GRACO INC.

88 Eleventh Avenue N.E.

Minneapolis, MN 55413

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

Dear Shareholder:

The 20222023 Annual Meeting of Shareholders of Graco Inc. will be held on April 29, 2022,28, 2023, beginning at 1:00 p.m. Central Time.This year’s meeting will again be a completely virtual meeting of shareholders. Our virtual shareholder meeting format uses technology designed to increase shareholder access, save the Company and our shareholders time and money, and provide our shareholders with rights and opportunities to participate in the meeting similar to what they would have at an in-person meeting. In addition to online attendance, we provide shareholders with an opportunity to hear all portions of the official meeting as conducted by the Chairman of the Board and the Secretary, submit written questions and comments during the meeting, and vote online during the open poll portion of the meeting. You may attend the meeting, vote your shares and submit questions electronically during the meeting via live webcast by visiting www.virtualshareholdermeeting.com/GGG2022GGG2023. You will need the 16-digit control number that is printed in the box marked by the arrow on your Notice Regarding the Availability of Proxy Materials to enter the annual meeting. We recommend that you log in 15 minutes before the meeting to ensure you are logged in when the meeting starts.

At this meeting, shareholders will consider the following matters:

Shareholders of record at the close of business on February 28, 2022,27, 2023, are entitled to vote at this meeting or any adjournment.

We encourage you to join us via the Internet and vote at the meeting. Regardless of whether you plan on joining the meeting, we encourage you to vote by Internet, or by requesting a paper copy of the proxy card and voting by telephone or by returning your proxy card by mail, as described in further detail later in this Proxy Statement.

If you do not vote by Internet, telephone, returning a proxy card or voting your shares online during the meeting, you will lose your right to vote on matters that are important to you as a shareholder. Accordingly, please vote your shares in one of the methods identified above. Instructions on how to vote while participating in the meeting live via the Internet are posted at www.virtualshareholdermeeting.com/GGG2022GGG2023.

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Graco Inc. 20222023 Proxy Statement

TABLE OF CONTENTS

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Graco Inc. 20222023 Proxy Statement

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Graco Inc. 20222023 Proxy Statement

GRACO INC.

88 Eleventh Avenue N.E.

Minneapolis, MN 55413

PROXY STATEMENT

FOR ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD APRIL 29, 202228, 2023

Your proxy is solicited by the Board of Directors of Graco Inc. in connection with our Annual Meeting of Shareholders to be held on April 29, 2022,28, 2023, and any adjournments of that meeting (the “Meeting”). Throughout this Proxy Statement, we may refer to Graco Inc. as “us,” “we,” “Graco,” “our Company” or “the Company.”

We have provided you with access to our proxy materials on the Internet. We are providing a Notice Regarding the Availability of Proxy Materials (the “Notice”) to our shareholders of record and our beneficial owners. All shareholders will have the ability to access the proxy materials free of charge on the website identified in the Notice or request email or paper copies of the proxy materials. The Notice contains instructions on how to access the proxy materials through the Internet or request electronic or paper copies. If your shares are held by a broker, bank, broker-dealer or similar organization, you are the beneficial owner of shares held in “street name” and the Notice will be forwarded to you by that organization. As the beneficial owner, you have the right to direct the organization holding your shares how to vote the shares.

The costs of the solicitation, including the cost of preparing and mailing the Notice, Notice of Annual Meeting of Shareholders, and this Proxy Statement, will be paid by us. Solicitation will be primarily through Internet availability of this Proxy Statement to all shareholders entitled to vote at the Meeting. Proxies may be solicited by our officers personally, but at no compensation in addition to their regular compensation as officers. We may reimburse brokers, banks and others holding shares in their names for third parties for the cost of forwarding proxy material to, and obtaining proxies from, third parties. The Notice will be mailed to shareholders on or about March 16, 2022,15, 2023, and the proxy materials will be available at that time on www.proxyvote.com.

Proxies may be revoked at any time prior to being voted by giving written notice of revocation to our Secretary or by voting online during the meeting. All properly executed proxies received by management will be voted in the manner set forth in this Proxy Statement or as otherwise specified by the shareholder giving the proxy.

Shares voted as abstentions on any matter will be counted as shares that are present and entitled to vote for purposes of determining the presence of a quorum at the Meeting, and as unvoted (although present and entitled to vote) for purposes of determining the approval of each matter as to which the shareholder has abstained. If a broker submits a proxy which indicates that the broker does not have discretionary authority as to certain shares to vote on one or more matters, those shares will be counted as shares that are present and entitled to vote for purposes of determining the presence of a quorum at the Meeting, but will not be considered as present and entitled to vote with respect to such matters. The election of directors and the advisory vote on our executive compensation will be considered proposals on which your broker does not have discretionary authority to vote. Thus, if your shares are held in street name and you do not provide instructions as to how your shares are to be voted on these matters, your broker or other nominee will not be able to vote your shares in these matters. Accordingly, we urge you to provide instructions to your broker or nominee so that your votes may be counted on these matters. You should vote your shares by following the instructions provided on the voting instruction card that you receive from your broker.

The vote required for the election of directors in an uncontested election is a majority of votes cast, where the number of votes cast “for” a nominee exceeds the number of votes cast “against” a nominee. In a contested election, the vote required for the election of directors is a plurality of votes cast. In the event an incumbent director does not receive a sufficient number of the votes cast for re-election, our Corporate Governance Guidelines require that the director promptly offer to tender his or her resignation to the Board. The Governance Committee will make a recommendation to the Board on whether to accept or reject the offer. The Board, taking into account the recommendation of the Governance Committee, will decide whether to accept or reject the offer, and will publicly disclose its decision and the rationale behind it within 90 days after the date of the election. The vote required to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year 20222023 requires the approval of the greater of a majority of the shares present at the Meeting and entitled to vote, or a majority of the voting power of the minimum number of shares necessary to constitute a quorum. The vote on our executive compensation isand the vote on the frequency of the vote on our executive compensation are advisory and non-binding. However, the Board will consider shareholders to have approved our executive compensation if the number of the votes cast “for” that proposal exceeds the number of votes cast “against” that proposal. Similarly, the Board will consider shareholders to have selected the frequency option for the advisory vote on our executive compensation that receives the most votes. An abstention will have no effect on the election of directors, the vote on our executive compensation or the vote on the frequency of the vote on our executive compensation, but will have the effect of a vote against the ratification of the appointment of Deloitte & Touche LLP.

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Graco Inc. 20222023 Proxy Statement

Only shareholders of record as of the close of business on February 28, 2022,27, 2023, may vote at the Meeting. As of that date, there were 169,341,863167,994,666 issued and outstanding common shares of the Company, the only class of securities entitled to vote at the Meeting. Each share registered to a shareholder of record is entitled to one vote. Cumulative voting is not permitted.

VOTING METHODS

Registered shareholders may vote by using any one of the following methods:

You may visit www.proxyvote.com to vote your shares on the Internet, 24 hours a day, seven days a week, prior to 11:59 p.m. Eastern Time on April 28, 2022.27, 2023. Have your Notice or proxy card (if you have requested one) in front of you when you access the website, as they include information, including a unique shareholder control number, that is required to access the system.

You may request a paper proxy card by following the instructions on your Notice for requesting a copy of materials. After you receive your paper proxy card, you may call the toll-free phone number, 1-800-690-6903, listed on your proxy card to vote your shares, 24 hours a day, seven days a week, prior to 11:59 p.m. Eastern Time on April 28, 2022.27, 2023. Have your proxy card or Notice in front of you when calling, as they include information, including a unique shareholder control number, which is required to access the system.

You may request a paper proxy card by following the instructions on your Notice for requesting a copy of materials. After you receive your paper proxy card, you may mark, date, and sign the proxy card, and return it to be received no later than April 28, 2022.27, 2023.

You may vote online during the Meeting through the link www.virtualshareholdermeeting.com/GGG2022GGG2023. The 16-digit control number provided on your Notice or proxy card is necessary to access this site. The Meeting will begin at 1:00 p.m. Central Time (with log-in beginning at 12:45 p.m. Central Time) on April 29, 2022.28, 2023.

If you own your shares through a broker, bank, broker-dealer or similar organization, you may vote by the methods made available to you through your broker. Follow the instructions describing the available processes for voting your stock that are provided to you by your broker.

ADDITIONAL MEETING INFORMATION

Shareholders of record at the close of business on February 28, 2022,27, 2023, may attend and participate in the Meeting. Shareholders will need to use their control number to log into the Meeting at www.virtualshareholdermeeting.com/GGG2022GGG2023.

We encourage you to access the Meeting prior to the start time. Please allow sufficient time for online check-in, which begins at 12:45 p.m. Central Time. You may check your browser’s compatibility any time prior to the Meeting at www.virtualshareholdermeeting.com/GGG2022GGG2023. If you experience any difficulties accessing the Meeting, please call (612) 623-6260 for assistance.

Shareholders who wish to submit questions may do so electronically before the Meeting (starting at the time of check-in) or during the Meeting. We will post any appropriate questions received during the Meeting and our answers on our Investor Relations website at https://investors.graco.com/webcast-presentation as soon as practical after the Meeting.

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Graco Inc. 20222023 Proxy Statement

20212022 HIGHLIGHTS

BOARD OF DIRECTORS

Nominees and Continuing Directors

The following information is given with respect to the threefour nominees for election at the Meeting and the other sevensix directors whose terms of office will continue after the Meeting, and includes a description of the particular experience, qualifications, attributes or skills that led the Board to conclude that each of the nominees and directors should serve as members of the Board. Except as noted below, each of the nominees and directors has held the same position, or another executive position with the same employer, for the past five years.

Nominees for election at the Meeting to terms expiring in 2025:

Eric P. Etchart

Mr. Etchart, 65, was Senior Vice President, Business Development of The Manitowoc Company, Inc., a manufacturer of cranes and foodservice equipment, from 2015 until his retirement in 2016. Mr. Etchart served as President of Manitowoc Cranes and Senior Vice President of The Manitowoc Company, Inc. from 2007 until 2015. From 2001 to 2007, Mr. Etchart was Executive Vice President, Asia Pacific and President, Zhang Jia Gang Company of the Manitowoc Crane Group, in Shanghai, China. Prior to that, Mr. Etchart held various management positions at Potain S.A., until it was acquired by Manitowoc in 2001, and at PPM Cranes S.A. Mr. Etchart has been a director of Graco since 2010. He also

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Graco Inc. 2022 Proxy Statement

Martha A. Morfitt

Ms. Morfitt, 64,65, is President and Chief Executive Officer of River Rock Partners, Inc., a business and cultural transformation consulting firm. She assumed this position in 2008. Ms. Morfitt formerly served as Chief Executive Officer of Airborne, Inc., a manufacturer of dietary supplements, from 2009 until 2012. Ms. Morfitt left her position at Airborne in 2012 as a result of the acquisition of Airborne by Schiff Nutrition Group. She also served as President and Chief Executive Officer of CNS, Inc., a manufacturer and marketer of consumer products, from 2001 until 2007. Ms. Morfitt left her position at CNS in 2007 as a result of the acquisition of CNS by GlaxoSmithKline plc. Ms. Morfitt has been a director of Graco since 1995 and is also a director and Chair of the Audit CommitteeBoard of lululemon athletica inc. and a director and Chair of the Audit Committee of Olaplex Holdings, Inc. From May 2017 until June 2020, Ms. Morfitt served as a director of Mercer International, Inc.; from 2008 until 2015, she served as a director of Life Time Fitness, Inc.; from

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Graco Inc. 2022 Proxy Statement

Brett C. Carter

Mr. Carter, 55,56, is Executive Vice President and Group President, Utilities and Chief Customer Officer of Xcel Energy Inc., a major U.S. electric and natural gas delivery company. He assumed this position in March 2022. Mr. Carter served as Executive Vice President and Chief Customer and Innovation Officer from May 2018 to March 2022. Prior to that, Mr. Carter served as Senior Vice President and Shared Services Executive of Bank of America, one of the world’s largest financial institutions, from October 2015 to May 2018, and as Senior Vice President and Chief Operating Officer of Bank of America from March 2015 to October 2015. Before joining Bank of America, Mr. Carter held several leadership roles at Duke Energy Co. from 2005 to 2015, including most recently as Senior Vice President and Chief Distribution Officer from 2013 to March 2015. Mr. Carter has been a director of Graco since February 2021. Among other qualifications, Mr. Carter brings to our Board substantial experience overseeing key business areas of operations, marketing, information technology, cyber and physical security, customer service and brand strategy at several major public companies. He has been designated by our Board as an audit committee financial expert.

R. William Van Sant

Mr. Van Sant, 83,84, has been a Senior Advisor at Yukon Partners II, LLC, a provider of mezzanine financing for middle-market private equity transactions, since 2014, and an Operating Partner at TJM Capital Partners, an operationally-focused private equity firm, since 2015. He also serves as Executive Chairman of the Board of Directors and Chief Executive Officer of Tenamec, Inc., a portfolio company of TJM Capital. In addition to actively advising private equity funds and their portfolio companies, Mr. Van Sant may from time to time take ownership interests in the funds and portfolio companies he advises. From 2013 until June 2017, he was a Senior Operating Partner at Tenex Capital Management, L.P., a private equity firm, and from 2012 until 2013, he served as a Senior Advisor. During this time, he also served as the Chairman or as a director of several portfolio companies of Tenex. From 2008 until 2013, he was an Operating Partner of

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Graco Inc. 2022 Proxy Statement

Jody H. Feragen

Ms. Feragen, 67, was Executive Vice President and Chief Financial Officer of Hormel Foods Corporation, a multinational marketer and manufacturer of brand name food and meat products, from 2010 until her retirement in 2016. She served as Hormel’s Senior Vice President and Chief Financial Officer from 2007 to 2010, and as Vice President of Finance and Treasurer from 2005 to 2007. She also served on Hormel’s board of directors from 2007 until 2016. Ms. Feragen has been a director of Graco since 2015 and is also a director of lululemon athletica inc. and a director of Olaplex Holdings,Patterson Companies, Inc. Ms. WhiteFeragen brings to our Board a wealth of financial expertise, business acumen, strong leadership skills and extensive public company experience. Our Board recognizes this expertise, leadership and experience through its designation of Ms. Feragen as one of our audit committee financial experts and by her appointment as Chair of the Audit Committee.

J. Kevin Gilligan

Mr. Gilligan, 68, was Chief Executive Officer of Capella Education Company, an online education provider, from 2009 until August 2018. He also served as a director of Zayo Group HoldingsCapella Education from April 20172009 until March 2020,August 2018, and serves on theas Chairman from 2010 until August 2018. Mr. Gilligan served as Executive Advisory Council for the National Center for Women & Information Technology. Ms. WhiteVice Chairman of Strategic Education, Inc. from August 2018 until July 2019 in connection with its merger with Capella Education, and has served as Vice Chairman of Strategic Education since August 2019. Mr. Gilligan was President and Chief Executive Officer of United Subcontractors, Inc., a national construction services company, from 2004 until 2009. Mr. Gilligan was President and Chief Executive Officer, Automation and Control Solutions, Honeywell International, Inc., a diversified technology and manufacturing company, from 2001 until 2004. Mr. Gilligan has been a director of Graco since 2001. From 2004 until 2009, Mr. Gilligan was a director of ADC Telecommunications, Inc., and served as lead director from 2008 until 2009. Among other qualifications, Mr. Gilligan bringse-commerce and social media expertise to our Board over twenty-five years of global operational experience as well as comprehensive knowledge of the construction industry, one of the key industries Graco serves. Mr. Gilligan’s public company experience as both an executive and a wealth of businessdirector provides additional depth to our Board’s leadership capabilities. Our Board recognizes this experience and judgment gained in her senior management positions at someleadership by his appointment as Chair of the world’s most successful technology companies.Management Organization and Compensation Committee.

Qualification Standards

Our Company will only consider as candidates for director individuals who possess a high level of ethics and integrity, and who are committed to representing the long-term interests of our shareholders. Such candidates must be able to make a significant contribution to the governance of our Company by virtue of their business and financial expertise, educational and professional background, and current or recent experience as a CEO or other senior leader of a public company or other major organization. The business discipline that may be sought at any given time will vary depending on the needs and strategic direction of our Company and the disciplines represented by incumbent directors. In evaluating candidates for nomination as a director of Graco, the Governance Committee will also consider other criteria, including geographical representation, independence, practical wisdom, mature judgment and the ability of the candidate to represent the interests of all shareholders and not those of a special interest group. One or more of our directors is required to possess the education or experience required to qualify as an audit committee financial expert as defined in the applicable rules of the Securities and Exchange Commission.

Once elected, all directors are subject to the standards set forth in our Corporate Governance Guidelines, which include, among others, the requirement to tender the director’s resignation if his or her employment status significantly changes, and the requirement to resign from the Board effective as of the date of the Annual Meeting of Shareholders next following the director’s 75^th birthday unless the director has current, substantial engagement in business activities that require skills relevant to Graco’s business and useful to the Board. In August 2021,2022, Mr. Van Sant reached age 83.84. At its September 20212022 meeting, the Board considered whether Mr. Van Sant had current, substantial engagement in business activities that require skills relevant to our Company’s business and useful to the Board. The Board unanimously determined that it would waive the mandated retirement of Mr. Van Sant which waiver will be reviewed annually, becausein recognition of: (i) Mr. Van Sant’s current and substantial engagement in various strategic and operational matters withrelated to Yukon Partners II, TJM Capital Partners, and several of each private equity firmsgroup’s portfolio manufacturing companies; (ii) Mr. Van Sant’s service as Senior Advisor to Yukon Partners and their portfolio companies requiresOperating Partner with TJM Capital Partners; (iii) the significant value continued to be derived from Mr. Van Sant’s tenure, experience and presence on the Board in facilitating a stable organizational and leadership transition given the strategic realignment of certain of the Company’s businesses in 2022, a number of recent changes in key Company leadership positions (including the appointment of a new President and Chief Executive Officer, a new Chief Financial Officer and Treasurer, a new Executive Vice President, General Counsel and Corporate Secretary, and a new President, Asia Pacific in 2021, and the creation of the role of, and appointment of, an Executive Vice President, Corporate Development in 2022), and the retirement of two directors from the Board, as well as the addition of two new directors to the Board, since 2020; (iv) Mr. Van Sant’s wealth of professional experience with mergers and acquisitions (“M&A”), including in advancing M&A-related strategies, analyzing potential M&A targets and integrating acquired businesses, and the relevance and application of that experience to the Company’s ongoing efforts to develop a more programmatic approach to M&A as a vehicle for inorganic growth; and (v) his otherwise having skills relevant to Graco’sthe Company’s business and useful to the Board.Board, it being anticipated by the Board that it will not approve any future waiver of Mr. Van Sant’s retirement or future nomination of Mr. Van Sant for election as a director, in which event, as per the retirement policy and director qualification requirements contained in our Corporate Governance Guidelines, he would retire from the Board when his current term of service as a director expires immediately prior to the Annual Meeting of Shareholders in April 2024.

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Graco Inc. 2023 Proxy Statement

The Governance Committee is responsible for the identification and recruitment of suitable prospective director candidates and has the sole authority to hire an outside search firm to identify director candidates. The Governance Committee may retain an outside search firm as a resource for future candidate sourcing and succession planning as the Governance Committee deems appropriate. In 2022, Mr. Black was identified and recommended for consideration as a director on our Board by our President and Chief Executive Officer. The Governance Committee reviewed and discussed Mr. Black’s qualifications and determined he meets the standards and expectations described above, and therefore recommended that the Board appoint Mr. Black as a director.

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Graco Inc. 2022 Proxy Statement

In making its determination, our Board reviewed information provided by each of the independent directors and information gathered by our management, and determined that none of the independent directors, other than Mr.Messrs. Black and Carter, have any relationship with our Company other than as a director and shareholder. The Board specifically considered that Mr. Black serves as Chief Executive Officer of SPS Commerce, Inc. and Mr. Carter serves as Executive Vice President and Group President, Utilities and Chief Customer Officer of Xcel Energy Inc. In 2021,2022, our Company paid SPS Commerce approximately $15,400 for cloud-based supply chain software services and paid Xcel Energy approximately $5.3$6.65 million for electric services to some of our facilities in Minnesota and South Dakota. Neither SPS Commerce nor Xcel Energy did not provideprovided any advisory services to the Company. Our relationshiprelationships with SPS Commerce and Xcel Energy predatespredate Mr. Black’s and Mr. Carter’s respective service on our Board, and neither Mr. Black nor Mr. Carter has neverhave ever been personally involved in any way in our transactions or relationshiprelationships with SPS Commerce or Xcel Energy. The total amount our Company paid to each of SPS Commerce and Xcel Energy in 20212022 falls significantly below two percent of SPS Commerce’s and Xcel Energy’s 20212022 gross revenues, which is the threshold for determining independence under the New York Stock Exchange’s independence standards. The Board determined that neither the nature of the relationshiprelationships between our Company and each of SPS Commerce and Xcel Energy and our Company nor the amountamounts of the payments waswere material to either the Company or SPS Commerce and Xcel Energy, and that Mr.Messrs. Black and Carter doesdo not have a material interest in the foregoing transactions because he wasthey were not directly involved in the transactions involving their respective companies and he doesthey do not derive any special benefit related to the transactions.

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Graco Inc. 2022 Proxy Statement

MEETINGS OF THE BOARD OF DIRECTORS

During 2021,2022, our Board of Directors met five times. Attendance of our directors at all Board and committee meetings averaged 99%98%. During 2021,2022, every director attended at least 75% of the aggregate number of meetings of the Board and all committees of the Board on which he or she served. Our Corporate Governance Guidelines require that each director make all reasonable efforts to attend the Company’s Annual Meeting of Shareholders. In 2021,2022, all of the directors attended the Annual Meeting of Shareholders. Each regularly scheduled meeting of the Board includes an executive session of only non-employee directors. Mr. Mitau, Chairman of the Board, presides at the executive sessions.

COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors has an Audit Committee, a Governance Committee, and a Management Organization and Compensation Committee. Membership as of February 28, 2022,27, 2023, the record date, was as follows:

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Graco Inc. 2022 Proxy Statement

Management Organization and Compensation Committee (5 (3 meetings in fiscal year 2021)2022)

The Management Organization and Compensation Committee is composed entirely of directors who meet the independence requirements of the New York Stock Exchange. The Management Organization and Compensation Committee has the following functions:

The responsibilities of the Management Organization and Compensation Committee are fully set forth in its written charter, which was most recently approved by the Board on February 14, 2020.

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Graco Inc. 2022 Proxy Statement

Non-employee directors receive an annual option grant. In February 2021, non-employee directors received an annual option grant of 7,360 shares. The number of shares granted was based on a Black-Scholes value of $17.66 per share on February 11, 2021, and an economic value of approximately $130,000. In February 2022, non-employee directors received an annual option grant of 6,820 shares. The number of shares granted was based on a Black-Scholes value of $19.06 per share on February 17, 2022, and an economic value of approximately $130,000. In February 2023, non-employee directors received an annual option grant of 6,250 shares. The number of shares granted was based on a Black-Scholes value of $22.40 per share on February 16, 2023, and an economic value of approximately $140,000. Upon first joining the Board, non-employee directors are also eligible to receive an initial option grant with an economic value equal to that of the most recent option grant for non-employee directors. Mr. CarterBlack received an initial option grant of 7,3606,160 shares on February 11, 2021,20, 2023, upon his appointment to the Board. The number of shares granted to Mr. CarterBlack was based on a Black-Scholes value of $17.64$22.72 on February 10, 2021,17, 2023, and an economic value of approximately $130,000.$140,000. Options granted to non-employee directors are issued under the Graco Inc. 2019 Stock Incentive Plan (the “Plan”). The options are non-statutory, have a 10-year duration and become exercisable in equal installments over four years, beginning with the first anniversary of the date of the grant. The option exercise price is the fair market value of the stock on the date of grant, as defined in the Plan. The Plan defines “fair market value” as the closing sales price of the stock on the principal securities market on which it trades on the date immediately preceding the date of grant.

Our Board’s philosophy is to target retainer compensation at a level approximately comparable to the median of the market, and to target equity compensation in the form of stock options at a level approximately comparable to the 75^th percentile of the market, in order to attract and retain capable Board members, to encourage above-market Company performance, and to strengthen the link between our director compensation program and the interests of our shareholders in Graco stock performance.

Our Governance Committee requested that the Graco Compensation Department conduct a peer group comparison of director compensation and present such data at its February 20212022 meeting. The peer companies selected for the 2022 comparison matched the peer group identified for executive compensation on page 22 of the Compensation Discussion and Analysis section of the Proxy Statement for the 20212022 Annual Meeting of Shareholders. In reviewing the peer group comparison, the Governance Committee concluded that its current retainer compensation was approximately at the median of the peer group, and that its equity compensation was approximately at the 75^th percentile of the peer group, so no changes were proposed for 2021.2022.

Our Governance Committee requested that the Graco Compensation Departmentretained Willis Towers Watson to conduct a peer group comparison of director

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Graco Inc. 2022 Proxy Statement

Director Compensation Table for Fiscal Year Ended December 31, 202130, 2022

The following table summarizes the total compensation paid to or earned by our non-employee directors for their service during the fiscal year ended December 31, 2021:30, 2022:

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Graco Inc. 2022 Proxy Statement

COMMUNICATIONS WITH THE BOARD

Our Board of Directors welcomes the submission of any comments or concerns from shareholders or other interested parties. These communications will be delivered directly to the Executive Vice President, General Counsel and Corporate Secretary. If a communication does not relate in any way to Board matters, he will deal with the communication as appropriate. If the communication does relate to any matter of relevance to our Board, he will relay the message to the Chairman of the Governance Committee, who will determine whether to relay the communication to the entire Board or to the non-employee directors. The Executive Vice President, General Counsel and Corporate Secretary will keep a log of all communications addressed to the

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Graco Inc. 2022 Proxy Statement

CORPORATE GOVERNANCE DOCUMENTS

The charters of the Audit, Governance, and Management Organization and Compensation Committees, as well as our Company’s Corporate Governance Guidelines and Code of Ethics and Business Conduct, are available on our website at www.graco.com and may be found by selecting the “For Investors” tab and then clicking on “Corporate Governance.”the “Governance” tab.

AUDIT COMMITTEE REPORT

Report of the Audit Committee

The Audit Committee has reviewed and discussed the audited financial statements of our Company for the fiscal year ended December 31, 202130, 2022 (the “Financial Statements”) with both the Company’s management and its independent registered public accounting firm, Deloitte & Touche LLP. The Audit Committee has discussed with Deloitte & Touche LLP the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the Securities and Exchange Commission. Our management has represented to the Audit Committee that the Financial Statements were prepared in accordance with accounting principles generally accepted in the United States of America.

The Audit Committee has received from Deloitte & Touche LLP the written disclosure and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence, and the Audit Committee has discussed with Deloitte & Touche LLP its independence. The Audit Committee has also received written material addressing Deloitte & Touche LLP’s internal quality control procedures and other matters, as required by the New York Stock Exchange listing standards. The Audit Committee has considered the effect of non-audit fees on the independence of Deloitte & Touche LLP and has concluded that such non-audit services are compatible with the independence of Deloitte & Touche LLP.

Based on these reviews and discussions, the Audit Committee recommended to our Board of Directors that the Financial Statements for the fiscal year ended December 31, 2021,30, 2022, be included in the Company’s 20212022 Annual Report on Form 10-K for filing with the Securities and Exchange Commission.

*Mr. Archie C. Black was not a member of the Audit Committee at the time the Audit Committee issued its report.

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Graco Inc. 20222023 Proxy Statement

Independent Registered Public Accounting Firm Fees and Services

The following table sets forth the aggregate audit fees incurred by Graco Inc. and its subsidiaries from our Company’s independent registered public accounting firm, Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu and their respective affiliates (collectively, the “Deloitte Firms”), and the fees paid to the Deloitte Firms for services in the other fee categories during the fiscal years ended December 31, 2021,30, 2022, and December 25, 2020.31, 2021. The Audit Committee has considered the scope and fee arrangements for all services provided by the Deloitte Firms to our Company, taking into account whether the provision of non-audit services is compatible with maintaining the Deloitte Firms’ independence. The Audit Committee pre-approved 100% of the services described below.

Pre-Approval Policies

The Audit Committee’s policy on approval of services performed by the independent registered public accounting firm is to pre-approve all audit and permissible non-audit services to be provided by the independent registered public accounting firm during the fiscal year. The Audit Committee reviews each non-audit service to be provided and assesses the impact of the service on the firm’s independence.

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Graco Inc. 20222023 Proxy Statement

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Overview

In 2021,2022, the Company continued to invest in its four core strategies for growth and long-term value creation: new product development; new markets; global expansion; and acquisitions. During the year, net sales were $1.988$2.144 billion (up 20%8% from 2020)2021), diluted net earnings per share were $2.52$2.66 (up 31%6% from 2020)2021), and dividends paid per share were $0.75$0.84 (up 7.1%12% from 20202021 - our 2223^ndrd consecutive annual increase)., and share repurchases totaled $233 million. Total shareholder return during the period was 12%-16%. In 2021,2022, the Company revised its form of Key Employee Agreement foradopted a policy prohibiting directors and executive officers to eliminate the excise tax gross-up provision as described in more detail on page 29.from pledging Company stock. The Company’s short-term cash incentive plan continued to use net sales and earnings per share as the sole metrics to reward top- and bottom-line performance. The earnings per share metrics used for 20212022 were adjusted to exclude certain items as defined by the Management Organization and Compensation Committee (for purposes of this Executive Compensation section, the “MOCC”) and as described in more detail on page 24,25, which we refer to as “Incentive EPS.” For 2021,2022, Incentive EPS were $2.53.$2.65. The following charts detail the Company’s net sales and Incentive EPS results against targets and prior year performance.

The Company’s named executive officers (“Named Executive Officers” or “NEOs”) for 20212022 were:

Consideration of “Say-on-Pay” Voting Results

The MOCC targets a competitive and equitable executive compensation program that rewards executives based upon Company and individual performance, and for certain executives, region or division performance as well. In making executive compensation decisions, the MOCC considers the results of the most recent advisory, non-binding vote on the compensation paid to our NEOs. At the Annual Meeting of Shareholders in April of 2020,2021, our shareholders approved the compensation paid to our NEOs by 90.8%90.1%. The MOCC believes this favorable outcome reflects our shareholders’ strong support of the Company’s executive compensation philosophy, program and practices. As a result, the MOCC determined it was not necessary to make any

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Compensation Philosophy

Compensation Risk Assessment

The Company’s Internal Audit Department conducts an annual risk assessment on the Company’s executive compensation program and presents its findings to the MOCC and the Audit Committee. The risk assessment identifies, among other things, certain potential risks in the Company’s short- and long-term incentive plans and the Company’s severance and change of control arrangements, and various factors that serve to mitigate those risks. Such mitigating factors include those set forth above, as well as the annual plan design and benchmarking review by the independent compensation consultant and the MOCC, the MOCC’s review and approval of incentive awards, the Company’s internal controls, and the use of “double-triggers” in severance and change of control arrangements. At its September 20212022 meeting, the MOCC reviewed and discussed the risk assessment and determined that the Company’s executive compensation program is not likely to have a material adverse impact on the Company, and recommended that the Audit Committee make the same determination as well. As a result, the MOCC did not make any changes to the Company’s executive compensation program.

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Executive Officer Compensation Processes

The MOCC uses the following resources, processes and procedures to help it effectively perform its responsibilities:

Executive Compensation Consultant

The MOCC has the authority under its charter to engage the services of outside consultants, to determine the scope of the consultants’ services and to terminate such consultants’ engagement. The MOCC retained Willis Towers Watson as its independent outside executive compensation consultant to advise the MOCC on matters relating to the determination of base salary, short-term incentive and long-term incentive programs for the Company’s executive officers.

In its capacity as the executive compensation consultant, Willis Towers Watson advises the MOCC on the following matters:

Our Company’s management engaged Willis Towers Watson to perform certain non-executive compensation services in 2021.2022. The total fees for these services were less than $120,000.

The MOCC reviews the independence of the executive compensation consultant on an annual basis. In evaluating Willis Towers Watson’s independence, the MOCC considers all factors relevant to Willis Towers Watson’s independence from management, including the following:

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Based on its review, the MOCC concluded there was no conflict of interest that impaired Willis Towers Watson’s independence.

Role of Management in Executive Compensation Decisions

Our management is involved in the following executive compensation processes:

Benchmarking

The MOCC annually retains Willis Towers Watson to provide survey market data of companies with similar revenues for all executive officer positions, with a focus on the manufacturing industry. The MOCC meets in the fall of each year to review this market data. The market data is derived from Willis Towers Watson’s database and is statistically adjusted to reflect variation in revenues among the companies. The MOCC is presented with data showing total direct compensation amounts at the 50^th and 75^th percentiles of the market data. In addition, the MOCC considers data from this survey reflecting the general mix of compensation elements among base salary, short-term incentives and long-term incentives. At the same time, the MOCC reviews information showing the relative positioning of the compensation of the Company’s executive officers in relation to the market data. When reviewing the relative positioning of each executive officer’s total direct compensation level, the MOCC compares each executive officer to generally comparable positions identified within the market data. The purpose of this annual review is to gather a general sense for whether the Company’s compensation levels and mix of compensation elements are generally consistent with this market data, with a general expectation that total direct compensation should be between the 50^th and the 75^th percentiles of the market data depending on Company and individual performance. At the same time, Willis Towers Watson provides general information to the MOCC about market trends and expected compensation level changes for the upcoming fiscal year (“Market Increase Projection”).

At the MOCC’s last meeting of each fiscal year, the MOCC sets base salaries for executive officers for the upcoming fiscal year. The decisions about the specific base salary levels are based on individual performance and budgetary constraints, and are guided by the 50^th percentile of the market data without a specific market position targeted.

At the MOCC’s first meeting of each fiscal year, the MOCC approves short-term incentive targets and long-term incentive awards. The target short-term cash award is determined as a percentage of base salary for the executive officer annual incentive plan, which percentage has been consistent for many years. The MOCC targets the value of the long-term incentive awards for the NEOs at the 75^th percentile for comparable positions within the Willis Towers Watson database, although the number of shares granted may be adjusted downward based on the Company’s stock dilution guidelines and internal equity. The reason for targeting the 75^th percentile is to encourage above-market performance. In addition, the MOCC believes that the opportunity for above-market compensation should be primarily earned in the area of long-term performance. Once the value of the long-term

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Refer to the discussions of each compensation element below, as well as the “Compensation of Individual Named Executive Officers” section below, for specific information on how this benchmarking process applied to specific compensation decisions for our NEOs for 2021.2022.

Our Company’s Peer Group

The Company’s peer group (the “Graco Peer Group”) was updated in 2019 with the assistance of Willis Towers Watson to ensure the group is large enough to maintain reliable market outcomes and is appropriately aligned with the Company in terms of industry, size, life cycle stage, labor market, and revenue and market capitalization characteristics. The following table lists the companies that were in the GracoCompany’s peer group (the “Graco Peer GroupGroup”) when the MOCC set 20212022 compensation levels for the executive officers, and includes financial and headcount data for the Company and the median of the Graco Peer Group:

(1)    Represents most recent fiscal year data availablecompiled by Willis Towers Watson from EquilarCapital IQ as of February 3, 2022.2023.

At its February 2022 meeting, the MOCC engaged Willis Towers Watson to assist in reviewing and analyzing the Graco Peer Group. The MOCC believes it is appropriate and necessary to review and analyze the peer group every three years to ensure the group is large enough to maintain reliable market outcomes and to assess the current alignment of the peer group with our Company. Willis Towers Watson reviewed and analyzed the Graco Peer Group for the September 2022 meeting to ensure the continued appropriateness of its constituents, seeking to ensure the group included a sample size robust enough that individual company actions or policies will not skew data or results in significant year-to-year volatility and is appropriately aligned with the Company in terms of industry, life cycle stage, labor market for executive talent, and financial scope characteristics in terms of revenue and market capitalization. Based on its review and analysis, Willis Towers Watson recommended no changes to the Graco Peer Group. Following its review of an executive compensation peer group report prepared by Willis Towers Watson and its discussions with Willis Towers Watson, the MOCC determined not to make any changes to the Graco Peer Group, believing the Graco Peer Group is appropriately aligned with the Company in terms of industry, life cycle stage, labor market for executive talent, and financial scope characteristics.

Given that compensation data for the CEO and CFO positions of the Graco Peer Group are readily available in securities filings, the MOCC used the applicable Graco Peer Group as a primary source of data when setting 20212022 and 20222023 compensation levels for the Company’s CEO and CFO. Compensation data for all other executive officer positions in the Graco Peer Group are limited to those executive officers identified in securities filings, which positions may or may not correspond to the positions held by, and responsibilities of, our other executive officers. Therefore, the MOCC used the Willis Towers Watson survey data as a primary source of data, and the relevant Graco Peer Group as a secondary source of data to the extent applicable, when setting 20212022 and 20222023 compensation levels for the Company’s other executive officers.

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Components of the Executive Compensation Program

Our executive compensation program is designed to reward short-term results and motivate long-term performance through the use of three primary total compensation components: base salary; short-term incentives; and long-term incentives. The following table summarizes each of these components of compensation:

In addition to reviewing the benchmark data described above, the MOCC reviews compensation and benefits tally sheets for our projected NEOs showing their current and potential total compensation and benefits components. The tally sheets also display estimated compensation and benefits for hypothetical change of control and involuntary and voluntary terminations. Specifically, the tally sheets reviewed by the MOCC in September 20212022 provided actual compensation for 20192020 and 20202021 and target annual compensation for 2021.2022. These tally sheets also provided retirement balances as of December 31, 2020,2021, projected to normal retirement age or the age at which the benefit is not subject to reduction, deferred compensation balances and the projected value of stock awards based on assumptions regarding stock price appreciation.

The MOCC strives to maintain a reasonable and competitive balance between fixed and variable elements of compensation. The MOCC believes the compensation mix and amount paid to each of our executive officers is market-based, reasonable and competitive. The 20212022 pay mix at target for our new CEO Mark Sheahan, and other NEOs is displayed below. The percentage allocation among each pay element may vary based on an individual’s experience, responsibilities, performance and corporate/division/region results. The “at“performance-based/at risk” pay components comprised between 63%62% and 85%86% of the total target annual direct compensation for 20212022 to align our NEOs’ compensation with the performance of the Company and the creation of shareholder value.

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Base Salary

Base salary is fixed compensation. Annual salary increases are based on individual performance and budgetary constraints, and are guided by the 50^th percentile market data.

For 2021,2022, the merit increase decisions for the NEOs were based on the criteria identified above. Additional information on individual salary adjustments for 20212022 is provided in the “Compensation of Individual Named Executive Officers” section below.

Short-Term Incentives (STI)

The Graco Inc. Incentive Bonus Plan (the “Incentive Bonus Plan”) is designed to motivate the executive officers of the Company to improve the overall performance of the Company and to reward them when the Company achieves specific measurable results. The Incentive Bonus Plan provides cash rewards to executive officers to encourage them to produce a strong return for the Company’s shareholders and to encourage them to remain employees of the Company. The MOCC has the discretion to designate executive officers and other employees of the Company as participants in the Incentive Bonus Plan. The Incentive Bonus Plan also permits the MOCC to establish performance periods based on a performance period of any length. Potential payouts under the Incentive Bonus Plan are expressed as a percentage of base salary, which percentages have remained constant within each level (CEO and other executive officers) for many years. Specific financial performance thresholds must be attained in order for the executive officers to earn an incentive payment. If specified performance levels are not achieved or exceeded, there is no payout. The annual incentives, to the extent earned, are typically paid in cash in March following the calendar year-end and are based upon the MOCC’s determination of financial performance against pre-established targets.

At its meeting in February 2021,2022, the MOCC approved participation of the CEO and other executive officers in the Incentive Bonus Plan for 2021.2022. The threshold, target and maximum payout levels as a percent of target and as a percent of base salary for 20212022 are displayed below. Achievement of performance levels between threshold and target, and target and maximum, result in a payout that is interpolated based on the level of performance, and permit a partial payout as soon as the threshold level of achievement has been exceeded.

The MOCC established two financial measures for the Incentive Bonus Plan: net sales and Incentive EPS growth over the prior year. Net sales and Incentive EPS growth were selected as the metrics against which to measure the executive officers’ performance for the Incentive Bonus Plan because the MOCC desires to motivate the executives to achieve profitable business growth consistent with our long-term financial objectives. The MOCC utilized projected global gross domestic product (GDP) growth rates as a guide in setting the 20212022 target performance levels. At the time the MOCC established the 20212022 target performance levels, the MOCC once again determined that final bonus payout calculations for corporate, worldwide division and region Incentive EPS would exclude certain purchase accounting and one-time transaction costs related to acquisitions and divestitures, the initial valuation of acquisitions and potential earn out adjustments, and the effects of excess tax benefits from stock option exercises. Final Incentive EPS calculations for 20212022 bonus payouts did exclude these items. Consistent with itsThe MOCC believes these adjustments provide a better measure of operating performance for 2022. In addition to these recurring adjustments, the MOCC has the authority to adjust Incentive Bonus Plan awards based on unanticipated or special circumstances, the MOCC also elected to exclude the impact of a non-cash pension settlement loss related to our pension plan restructuring in 2021 when determining final EPS calculations as the restructuring was determined to be in the Company’s best interest and was not contemplated at the time 2021 target performance levelsbut no such adjustments were established. The MOCC believes these adjustments provide a better measure of operating performancemade for 2021.2022.

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The 20212022 incentive award payouts were based upon the achievement of specified levels of net sales and Incentive EPS at the corporate and division/region levels. Financial performance levels and actual results for the 20212022 Incentive Bonus Plan were as follows:

While Mr. J. Johnson had divisional leadership responsibility in 2022, he was subject to the financial performance levels and metric weightings applicable to the CEO, CFO and function executives. The 20212022 financial results produced abovebelow target payouts for the Incentive Bonus Plan for each of the NEOs. The Incentive Bonus Plan targets as a percentage of base salary, awards at target, performance achievements, actual payouts and payouts as a percentage of base salary for each NEO were as follows:

The MOCC has the authority to award special bonuses outside of the Incentive Bonus Plan to individual executive officers, but no such special bonuses were awarded for 2021.2022.

Long-Term Incentives (LTI)

The MOCC typically grants long-term incentive awards in the form of stock options to each executive officer at its regularly scheduled February meeting based on a review of the market data. The MOCC is guided by the 75^th percentile of the market data for comparable groupings of positions to determine the economic value of such awards. The stock option awards are designed to

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As part of its review of the market data and trends in executive compensation, the MOCC periodically considers whether to utilize other long-term incentive vehicles in addition to or in lieu of stock options. While the MOCC has on rare occasions granted restricted stock to certain executive officers, the MOCC has determined that the use of stock options as the sole long-term incentive vehicle for the executive officer compensation program has successfully motivated the executive officers to attain long-term goals and operational growth for the Company, and has aligned the executive officers’ interests with our shareholders’ interests in creating long-term shareholder value. The MOCC has utilized stock options as the sole long-term incentive vehicle for the executive officer compensation program for 2829 years. Over the past 2829 years, the Company’s cumulative total shareholder return has been 12,804%10,807% versus 922%723% for the S&P 500 and 868%783% for the Dow Jones Industrial Average. Assuming all dividends were reinvested, a $1,000 investment in the Company’s common stock at the beginning of the 28-year29-year period would have been worth $129,041$109,066 on December 31, 2021,30, 2022, while a $1,000 investment in each of the S&P 500 Index and the Dow Jones Industrial Average Index would have been worth $10,218$8,231 and $9,680,$8,830, respectively, on December 31, 2021.30, 2022. The MOCC believes these results demonstrate that stock options have been highly effective in aligning management’s interests with our shareholders’ interests and creating significant value for our shareholders over the long term.

Under the terms of the Graco Inc. 2019 Stock Incentive Plan (the “2019 Plan”), the MOCC must approve all stock option grants to executive officers. In February 2021,2022, executive officers were awarded non-qualified stock options with an exercise price equal to the fair market value of our common stock on the grant date, defined in the 2019 Plan as the last sale price of the stock on the day immediately preceding the grant date. Each option has a 10-year term and becomes exercisable in equal installments over four years, beginning with the first anniversary of the grant date. Additionally, the 2019 Plan prohibits the repricing of stock options.

In 2021,2022, the MOCC granted the following stock option awards to the NEOs under the 2019 Plan:

The MOCC also granted to Dale D. Johnson 25,000 restricted stock units under the 2019 Plan with a grant date fair value of $1,734,500 as described below.

Compensation of Individual Named Executive Officers

Mark W. Sheahan

President and Chief Executive Officer (effective June 10, 2021)

Chief Financial Officer and Treasurer (through June 9, 2021)

Mr. Sheahan’s base salary as of December 20202021 was below the median of the Graco Peer Group. In December 2020,2021, the MOCC approved a base salary increase of 10%5% to $494,300$918,800 for 20212022 based on Mr. Sheahan’s relative position in the market and individual performance. Effective June 10, 2021, Mr. SheahanThe increase was promoted to President and Chief Executive Officer ofin line with the Company.Market Increase Projection. Based on a review of benchmarking data for the Graco Peer Group, the MOCC increased Mr. Sheahan’s base salary to $875,000 effective June 10, 2021, which is below the median of the Graco Peer Group, to compensate him for his new role and responsibilities. Effective July 1, 2021, the MOCC increased Mr. Sheahan’s target and maximum payouts as a percentage of base salary under the Incentive Bonus Plan from 70% to 100% and from 105% to 150%, respectively, in connection with his promotion. Based on 20212022 corporate net sales and corporate Incentive EPS performance, Mr. Sheahan received a $938,523$788,695 bonus payment under the Incentive Bonus Plan, based on six months of participation in the Incentive Bonus Plan with a maximum payout of 105% of base salary and six months of participation with a maximum payout of 150% of base salary.Plan. Mr. Sheahan’s bonus payout represented 150%86% of his blended target award. Based on the process described above for setting long-term incentive awards, Mr. Sheahan received a stock option award of 50,960236,090 shares in February 2021, and an additional stock option award of 137,490 shares in June 2021 to compensate him for his new role and responsibilities.2022.

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Christian E. Rothe

President, Worldwide Applied Fluid TechnologiesIndustrial Division

Mr. Rothe’s base salary as of December 20202021 was above the median of the 20202021 Willis Towers Watson survey data. In December 2020,2021, the MOCC approved a 3%4% increase to Mr. Rothe’s base salary to $499,800$519,800 for 20212022 based on his relative position in the market and individual performance. Based on 20212022 corporate net sales, corporate Incentive EPS, worldwide Applied Fluid TechnologiesIndustrial Division net sales, and worldwide Applied Fluid TechnologiesIndustrial Division Incentive EPS performance, Mr. Rothe received a $524,790$353,615 bonus payment under the Incentive Bonus Plan. Mr. Rothe’s bonus payout represented 150%97% of his target award. Based on the process described above for setting long-term incentive awards, Mr. Rothe received a stock option award of 28,31026,230 shares in February 2021.2022.

Jeffrey P. Johnson

President, Electric Motor Division

Mr. Johnson’s base salary as of December 20202021 was above the median of the 20202021 Willis Towers Watson survey data. In December 2020,2021, the MOCC approved a base salary increase of 3%4% to $389,100$404,700 for 20212022 based on Mr. Johnson’s relative position in the market and individual performance. Based on 20212022 corporate net sales and corporate Incentive EPS, Mr. Johnson received a $408,555$243,173 bonus payment under the Incentive Bonus Plan. Mr. Johnson’s bonus payout represented 150%86% of his target award. Based on the process described above for setting long-term incentive awards, Mr. Johnson received a stock option award of 28,31026,230 shares in February 2021.2022.

Patrick J. McHale

Former President and Chief Executive Officer (served as President and Chief Executive Officer through June 9, 2021, then served as Special Advisor to the President and Chief Executive Officer until his retirement on September 15, 2021)

Mr. McHale’s base salary as of December 2020 was below the median of the Graco Peer Group. In December 2020, the MOCC approved a base salary increase of 3% to $892,200 for 2021 based on Mr. McHale’s relative position in the market and individual performance. The increase was in line with the Market Increase Projection. Based on 2021 corporate net sales and

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Accordingly, the agreements generally provide for certain benefits if the executive officer’s employment or service is involuntarily terminated by our Company without cause prior to a change of control or if, within two years after a change of control, the executive officer’s employment or service is terminated involuntarily by the Company without cause or the executive officer resigns for good reason. The current form of Key Employee Agreement was approved by the MOCC in April 2021 after reviewing the Key Employee Agreement previously in effect and current market practices related to severance arrangements and benefit levels related thereto. The current form of Key Employee Agreement has been signed by all executive officers having served in such capacity in 2022. The MOCC reviews the form of Key Employee Agreement on a periodic basis in consultation with the executive compensation consultant and legal advisors.

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Tax Implications of Executive Compensation

Section 162(m) of the Internal Revenue Code places a limit of $1 million in compensation per year on the amount public companies may deduct with respect to certain executive officers. Our pay-for-performance philosophy is central to our compensation program, and the MOCC believes shareholder interests are best served if its discretion and flexibility in structuring and awarding compensation is not restricted even though some compensation awards may result in non-deductible compensation expense to the Company.

Report of the Management Organization and Compensation Committee

The Management Organization and Compensation Committee of the Company has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management, and based on such review and discussions, the Management Organization and Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

The Members of the Management Organization and Compensation Committee

*Mr. Archie C. Black was not a member of the Management Organization and Compensation Committee at the time it issued its report.

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Summary Compensation Table

The table below summarizes the total compensation for the last three fiscal years awarded to, earned by or paid to individuals who served as our Chief Executive Officer and our Chief Financial Officer during fiscal year 20212022 and each of the other three most highly compensated Named Executive Officers who were serving as executive officers at the end of fiscal year 2021.2022.

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Outstanding Equity Awards at 20212022 Fiscal Year End

The following table summarizes the outstanding equity awards held by each Named Executive Officer on December 31, 2021:30, 2022: