirement equalization benefit to compensate for the deferral of income. A participant who is already eligible to receive an equalization benefit of the same value under the SERP is not eligible for this benefit.
Amounts deferred under the GDCP on or after January 1, 2005 (and earnings on those amounts) that had not been distributed prior to January 1, 2009 are distributed under the terms of the ESP, as described above. Amounts deferred under the GDCP prior to January 1, 2005 (and earnings on those amounts credited prior to that date) are distributed in a lump sum at termination of service or upon an event or at a date (no later than the tenth anniversary of termination of service) and in a lump sum or in monthly installments as elected by the participant. Upon a change of control, each participant receives the entire amount credited to his deferred account along with the present value of any retirement equalization benefit in a lump sum payment.
29
Executive | Registrant | Aggregate | Aggregate | Aggregate | ||||||||||||||||||||
Name and | Deferrals in | Matching Credits | Earnings in | Withdrawals/ | Balance at | |||||||||||||||||||
Plan Name | Last FY(1) | in Last FY | Last FY(3) | Distributions | Last FYE(4) | |||||||||||||||||||
Carol Meyrowitz | ||||||||||||||||||||||||
GDCP | $ | 0 | $ | 0 | $ | 20,779 | $ | 0 | $ | 523,437 | ||||||||||||||
ESP | $ | 292,115 | $ | 0 | $ | 2,803 | $ | 0 | $ | 294,919 | ||||||||||||||
Donald G. Campbell | ||||||||||||||||||||||||
GDCP | $ | 0 | $ | 0 | $ | 6,560 | $ | 0 | $ | 165,258 | ||||||||||||||
ESP | $ | 118,293 | $ | 0 | $ | (306,741 | ) | $ | 0 | $ | 1,914,856 | |||||||||||||
Ernie L. Herrman | ||||||||||||||||||||||||
GDCP | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
ESP | $ | 0 | $ | 0 | $ | 1,755 | $ | 0 | $ | 489,562 | ||||||||||||||
Arnold S. Barron | ||||||||||||||||||||||||
GDCP | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
ESP | $ | 138,576 | $ | 0 | $ | (446,163 | ) | $ | 715,988 | |||||||||||||||
Jeffrey G. Naylor | ||||||||||||||||||||||||
GDCP | $ | 0 | $ | 0 | $ | 4,965 | $ | 0 | $ | 125,086 | ||||||||||||||
ESP | $ | 145,230 | $ | 9,396 | (2) | $ | (158,652 | ) | $ | 0 | $ | 286,448 |
Name and Plan Name | Executive Contributions in Last FY(1) | Registrant Contributions in Last FY(2) | Aggregate Earnings in Last FY(3) | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last FYE(4) | |||||||||||||||
Carol Meyrowitz | ||||||||||||||||||||
GDCP | $ | 0 | $ | 0 | $ | 17,856 | $ | 0 | $ | 577,260 | ||||||||||
ESP | $ | 271,039 | $ | 0 | $ | 18,470 | $ | 0 | $ | 1,310,881 | ||||||||||
Ernie L. Herrman | ||||||||||||||||||||
GDCP | — | — | — | — | — | |||||||||||||||
ESP | $ | 111,731 | $ | 267,155 | $ | 88,578 | $ | 0 | $ | 1,400,692 | ||||||||||
Jeffrey G. Naylor | ||||||||||||||||||||
GDCP | $ | 0 | $ | 0 | $ | 4,267 | $ | 0 | $ | 137,949 | ||||||||||
ESP | $ | 167,500 | $ | 200,524 | $ | (30,195 | ) | $ | 0 | $ | 1,517,294 | |||||||||
Jerome Rossi | ||||||||||||||||||||
GDCP | $ | 0 | $ | 0 | $ | 36,555 | $ | 0 | $ | 1,216,057 | ||||||||||
ESP | — | — | — | — | — |
(1) | Also included as Salary or Non-Equity Incentive Plan Compensation, as applicable, in the Summary Compensation Table. | |
(2) | ||
(3) | Reflects notional market-based earnings on deferrals and other amounts | |
(4) | The aggregate balance includes |
We believe that providing severance and change of control benefits helps us attract and retain high quality executives and protect our other business interests, as discussed further in “Compensation Discussion and Analysis.”
Potential Payments under our Employment and Severance Agreements.Each of our named executive officers duringin fiscal 20092012 was a party to an employment agreement providing for payments in connection with such officer’sthe specified termination or a change of control. Under these agreements, a qualifying termination entitled the executive to salary continuation for a period from twelve to eighteen months plus payments to defray the cost of continued health care coverage and the continuation of an automobile benefit.control events generally described below. In addition, the executive would be entitled to prorated MIP (and/or a full MIP in the case of death or disability) and prorated LRPIP awards based in each case on target award level, plus other amounts (including amounts payable under our other employee benefit plans) that had been earned prior to termination but were unpaid. Termination for cause or a voluntary termination (other than in connection with a forced relocation) would not entitle the executive to these benefits, other than to the payment of certain already accrued and vested amounts. In addition, upon an involuntary termination without cause, or death or disability, Ms. Meyrowitz and Mr. Campbell would have been fully vested in outstanding stock options and would have been relieved of the service condition with respect to unvested stock awards. Each of these agreements also included a non-competition undertaking with a duration equal to the scheduled severance period (or two years in the case of Mr. Herrman and Mr. Barron) and a two-year non-solicitation undertaking (eighteen months in the case of Ms. Meyrowitz). Our obligation to continue to pay benefits ceased if, during such period following termination, the executive violated these agreements. Except for Mr. Campbell and Mr. Barron, termination of the executive’s employmenthis departure at the end of fiscal 2012 Mr. Sweetenham entered into agreements with TJX and its subsidiary TJX UK that clarified and supplemented the entitlements under his employment agreement term was treatedagreement.
• | Termination Other than for Cause or Constructive Termination: For our U.S. named executive officers, if we terminate an executive’s employment other than for cause or the executive terminates employment in connection with a forced relocation of more than forty miles (a “constructive termination”), the executive would be entitled to twenty-four months of continued base salary (for Ms. Meyrowitz, at her fiscal 2011 salary rate) and any automobile allowance; cash payments in an amount sufficient after taxes to cover the cost of any COBRA continuation of health benefits elected by the executive; cash incentive awards under MIP and LRPIP for each uncompleted year or award cycle, if applicable performance goals are met and adjusted to reflect the executive’s period of service during the cycle; and equity awards in accordance with their terms (plus, for Ms. Meyrowitz, acceleration of outstanding and unvested stock options as provided under her agreement). |
Under agreements entered into in connection with his departure from TJX, Mr. Sweetenham is also eligible to receive the same amount of severance benefits as described above for U.S. named executive officers (other than Ms. Meyrowitz), except that he is entitled to twelve months of automobile allowance (instead of twenty-four) and is not entitled to health coverage-related payments. Mr. Sweetenham is also eligible under these agreements for an involuntary termination unless we made an offer of continued employment that satisfies conditions specified in the employment agreement and the executive declined the offer.
30
• | Death or Disability: Upon a termination of employment by reason of death or disability, each U.S. named executive officer (or his or her legal representative) would be entitled to the same benefits as are described above, except that salary continuation would be subject to adjustment for any long-term disability benefits and the MIP award would be paid at target without proration. |
• | Voluntary Termination: Our U.S. named executive officers would not be entitled to these separation benefits upon a voluntary termination (other than a constructive termination), except that if Ms. Meyrowitz voluntarily terminates her employment with 90 days’ notice and prior to a change of |
control, she would be entitled to salary continuation, automobile allowance, and health coverage-related payments on the same basis as if she had been involuntarily terminated without cause, as well as prorated LRPIP benefits for any full fiscal years in a cycle completed prior to the date of termination. |
• | End of Contract Term: For Ms. Meyrowitz, Mr. Herrman and Mr. Naylor, a termination occurring on the last day of the agreement term would be treated as a termination other than for cause (unless, in the case of Mr. Herrman and Mr. Naylor, we make an offer of continued service in a comparable position). Mr. Rossi’s agreement in effect during fiscal 2012 did not entitle him to separation benefits at the end of the agreement term, but under his new employment agreement (effective at the beginning of fiscal 2013) he would be entitled upon termination of employment at the end of the agreement term to a prorated portion of outstanding LRPIP and performance-based restricted stock awards, if applicable performance conditions are met. |
• | Change of Control: Upon a change of control (with or without a termination of employment), each U.S. named executive officer would be entitled to receive a lump sum settlement at target of MIP and LRPIP awards for which the performance period or cycle had not ended (or, for Mr. Rossi, a lump sum payment equal to his target award and a prorated target award under MIP for the year of the change of control, plus his maximum award for each uncompleted LRPIP cycle), plus any benefits (including any acceleration of awards) under the SIP and our deferred compensation plans. We would also be obligated to pay legal fees and expenses the U.S. named executive officer reasonably incurs in seeking enforcement of contractual rights following a change of control. Under Mr. Rossi’s new employment agreement, he would be entitled to the same MIP- and LRPIP-based payments as described above for the other U.S. named executive officers. |
The events that constitute a change of control under the employmentfiscal 2012 agreements for our named executive officers at fiscal 2009 year end generally consistedconsist of the following, subject to the qualifications set forth in those employment agreements: (i) a change of control required to be reported under the Securities Exchange Act of 1934, as amended; (ii) the acquisition of 20% or more of our common stock followed by a change in at least one-fourtha majority of our board of directors; (iii) a proxy solicitation or solicitations followed by a change in at least one-fourtha majority of our board of directors; and (iv) the execution of certain agreements of acquisition, merger or consolidation followed by if required, shareholder approvalconsummation of the transactions contemplated by such agreement.
• | Change of Control Followed by Qualifying Termination: Upon a qualifying termination of employment following a change of control, each U.S. named executive officer would be entitled to receive alternative severance benefits instead of the separation-related benefits described above. The alternative severance benefits consist of a lump sum severance payment equal to two times the sum of the executive’s annual base salary (for Ms. Meyrowitz, by reference to her fiscal 2011 salary rate), any annual automobile allowance and (except for Mr. Rossi) target MIP award amount; and two years of continued participation in medical and life insurance programs, except to the extent of replacement coverage. For this purpose, base salary would be adjusted for any long-term disability benefits and the target MIP amount and (except for Ms. Meyrowitz) base salary would be determined by reference to the higher of the executive’s base salary immediately prior to termination or the change of control. Ms. Meyrowitz and Mr. Rossi would also be entitled to an alternative lump sum SERP benefit determined by using specified actuarial assumptions representing potential early commencement of the benefit. Under his new agreement, Mr. Rossi would be entitled to the same MIP-based payments as described above for the other U.S. named executive officers. |
A qualifying termination for certain taxes that might be incurredthese purposes includes a termination by us other than for cause, by the executive for good reason (as defined in connection withthe agreements), or a changetermination by reason of control and to severance benefits upon certain voluntary terminations without good reasondeath or disability, in each case within 24 months following a change of control. A qualifying termination does not include a voluntary termination without good reason. Under the agreement with Mr. Rossi in effect during fiscal 2012 (but not under his new agreement) the qualifying termination would also have to have occurred by the end of agreement term.
In addition to amounts described above, the executives would remain entitled to vested and accrued, but unpaid, compensation and benefits (including earned but unpaid amounts under MIP and LRPIP). Our named executive officers would not be entitled to any tax gross-up payment for any “golden parachute” excise tax on change of control benefits, but payments and benefits to each executive would be reduced if and to increase their severance benefits following an involuntarythe extent such a reduction would have put the executive in a better after-tax position.
Potential Acceleration of Unvested Equity Awards. Under the terms of awards granted under our SIP, each of our U.S. named executive officers would be entitled to partial vesting of stock options upon death or disability and full vesting of both stock options and stock awards upon a change of control. Ms. Meyrowitz would also be entitled to full vesting of unvested stock awards upon termination of employment by reason of death or disability. In the event of a termination without cause or a voluntaryconstructive termination, for good reason to twenty-four months. We also agreed to revisionsMs. Meyrowitz’s options vest in full and her stock awards remain subject to the changesatisfaction of control definitionthe applicable performance conditions but applicable service-based conditions would be deemed satisfied. Following a termination of employment at the end of fiscal 2012, the executives would have been able to include a changeexercise vested options in accordance with applicable post-termination exercise periods and Mr. Rossi (had he retired at the end of control required to be reportedfiscal 2012) would have been eligible for continued vesting of his outstanding options, in each case in accordance with the terms described above under the Securities Exchange Act; the acquisition“Grants of 20% or more of our common stock followed by a changePlan-Based Awards in at least a majority of our board of directors; a proxy solicitation or solicitations followed by a change in at least a majority of our board of directors; and the execution of certain agreements of acquisition, merger or consolidation followed by consummation of such agreement.
31
Triggering Event(1) | ||||||||||||||||||||||||
Death/Disability | Termination without Cause(2) | Change of Control(3) | ||||||||||||||||||||||
Name | Option Awards | Stock Awards | Option Awards | Stock Awards | Option Awards | Stock Awards | ||||||||||||||||||
Carol Meyrowitz | $ | 736,185 | $ | 8,172,000 | $ | 3,243,647 | $ | 8,172,000 | $ | 3,243,647 | $ | 8,172,000 | ||||||||||||
Ernie L. Herrman | $ | 507,778 | — | — | — | $ | 2,292,384 | $ | 8,215,650 | |||||||||||||||
Jeffrey G. Naylor | $ | 380,829 | — | — | — | $ | 1,719,084 | $ | 5,478,000 | |||||||||||||||
Jerome Rossi | $ | 380,829 | — | — | — | $ | 1,719,084 | $ | 2,466,360 |
(1) | For purposes of these estimates, we valued performance-based restricted stock and stock options using $33.69, the closing price of our common stock on the New York Stock Exchange on January 27, 2012, the last business day of the fiscal year. We included the full value of all accelerated performance-based restricted stock awards ($33.69 per share), plus the value of any accumulated dividends that would have been paid upon the vesting of such awards, and the spread value ($33.69 per share minus the option exercise price) for all stock options that would have been accelerated upon a termination of employment (including by reason of death or disability) or change of control. We did not include any amounts in respect of outstanding equity awards that either were earned based on service and performance as of January 28, 2012, or that would not have accelerated upon the triggering event. See the “Outstanding Equity Awards at Fiscal 2012 Year End” table for more information about these equity awards. We further assumed that each executive would satisfy his or her non-competition, non-solicitation, or confidentiality agreements with us following termination. |
(2) | Assumes that the performance conditions applicable to Ms. Meyrowitz’s unvested stock awards would have been satisfied. |
(3) | Assumes that all awards would have been cashed out at closing, and that any change of control would have qualified as a “change in control event” under Section 409A of the Internal Revenue Code (Section 409A). |
Potential Acceleration of Unvested Deferred Compensation. As noted above under “Nonqualified Deferred Compensation Plans,” unvested employer credit accounts under the ESP also vest in full upon a change of control or termination of employment due to death or disability. Of our named executive officers, only Mr. Naylor had an employer credit account under ESP that was not fully vested as of the end of fiscal 2012.
Related Provisions. Each U.S. named executive officer agreed to non-solicitation and non-competition provisions that operate during the term of employment and for twenty-four months thereafter, and to confidentiality provisions during and after employment. Benefits under the employment agreements and SERP, as well as benefits attributable to the enhanced employer match under the ESP, are also conditioned on compliance with restrictive covenants. Mr. Naylor agreed to additional restrictive covenants applicable to the stock award granted to him during fiscal 2012, as described above under “Outstanding Equity Awards at Fiscal 2012 Year End.” Mr. Sweetenham agreed to post-employment non-solicitation and non-competition provisions for twenty-four and eighteen months, respectively, under his agreement with TJX and for twelve months under his agreement with TJX UK, as well as post-employment confidentiality and non-disparagement provisions under both agreements. Upon a change of control, our named executive officers would no longer be subject to any covenant not to compete following a termination of employment.
The agreements and plans include terms designed to comply with the deferred compensation provisions of Section 409A, including provisions that would delay certain termination-related benefits for six months beyond termination of employment and alternative payment provisions that could apply in connection with a change of control not described in Section 409A.
The following table sets forth aggregate estimated payment obligations to each of our U.S. named executive officers, assuming that the triggering events had occurred on January 28, 2012, all pursuant to the terms of TJX’s plans and each executive’s employment agreement as in effect on such date (which do not reflect the changes described above)above in Mr. Rossi’s new agreement). PursuantBecause our post-termination obligations to Mr. Sweetenham upon his separation agreement, Mr. Tripathy’s benefits and paymentsdeparture were established as of January 31, 2009. Mr. Barron’s retirement, effective January 31, 2009, entitled him only to those payments and benefits in which he was vested on the date of termination under our various employee benefit programs, including earned and unpaid amounts under our cash and equity-based award programs. Because the Company’s post-termination obligations to Mr. Tripathy and Mr. Barron were established as of January 31, 2009,28, 2012, the table below reflects that no other amounts would have become payable on such date to these named executives upon death/disability, a change of control, a change of control followed by termination or a termination without cause or voluntary termination with good reason.
Triggering Event /Payments | J. Naylor | D. Campbell | C. Meyrowitz | A. Barron | N. Tripathy(1) | E. Herrman | ||||||||||||||||||
Death /Disability | ||||||||||||||||||||||||
Severance | $ | 1,110,000 | $ | 435,675 | $ | 2,212,500 | $ | 0 | $ | 0 | $ | 1,387,500 | ||||||||||||
MIP and LRPIP | 2,144,590 | 1,710,637 | 5,161,759 | 0 | 0 | 2,285,535 | ||||||||||||||||||
Acceleration of Unvested Option Awards | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Acceleration of Unvested Stock Awards | 0 | 388,400 | 3,107,200 | 0 | 0 | 0 | ||||||||||||||||||
Medical/Life Insurance | 27,244 | 16,191 | 36,191 | 0 | 0 | 36,188 | ||||||||||||||||||
Automobile Benefit | 53,856 | 53,856 | 53,856 | 0 | 0 | 53,856 | ||||||||||||||||||
Total | $ | 3,335,690 | $ | 2,604,759 | $ | 10,571,506 | $ | 0 | $ | 0 | $ | 3,763,079 | ||||||||||||
Termination without Cause /Voluntary Termination with Good Reason | ||||||||||||||||||||||||
Severance | $ | 1,110,000 | $ | 435,675 | $ | 2,212,500 | $ | 0 | $ | 754,570 | $ | 1,387,500 | ||||||||||||
MIP and LRPIP(2) | 1,736,955 | 1,375,200 | 3,658,393 | 0 | 789,873 | 1,792,175 | ||||||||||||||||||
Acceleration of Unvested Option Awards | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Acceleration of Unvested Stock Awards | 0 | 388,400 | 3,107,200 | 0 | 0 | 0 | ||||||||||||||||||
Medical/Life Insurance | 27,244 | 16,191 | 36,191 | 0 | 18,162 | 36,188 | ||||||||||||||||||
Automobile Benefit | 53,856 | 53,856 | 53,856 | 0 | 29,170 | 53,856 | ||||||||||||||||||
Total | $ | 2,928,055 | $ | 2,269,322 | $ | 9,068,140 | $ | 0 | $ | 1,591,775 | $ | 3,269,719 | ||||||||||||
Change of Control | ||||||||||||||||||||||||
MIP and LRPIP | $ | 3,655,100 | $ | 2,626,074 | $ | 8,369,322 | $ | 0 | $ | 0 | $ | 3,826,550 | ||||||||||||
Acceleration of Unvested Option Awards | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Acceleration of Unvested Stock Awards | 855,723 | 388,400 | 3,107,200 | 0 | 0 | 855,723 | ||||||||||||||||||
TaxGross-up | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Total | $ | 4,510,823 | $ | 3,014,474 | $ | 11,476,522 | $ | 0 | $ | 0 | $ | 4,682,273 | ||||||||||||
Change of Control followed by Termination | ||||||||||||||||||||||||
Severance | $ | 1,480,000 | $ | 580,900 | $ | 2,950,000 | $ | 0 | $ | 0 | $ | 1,850,000 | ||||||||||||
MIP and LRPIP | 3,655,100 | 2,626,074 | 8,369,322 | 0 | 0 | 3,826,550 | ||||||||||||||||||
SERP Enhancement | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Acceleration of Unvested Option Awards | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Acceleration of Unvested Stock Awards | 855,723 | 388,400 | 3,107,200 | 0 | 0 | 855,723 | ||||||||||||||||||
Medical/Life Insurance | 24,332 | 15,534 | 31,454 | 0 | 0 | 31,452 | ||||||||||||||||||
Automobile Benefit | 64,407 | 64,407 | 64,407 | 0 | 0 | 64,407 | ||||||||||||||||||
TaxGross-up | 2,129,102 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Total | $ | 8,208,663 | $ | 3,675,315 | $ | 14,522,383 | $ | 0 | $ | 0 | $ | 6,628,131 | ||||||||||||
32
Triggering Event and Payments(1) | C. Meyrowitz | E. Herrman | J. Naylor | J. Rossi | P. Sweetenham(2) | |||||||||||||||
Death/Disability | ||||||||||||||||||||
Severance | $ | 3,150,000 | $ | 2,200,000 | $ | 1,660,000 | $ | 1,560,000 | $ | — | ||||||||||
MIP/LRPIP(3) | 3,356,667 | 1,813,333 | 1,235,000 | 761,970 | — | |||||||||||||||
Acceleration of Unvested Equity Awards(4) | 8,908,185 | 507,778 | 380,829 | 380,829 | — | |||||||||||||||
Deferred Compensation Enhancement(5) | — | — | 276,503 | — | — | |||||||||||||||
Health, Life, and/or Automobile Benefits | 106,779 | 118,671 | 106,779 | 118,671 | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total(6) | $ | 15,521,631 | $ | 4,639,782 | $ | 3,659,111 | $ | 2,821,470 | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Voluntary Termination with 90 Days Notice | ||||||||||||||||||||
Severance | $ | 3,150,000 | $ | — | $ | — | $ | — | $ | — | ||||||||||
LRPIP(3) | 1,376,667 | — | — | — | — | |||||||||||||||
Health, Life, and/or Automobile Benefits | 106,779 | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | $ | 4,633,446 | $ | — | $ | — | $ | — | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Termination without Cause/Constructive Termination | ||||||||||||||||||||
Severance | $ | 3,150,000 | $ | 2,200,000 | $ | 1,660,000 | $ | 1,560,000 | $ | 2,550,000 | ||||||||||
MIP/LRPIP(3) | 1,376,667 | 933,333 | 700,000 | 375,000 | 700,000 | |||||||||||||||
Acceleration of Unvested Equity Awards(4) | 11,415,647 | — | — | — | — | |||||||||||||||
Health, Life and/or Automobile Benefits | 106,779 | 118,671 | 106,779 | 118,671 | 35,904 | |||||||||||||||
Additional Payments(7) | — | — | — | — | 1,271,184 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | $ | 16,049,093 | $ | 3,252,004 | $ | 2,466,779 | $ | 2,053,671 | $ | 4,557,088 | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Change of Control | ||||||||||||||||||||
Settlement of MIP/LRPIP | $ | 2,725,000 | $ | 1,950,000 | $ | 1,400,000 | $ | 1,898,940 | $ | — | ||||||||||
Acceleration of Unvested Equity Awards(4) | 11,415,647 | 10,508,034 | 7,197,084 | 4,185,444 | — | |||||||||||||||
Deferred Compensation Enhancement(5) | — | — | 276,503 | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total | $ | 14,140,647 | $ | 12,458,034 | $ | 8,873,587 | $ | 6,084,384 | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Change of Control followed by Qualifying Termination | ||||||||||||||||||||
Change of Control Benefits (see above) | $ | 14,140,647 | $ | 12,458,034 | $ | 8,873,587 | $ | 6,084,384 | $ | — | ||||||||||
Severance | 7,110,000 | 3,960,000 | 2,739,000 | 1,560,000 | — | |||||||||||||||
Deferred Compensation Enhancement(5) | 5,413,176 | — | — | — | — | |||||||||||||||
Health, Life, and/or Automobile Benefits | 100,917 | 110,676 | 100,917 | 110,677 | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total(6) | $ | 26,764,740 | $ | 16,528,710 | $ | 11,713,504 | $ | 7,755,061 | $ | — | ||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | ||
We used the |
We assumed in each case that the termination was not for cause; the executive does not violate his or her non-competition, non-solicitation, confidentiality or other obligations to us following termination; the executive does not receive medical or life insurance coverage from another employer within the relevant periods; and the executive does not incur legal fees requiring reimbursement from us. We also assumed that any change of control would have qualified as a “change in control event” under Section 409A.
For health care benefits, we assumed COBRA continuation for 18 months in the event that an executive (other than Mr. Sweetenham) would be contractually entitled to payments based on the cost of such coverage following a termination of employment.
In the case of payments following termination by reason of disability, the amounts shown assume salary continuation and/or long-term disability payments, coordinated to avoid duplication.
We did not include any amounts in respect of accrued but unpaid base salary or benefits (such as Mr. Sweetenham’s accrued holiday pay included above under All Other Compensation for fiscal 2012), or any amounts in respect of bonuses under MIP and LRPIP for performance periods ending on January 28, 2012 that were earned but remained unpaid as of that date. For additional assumptions applicable to equity awards, see “Potential Acceleration of Unvested Equity Awards” above.
(2) | U.S. dollar amounts payable to Mr. Sweetenham under his agreements are converted to pounds sterling at the rate of $1.56 per pound under the terms of his agreements, except that LRPIP-based amounts will be converted to pounds sterling based on the exchange rate in effect at the end of the performance cycle. Under his agreement with TJX UK, Mr. Sweetenham is eligible for |
(3) | The amount, for | |
(4) | See “Potential Acceleration of Unvested Equity Awards” above for additional detail about these amounts. |
(5) | For Mr. Herrman and Mr. Naylor, the amount represents any unvested portion of the executive’s employer credit account under the ESP that would have vested upon a change of control | |
(6) | In the event of death on January 28, 2012, the beneficiaries of our U.S. named executive officers would also have been entitled to the following amounts under our management- and executive-level life insurance programs: Ms. Meyrowitz, $975,000; Mr. Herrman, $520,000; Mr. Naylor, $975,000 and Mr. Rossi $975,000. Company-paid amounts for these programs are included and described above under All Other Compensation for fiscal 2012. |
(7) |
Although certain amounts in the tables above are subject to reduction if, as a result of change-of-control excise and other taxes, a reduction is needed to maximize an executive’s after-tax benefits, we determined that no mandatory reduction to benefits would apply in the case of a change of control (both with and without a termination). For purposes of calculating the estimated taxgross-up payments, we assumed that all outstandingin-the-money stock options are cashed out at their spread value ($19.42 per share minus the option exercise price) and that anyout-of-the-money stock options are cashed out at zero value. We further assumed that any stock awards are cashed out at full value, except that only a portion of the value of any performance-based stock award with a performance period ending on January 31, 2009 is taken into account for purposes of calculating the present value of the parachute payment attributable to an executive’s equity acceleration. Finally, these
33
For fiscal 2009,2012, we paid all of our non-employee directors as follows:
Annual retainer of $50,000 for each director.
Additional annual retainer of $10,000 for each Committee chair.
Additional annual retainer of $70,000 for the Lead Director. Fee of $1,500 for each Board meeting attended (each day of a multiple day Board meeting is treated as a separate Board meeting with respect to this fee). Fee of $2,000 for each Committee meeting attended as a Committee member or $2,500 for each regularly scheduled Committee meeting attended as Committee chair (other than, in each case, the Executive Committee). Two annual deferred stock awards, each representing shares of our common stock valued at $62,500. Payment of | ||
Our non-employee directors wereare eligible to defer their retainers and fees under the ESP in which theybut are not eligible for matching credits. Amounts deferred by directors under the ESP are notionally invested in mutual funds or other investments, available on the market specified by the plan administrator.investments. Participating non-employee directors may select a distribution date earlier than retirement from the Board, but no earlier than January 1st of the second year following the year of the deferral. During fiscal 2012, Mr. Bennett and Ms. Shire participated in the ESP deferral program. Prior to January 1, 2008, our non-employee directors were eligible to defer their retainers and fees in our GDCP, under which amounts deferred continue to earn interest at a periodically adjusted market-based rate. Amounts deferred under the GDCP on or after January 1, 2005 that had not been distributed prior to January 1, 2009 arewill be distributed under the terms of the ESP, as described above. Amounts deferred under the GDCP prior to January 1, 2005 arewill be paid at retirement fromon leaving the Board. OurMr. Bennett and Ms. Shire currently participate in the GDCP. We do not provide retirement or insurance benefits for our non-employee directors.
The following table provides information concerning compensation for our non-employee directors for fiscal 2012. Compensation for Mr. Cammarata as an employee and executive officer of TJX for fiscal 2012 is included below, although it is our policy that employee directors are not paid additional compensation for their service as directors. We doMs. Meyrowitz’s compensation is shown above in the Summary Compensation Table with that of the other named executive officers. Mr. Abdalla was elected to the Board at the beginning of fiscal 2013 so did not provide retirement or insurance benefits for our non-employee directors.
34
Change in | ||||||||||||||||||||||||||||
Pension Value and | ||||||||||||||||||||||||||||
Non-Qualified | ||||||||||||||||||||||||||||
Fees Earned | Non-Equity | Deferred | ||||||||||||||||||||||||||
or Paid | Stock | Option | Incentive Plan | Compensation | All Other | |||||||||||||||||||||||
Name | In Cash | Awards(1),(4) | Awards(1),(4) | Compensation | Earnings(3) | Compensation | Total | |||||||||||||||||||||
José B. Alvarez | $ | 96,750 | $ | 100,315 | — | — | $ | 197,065 | ||||||||||||||||||||
Alan M. Bennett | $ | 85,750 | $ | 100,315 | — | — | $ | 186,065 | ||||||||||||||||||||
David A. Brandon | $ | 112,250 | $ | 104,774 | — | — | $ | 217,024 | ||||||||||||||||||||
Bernard Cammarata(2) | $ | 509,616 | — | $ | 39,087 | $ | 548,703 | |||||||||||||||||||||
David T. Ching | $ | 105,750 | $ | 101,336 | — | — | $ | 207,086 | ||||||||||||||||||||
Michael F. Hines | $ | 117,734 | $ | 101,336 | — | — | $ | 219,070 | ||||||||||||||||||||
Amy B. Lane | $ | 119,750 | $ | 103,348 | — | — | $ | 223,098 | ||||||||||||||||||||
John F. O’Brien | $ | 159,750 | $ | 106,757 | — | — | $ | 266,507 | ||||||||||||||||||||
Robert F. Shapiro | $ | 114,266 | $ | 109,566 | — | — | $ | 223,832 | ||||||||||||||||||||
Willow B. Shire | $ | 112,250 | $ | 106,202 | — | — | $ | 218,452 | ||||||||||||||||||||
Fletcher H. Wiley | $ | 107,500 | $ | 109,367 | — | — | $ | 216,867 |
Directors Compensation for Fiscal 2012
Name | Fees Earned or Paid In Cash | Stock Awards(1)(2) | Option Awards(2) | Non-Equity Incentive Plan Compensation | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation | Total | |||||||||||||||||||||
José B. Alvarez | $ | 88,500 | $ | 132,205 | — | — | — | — | $ | 220,705 | ||||||||||||||||||
Alan M. Bennett | $ | 85,764 | $ | 132,205 | — | — | — | — | $ | 217,969 | ||||||||||||||||||
David A. Brandon(6) | $ | 35,168 | $ | 13,894 | — | — | — | — | $ | 49,062 | ||||||||||||||||||
Bernard Cammarata | $ | 500,000 | (3) | — | — | — | $ | 68,855 | (4) | $ | 42,304 | (5) | $ | 611,159 | ||||||||||||||
David T. Ching | $ | 84,500 | $ | 130,804 | — | — | — | — | $ | 215,304 | ||||||||||||||||||
Michael F. Hines | $ | 101,000 | $ | 132,883 | — | — | — | — | $ | 233,883 | ||||||||||||||||||
Amy B. Lane | $ | 98,500 | $ | 133,681 | — | — | — | — | $ | 232,181 | ||||||||||||||||||
John F. O’Brien | $ | 140,500 | $ | 139,112 | — | — | — | — | $ | 279,612 | ||||||||||||||||||
Willow Shire | $ | 88,000 | $ | 139,167 | — | — | — | — | $ | 227,167 | ||||||||||||||||||
Fletcher Wiley(6) | $ | 31,431 | $ | 21,924 | — | — | — | — | $ | 53,355 |
(1) | ||
(2) | ||
The following table shows the number of outstanding shares of deferred stock awards and the number of outstanding shares underlying option awards |
Outstanding | Outstanding | |||||||
Name | Stock Awards | Option Awards(a) | ||||||
José B. Alvarez | 5,646 | 0 | ||||||
Alan M. Bennett | 5,646 | 0 | ||||||
David A. Brandon | 15,833 | 0 | ||||||
Bernard Cammarata | 0 | 450,000 | ||||||
David T. Ching | 6,679 | 0 | ||||||
Michael F. Hines | 6,679 | 0 | ||||||
Amy B. Lane | 10,257 | 7,956 | ||||||
John F. O’Brien | 19,334 | 68,000 | ||||||
Robert F. Shapiro | 28,592 | 0 | ||||||
Willow B. Shire | 17,857 | 68,000 | ||||||
Fletcher H. Wiley | 28,064 | 36,000 |
35
Name | Outstanding Deferred Stock Awards(a) | Outstanding Option Awards(b) | ||||||
José B. Alvarez | 27,849 | — | ||||||
Alan M. Bennett | 27,849 | — | ||||||
David A. Brandon | — | — | ||||||
Bernard Cammarata | — | — | ||||||
David T. Ching | 21,215 | — | ||||||
Michael F. Hines | 29,995 | — | ||||||
Amy B. Lane | 30,323 | 13,912 | ||||||
John F. O’Brien | 47,515 | 24,000 | ||||||
Willow B. Shire | 47,687 | 72,000 | ||||||
Fletcher H. Wiley | — | — |
(a) | 2,521 deferred shares for each director are unvested and will vest on the date of the 2012 Annual Meeting. |
(b) | All options |
(3) | Represents Mr. Cammarata’s |
(4) | Represents the |
36
(5) | ||
(6) | ||
37
38
39
40
Restricted | ||||||||
Stock Awards | Stock Options | |||||||
Name and Position | (# of Shares) | (# of Shares) | ||||||
Carol Meyrowitz | 60,000 | 102,630 | ||||||
President and Chief Executive Officer | ||||||||
Donald G. Campbell | 0 | 68,430 | ||||||
Vice Chairman | ||||||||
Arnold S. Barron | 0 | 51,330 | ||||||
Senior Executive Vice President, Group President | ||||||||
Ernie L. Herrman | 12,188 | 68,430 | ||||||
Senior Executive Vice President, Group President | ||||||||
Jeffrey G. Naylor | 12,188 | 51,330 | ||||||
Senior Executive Vice President, Chief Administrative and Business Development Officer | ||||||||
Nirmal K. Tripathy | 7,800 | 25,670 | ||||||
Executive Vice President, Chief Financial Officer | ||||||||
Executive Officer Group | 109,076 | 449,960 | ||||||
Non-Executive Director Group | 0 | 0 | ||||||
Non-Executive Officer Employee Group | 63,465 | 4,749,420 |
41
PUBLIC ACCOUNTING FIRM
The Audit Committee of our Board of Directors has appointed PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending January 30, 2010.February 2, 2013. We are asking stockholders to ratify this appointment. Representatives of PwC will attend the 2009 Annual Meeting, where they will have the opportunity to make a statement if they wish to do so and will be available to answer questions from the stockholders.
Your Board of Directors unanimously recommends a vote FOR Proposal 3,2, Ratification of Appointment of Independent Registered Public Accounting Firm.
APPROVAL OF MATERIAL TERMS OF EXECUTIVE OFFICER PERFORMANCE GOALS
UNDER CASH INCENTIVE PLANS
We are seeking approval of the material terms of performance goals of our cash incentive plans, MIP and LRPIP, as they apply to our executive officers.
Section 162(m) of the Internal Revenue Code generally provides that compensation provided to a publicly held corporation’s CEO or any of its three most highly paid named executive officers (other than its CEO or CFO) is not deductible by the corporation for U.S. income tax purposes for any taxable year to the extent it exceeds $1 million. This limitation does not apply to compensation that qualifies as exempt performance-based compensation by meeting certain requirements under Section 162(m), including the requirement that the material terms of the related performance goals be disclosed to and approved by shareholders every five years. Under Section 162(m), the material terms include the class of eligible employees, a description of the business criteria on which the performance goals may be based and the maximum amount that can be paid to any participant for a specified period. Although shareholder approval is one of the requirements for exemption under Section 162(m), even with shareholder approval there can be no guarantee that compensation will be treated as exempt performance-based compensation under Section 162(m).
Our stockholders last approved the material terms of MIP and LRPIP performance goals at our Annual Meeting in 2007. Those terms will continue to apply to outstanding MIP and LRPIP awards. The ECC amended MIP and LRPIP in April 2012 to expand the available business criteria on which future performance goals may be based and to increase the award maximum per participant for future awards, as described below.
We now seek approval of the material terms of MIP and LRPIP performance goals to enable us to provide exempt performance-based compensation under these programs. As discussed above in Tax and Accounting Considerations in “Compensation Discussion and Analysis,” notwithstanding stockholder approval of these performance goals, the ECC will continue to have authority to provide compensation that is not exempt from the limits on deductibility under Section 162(m).
Overview. MIP and LRPIP are both administered by the ECC, which consists solely of outside directors. Awards consist of individual award opportunities and related performance targets for a specified performance period, typically one year for MIP and three years for LRPIP. For awards intended to qualify as exempt performance-based compensation under Section 162(m), objectively determinable performance goals and payout formulas are pre-established by the ECC for each performance period. After completion of the performance period, the ECC reviews and certifies performance results and the payout for the awards. Once award terms have been established, the Section 162(m) exemption rules generally prohibit discretionary adjustments, other than
adjustments to reduce any amount payable under the award. Amounts payable under the amended MIP and LRPIP performance goals described in this proposal will be based on future award opportunities and performance and are not determinable at this time. For a description of prior MIP and LRPIP awards for our named executive officers, see the “Compensation Discussion and Analysis” and related compensation tables, above.
Eligibility and Participation. Awards under MIP and LRPIP may be granted to executive officers selected from time to time by the ECC and to other key employees of TJX and its subsidiaries selected from time to time by the ECC or its authorized delegate. Currently, approximately 3,400 Associates participate in these plans, including our executive officers.
Business Criteria for MIP and LRPIP Performance Goals. For each award granted under MIP and LRPIP that is intended to qualify as exempt performance-based compensation, the performance goals set by the ECC will be one or more objectively determinable measures of performance relating to any one or any combination of the following business criteria (measured on an absolute basis or relative to one or more comparators, including one or more companies or indices, and determined on a consolidated, divisional, line of business, project, geographical or area of executive’s responsibilities basis, or any combination thereof):
Sales, revenues, or comparable store sales;
Assets, inventory levels, inventory turns, working capital, cash flow or expenses;
Earnings, profit, income, losses or margins, before or after deduction for all or any portion of interest, taxes, depreciation, amortization, rent, or such other items as the ECC may determine at the time the performance goals are pre-established, whether or not on a continuing operations and aggregate or per share basis, basic or diluted, before or after dividends;
Return on investment, capital, equity, assets, sales or revenues, or economic value added models or equivalent metrics;
Market share, store openings or closings, customer service or satisfaction levels, or employee recruiting, retention or diversity;
Stock price, dividends, or total shareholder return, or credit ratings; or
Strategic plan implementations.
The ECC may provide for automatic adjustments (in measures of achievement, amounts payable, or other award terms) to reflect objectively determinable events (for example, acquisitions, divestitures, extraordinary items, other unusual or non-recurring items and/or changes in accounting principles) that may affect the business criteria, any such adjustment to be established and administered in a manner consistent with the requirements for exempt performance-based compensation under Section 162(m).
Maximum Awards. Under the amended plans, the maximum amount payable to any participant under MIP for any fiscal year, and the maximum amount payable to any participant under LRPIP for one or more performance cycles beginning in a single fiscal year, is $5 million, increased by 5% per year starting with our fiscal year ending February 1, 2014 (fiscal 2014).
Performance-based awards under our MIP and LRPIP are an important part of our compensation system. We rely on them to attract and retain our management. In order to preserve our ability to make tax deductible awards under MIP and LRPIP, we are seeking your approval of the material terms of the performance goals described above.
Your Board of Directors unanimously recommends that you vote FOR Proposal 3, Approval of Material Terms of Executive Officer Performance Goals under Cash Incentive Plans.
ADVISORY APPROVAL OF EXECUTIVE COMPENSATION
The Compensation Discussion and Analysis beginning on page 15 of this Proxy Statement describes our executive compensation program and the compensation of our named executive officers for fiscal 2012. The Board of Directors is asking stockholders to cast a non-binding, advisory vote indicating their approval of that compensation by voting FOR the following resolution:
“RESOLVED, that the stockholders of The TJX Companies, Inc. APPROVE, on an advisory basis, the compensation paid to its named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, compensation tables and narrative discussion.”
As described in more detail in the Compensation Discussion and Analysis, we have a total compensation approach focused on performance-based incentive compensation that seeks to:
attract and retain very talented individuals in the highly competitive retail environment, maintaining an extremely high talent level in our company and providing for succession broadly across our management,
reward objectively determinable achievement of the short- and long-term financial objectives reflected in our business plans, and
enhance shareholder value by directly aligning the interests of our executives and stockholders.
The Board is asking stockholders to support this proposal. We believe TJX’s performance demonstrates the effectiveness of our compensation program. We received a strong supporting vote last year (more than 97% of votes cast) expressing support for our compensation policies and practices and believe our program continues to be effective. We continue to focus on pay for performance in our compensation program, as described in the Compensation Discussion and Analysis, which we encourage you to review. Although the vote we are asking you to cast is non-binding, the ECC and the Board value the views of our stockholders. As with the results last year, the Board and Executive Compensation Committee will consider the outcome of this vote when determining future compensation arrangements for our named executive officers. Our Board of Directors currently intends to conduct an annual advisory stockholder vote on executive compensation each year until the next advisory vote on the frequency of our say on pay advisory votes is held, which will be no later than the annual meeting of the stockholders in 2017.
Your Board of Directors unanimously recommends a vote FOR Proposal 4, Advisory Approval of Executive Compensation.
The nominees receiving a majority of votes properly cast at the meeting will be elected directors. Under our Corporate Governance Principles, any nominee for director must provide the Secretary of the Company an irrevocable contingent resignation prior to the distribution of proxy solicitation materials for the meeting at which such director is expected to be nominated to stand for election. Such resignation will be effective only if such director fails to receive a majority of the votes cast in an uncontested election, as provided in the by-laws, and the Board accepts such resignation. All other proposals require the approval of the majority of votes properly cast.
If you vote your shares by mail, telephone or Internet, your shares will be voted in accordance with your directions. If you do not indicate specific choices when you vote by mail, telephone or Internet, your shares will be voted for the election of the director nominees for approval of amendments to and performance terms of the Stock Incentive Plan, and(Proposal 1), for the ratification of the appointment of the independent registered public accounting firm.firm (Proposal 2), for the approval of material terms of executive officer performance goals under cash incentive plans (Proposal 3) and for the advisory approval of the company’s executive compensation (Proposal 4). The persons named as proxies will also be able to vote your shares at postponed or adjourned meetings. If any nominee should become unavailable, your shares will be voted for another nominee selected by the Board or for only the remaining nominees. Brokers are not permitted to vote your shares with respect to approval of amendments to and performance termson any matter other than the ratification of the Stock Incentive Planindependent registered public accounting firm
(Proposal 2) without instructionsinstruction from you. If your shares are held in the name of a broker or nominee and you do not instruct the broker or nominee how to vote your shares with respect to the approvalelection of amendments to and performance terms of the Stock Incentive Plandirectors or Proposals 3 or 4, or if you abstain or withhold authority to vote on any matter, your shares will not be counted as having been voted on that matter, but will be counted as in attendance at the meeting for purposes of a quorum.
A stockholder who intends to present a proposal at the 20102013 Annual Meeting of Stockholders and who wishes the proposal to be included in theour proxy materials for that meeting must submit the proposal in writing to us so that we receive it no later than December 28, 2009.
42
At the time of mailing of this proxy, we do not know of any other matter that may come before the Annual Meeting and do not intend to present any other matter. However, if any other matters properly come before the meeting or any adjournment, the persons named as proxies will have discretionary authority to vote the shares represented by the proxies in accordance with their own judgment, including the authority to vote to adjourn the meeting.
We will bear the cost of solicitation of proxies. We have retained Morrow & Co., Inc. to assist in soliciting proxies by mail, telephone and personal interview for a fee of $10,000,$11,000, plus expenses. Our officers and employeesother Associates may also assist in soliciting proxies in those manners.
43
DIRECTIONS TO TJX CORPORATE HEADQUARTERS
770 Cochituate Road
Framingham, MA 01701From Logan International Airport (From the East)
Leaving the Airport, follow the signs for the Massachusetts Turnpike West (I-90W). The Plan is an amendment and restatement of The TJX Companies, Inc. Stock Incentive Plan as most recently previously amended in 2006. The provisions ofFollow the Plan as herein amended and restated shall applyMassachusetts Turnpike West for approximately 20 miles to Awards made after January 31, 2009 (the “Adoption Date”), except thatexit 13 (Framingham/Natick). Follow the definition of “Change of Control” as set forth herein shall apply to all Awards outstandingdirections above for“From Exit 13 on the Adoption Date andMassachusetts Turnpike.”
From the clarifications and related rules set forth herein that are relatedWest
Take Massachusetts Turnpike East (I-90E) to Section 409A ofexit 13 (Framingham/Natick). Follow the Code shall apply effective as of January 1, 2008.
From the North
Take I-95 South to secureexit 25 (Massachusetts Turnpike I-90). Take the Massachusetts Turnpike West (I-90W) approximately 6.5 miles to exit 13 (Framingham/Natick). Follow the directions above for The “From Exit 13 on the Massachusetts Turnpike.”
From the South
Take I-95 North to exit 25 (Massachusetts Turnpike). Take the Massachusetts Turnpike West (I-90W) approximately 6.5 miles to exit 13 (Framingham/Natick). Follow the directions above for“From Exit 13 on the Massachusetts Turnpike.”
Parking
TJX Companies, Inc. (the “Company”) and its stockholdersoffers free parking. Follow the benefit of the incentives inherent in stock ownership and the receipt of incentive awards by selected key employees and directors of the Company and its Subsidiaries who contribute to and will be responsible for its continued long term growth. The Plan is intended to motivate such individuals to enhance the long-term value of the Company by providing an opportunity for capital appreciation and to recognize services that contribute materiallyparking lot directory signage to the successvisitor parking areas.
Building Entrance
Enter the building through the Northeast Entrance (facing the Massachusetts Turnpike (I-90)).
YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY.
We encourage you to take advantage of the Company. Capitalized terms used in the Plan shall have the meaning set forth in Section 14.
Both are available 24 hours a Non-Employee Directorday, 7 days a week.
Internet and an Outside Director. If at any time the Committee shall include one or more members whotelephone voting are not Non-Employee Directors or Outside Directors, a subcommittee consisting solely of two or more individuals who are both Non-Employee Directors and Outside Directors shall constitute the Committee for purposes of the immediately preceding sentence. If at any time no Committee shall be in office, the functions of the Committee shall be exercised by the Board.
-2-
-3-
-4-
-5-
-6-
-7-
-8-
The TJX Companies, Inc. | INTERNET http://www.proxyvoting.com/tjx Use the Internet to vote your proxy. Have your proxy card in hand when you access the | |||
web site. | ||||
OR | ||||
TELEPHONE 1-866-540-5760 Use any touch-tone telephone to |
-9-hand when you call.
If you vote your proxy by Internet or by telephone, you do NOT need to mail back your proxy card. | ||||
To vote by mail, mark, sign and date your proxy card and return it in the | ||||
Your Internet or telephone vote authorizes the | ||||
WO# 22569 |
q FOLD AND DETACH HEREq
Please vote, date and sign below and return promptly in the enclosed envelope. |
-10-
Please mark your votes as
indicated in this example
x | |||
-11-
-12-
-13-
-14-
-15-
-16-
-17-
-18-
-19-
-20-
-21-
-22-
The Board of Directors recommends a | ||||||||||
vote FOR the |
1. Election of Directors | ||||||||||||||||||||||||||
Nominees: | FOR | |||||||||||||||||||||||||
AGAINST | ABSTAIN | |||||||||||||||||||||||||
FOR | AGAINST | ABSTAIN | ||||||||||||||||||||||||
1.1 Zein Abdalla | ¨ | ¨ | ¨ | 1.6 Michael F. Hines | | |||||||||||||||||||||
¨ | ||||||||||||||||||||||||||
¨ | ||||||||||||||||||||||||||
The Board of Directors recommends a vote FOR Proposal 2. | FOR | AGAINST | ABSTAIN | |||||||||||||||||||||||
1.2 José B. Alvarez | ¨ | ¨ | ¨ | 1.7 Amy B. Lane | ¨ | ¨ | ¨ | 2. | Ratification of appointment of independent registered public accounting firm. | ¨ | ¨ | ¨ | ||||||||||||||
1.3 Alan M. Bennett | ¨ | ¨ | ¨ | 1.8 Carol Meyrowitz | ¨ | ¨ | ¨ | The Board of Directors recommends avote FOR Proposal 3. | FOR | AGAINST | ABSTAIN | |||||||||||||||
1.4 Bernard Cammarata | ¨ | |||||||||||||||||||||||||
¨ | ¨ | 1.9 John F. O’Brien | ¨ | ¨ | ¨ | 3. | Approval of | |||||||||||||||||||
1.5 David T. Ching | ¨ | ¨ | ¨ | 1.10 Willow B. Shire | ||||||||||||||||||||||
¨ | ¨ | ¨ | The Board of Directors recommends a vote FOR Proposal | FOR | AGAINST | ABSTAIN | ||||||||||||||||||||
4. | Advisory approval of TJX’s executive compensation. | ¨ | ¨ | ¨ |
Address Change | ||||||||||||||||
or Comments | ||||||||
SEE REVERSE | ||||||||
Please sign exactly as your name(s) appear(s) on the books of the Company. Joint owners should each sign personally. Trustees and other fiduciaries should indicate the capacity in which they sign, and when more than one name appears, a majority must sign. If a corporation, this signature should be that of an authorized officer who should state his or her title.
Signature | Signature | Date |
You can access your
5 | FOLD AND DETACH HERE | 5 |
Access your The TJX Companies, Inc. account online via Investor ServiceDirect® (ISD).
The transfer agent for The TJX Companies, Inc. makes it easy and convenient to get current information on your shareholder account.
• View account status | • View payment history for dividends | |||||
• View certificate history | • Make address changes | |||||
• View book-entry information | • Obtain a duplicate 1099 tax form |
Visit us on the web at www.bnymellon.com/shareowner/equityaccess
For Technical Assistance Call 1-877-978-7778 between 9am-7pm
Monday-Friday Eastern Time
For all other inquiries call
Investor ServiceDirect®
Available 24 hours per day, 7 days per week
TOLL FREE NUMBER: 1-866-606-8365
THE TJX COMPANIES, INC. Please take note of the important information enclosed with this proxy card. Your vote counts and you are strongly encouraged to exercise your right to vote your shares. Please vote on the Internet or by telephone or by mail prior to the Annual Meeting of Stockholders to be held on June 13, 2012. Thank you in advance for your prompt consideration of these matters. |
ChooseMLinkSMfor fast, easy and secure 24/7 online access to your future proxy materials, investment plan statements, tax documents and more. Simply log on toInvestor ServiceDirect®atwww.bnymellon.com/shareowner/equityaccess where step-by-step instructions will prompt you through enrollment. |
Important notice regarding the Internet availability of proxy materials for the Annual Meeting of StockholdersStockholders.
ANNUAL MEETING OF STOCKHOLDERS –— JUNE 2, 2009
The stockholder(s) whose signature(s) appear(s) on the reverse side of this Proxy Card hereby appoint(s) CAROL MEYROWITZ, JEFFREY G. NAYLORSCOTT GOLDENBERG and MARY B. REYNOLDS, or any of them, each with full power of substitution, as proxies, to vote at the Annual Meeting of Stockholders of The TJX Companies, Inc. (the “Company”) to be held at the Company’s corporate office, 770 Cochituate Road, Framingham, Massachusetts on Tuesday,Wednesday, June 2, 200913, 2012 at 11:00 a.m., Eastern Time, and any adjournment or postponement thereof, all the shares of Common Stock of the Company which the stockholder(s) could vote, if present, as directed on the reverse of this card and in such manner as the proxies may determine on any other matters which may properly come before the meeting and to vote as specified on the reverse.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN.IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALLTHE DIRECTOR NOMINEES, FOR PROPOSAL 2, FOR PROPOSAL 3 AND FOR PROPOSAL 3.4.THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENT.ADJOURNMENT OR POSTPONEMENT.THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS.
The Board of Directors recommends a vote FOR the Electionelection of Directors,the Director nominees, FOR Proposal 2, FOR Proposal 3 and FOR Proposal 3.
Address Change/Comments (Mark the corresponding box on the reverse side) | ||||
SHAREOWNER SERVICES P.O. BOX 3550 SOUTH HACKENSACK, NJ 07606-9250 |
(Continued and to be marked, dated and signed, on the other side)