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  x                            Filed by a Party other than the Registrant  ¨

Check the appropriate box:

520 Lake Cook Road, Deerfield, Illinois 60015

NOTICE OF ANNUAL MEETING

AND PROXY STATEMENT

March 3, 20152016

Dear Fellow Stockholders:

We are pleased to invite you to the Annual Meeting of Stockholders of Fortune Brands Home & Security, Inc. on Tuesday, April 28, 201526, 2016 at 8:00 a.m. (CDT) at the RenaissanceWestin Chicago North Shore, Hotel, 933 Skokie Boulevard, Northbrook,601 N. Milwaukee Avenue, Wheeling, Illinois. The following matters will be considered at the Annual Meeting:

such other business as may properly come before the meeting.

Stockholders of record at the close of business on February 27, 2015,26, 2016, the record date for the meeting, are entitled to vote at the Annual Meeting.Stockholders who wish to attend the Annual Meeting in person should review the instructions beginning on page 1.

YOUR VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SUBMIT YOUR PROXY OR VOTING INSTRUCTIONS AS SOON AS POSSIBLE. You may submit your proxy (1) by mail using a traditional proxy card, (2) by telephone at1-800-690-6903, or (3) through the Internet atwww.proxyvote.com. See pages 1-4 for voting instructions.

This Proxy Statement and accompanying proxy are first being distributed on or about March 10, 2015.11, 2016.

Robert K. Biggart

Senior Vice President, General Counsel and Secretary

Important Notice Regarding the Availability of Proxy Materials

for the Annual Meeting of Stockholders to be Held Onon Tuesday, April 28, 2015.26, 2016.

This Notice of Annual Meeting and Proxy Statement and the Annual Report on Form 10-K for the fiscal year ended December 31, 20142015 (“Form 10-K”) are available at www.proxyvote.com.www.proxyvote.com.

Why did I receive these materials?

These materials were provided to you in connection with the solicitation by the Board of Directors (the “Board”) of Fortune Brands Home & Security, Inc. (“Fortune Brands” or the “Company”), of proxies to be voted at our 20152016 Annual Meeting of Stockholders and at any adjournment or postponement of the Annual Meeting. The Annual Meeting will take place on April 28, 201526, 2016 at 8:00 a.m. (CDT), at the RenaissanceWestin Chicago North Shore, Hotel, 933 Skokie Boulevard, Northbrook,601 N. Milwaukee Avenue, Wheeling, Illinois. This Proxy Statement describes the matters on which you, as a stockholder, are entitled to vote and gives you the information that you need to make an informed decision on these matters.

Why did I receive a “Notice of Internet Availability of Proxy Materials” instead of printed proxy materials?

Companies are permitted to distributeprovide stockholders with access to proxy materials to stockholders by providing access to these documents over the Internet instead of mailing a printed copy. We mailed a Notice of Internet Availability of Proxy Materials (the “Notice”) to most stockholders. The Notice contains instructions on how to access the proxy materials on the Internet, how to vote and how to request a printed set of proxy materials. This approach reduces the environmental impact and our costs of printing and distributing the proxy materials, while providing a convenient method of accessing the materials and voting.

The Notice contains instructionsCompany will make its Annual Report on howForm 10-K for the last fiscal year, including any financial statements or schedules, available to accessstockholders without charge, upon written request to the proxy materials onSecretary, Fortune Brands Home & Security, Inc., 520 Lake Cook Road, Deerfield, Illinois 60015. The Company will furnish exhibits to Form 10-K to each stockholder requesting them upon payment of a $.10 per page fee to cover the Internet, how to request a printed set of proxy materials and how to vote.Company’s cost.

Can I get electronic access to the proxy materials if I received printed materials?

Yes. If you received printed proxy materials, you can also access them online atwww.proxyvote.com before voting your shares. The Company’s proxy materials are also available on our website athttp://ir.fbhs.comir.fbhs.com/annuals-proxies.cfm. Stockholders are encouraged to elect to receive future proxy materials electronically instead of paper.electronically. If you opt to receive our future proxy materials electronically, you will receive an email next year with instructions containing a link to view those proxy materials and a link to the proxy voting site.website. Your election to receive proxy materials by email will remain in effect until you terminate it or for as long as the email address provided by you is valid. Stockholders of record who wish to participate can enroll athttp://enroll.icsdelivery.com/fbhs. Beneficial owners should check the information provided bywith their bank or broker regarding the availability of this service.

What is the difference between being a stockholder of record and a beneficial owner?

If your shares are registered directly in your name with Wells Fargo Shareowner Services, the Company’s transfer agent, you are the “stockholder of record.” If your shares are held in a brokerage account or by a bank, you hold your shares in “street name” and are thea “beneficial owner” of those shares. The majority of stockholders are beneficial owners. For such shares, the bank or broker is considered the stockholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, youBeneficial owners have the right to direct that organizationtheir bank or broker on how to vote the shares held in yourtheir account by using the voting instructions provided to you by yourthe bank or broker.

Who is entitled to vote?

Only stockholders who owned the Company’s common stock of record at the close of business on February 27, 201526, 2016 are entitled to vote. Each holder of common stock is entitled to one vote per share. There were 159,220,079 shares152,579,248shares of common stock outstanding on February 27, 2015.26, 2016.

We request that persons who hold stock in their names or custody or in the names of nominees, for the benefit of others, forward copies of the Notice to the beneficial owners of our stock and request the authority to vote on their behalf.

Who can attend the meeting?

Only stockholders who owned Fortune Brands’ common stock as of the close of business on February 27, 2015,26, 2016, or their authorized representatives, may attend the Annual Meeting. At the entrance to the meeting, stockholders will be asked to present valid photo identification to determine if you owned common stock on February 27, 2015.26, 2016. If you are acting as a proxy, you will need to submit a valid written legal proxy signed by the owner of the common stock.You must bring such evidence with you to be admitted to the meeting.

Stockholders who own their shares in “street name” will be required to submit proof of ownership at the entrance to the meeting. Either your voting instruction card or brokerage statement reflecting your stock ownership as of February 27, 201526, 2016 may be used as proof of ownership.

How do I vote?

If you received a Notice in the mail, you can either vote by (i) Internet (www.proxyvote.com) or (ii) in person at the Annual Meeting. Voting instructions are provided on the Notice. If you request a paper copy of the materials, you may vote by mail.

Stockholders who received printed proxy materials in the mail can vote by (i) filling out the proxy card and returning it in the postage paid return envelope, (ii) telephone (800-690-6903), (iii) Internet (www.proxyvote.com), or (iv) in person at the Annual Meeting of Stockholders. Voting instructions are provided on the proxy card.

Stockholders who elected to receivereceived proxy materials electronically can vote by (i) Internet (www.proxyvote.com), (ii) telephone (800-690-6903), or (iii) in person at the Annual Meeting of Stockholders.

If you are a beneficial owner of our shares, you must vote by giving instructions to your bank or broker. You should follow the voting instructions on the form that you receive from your bank or broker. The availability of telephone or Internet voting will depend on your bank’s or broker’s voting process.To be able to vote in person at the Annual Meeting, you must obtain a legal proxy from your bank or broker in advance and present it to the Inspector of Election with your completed ballot at the Annual Meeting.

How will my proxy be voted?

Your proxy card, when properly signed and returned to us, or processed by telephone or via the Internet, and not revoked, will be voted in accordance with your instructions. If any matter is properly presented other than the three items described below,above, the Proxy Committee (the persons named in the enclosed proxy card or, if applicable, their substitutes), will have discretion to vote your shares in their best judgment.

What if I don’t mark the boxes on my proxy or voting instruction card?

Unless you give other instructions on your proxy card, or unless you give other instructions when you cast your vote by telephone or the Internet, the Proxy Committee will vote your shares in accordance with the recommendations of the Board, which are:areFOR Items 1, 2 and 3.

If you hold shares beneficially and you have not provided voting instructions, your bank or broker is only permitted to use its discretion and vote your shares on certain routine matters (such as Item(Item 2). If you have not provided voting instructions to your bank or broker on non-routine matters (such as Items(Items 1 and 3), your bank or broker is not permitted to use discretion and vote your shares.Therefore, we urge you to give voting instructions to your bank or broker on all three voting items. Shares that are not permitted to be voted by your bank or broker with respect to any matter are called “broker non-votes.” Broker non-votes are not considered votes for or against a proposal and will have no direct impact on any proposal.

How many votes are needed to approve an item?

The nominees for director, in non-contested elections, must receive a majority of the votes cast at the meeting, in person or by proxy, to be elected. A proxy card marked to abstain on the election of a director will not be counted as a vote cast with respect to that director.

Under the Company’s majority vote Bylaw provision relating to the election of directors, if the number of votes cast “for” a director nominee does not exceed the number of votes cast “against” the director nominee, then the director must tender his or her resignation from the Board promptly after the certification of the stockholder vote. The Board (excluding the nominee in question) will decide within 90 days of that certification, through a process managed by the Nominating and Corporate Governance Committee, whether to accept the resignation. The Board’s explanation of its decision will be promptly disclosed in a filing with the Securities and Exchange Commission (“SEC”).

The affirmative vote of shares representing a majority in voting power of the common stock, present in person or represented by proxy at the meeting, and entitled to vote is necessary for the approval of Items 2 and 3. Proxy cards marked as abstentions on Items 2 and 3 will not be voted and will have the effect of a negative vote.

How can I revoke my proxy or change my vote?

You may revoke your proxy by giving written notice to the Secretary of the Company or by delivering a later dated proxy at any time before it is actually voted. If you voted on the Internet or by telephone, you may change your vote by voting again. Your last vote is the vote that will be counted. Attendance at the Annual Meeting does not revoke your proxy unless you vote at the Annual Meeting.

Will my vote be public?

As a matter of policy, proxies, ballots and tabulations that identify individual stockholders are not publicly disclosed, but are available to the independent Inspector of Election, the proxy solicitation firm and certain employees of the Company.

What constitutes a quorum?

The presence at the meeting, in person or by proxy, of the holders of a majority in voting power of the outstanding shares of common stock entitled to vote will constitute a quorum. Proxies received but marked as abstentions and broker non-votes will be included in the calculation of the number of shares considered to be present at the meeting.

Our Board is soliciting this proxy. The Company will bear the expense of soliciting proxies for this meeting, including mailing costs. To assure that there is sufficient representation at the meeting, our proxy solicitor or our employees may solicit proxies by telephone, facsimile or in person. We have retained Innisfree M&A Incorporated as our proxy solicitor to aid in soliciting proxies for a fee, estimated at $15,000, plus reasonable out-of-pocket expenses. Our total expenses will depend upon the volume of shares represented by the proxies received in response to the Notice and Proxy Statement.

What if I am a participant in the Fortune Brands Home & Security Retirement Savings Plan or the Fortune Brands Home & Security Hourly Employee Retirement Savings Plan?

We are mailing a printed copy of the proxy materials to participants in the Fortune Brands Home & Security Retirement Savings Plan and the Fortune Brands Home & Security Hourly Employee Retirement Savings Plan (collectively, the “Savings Plans”) who invest in the Fortune Brands Stock Fund underthrough the Savings Plans. The Trustee of the Savings Plans, as record holder of the Fortune Brands common stock held in the Savings Plans, will vote whole shares attributable to your interest in the Fortune Brands Stock Fund in accordance with your directions. If you invest in the Fortune Brands Stock Fund under the Savings Plans and you sign and return the enclosed proxy card, we will forward it to the Trustee of the Savings Plans. The proxy card will serve as instruction to the Trustee to vote the whole shares attributable to your interest in the manner you indicate on the card. If the Trustee does not receive timely direction with respect to the voting of your shares held in the Fortune Brands Stock Fund, the Trustee will vote such shares in the same manner and in the same proportion as the shares for which the Trustee received voting instructions.

How can I eliminate multiple mailings to the same address?

If you and other residents at your mailing address are registered stockholders and you receive more than one copy of the Notice, but you wish to eliminate the duplicate mailings, you must submit a written request to the Company’s transfer agent, Wells Fargo. To request the elimination of duplicate copies, please write to Wells Fargo Shareowner Services, 1110 Centre Pointe Curve, Suite 101, MAC N9173-010, Mendota Heights, Minnesota 55120.

If you and other residents at your mailing address own shares in street name, your broker or bank may have sent you a notice that your household will receive only one Notice or one set of proxy materials for each company in which you hold stock through that broker or bank. This practice, known as “householding,” is designed to reduce our printing and postage costs. If you did not respond, the broker or bank will assume that you have consented, and will send only one copy of the Notice to your address. You may revoke your consent to householding at any time by sending your name, the name of your brokerage firm, and your account number to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717. The revocation of your consent to householding will be effective 30 days following its receipt. In any event, if you did not receive an individual copy of the Notice, or if you wish to receive individual copies of the Notice or our proxy materials for future meetings, we will send a copy to you if you call Shareholder Services at (847) 484-4538, or write to the Secretary of Fortune Brands Home & Security, Inc., 520 Lake Cook Road, Deerfield, Illinois 60015.

How can I submit a stockholder proposal or nomination next year?

Our Bylaws provide that in order for a stockholder to (i) nominate a candidate for election to our Board at the 2017 Annual Meeting, or (ii) propose business for consideration at the 2017 Annual Meeting, written notice containing the information required by the Bylaws must be delivered to the Secretary of the Company no less than 90 days nor more than 120 days before the anniversary of the prior year’s Annual Meeting, that is, after December 27, 2016 but no later than January 26, 2017 for the 2017 Annual Meeting.

Under SEC rules, if a stockholder wishes to submit a proposal for possible inclusion in the Company’s 2017 proxy statement pursuant toRule 14a-8 of the Exchange Act, we must receive it on or before November 11, 2016.

Copies of the Restated Certificate of Incorporation and Bylaws are available upon written request to the Secretary, Fortune Brands Home & Security, Inc., 520 Lake Cook Road, Deerfield, Illinois 60015. The person presiding at the meeting is authorized to determine if a proposed matter is properly brought before the meeting or if a nomination is properly made.

Summary of Qualification of Directors

The Board believes that all directors must possess a considerable amount of education and business management experience (such as experience as a chief executive, chief operating or chief financial officer) and education.. The Board also believes that it is necessary for each of the Company’s directors to possess many qualities and skills. The Board believes that there are certain general requirements which are mandatory for service on the Company’s Board, while there are other skills and experiences that should be represented on the Board as a whole, but not necessarily by each individual director.

General requirements for all directors:

Experiences,Specific experiences, qualifications, and backgrounds to be represented on the Board as a whole:

The process used by the Nominating and Corporate Governance Committee in recommending qualified director candidates is described below under Corporate Governance – Director Nomination Process (see page 910 of this Proxy Statement).

Election of Class III Directors

The Board consists of eightnine members and is divided into three classes, each having three-year terms that expire in successive years. The term of the Class III directors expires at the 2016 Annual Meeting of Stockholders. In 2015, Ms. Susan S. Kilsby was recommended for nomination to the Board by certain non-management directors and the chief executive officer and was appointed as a Class II member of the Board of Directors for a term continuing until the 2016 Annual Meeting of Stockholders. The Board proposes that the three nominees described below,has nominated Ms. Kilsby and Mr. Christopher J. Klein, each of whom is currently serving as a Class III director, be re-elected tofor re-election as Class III directors for a new term of three years expiring at the 20182019 Annual Meeting of Stockholders and until their successors are duly elected and qualified. Mr. Richard A. Goldstein, who currently serves as a Class II director, was not nominated for re-election and will retire from the Board immediately following the Annual Meeting of Stockholders. The Board did not re-nominate Mr. Goldstein consistent with the retirement age policy set out in the Company’s Corporate Governance Principles and has reduced the size of the Board from nine directors to eight directors, effective immediately following the Annual Meeting. Proxies cannot be voted for more than the number of nominees proposed for re-election.

Each of the nominees has consented to be named as a nominee and to serve as a director, if elected. If any of them should become unavailable to serve as a director (which is not now expected), the Board may designate a substitute nominee. In that case, the Proxy Committee will vote for the substitute nominee designated by the Board.

The names of the nominees and the current Class III and Class III directors, along with their present positions, their principal occupations and directorships held with other public corporations during the past five years, their ages and the year first elected as a director of the Company, are set forth below. Individual qualifications and experiences of our directors that contribute to the Board’s effectiveness as a whole are also described in the following paragraphs.

The Board of Directors recommends that you vote FOR the election of each nominee named above.

Fortune Brands is committed to maintaining strong corporate governance practices that are good for our stockholders and our business. We are dedicated to maintaining these practices and upholding high standards of conduct.

Corporate Governance Principles

The Board adopted a set of Corporate Governance Principles which describe our corporate governance practices and address corporate governance issues such as Board composition and responsibilities, Board meeting procedures, the establishment of Board committees, management succession planning process and review of risks. The Corporate Governance Principles are available athttp://ir.fbhs.com/governance.cfmcorporate-governance.cfm.

Director Independence

The Company’s Corporate Governance Principles provide that a majority of the members of the Board shall be independent directors. New York Stock Exchange requirements, as well as the Company’s committee charters, require each member of the Audit, Compensation and Nominating and Corporate Governance Committees to be independent. The Board applies the definition of independence found in the New York Stock Exchange Listed Company Manual in determining which directors are independent. When determining each director’s independence, the Board also considered charitable contributions made by the Company to organizations with which each director is affiliated.

Applying that definition, Messrs. Goldstein, Mackay, Morikis, Thomas, Wesley and Waters and Ms.Mses. Hackett and Kilsby were affirmatively determined by the Board to be independent and all such charitable relationships were deemed immaterial. Due to Mr. Klein’s employment with the Company, he is not considered independent.

None of the non-employee directors has any material relationship with the Company other than being a director and stockholder. Also, none of the non-employee directors participated in any transaction or arrangement that interferes with such director’s independence.

Policies with Respect to Transactions with Related Persons

The Board has adopted a Code of Business Conduct and Ethics which sets forth various policies and procedures intended to promote the ethical behavior of all of the Company’s employees, officers and directors (the “Code of Conduct”). The Code of Conduct describes the Company’s policy on conflicts of interest. The Board has established a Compliance Committee (comprised of management) which is responsible for administering and monitoring compliance with the Code of Conduct. The Compliance Committee periodically reports on the Company’s compliance efforts to the Audit Committee and to the Board.

The Board has also established a Conflicts of Interest Committee (comprised of management) which is responsible for administering, interpreting and applying the Company’s policies with respect to conflicts of interest. The Conflicts of Interest Policy describes the types of relationships that may constitute a conflict of interest with the Company. TheUnder the Conflicts of Interest Policy, requires all directors and executive officers to reportare responsible for reporting any potential related person transaction (as defined in Item 404 of RegulationS-K) to the Conflicts of Interest Committee in advance of commencing a potential transaction. All employees and directors are required to periodically certify compliance with the Company’sThe Conflicts of Interest Policy.Committee will present to the Audit Committee any potential related party transaction. The Audit Committee will evaluate the transaction, determine whether the interest of the related person is material and approve or ratify, as the case may be, the transaction. In addition, the Company’s executive officers and directors annually complete a questionnaire on which they are required to disclose any related person transactions and potential conflicts of interest. The General Counsel reviews the responses to the questionnaires and, if a related person transaction is reported by a director or executive officer, submits the transaction for review by the Audit Committee. The Conflicts of Interest Committee also reviews potential conflicts of interest and reports findings involving any director or executive officer of the Company to the Nominating and Corporate Governance Committee (the “Nominating Committee”) and the Audit Committee.. The Nominating Committee will review any potential conflict of interest or related person transaction involving a member of the Board to determine whether such potential conflict or transaction would affect that director’s independence. The Conflicts

of Interest Committee will also present any potential related person transaction involving a member of the Board or an executive officer of the Company to the Audit Committee to evaluate each related person transaction, determine whether the interest of the related person in the transaction is material and approve or ratify, as the case may be, the transaction. The Audit Committee may ratify any related person transactions that were not submitted in advance of the transaction.

Certain Relationships and Related Transactions

Since January 1, 2014,2015, the Company did not participate in any transactions in which any of its directors, executive officers, any immediate family member of a director or executive officer or any beneficial owner of more than 5% of the Company’s common stock had a direct or indirect material interest.

Director Nomination Process

The Nominating Committee is responsible for, among other things, screening potential director candidates, recommending qualified candidates to the Board for nomination and assessing director independence.

When identifying director candidates, the Nominating Committee determines whether there are any evolving needs that require an expert in a particular field or other specific skills or experiences. When evaluating director candidates, the Nominating Committee first considers a candidate’s management experience and then considers issues of judgment, background, stature, conflicts of interest, integrity, ethics and commitment to the goal of maximizing stockholder value. The Nominating Committee also focuses on issues of diversity, such as diversity of gender, race and national origin, education, professional experience and differences in viewpoints and skills. The Nominating Committee does not have a formal policy with respect to diversity; however, the Board and the Nominating Committee believe that it is essential that the Board members represent diverse viewpoints. In considering candidates for the Board, the Nominating Committee considers the entirety of each candidate’s credentials in the context of these standards. With respect to the nomination of continuing directors for re-election, the individual’s contributions to the Board are also considered. For the purpose of this Annual Meeting of Stockholders, the Nominating Committee recommended the nomination of each of the Company’s currentMs. Kilsby and Mr. Klein as Class III directors.

In connection with future director elections, or at any time there is a vacancy on the Board, the Nominating Committee may retain a third-party search firm to assist in locating qualified candidates that meet the needs of the Board at that time.

It is the Nominating Committee’s policy to consider director candidates recommended by stockholders, if such recommendations are properly submitted to the Company. Stockholders that wish to recommend an individual as a director candidate for consideration by the Nominating Committee can do so by writing to the Secretary of Fortune Brands Home & Security, Inc. at 520 Lake Cook Road, Deerfield, Illinois 60015. Recommendations must include the proposed nominee’s name, biographical data and qualifications, as well as other information that would be required if the stockholder were actually nominating the recommended candidate pursuant to the procedures for such nominations provided in our Bylaws. The Nominating Committee will consider the candidate and the candidate’s qualifications in the same manner in which it evaluates nominees identified by the Nominating Committee. The Nominating Committee may contact the stockholder making the nomination to discuss the qualifications of the candidate and the stockholder’s reasons for making the nomination. Members of the Nominating Committee may then interview the candidate if the committee deems the candidate to be appropriate. The Nominating Committee may use the services of a third-party search firm to provide additional information about the candidate prior to making a recommendation to the Board.

The Nominating Committee’s nomination process is designed to ensure that the Nominating Committee fulfills its responsibility to recommend candidates that are properly qualified to serve the Company for the benefit of all of its stockholders, consistent with the standards established under the Company’s Corporate Governance Principles.

Communication with the Board

The Board and management encourage communication from the Company’s stockholders. Stockholders who wish to communicate with the Company’s management should direct their communication to the Chief Executive Officer or the Secretary of Fortune Brands Home & Security, Inc. at 520 Lake Cook Road, Deerfield,

Illinois 60015. Stockholders, or other interested parties, who wish to communicate with the non-management directors or any individual director should direct their communication c/o the Secretary at the address above. The Secretary will forward communications intended for the Board to the Chairman of the Board, or, if intended for an individual director, to that director. If multiple communications are received on a similar topic, the Secretary may, in his or her discretion, forward only representative correspondence. Any communications that are abusive, in bad taste or present safety or security concerns may be handled differently.

Board Leadership Structure

Mr. Thomas serves as the Company’s non-executive, independent Chairman. The Board determined that having an independent director serve as Chairman of the Board is in the best interests of our stockholders at this time. This leadership structure aids the Board’s oversight of management and allows our Chief Executive Officer to focus primarily on his management responsibilities. The non-executive Chairman has the responsibility of presiding at all meetings of the Board, consulting with the Chief Executive Officer on Board and committee meeting agendas, acting as a liaison between management and the non-management directors, including maintaining frequent contact with the Chief Executive Officer and advising him or her on the efficiency of the Board meetings, facilitating teamwork and communication between the non-management directors and management, as well as additional responsibilities that are more fully described in the Company’s Corporate Governance Principles. In addition, the Company’s non-executive Chairman facilitates the Board’s annual performance assessment of the Chief Executive Officer.

The Board does not believe that a single leadership structure is right at all times, so the Board periodically reviews its leadership structure to determine, based on the circumstances at the time, whether other leadership structures might be appropriate for the Company. The Board has been and remains committed to maintaining strong corporate governance and appropriate independent oversight of management. Given that each of the members of the Board, other than Mr. Klein, is independent we believe that the leadership structure currently utilized by the Board provides effective independent Board leadership and oversight.

Executive Sessions

Pursuant to the Company’s Corporate Governance Principles, non-management directors of the Board are required to meet on a regularly scheduled basis without the presence of management. The non-executive Chairman of the Board leads these sessions.

Meeting Attendance

The Board of Directors met sevensix times in 2014.2015. Each director attended at least 94%75% of the total meetings of the Board and committees of the Board of which the director was a member during 2014. In addition to participation at Board and committee meetings, our directors regularly engage in other communications throughout the year, including considerable telephone and email contact with the Chairman of the Board, the Chief Executive Officer and other members of management regarding matters of interest and concern to the Company.

2015. Pursuant to the Company’s Corporate Governance Principles, all directors are encouraged and expected to attend the Annual Meeting. In 2014,2015, all of the directors attended the Company’s annual meeting of stockholders.

Risk Management

The responsibility for the day-to-day management of risks lies with the Company’s management team; however, the Board has an active role, as a whole and also at the committee level, in overseeing the strategy and process for managing the Company’s risks. The Board regularly reviews information regarding the Company’s business strategy, leadership development, resource allocation, succession planning, credit, liquidity and operations, as well as the risks associated with each. The Company’s overall risk management program consists of periodic management discussions analyzing and mitigating risks, an annual review of risks associated with each of the Company’s operating businesses and an annual review of risks related to the Company’s compensation programs and practices.

Annually, management identifies both external risks (i.e., economic) and internal risks (i.e., strategic, operational, financial and compliance risks,compliance), assesses the impact of these risks and determines how to mitigate such risks. The Audit Committee manages the Company’s risk management program and reviews the results of the annual assessment. Management also provides the Audit Committee with quarterly updates on the Company’s risks. In addition, the Audit Committee oversees management of the Company’s financial risks.

The Company’s Compensation Committee is responsible for overseeing the management of risks relating to the compensation paid to the Company’s executives and the Company’s executive compensation plans and programs. Annually, the Compensation Committee’s independent compensation consultant conducts an assessment of the risks associated with the Company’s executive compensation practices and programs. The compensation consultant conducts a more extensive review of all of the Company’s broad-based compensation incentive arrangements every three years. For more information about that assessment see “Compensation Risks” below.

The Nominating Committee manages risks associated with the independence of the Board, potential conflicts of interest of Board members, and the Company’s corporate governance structure, as well as management of risks associated with the environment, health and safety, diversity, philanthropy, global citizenship and sustainability.

While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board is regularly informed through committee reports about all of the risks described above. The Board’s assignment of responsibility for the oversight of specific risks to its committees enables the entire Board, under the leadership of the non-executive Chairman and the Chief Executive Officer, to better monitor the risks of the Company and more effectively develop strategic direction, taking into account the various risks facing the Company, including the magnitude of such risks.

Compensation Risks

The Compensation Committee’s compensation consultant conducts an annual assessment of the risks associated with the compensation policies and practices used to compensate the Company’s executives and reports on the assessment to the Compensation Committee. In 2014,2015, the Compensation Committee, with assistance from its independent compensation consultant, reviewed the elements of executive compensation to determine whether any portion of executive compensation encouraged excessive risk taking and concluded that they do not. In general, the executive compensation arrangements are consistent with the structure and design of other companies of similar size and industry sector, and the following risk-mitigating design features have been incorporated into the Company’s programs:

As described in our Compensation Discussion and Analysis, compensation decisions are made using a combination of objective and subjective considerations designed to mitigate excessive risk taking by executives.

Board Committees

The Board established an Audit Committee, a Compensation Committee, an Executive Committee and a Nominating and Corporate Governance Committee. A list of current Committee memberships may be found on the Company’s website athttp://ir.fbhs.com/committees.cfm. The Committee memberships as of the date of this Proxy Statement are set forth below:

An “X” indicates membership on the committee.

A “C” indicates that the director serves as the chair of the committee.

Audit Committee

The Audit Committee’s primary function is to assist the Board in overseeing the (i) integrity of the Company’s financial statements and the financial reporting process of the Company;process; (ii) Company’s compliance with legal and regulatory requirements; (iii) independence and qualifications of the Company’s external auditors; and (iv) performance of the Company’s external and internal auditors.

Each member of the Audit Committee (Messrs. Mackay, Morikis, Thomas, Waters and Wesley), is financially literate. Each of Messrs. Mackay, Thomas, Waters and Wesley has accounting or financial management expertise and is an audit committee financial expert as defined in Item 407(d)(5)(ii) and (iii) of Regulation S-K under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As required by its charter, each Audit Committee member has also been determined by our Board to be independent as such term is defined in Rule 10A-3 under the Exchange Act and the New York Stock Exchange Listed Company Manual. The Audit Committee met eight times in 2014.2015.

Compensation Committee

The Compensation Committee’s primary functions are to (i) develop and critically review the Company’s executive pay philosophy and practices so that they are aligned with the Company’s business strategy; and (ii) set the compensation of the Company’s executive officers, which includes the presidents of the Company’s principal operating companies, in a manner that is consistent with competitive practices, individual and Company performance and the requirements of appropriate regulatory bodies.

As required by its charter, each member of the Compensation Committee (Messrs. Goldstein, Mackay, Morikis and Wesley and Ms. Hackett)Mses. Hackett and Kilsby) has been determined by our Board to be independent as such term is defined in the New York Stock Exchange Listed Company Manual and pursuant to SEC regulations. The Committee has created a special Subcommittee comprised of Ms.Mses. Hackett and Kilsby and Messrs. Goldstein, Mackay and Morikis that is

responsible for approving all performance standards and payments for any pay program intended to qualify as “performance-based compensation” under Section 162(m) of the Internal Revenue Code (the “Code”). The Compensation Committee met sevensix times in 2014.2015.

Compensation Committee Procedures

The Compensation Committee directs management to prepare financial data to be used by the Compensation Committee in determining executive compensation. In addition, members of the Company’s human resources department assist in the preparation of executive compensation tally sheets and historical information describing compensation paid to executives and the Compensation Committee’s independent consultant provides market data for use in determining executive compensation. The Compensation Committee is presented with recommendations from management and from the Committee’s independent compensation consultant as to the level and type of compensation to provide to the Company’s executive officers. Members of the Company’s legal department provide the Compensation Committee with general advice on laws applicable to executive compensation and the directors’ fiduciary duties in setting compensation.

The Chief Executive Officer attends meetings of the Compensation Committee. The Chief Executive Officer’s feedback about each officer’s performance is essential in the Compensation Committee’s determination of the officer’s salary and target incentive compensation determinations. See pages 1718 through 32 of this Proxy Statement for more information about how the Compensation Committee determined the executive officers’ compensation in 2014.2015.

Compensation Committee Consultant

The Compensation Committee engages an outside compensation consultant. Meridian Compensation Partners, LLC (“Meridian”) was retained directly by and reports directly to the Compensation Committee. In 2014,2015, Meridian provided the following services and information to the Compensation Committee:

The Compensation Committee has authorized Meridian to interact with management in connection with advising the Compensation Committee. Meridian is included in discussions with management and, when applicable, the Compensation Committee’s outside legal counsel on matters being brought to the Compensation Committee for consideration. Meridian is prohibited from performing any services for management outside of services needed in connection with advising the Compensation Committee. The Compensation Committee has assessed Meridian’s independence and concluded that Meridian’s work for the Compensation Committee does not raise any conflict of interest.

Executive Committee

The Executive Committee did not meet in 2014.2015. The Executive Committee has all the authority of the full Board, except for specific powers that are required by law to be exercised by the full Board. The Executive Committee may not amend the Company’s charter, adopt an agreement of merger, recommend actions for stockholder approval, amend or repeal the Bylaws, elect or appoint any director or remove an officer or director, amend or repeal any resolutions of the Board, fix the Board’s compensation, and unless expressly authorized by the Board, declare a dividend, authorize the issuance of stock or adopt a certificate of ownership and merger.

Nominating and Corporate Governance Committee

The Nominating Committee’s primary functions are to (i) provide recommendations to the Board with respect to the organization and function of the Board and its committees; (ii) recruit, identify and recommend potential director candidates and nominees; (iii) develop a set of corporate governance principles; (iv) oversee the process of the evaluation of the Board and management; and (v) review and advise management on matters relating to the Company’s responsibilities to its employees and the community. The Nominating Committee also makes recommendations to the Board regarding the level and composition of compensation for non-employee directors.

As required by its charter, each member of the Nominating Committee (Messrs. Goldstein, Thomas and Waters and Ms. Hackett)Mses. Hackett and Kilsby) has been determined by our Board to be independent as such term is defined in the New York Stock Exchange Listed Company Manual. The Nominating Committee met four times in 2014.2015.

Other Corporate Governance Resources

The charters of each committee, the Company’s Corporate Governance Principles, the Company’s Code of Business Conduct and Ethics and the Company’s Code of Ethics for Senior Financial Officers are available on the Company’s website athttp://ir.fbhs.com/governance.cfmcorporate-governance.cfm.

Cash Fees

The annual cash fee for services as a non-employee director of the Company is $80,000. The members of the Audit Committee (Messrs. Mackay, Morikis, Thomas, Waters and Wesley) and the Compensation Committee (Ms.(Mses. Hackett and Kilsby and Messrs. Goldstein, Mackay, Morikis and Wesley) receive an additional annual cash fee of $7,500 for their service on these committees. In addition, the chairperson of each of the Audit, Compensation and Nominating and Corporate Governance Committees receives an additional annual cash fee of $15,000 for such service (Messrs. Thomas and(Mr. Waters, and Ms. Hackett and Mr. Thomas, respectively). Mr. Thomas receives an additional annual cash fee of $200,000 for his service as non-executive Chairman of the Board.

Directors have the ability tomay elect to receive payment of their cash fees in Company common stock rather than cash. In 2014, Mr. Morikis elected to convert all of his cash fees to Company stock.

Stock Awards

EachIn April 2015, each non-employee director receives(other than Ms. Kilsby) received an annual stock grant that iswas based on a set dollar value of $115,000. In 2014, theThe number of shares granted was determined by dividing the dollar value of the annual stock grant ($115,000) by the closing price of the Company’s common stock on the grant date ($39.46) into the dollar value ($115,000)45.62), rounded to the nearest share. Accordingly, 2,9142,521 shares of Company common stock were granted to each of the then-serving non-employee directors in April 2015. As Ms. Kilsby was elected a director in 2014.

July 2015, she did not receive a 2015 stock grant. Directors have the abilitymay elect to defer receipt of their annual stock awards until the January following the year in which the individual ceases actingserving as a director of the Company. In 2014, Ms. Hackett and Mr. Thomas elected to defer receipt of their annual stock award.

DirectorStockDirector Stock Ownership Guidelines

To further align the Board’s interests with those of stockholders, the Board established Stock Ownership Guidelines for non-employee directors. Directors are encouraged to own Company common stock with a fair market value currently equal to $240,000 (or three times their annual cash fee)fee, which is currently set at $80,000). The guidelines allow directors five years from the date of the director’s election to the Board to meet the guidelines. All of our directors, other than Ms. Kilsby, currently meet the Stock Ownership Guidelines. Ms. Kilsby has five years from the date of her election to the Board to meet the guidelines. For information onabout the beneficial ownership of the Company’s securities of the Companyheld by directors and executive officers, see “Certain Information Regarding Security Holdings” on pages 46 and 47.

Anti-Hedging and Anti-Pledging

The Company has a policy prohibiting directors (as well as senior management) from hedging the risk of owning Company common stock and from pledging or otherwise encumbering shares of Company common stock as collateral for indebtedness in any manner including, but not limited to, holding shares in a margin account.

 * Although Mr. Klein currently serves as a member of the Board, he does not receive any additional compensation for such service.

This Compensation Discussion and Analysis^* (“CD&A”) describes the Company’s executive compensation program and explains how the Compensation Committee made compensation decisions for the following Named Executive Officers (the “NEOs”) in 2014:2015:

Use of the term “Operating Company Presidents” throughout the CD&A specifically refers to the NEOs who served as operating company presidents of our businesses in 2014, namely, Messrs. Randich and Lingafelter, but does not refer to all of the Company’s operating company presidents.

This CD&A is divided into the following main sections:

EXECUTIVE SUMMARY

20142015 Business Highlights

Fortune Brands has a strong business model built on its structural competitive advantages, leadership positionsindustry-leading brands in attractive product categories, consumer driven innovation, operational excellence and strong capital structure. Fortune Brands demonstratedcontinued to demonstrate its ability to outperform the housing market for our products during 2014.2015. In addition, to outperforming the market, the Company was able to take steps to position itselfthat we believe positions us for even higher growth in the future. These steps included investing in capacity across several businesses and refining theour portfolio of businesses by purchasing SentrySafe,Norcraft cabinetry and selling Simonton Windows and moving the Waterloo tool storage businessbusiness. In 2015, the Company also seized the opportunity to discontinued operations as we undertook a strategic review ofsecure long-term financing by issuing $900 million in corporate bonds that business.enhanced the Company’s financial flexibility. We believe the Company’s 2015 performance demonstrates the strength of our businesses and the Company’s ability to deliver results by leveraging its structural competitive advantagesadvantages. We also believe we are positioned well to drivecontinue to outperform the market for our products and extend our record of profitable growth throughout the continued housing market recovery.

2015 Financial Highlights

The Board believes that the Company’s 2015 results from continuing operations, as shown in the charts below, exhibit how Fortune Brands grew net sales, operating income and earnings per share in 2015 and generated strong operating leverage. The Company’s consistent cash flow and strong balance sheet coupled with its 2015 bond issuance strengthened the flexibility of the Company’s capital structure to drive incremental growth and shareholder value. The compensation earned by the NEOs in 2015 reflected the Company’s strong financial performance.

2014 Compensation Highlights

Importantly, we believe that our compensation program helps drive performance. The vast majority of compensation awarded to NEOs is at risk, meaning the level of compensation is dependent upon Company performance. In 2014, 84% of Mr. Klein’s total target compensation was pay-at-risk and 73% (on average) of the remaining NEOs’ total target compensation was pay-at-risk. The amount of total target compensation at risk to each NEO was significantly more than the amount of base salary. Also, the majority of total target compensation awarded to each NEO was in the form of equity with multi-year vesting and performance conditions. Total target compensation refers to the sum of an NEO’s base salary, target annual incentive and target long-term incentives. The Compensation Committee has focused the Company’s compensation programs on the following:

The Board believes that this approach to our compensation program, along with our leading market positions and structural competitive advantages, has allowed our Company to continue to outperform the housing market in the early stages of the housing market recovery.

2014 Financial Highlights

The Board believes that the Company’s 2014 results, from continuing operations, asgrowth percentages shown in the charts below, exhibit how Fortune Brands grew net sales, operating income and EPS in 2014, generated strong operating leverage and maintained a flexible capital structure with a strong balance sheet. The compensation paid toillustrations above represent the NEOs during 2014 reflected the Company’s strong 2014 financial performance.percentage of growth from 2013 through 2015.

The chart below reflects Fortune Brands’ consistently strong long-term stock price performance since October 4, 2011, the date when the Company became publicly-traded on the New York Stock Exchange.

2011-2015 STOCK PRICE PERFORMANCE

The chart below reflects Fortune Brands’ consistently strong long-term stock price performance since Fortune Brands began trading on the New York Stock Exchange on October 4, 2011.

2011-2014 STOCK PRICE PERFORMANCE

20142015 Compensation ProgramHighlights

We use our compensation program to attract, motivate and retain the executives who lead our businesses.Company. The Compensation Committee has established programs and practices that are designed to pay-for-performancepay for performance and to align management’s interests with those of the Company’s stockholders. The Compensation Committee believesWe believe that it does thisour compensation program helps drive Company performance by providing a significant amount of compensation in the form of equity, and by utilizing both short-term and long-term incentives that are tied to Company performance. The compensation program is designedperformance, and by making efforts to appropriately balance fixed (base salary) and variable (cash(annual cash and equity incentives) compensation. The 2015 executive compensation as well as reward both short-term and long-term Company performance. Because a large portion of each NEO’s compensation is tied to Company performance, the compensation that is actually paid to NEOs will vary from the target compensation awardedprogram was guided by the Compensation Committeefollowing principles:

Equity-based compensation aligns executives’ interests with stockholders, drives performance and is at risk for each NEO.

As described above, incentive compensation drives increasing profit and returns andfacilitates retention of superior talent. We believe that equity-based compensation further aligns the executives’ interests with those of our stockholders. For Mr. Klein, equity-based compensation made up 66% of his total target compensation and for all other NEOs, equity-based compensation made up 54% (on average) of their total target compensation. In 2015, the Compensation Committee approved the following equity-based compensation:

Incentive compensation drives increasing profits and returns. The Compensation Committee continues to believe that linking compensation to certain performance metrics results in increased profits and stronger returns, which supports improving stockholder returns. Below is a descriptionThe vast majority of the three types of equitycompensation awarded to NEOs is dependent upon Company performance. In 2015, the NEOsCompensation Committee set challenging performance goals in 2014:connection with the annual incentive awards and PSAs:

Base salary represents the smallest portion of total target compensation.The Compensation Committee continuously makes efforts to appropriately balance fixed (base salary) and variable (annual cash and equity incentives) compensation to each NEO.

The following chart summarizes total target compensation awarded to each NEO in 2014:2015:

The Board believes that this approach to our compensation program, along with our leading market positions and structural competitive advantages, has allowed our Company to continue to outperform the market for our products in the continued housing market recovery.

RESULTS OF THE 20142015 SAY-ON-PAY VOTE

In 2014,2015, we sought an advisory vote from our stockholders on NEO compensation (commonly referred to as “Say-on-Pay”). More than 96% of the votes cast for the Say-on-Pay vote were in support of the Company’s executive compensation program. Even with this strong endorsement of the Company’s pay practices, the Compensation Committee believes that it is essential to regularly review the executive compensation program. In 2014,2015, the Compensation Committee concluded that the compensation program provides awards that it believes motivate our NEOs to maximize long-term stockholder value and encourage long-term retention. Accordingly, the Compensation Committee did not make any changes to the design of the Company’s executive compensation program in response to the 20142015 Say-on-Pay vote. However, in connection with its ongoing review of the Company’s executive compensation program, and to further strengthen our internal policies and practices, the Compensation Committee entered into amended severance agreements with eachadopted a holding requirement on 50% of stock received from vested RSUs and PSAs (net of shares withheld to pay for taxes) until the executives meet the Company’s executive officers, added a non-compete provision to all equity award grants and increased the stock ownership guidelines for the Chief Financial Officer from threeand adopted a deferred compensation plan which will allow participants to four times annual base salary. Fordefer a detailed descriptionportion of each of these changes, refer to the respective sections of this CD&A.

PHILOSOPHY AND PROCESS FOR AWARDING NEO COMPENSATION

Philosophy of the Executive Compensation Program

We strongly believe that executive compensation should be closely tied to Company performance. Our executive compensation programs are designed to reward NEOs for the achievement of both short-term and long-term strategic and operational goals that lead to the creation of long-term stockholder value, while at the same time avoid incentives that encourage unnecessary or excessive risk taking. To accomplish this, the Compensation Committee has designed an executive compensation program that it believes:

Maintaining a Competitive Compensation Program

When setting annual NEO compensation, the Compensation Committee uses compensation data from a group of similarly sized peer companies to evaluate compensation arrangements against those of the Company (the “Survey Group”). On an annual basis,Annually, the Compensation Committee reviews and assesses the appropriateness of the Survey Group. During this annual assessment, theThe Compensation Committee made slightdid not make any modifications to the composition of the Survey Group to be used whenfor setting 20142015 compensation. The modifications made were based on information and suggestions provided by the Compensation Committee’s compensation consultant. The changes to the Survey Group for 2014 included the elimination of Cooper Industries plc due to the fact that it was acquired by Eaton Corp. and Watsco, Inc. because its business is more consistent with distribution rather than manufacturing. Based on the recommendation of the compensation consultant and revenue data, the Survey Group for 2014 also included the addition of Nortek, Inc., Owens Corning and RPM International Inc. As a result, in 2014 the Survey Group consisted of 19 consumer or housing product companies with a median 20132014 revenue of $4.1$4.15 billion and median 20132014 market capitalization for publicly-traded peers of $6.0$6.92 billion which aligns with the Company’s 20132014 revenue of $4.2$4.01 billion and 2014 market capitalization of $6.6$7.15 billion. The Company believes that it competes with these companies for executive talent. The 20142015 Survey Group consisted of the following companies:

The Compensation Committee compared the base salaries, target annual cash incentives, target total long-term incentives and total target compensation forof each of the Company’s NEOs to the Survey Group compensation data of the Survey Group. The comparison was made to help the Compensation Committee determine whether the Company’s compensation practices fell in line with competitive market data. Throughout the CD&A, the compensation data used by the Compensation Committee is referred to as “market data.”

The Compensation Committee believes that compensation decisions are complex and require a deliberate review of Company performance, peer compensation levels, experience of individual executives, and individual performance. In determining executive compensation, the Committee considers all forms of compensation and benefits, and uses appropriate tools – such as tally sheets and market data – to review the value delivered to each

executive throughby each component of compensation.compensation to each executive. Accordingly, the Compensation Committee may determine that with respect to any individual it is appropriate for total target compensation or any particular element of compensation

to meet, exceed or fall below the 50^th percentile of the market data. The factors that might influence the amount of compensation awarded include market competition for a particular position, retention considerations, an individual’s performance, possession of a unique skill or knowledge set, proven leadership capabilities or other business experience, tenure with the Company and internal pay equity.

Evaluating NEO Performance

TheAt the end of each year, the Compensation Committee, in conjunction with the non-management members of the Board, conducts a formal evaluation of the Company’s Chief Executive Officer (the “CEO”) each year to analyze his performance against strategic, financial and operational goals established at the beginning of the year. The Compensation Committee then sets the CEO’s total target compensation for that year.compensation. The CEO reviews and evaluates each of the other NEOs relative to their performance against strategic, financial and operational goals established at the beginning of the year and then presents his evaluations to the Compensation Committee. The Compensation Committee evaluates the CEO’s recommendations and then independently sets each of the other NEO’s total target compensation for the year.compensation.

Maintaining Best Practices Regarding Executive Compensation

The Compensation Committee maintains policies and procedures for itself and for certain of the Company’s executives, including the NEOs, many of which it believes represent best practices in corporate governance.

TYPES AND AMOUNTS OF NEO COMPENSATION AWARDED IN 20142015

Summary of ExecutiveCompensation Elements

The Company provided both fixed (base salary) and variable (cash(annual cash and equity incentives) compensation to the NEOs in 2014.2015. The vast majority of compensation awarded to the NEOs in 2014 is at risk to the executiveeach NEO because the compensation that is actually paid may vary from the target compensation that was awarded by the Compensation Committee and the payment is dependent upon Company (or individual operating company) performance. The amount of total target compensation at risk was significantly more than the amount of base salary.salary for each NEO. Also, the majority of total target compensation awarded in 20142015 to each NEO was in the form of equity. The following charts show each element of 20142015 target NEO compensation, including the mix of short-term and long-term incentives, as well as the amount of pay-at-risk for the CEO and for the other NEOs (on average):

COMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED)

The following chart summarizes the material elements of the Company’s 20142015 executive compensation program. Further details regarding each of the elements are provided in the discussion that follows the chart.

 

Executive Compensation Program
		Element		Key Characteristics		Why We Pay This Element		How We Determine Amount		20142015 Decisions
Fixed		Base Salary		Fixed compensation payable in cash.cash compensation.		Provides a base level of competitive cash compensation toTo attract, retain and motivate superior talent.		Starts with market data and is adjusteddata. Adjusted based on individual performance, proven leadership capabilities, other business experience, possession of a unique skill or knowledge set, internal pay equity, tenure or retention.		4 of 5 NEOs received a salary increase in 2014. IncreasesSalary increases ranged from 2.1%-14.1%2%-6.7%.
Pay-At-Risk		Annual Incentive Awards (Bonus)		Variable compensation payable in cash. Expressed as a percentagecash compensation. Percentage of base salary and based on the achievement of annual performance goals.		Aligns compensation program with strong performance metrics that directly impactTo align overall Company and operating company and overall company performance.performance directly with cash compensation.		The target percentage of base salary is determined based on job scope, market data and internal pay equity.   Actual payouts can range from 0% to 200%, based on the achievement of performance goals.goals and can range from 0% to 200%.		The5% increase in target opportunity was increased by 5%bonus for each of Messrs. Klein, Randich and Lingafelter.Mr. Klein.   Company-wideEPS and ROIC performance goals were based on EPS (weighted 75%) and ROIC (weighted 25%) resultingresulted in a 70%105.1% payout for Messrs. Klein, Wyatt and Biggart.Fink.   PerformanceOI and WCE performance goals for Messrs. Randich and Lingafelter were based on OI (weighted 75%) and RONTA (weighted 25%) resultingresulted in a 14.6%131.7% payout for Mr. RandichRandich. OI and RONTA performance goals resulted in a 91.1%125.3% payout for Mr. Lingafelter.
		Performance Share Awards (PSAs)		Variable compensation Equity compensation. Number of shares paid in sharesbased on achievement of Company common stock if three-year cumulative performance goals are met.goals. Value of PSAs is variable based on long-term stock price growth.		AlignsTo focus management on long-term Company performance and results. To align management’s interest with those of stockholders. stockholders’ interests. Long-term performance metrics directly impact operating company and overall company performance. PSAs along with stock options and RSUs optimize a mix of long-term incentives that support our business strategy.		Based on job scope, market data and individual performance.   Actual payouts can range from 0% to 200%, based on the achievement of three-year performance goals.goals and can range from 0% to 200%.		One-third of the value of the total equity award was granted in the form of PSAs.   Performance goals were basedBased on cumulative EPS (weighted 75%) and average ROIC (weighted 25%) for the period January 1, 2014-December2015-December 31, 2016.2017.
		Stock Options		Nonqualified stock options that vest ratably Equity compensation. Time-vested over three years (assuming continued employment) and expire Value of stock options is variable based on long-term stock price growth. Expire in ten years.		Aligns management’s interests with those of stockholders. FocusesTo focus management on long-term stock price growth.   Stock options alongTo align management’s interests with PSAs and RSUs optimize a mix of long-termstockholders’ interests. Long-term incentives that support our business strategy.		Based on job scope, market data and individual performance.		One-third of the value of the total equity award was granted in the form of stock options.
		Restricted Stock Units (RSUs)		Equity compensation. Time-vested RSUs that vest inover three equal annual installments and are paid in shares of Company common stockyears (assuming continued employment). Value of RSUs is variable based on long-term stock price growth.		Aligns management’s interest with those of stockholdersTo encourage retention and encourages retention. Focusesfocus management on long-term stock price growth.   RSUs alongTo align management’s interests with PSAs and stock options optimize a mix of long-termstockholders’ interests. Long-term incentives that support our business strategy.		Based on job scope, market data and individual performance.		One-third of the value of the total equity award was granted in the form of RSUs. Retention award granted to Mr. Randich, which vests over four years. New hire RSU award granted to Mr. Fink.

COMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED)

Compensation Provided to NEOs in 20142015

Base Salary

In setting 2015 base salary levels, the Compensation Committee (together with Mr. Klein for the NEOs other than himself) considered competitive market data market competition for a particular position, retention concerns,and the individual performance possession of a unique skill or knowledge set, proven leadership capabilities or other business experience, internal pay equity and tenure with the Company.each NEO. In 2014,2015, each of the NEOs other than Mr. Biggart,Fink, received an annual base salary increase ranging from 2.1% -14.1%2%–6.7%. Mr. Randich received a 14.1%6.7% increase in his base salary in recognition of his performance in 2013,2015 and his value to the Company and to bring his base salary in line with the significantly larger size of the business that he now runs.Company. Mr. BiggartFink was hired by the Company in December 2013June 2015 and his initial base salary level was determined at the time of his hire based on market data.

 

NEO Base Salary	NEO Base Salary												NEO Base Salary
Named Executive Officer		2014				2013				% Increase				2015				2014				% Increase
Christopher J. Klein			$1,030,000				$1,000,000				3.0%				$1,060,000				$1,030,000				2.9%
E. Lee Wyatt, Jr.			$725,000				$686,000				5.7%				$747,000				$725,000				3.0%
David M. Randich			$525,000				$460,000				14.1%				$560,000				$525,000				6.7%
Nicholas I. Fink															$485,000				n/a				n/a
David B. Lingafelter			$490,000				$480,000				2.1%				$500,000				$490,000				2.0%
Robert K. Biggart			$450,000				$450,000				0%

Annual Cash Incentive

The Compensation Committee believes that annual cash incentive awards reinforce a pay-for-performance culture because the payment is based on the Company’s financial results. Annually, the Compensation Committee sets the percentage of base salary used to determine theeach NEO’s cash incentive, as well as performance goals for the Company and each Operating Company.operating company.

In setting2015, the Compensation Committee increased the percentage of base salary used to determine each NEO’s targetMr. Klein’s annual cash incentive award thefrom 120% to 125% in recognition of his performance. The Compensation Committee (together with Mr. Kleindid not make any other increases in the percentages used to determine the annual cash awards for the NEOs other NEOs. For Mr. Fink the percentage of base salary was determined based upon job scope and market data. The Compensation Committee determined that for Mr. Fink, the full amount of his annual incentive award will be paid, based on actual performance, rather than himself) considered competitive market data, market competitiona pro-rata portion beginning from his June 2015 start date. The purpose of this treatment was to induce Mr. Fink to join the Company and to make him whole for a particular position and internal pay equity.compensation that he forfeited by leaving his prior employer. The Compensation Committee believes that the percentage of base salary levels were competitive compared to the market data. The percentage of base salary for each NEO in 20142015 was:

 

Named Executive Officer		Percentage of Base Salary
Christopher J. Klein		120%125%
E. Lee Wyatt, Jr.		85%
David M. Randich		65%
Nicholas I. Fink		65%
David B. Lingafelter		65%
Robert K. Biggart		60%

In 2014,2015, the Compensation Committee set minimum, target and maximum annual performance goals used to determine each NEO’s annual cash incentive award. For officers of the Company,Messrs. Klein, Wyatt and Fink, the goals were based on Fortune Brands’ EPS (weighted 75%) and ROIC (weighted 25%) and, for Operating Company Presidents,Mr. Randich, the goals were based on OI (weighted 75%) and WCE (weighted 25%) and for Mr. Lingafelter, the goals were based on Moen’s OI (weighted 75%) and RONTA (weighted 25%). Mr. Randich’s annual incentive award metrics were changed from MasterBrand Cabinets’ OI and RONTA in 2014 to OI and WCE in 2015. Due to investments made in 2014 and planned for 2015 in MasterBrand Cabinets’ capacity, the Committee believed that basing the awards of their respective operating companies.MasterBrand Cabinets’ employees, including Mr. Randich, on OI and WCE would reflect the importance of capital efficiency, cost reduction and inventory control of MasterBrand Cabinets as the housing market continues to recover. The Compensation Committee believes that these metrics focus executives on maximizing long-term stockholder value (EPS),

COMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED)

operational efficiency (ROIC, WCE and RONTA) and profitability (OI). Under the annual incentive program, the actual annual incentive payouts can range from 0% to 200%, based on the achievement of performance goals.

The performance goals set at the minimum, targetbeginning of the year and maximum payout levels, were intendedcan range from 0% to be challenging and required superior performance. 200%.

To establish challenging performance goals under the annual incentive program, the Compensation Committee reviewed the target performance goals and actual results for awards paid in 20132014 and considered the 20142015 expected growth rate in the home products market as well as key assumptions relating to share gains, pricing, material inflation and productivity. Based on this review,The performance goals, at the Compensation Committee increased the EPSminimum, target and ROIC goals for officers of the Company from $1.18maximum payout levels, were intended to be challenging and 8.2% in

required superior performance.

COMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED)

2013 to $1.96 and 11.7% in 2014. For MasterBrand Cabinets, OI and RONTA were increased from $62.5 million and 19% in 2013 to $188.6 million and 46.2% in 2014. For Moen, OI and RONTA were increased from $209.3 million and 95.1% in 2013 to $279.1 million and 100.5% in 2014.

The Committee certified a payout level of 70.0% for Messrs. Klein, Wyatt and Biggart. Based on their respective operating company’s actual results, the Committee certified a payout level of 14.6% for Mr. Randich and 91.1% for Mr. Lingafelter. The following table sets forth the target performance measures, the actual performance results, the percentage payout and the amounts paid to each NEO for the 20142015 annual cash incentive awards:

 

2014 Annual Cash Incentive Performance Goals and Results
2015 Annual Cash Incentive Performance Goals and Results																			2015 Annual Cash Incentive Performance Goals and Results
		Performance Measures and Goals						Results and Award												Performance Measures and Goals(1)						Results and Award
Named Executive Officer		Performance Measures		Target Performance Measure ($ in millions)				Actual Performance(1)				% of Payout(2)				Amount Paid				Performance Measures		Target Performance Measure				Actual Performance(2)				% of Payout				Amount Paid
Christopher J. Klein		EPS			td.96				td.76				70.0	%			$865,200			EPS			td.03				td.11				105.1	%		$	1,392,575
		ROIC			11.7%				10.5%											ROIC			11.8%				11.5%
E. Lee Wyatt, Jr.		EPS			td.96				td.76				70.0	%			$431,375			EPS			td.03				td.11				105.1	%			$667,333
		ROIC			11.7%				10.5%											ROIC			11.8%				11.5%
David M. Randich		OI			td88.6				td39.4				14.6	%			$49,823			OI			td85.0				td95.0				131.7	%		$	479,388
		RONTA			46.2%				34.8%											WCE			12.6%				12.0%
Nicholas I. Fink																				EPS			td.03				td.11				105.1	%		$	331,328
																				ROIC			11.8%				11.5%
David B. Lingafelter		OI			td79.1				td65.5				91.1	%			td90,154			OI			td86.5				td99.6				125.3	%		$	407,225
		RONTA			100.5%				102%											RONTA			93.7%				104.0%
Robert K. Biggart		EPS			td.96				td.76				70.0	%			td89,000
		ROIC			11.7%				10.5%

(1)

OI target performance measures and actual performance results are shown in millions.

 

(1)(2)

Actual CompanyEPS and OI actual performance waswere adjusted to exclude the effect of foreign exchange.

(2)

The Committee used discretion to reduce the payout level for Messrs. Klein, Wyatt and Biggart from 75.9% to 70% to be more in line with the payout levels achieved by our operating companies.

Long-Term Incentive Awards

The Compensation Committee believes that equity awards both align management’s interests with those of stockholders and reinforce a pay-for-performance culture. The 20142015 target equity-based compensation represented 65%66% of Mr. Klein’s and 54% (on average) of the other NEOs’ total target compensation.

In setting 2015 long-term incentive awards, the Compensation Committee (together with Mr. Klein for NEOs other than himself) considered competitive market data job scope and the individual performance.performance of each of the NEOs. In 2014, the Compensation Committee awarded a2015, Messrs. Klein’s, Wyatt’s, Randich’s and Lingafelter’s target long-term incentive award values were increased by 11%, 8.8%, 10% and 2.2%, respectively. The target long-term incentive award value to each of the NEOs, to be comprised equally of three types of equity awards (PSAs, stock options and RSUs) under the Fortune Brands Home & Security, Inc. 2013 Long Term Incentive Plan (the “LTIP”). In 2014, the target long-term incentive award values for each NEO, other than Mr. Biggart, were increased. Mr. Klein received a 13.7% increase in his target long-term incentive award to further align his long-term incentive award with market data and in recognition of his performance in 2013. Mr. Randich received an 11.1% increase in his target long-term incentive award to bring his target equity in line with the significantly larger size of the business that he now runs and in recognition of his performance in 2013. The aggregate grant date value of each NEO’s 20142015 equity-based awards was as follows and was comprised equally of PSAs (with the PSAs valued assuming achievement of the target performance level):, RSUs and stock options:

 

Named Executive Officer		Value of 20142015 Equity Award
Christopher J. Klein			$4,150,0004,615,000
E. Lee Wyatt, Jr.			$1,700,0001,850,000
David M. Randich			$1,100,000
Nicholas I. Fink			$1,000,000
David B. Lingafelter			$900,000
Robert K. Biggart.			$800,000920,000

COMPENSATION DISCUSSIONAND ANALYSIS (CONTINUED)

Performance Share Awards – 2014 GrantAwards:

One-thirdIn 2015, one-third of the total target long-term incentive award value granted to the NEOs in 2014 was made in the form of PSAs. The PSAs awarded in 2014 will be paid to the NEOssettled in shares of the Company’s common stock only if the Company achieves specified EPS (weighted 75%) and ROIC (weighted 25%) goals during the cumulative performance period from January 1, 20142015 through December 31, 2016.2017, with vesting ranging from 0% to 200% of the target award based on performance. No shares will be paid unless the minimum established performance goals are achieved. Payouts for PSAs awarded in 2014,achieved and payout, if any, will not occur until early in 2017,2018, following completion of the performance period and certification of the performance results by the Compensation Committee’s certification ofCommittee.

The EPS and ROIC goals were intended to be challenging and require superior performance results.at the minimum, target and maximum payout levels. The Compensation Committee believes that awarding PSAs with a cumulative three-year performance goal drives long-term sustained growth and, as a result, management is only rewarded if the long-term growth goals are met or exceeded. The value of PSAs awarded is at risk to the NEOs because the PSAs only vest if the long-term growth goals are met or exceeded.

The EPS and ROIC goals were intended to be challenging and require superior performance at the minimum, target and maximum payout levels. In establishing performance goals for PSAs, the Compensation Committee considered the Company’s strategic operating plan, the expected 3-year compound market growth rate, as well as key assumptions relating to share gains, pricing, material inflation and productivity. The Compensation Committee based the performance goals on EPS and ROIC because it believes that the combined use of these metrics reflect sustainable growth and stronger returns. Although the combined use of EPS and ROIC goals are used for both the annual cash incentive award and PSAs awarded to Messrs. Klein, Wyatt and Biggart,Fink, the Compensation Committee believes this is appropriate because the annual incentive employs a one-year goal, while the PSAs focus on cumulative performance over three years. The Compensation Committee also believes that use of these goals for PSAs provides a strong incentive for sustained results over the long-term.

The number of shares paid is determined by multiplying the target number of PSAs awarded by the percentage of achievement of the combined, weighted performance goals, as follows:

RSUs and Stock Options:One-third of the total target long-term incentive award value granted to the NEOs in 20142015 was made in the form of RSUs and one-third was made in the form of stock options. StockThe Compensation Committee believes that both RSUs and stock options grantedfurther focus management on increasing stockholder returns and align the interests of management with stockholders.

RSUs awarded in 20142015 vest in three equal annual installments, assuming the NEO remains employed through each annual vesting date. The Compensation Committee believes that stock options further focus management on increasing stockholder returns and align the interests of management with stockholders. The Compensation Committee also believes that stock options are performance-based because the value of stock options grows when the Company’s long-term stock price increases. The value of stock options is at risk to the NEOs as they only realize a value if the Company’s stock price increases after the grant date.

RSUs:One-third of the total target long-term incentive award value granted to the NEOs in 2014 was made in the form of RSUs. The RSUs awarded in 2014 vest in three equal annual installments, assuming the NEO remains employed through each annual vesting date. The Compensation Committee believes that RSUs further focus management on increasing stockholder returns and align the interests of management with stockholders. RSUs also serve as a long-term retention device in a cyclical business, as an executive must remain employed with the Company through each of the three annual vesting dates to receive all of the shares. The Compensation Committee also believes that RSUs are performance-based because the value of RSUs grows when the Company’s long-term stock price increases and is at risk to the NEOs as the value of the RSUs will fluctuate based on the Company’s stock price.

Stock options granted in 2015 vest in three equal annual installments, assuming the NEO remains employed through each annual vesting date, and expire ten years from the date of grant. The Compensation Committee also believes that stock options are performance-based because the value of stock options grows when the Company’s long-term stock price increases. The value of stock options is at risk to the NEOs as they only realize a value if the Company’s stock price increases after the grant date.

Other Equity Awards Granted in 2015

In April 2015, the Compensation Committee granted a retention RSU award to Mr. Randich in the amount of $2,269,250 (50,000 RSUs) in recognition of his increased job scope and responsibilities in running a larger business in light of the Norcraft acquisition and in consideration of the importance of retaining him. The Compensation Committee believes that this equity award will serve as a long-term retention device as Mr. Randich must remain employed with the Company through each of the vesting dates to receive all of the shares awarded to him. For this award, the Compensation Committee approved a four-year vesting schedule rather than the three-year vesting schedule used for the Company’s annual grants. Accordingly, fifty percent (50%) of the award will vest in April 2017 (on the 2^nd anniversary of the grant), twenty-five percent (25%) will vest in April 2018 (the 3^rd anniversary of the grant) and the remaining twenty-five (25%) percent will vest in April 2019 (the 4^th anniversary of the grant).

In July 2015, the Compensation Committee granted a one-time new hire RSU award to Mr. Fink in the amount of $1,100,000 (23,900 RSUs). The Compensation Committee made this award to induce Mr. Fink to join the Company and to make him whole for the loss of equity he forfeited by leaving his prior employer.

2013-2015 Performance Share Awards – 2012-2014 Payout

In 2012,2013, the Compensation Committee awarded all of the then-serving NEOs except for Mr. Biggart, PSAs to be paid in 20152016 if the Company achieved certain EPS and ROIC goals during the cumulative performance period from January 1, 20122013 through December 31, 2014,2015, with EPS weighted 75% and ROIC weighted 25%. The Company’s actual results exceeded the maximum performance goals, but due to the maximum cap on the payout of incentives under the program, the Committee certified a payout level of 200%. The target goals for cumulative EPS and average ROIC from January 1, 20122013 through December 31, 20142015 and the Company’s actual results were as follows:

Based on the achievement of the 2012-20142013-2015 EPS and ROIC performance goals, the NEOs received the following number of shares of Company common stock pursuant to the terms of the award agreements:

Retirement Benefits

All of the NEOs are eligible for retirement benefits through the Fortune Brands Home & Security Retirement Savings Plan (the “Savings Plan”), a tax-qualified defined contribution 401(k) plan. Only Messrs. Klein and Lingafelter are eligible for retirement benefits through a tax-qualified defined benefit pension plan. Due to their respective hire and/or transfer dates, Messrs. Wyatt, Randich and BiggartFink are not eligible to participate in any of the Company’s tax-qualified defined benefit plans sponsored by the Company or its operating companies.plans. In addition to its tax-qualified plans, the Company and each operating company provides non-qualified supplemental retirement benefits for accruals or contributions that would have been made under the tax-qualified plans but for limitations imposed by the Code.

The Compensation Committee believes that these types of retirement plans are consistent with competitive pay practices, and are an important element in attracting and retaining talent in a competitive market. Please see the narratives that follow the “2014“2015 Pension Benefits” table and the “2014 Nonqualified Deferred Compensation” table on pagespage 37 to 39 of this Proxy Statement for further information regarding these retirement plans.

Severance Agreements

In 2014, the Compensation Committee amended and restated the form AgreementThe Company has Agreements for the Payment of Benefits Following Termination of Employment (the “Agreements”“Severance Agreements”) and entered into new Agreements with each NEO. TheUnder the terms of the Severance Agreements, were not materially amended and provide foreach NEO is entitled to severance benefits followingupon a qualifying termination of employment.employment (i.e., termination by the Company without “cause” or by the NEO for “good reason”). The Compensation Committee believes that these Severance Agreements help accomplish the Company’s compensation objectives of attracting and retaining superior talent. The Compensation Committee also believes that it is appropriate to provide executives with the protections afforded by these Severance Agreements and that these Severance Agreements promote management independence and help retain and focus the attention of executive officers on the business in the event of a change in control.

All of the Agreements contain “double-trigger” change in control provisions, which means that there must be both a change in control of the Company (or applicable operating company) and a qualifying termination of employment (i.e., termination by the Company without “cause” or by the NEO for “good reason”) before any change in controlenhanced benefits can be paid.paid following a change in control. The NEOs are not entitled to tax gross ups in the event that their change in control benefits are subject to the “golden parachute” excise tax under the Code. Please see the “Potential Payments Upon Termination or Change in Control” table, as well as the narratives that follow for further information regarding the Company’sSeverance Agreements and the treatment of outstanding equity upon a qualifying termination of employment or a change in control on pages 40 to 42.

Perquisites

The Company provides a limited number of perquisites. The Compensation Committee authorized limited annual use of Company aircraft by Mr. Klein.Messrs. Klein and Wyatt. In 2014,2015, Mr. Klein and Mr. Wyatt reimbursed the Company for any personal use of Company aircraft, equivalent in amount to the cost of a first class ticket for each passenger on these flights. The Company’s executive health program makes annual medical examinations available to certain executives, including each of the NEOs, because the health of the NEOs is important to the Company. The Company also provides broad-based plans which are generally available to employees such as reimbursement of certain relocation expenses incurred when the Company requires an employee to relocate, a match on charitable contributions and company product purchase programs.

Clawback Policy

The Company has a policy that allows it to recoup all or part of annual cash incentives or PSAs if there is a: (1) significant or material restatement of the Company’s financial statements covering any of the three fiscal years preceding the grant or payment, or (2) restatement of the Company’s financial statements for any such year which results from fraud or willful misconduct committed by an award holder. The Company also includes the right to recoup all or part of an executives’executive’s other equity awards in the terms and conditions of the awards.

Stock Ownership Guidelines

The Company maintains the following stock ownership guidelines for directors, NEOs and other officers, which requires them to hold a number of shares equal to a multiple of their annual retainer or base salary, as applicable.salary. The ownership guidelines are as follows:

In 2014, the Compensation Committee increased the ownership requirement for the Company’s Chief Financial Officer from a multiple of 3 to a multiple of 4 times base salary. Directors and officersExecutives have five years from the date of election (if a director), date of hire or date of promotion to acquire the requisite amount of stock. All of the NEOs currently satisfy the stock ownership guidelines, except for Mr. Biggart,Fink, who was recently hired and is expected to satisfy the guidelines within the five-year period specified in the policy.

In 2015, the Compensation Committee amended the policy to require executives to hold 50% of net shares acquired from the vesting of PSAs or RSUs until the ownership guidelines are met.

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management and, based on the review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in the Company’s Proxy Statement and the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.2015.

Compensation Committee

Ann F. Hackett, Chair

Richard A. Goldstein

Susan S. Kilsby

A. D. David Mackay

John G. Morikis

Norman H. Wesley