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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]
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Check the appropriate box:
 
[   ]      Preliminary Proxy Statement
[   ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[   ] Definitive Additional Materials
[   ] Soliciting Material Pursuant tounder §240.14a-12

 THE CLOROX COMPANYThe Clorox Company 
 (Name of Registrant as Specified In Its Charter) 
 
     
 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

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ToLetter from Our Fellow ShareholdersIndependent Chair


This past year presented another year of unprecedented challenges. Through ongoing uncertainty, the board has continued to be stewards of the company, guiding its strategy to ensure long-term, sustainable value creation for all stakeholders. We believe that the foundation of Clorox's resilience through uncertainty and challenges has been strong corporate governance, together with our commitment to our corporate purpose and values. We appreciate the opportunity to share with you our progress and governance enhancements over this past fiscal year.

I am pleasedEnhancing Board ESG Governance

Board oversight of ESG has never been more critical, given its strategic importance to invite youour company and the increasing scrutiny by regulators, shareholders and other stakeholders on corporate disclosures and activities around these matters. We believe our approach to attendstewardship of these issues continues to serve us, the company, and our 2020 Annual Meeting of Shareholders –shareholders well. We made progress on our first meeting to be held virtually.

TheESG priorities and goals and enhanced our governance over these areas across the organization, which, we believe, will create long-term stakeholder value. For example, this past year has been a challenging one. Amid the COVID-19 global pandemic, The Clorox Company has been guided by our IGNITE strategy. When we launched our IGNITE strategy lastfiscal year, we did not know how prescient it would be, but it has grounded uscontinued to broaden our board's knowledge on these topics through engagement and provided the framework for us to act quicklydialogue with internal and boldly – not only in overcoming the challenges we have faced due to COVID-19 butexternal experts. We also in confronting the systemic racial injustice that has plagued our nation for centuries.

By integrating environmental, social and governance (ESG) goals into our IGNITE strategy, we put Planet, Product, People and Governance squarely at the centerundertook a review of our roadmapESG governance across the full Board and committees, including benchmarking and discussion among board leadership, to ensure these areas were managed in an integrated manner across committees, with oversight and visibility to the full Board. Based on this, we updated our board committee charters to enhance oversight and coordination on these key matters.

Maintaining Active Board Refreshment

Since our last annual meeting, we appointed two new directors to the board — Julia Denman and Stephanie Plaines — who collectively bring additional deep strategic, financial and industry leadership experience as well as strong track records of value creation and transformation. These two directors serve on the Audit Committee, and the board has determined that they are audit committee financial experts for fiscal year 2023. Their appointments add to the near term. These core facetsstrength and diversity of our strategy have guideddirector nominee group, which is 50% women and 25% people of color.

After 15 years of service, Dr. Richard Carmona will be retiring from the board. We congratulate Rich on his retirement and thank him for his dedicated years of service, including six years as chair of the NGCRC. We are very grateful for his substantial contributions to the board, the company and our priorities during this time – maximizing supply to get our products where they’re needed; protectingshareholders, particularly his important perspectives as a former surgeon general of the health, safety and well-beingU.S. as the company navigated through the height of the pandemic.

Year-round, Ongoing Shareholder Engagement

As part of our employees; supporting caregivers and people most impacted by COVID-19; and donating to community-based racial justice initiatives. And we are committed to enhancing our leadership in these areas through an unwavering commitment to strong corporate governance, our directors also continued to engage with shareholders to discuss key issues and to listen to their perspectives. The feedback from these conversations informed the implementation of recent practices such as the launch of our new ESG performance overseen byData Hub, which provides a centralized source for our board of directors.

key ESG disclosures. As of September 14, 2020, I stepped down as CEO, and Linda Rendle stepped into this role. Linda has been with Clorox for 17 years and was a key part of the team that developedboard's effort to continually enhance and expand their knowledge and skills, we invited one of our IGNITE strategy. With her outstanding track record of achieving results and her deep business and functional experience, I am confident Linda will lead the company’s ongoing progress against our IGNITE strategy and ESG goals – and will continue to make bold decisions, guided by Clorox’s core value, Do the Right Thing.

I am so proud of what we, as a team, have accomplished for our shareholders, as well as for our employees, consumers and communities, during my tenure as CEO – and we look forward to sharing that progress with you at our annual meeting. Thank you for your continued support and investment in Clorox.

Sincerely,


Benno Dorer
Executive Chair

As lead independent director of The Clorox Company, it is my honor to serve with our other independent directors as the independent voices representing you, ourlargest shareholders to help ensure thata board meeting and had the company continues to be managed with integrity and strong corporate governance.

The board of directors was faced with significant challenges this past year in overseeing and navigating the new risks presented by the COVID-19 pandemic as well as by the reawakening of deep wounds created by longstanding and systemic racial injustices. Clorox’s core value, Do the Right Thing, has been a beacon for the board of directors during this challenging time, guiding our work of overseeing strategy, risks and corporate culture.

During the COVID-19 pandemic, my role as liaison between the CEO and the other independent directors has become even more important in ensuring appropriate board oversight of risks. Benno and I have met at least weekly as the situation has progressed to ensure connectivity with and input from the Board. This work with Benno will continue, even as he steps into his new executive chair role. In addition, this year, as in past years, I participated in valuable discussions with a number of shareholders, particularly around our ESG efforts. I always appreciate theunique opportunity to hear their perspectives and feedback, which I shareengage in a dialogue with the rest of the Clorox board and management.them on emerging ESG issues.

As Benno recently transitioned to the role of executive chair, our new CEO, Linda Rendle, began assuming her new responsibilities. I worked closely with the executive committee and the other independent directors on her appointment, and I am very excited and proud that our thoughtful, long-term succession planning positioned us to name the company’s first female CEO.

The board of directors, upon recommendation of the Nominating, Governance and Corporate Responsibility Committee, has also nominated Linda for election to the board, along with four other female director nominees, putting our director nominee slate at 38% female. The director nominee slate is also ethnically diverse, with 31% of our director nominees self-identifying as an ethnic minority.

Inclusion and diversity is an important priority at Clorox – a priority that is encapsulated in the ESG goals of the company’s IGNITE strategy. This commitment starts at the top, with our board of directors, which is why we adopted a Board Diversity Policy over the last fiscal year, formalizing our historical practice of considering many forms of diversity to ensure we have the optimal mix of perspectives for effective governance.

On behalf of the independent directors,board, I want to thank you for your continued investment and confidence in Clorox. We believe that Clorox is well-positioned to drive sustainable growth, build a stronger, more resilient company and support.create long-term value for all of our stakeholders, including our shareholders. We look forwardthank you for the opportunity to engaging withcontinue serving you at our annual meeting.and the company.

Sincerely,


Pamela Thomas-GrahamMatthew J. Shattock
Lead Independent DirectorChair


THE CLOROX COMPANY - 20202022 Proxy Statement

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MessageLetter from Linda Rendle, DirectorOur Chief Executive Officer

Even in the face of a challenging macroeconomic environment, we made strong progress against our IGNITE strategy this past year, while staying true to our corporate purpose of championing people to be well and thrive every single day. As we look ahead, bolstered by our strong brands and lasting consumer trend tailwinds, we remain focused on delivering 3% to 5% long-term sales growth and positioning the company for long term success through a broad set of actions and key investments.

Some of the actions we are taking include:

Operating with discipline: We are focused on our commitment to rebuild margins, which we are implementing through pricing, a focus on operational excellence, and our hallmark cost savings program.

Delivering bigger, stickier innovation platforms: We have a robust innovation pipeline and introduced innovations across 28 categories in fiscal year 2022, setting us up well to drive growth for years to come.

Building purpose-driven, personalized brands: We have also been focused on our 2025 goal of knowing 100 million consumers and are 75% of the way to reaching our goal. This enables greater efficiencies and engagement and allows our brands to have the highly personalized and customized interactions that consumers expect.

Accelerating our digital transformation: We're upgrading our digital infrastructure and capabilities to better position us for the long term in supply chain, digital commerce, innovation and brand building, including transitioning to a new global Enterprise Resource Planning (ERP) system over the next five years, through a $500 million investment.

Reimagining how we work: We started implementing a streamlined operating model in the first quarter of fiscal year 2023 to further support our goals of driving both growth and productivity, by creating a simpler, faster company that puts the business even closer to our consumers and customers.

Our ESG goals are integrated into our business strategy and CEOwe are committed to helping build a more sustainable and inclusive world because we recognize the connection between ESG issues and our company's long-term performance.


Dear Shareholders:

Putting People at the Center: We continue to lead with a human-centric approach. Supporting people's well-being starts with our own teammates, who are critical enablers of Clorox's success. Over the past year, we continued to enhance our benefits and programs to support the physical, mental and financial well-being of our incredible Clorox team. We also maintained our strong safety standards with a recordable incident rate well below our target and the industry average.

Continuing Commitment to Inclusion, Diversity, Equity and Allyship: We recently expanded the scope of our inclusion and diversity strategy to highlight the importance of equity and allyship and formalize our work in these areas. In July, Clorox's first-ever Chief Diversity and Social Impact Officer joined the Clorox Executive Committee, and under her leadership, we will continue to drive systemic and lasting change to build an even more people-centered, purpose-driven culture.

Taking Climate Action: We also made further progress on our long-term environmental sustainability goals, which are an integral part of our IGNITE strategy. Building on our accomplishment of reaching 100% renewable electricity in the U.S. and Canada last year, we signed a second virtual power purchase agreement to underscore our commitment to renewable energy. We also set out our path to achieving net zero emissions by 2050 in our recently published climate action plan.

As a longtime Clorox employee and your new chief executive officer,the world around us continues to rapidly change, I am honoredconfident that we are taking the necessary actions to write my first letter better position Clorox to you.

If the pandemicnavigate this uncertain macroeconomic environment, drive sustainable, profitable growth and societal shiftsdeliver long-term value to all our stakeholders. I encourage you to read more about our results and our progress against our IGNITE strategy in our 2022 Integrated Annual Report. Thank you, fellow shareholders, for your continued support of 2020 have shown us anything, it’s that crises do not create leaders; they reveal them — all over our company. During COVID-19 we needed to find creative ways to protect our people’s health and safety while asking them to work around the clock on the front lines to produce record numbers of disinfecting and essential household products. We have aggressively expanded our production capacity, simultaneously reshaping and redeploying our output to focus on people who needed our products most, including healthcare workers. Continuing this expansion, while keeping our employees safe, remains our highest priority.

Throughout this period, we’ve never lost focus on the bigger picture: our commitment to Good Growth – growth that’s profitable, sustainable and responsible. It starts with continuing to serve more consumers through our global portfolio of trusted brands; helping people feel safer and more confident in public spaces as communities begin to reopen; making supply chain enhancements, including running some plants 24/7 to get as much of our products to people who need them most; and continuing to make progress in inclusion and diversity so that our employees and management team increasingly reflect the diverse make up of our consumers and communities.

It is in recognition of these things that the July 2020 Axios-Harris Poll 100, which surveyed about 35,000 Americans, ranked The Clorox Company No. 1 for corporate reputation based on vision, growth, products, culture, ethics and citizenship. Recent months have showcased my teammates’ courage, creativity and leadership; I take very seriously my responsibility to protect, enable and learn from them as we move forward together.

Sincerely,


Linda Rendle
Director and Chief Executive Officer

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Notice of Annual Meeting of Shareholders

The 2020 Annual Meeting of Shareholders (the Annual Meeting) of The Clorox Company (Clorox or the Company) will be held at Information
Date and Time
Wednesday, November 16, 2022
9:00 a.m. Pacific timeTime

Virtual Meeting URL
meetnow.global/MXNXWKW

Record Date
You can vote electronically at the Annual Meeting if you were a shareholder of record on Wednesday, November 18, 2020, for the following purposes:September 23, 2022.

Agenda

1.

To elect the thirteen12 director nominees named in the proxy statement;

2.

To hold an advisory vote to approve executive compensation; and

3.

To ratify the selection of Ernst & Young LLP as the Company’s independent registered public accounting firm; and

4.To approve an amendment to the Company’s Restated Certificate of Incorporation to eliminate the supermajority voting provision.firm.

Due to concerns relating to the coronavirus (COVID-19) pandemic, and to support the health and well-being of our employees and shareholders, this year’s Annual MeetingShareholders will be virtual and will be held entirely online via live webcast at www.meetingcenter.io/246179169 (password: ‘CLX2020’). There will not be an option to attend the meeting in person.

Shareholders also will consider and act upon such other business as may properly come before the Annual Meeting or any adjournment or postponement.

ShareholdersHow to Vote
Internet
www.envisionreports.com/CLX

Telephone
Call toll-free 1-800-652-VOTE (8683) within the USA, US territories and Canada.

Mail
Mark, sign and date your proxy card or voting instruction form and return it in the postage-paid envelope.

During the Annual Meeting
Visit meetnow.global/MXNXWKW. Log in using the 15-digit control number included on your Notice of record atInternet Availability of Proxy Materials on your printed proxy card, or on the closeinstructions that accompanied your proxy materials to access the meeting.

How to Attend the Annual Meeting
Visit meetnow.global/MXNXWKW. Log in using the 15-digit control number included on your Notice of businessInternet Availability of Proxy Materials on September 25, 2020, are entitledyour printed proxy card, or on the instructions that accompanied your proxy materials to access the meeting.



If you are a beneficial owner (you own shares through a broker, bank or other holder of record) and plan on attending, voting or asking questions at the Annual Meeting, you may need to pre-register with Computershare by 5:00 p.m. Eastern Time on November 11, 2022. Please see pg 88 of the Attending the Virtual Annual Meeting section for more information.

You may also vote atonline and examine our shareholder list during the Annual Meeting by following the instructions provided on the meeting website during the Annual Meeting.

On or about October 5, 2022, we began mailing a Notice of Internet Availability of Proxy Materials (the Notice) to our shareholders informing them that our Proxy Statement, 2022 Integrated Annual Report – Executive Summary, and any adjournmentvoting instructions are available on the Internet.

Your vote is very important. Whether or postponement.

not you plan to attend the virtual Annual Meeting, we encourage you to vote and submit your proxy in advance of the meeting by one of the methods described on pages 83-84. While you will not be able to attend the Annual Meeting at a physical location, we have designed the virtual Annual Meeting to ensure that our shareholders are given the same rights and opportunities to actively participate in the Annual Meeting as they would at an in-person meeting, using online tools to facilitate shareholder access and participation.

How to Attend the 2020 Virtual Annual Meeting. This year’s Annual Meeting will be virtual and held online via live webcast. In order to attend the Annual Meeting, you will need to visit www.meetingcenter.io/246179169, and you will be required to enter the meeting password ‘CLX2020’ and the 15-digit control number included on your Notice of Internet Availability of Proxy Materials, on your proxy card (if you received a printed copy of the proxy materials), or on the instructions that accompanied your proxy materials to access the meeting. If you are the beneficial owner of shares held in “street name” (that is, you hold your shares through a broker, bank or other holder of record), you must register in advance to gain access to the Annual Meeting and to vote your shares or ask questions during the Annual Meeting. Please see the Attending the Virtual Annual Meeting section of the proxy statement for more information. Whether or not you plan to attend the virtual Annual Meeting, we encourage you to vote and submit your proxy in advance of the meeting by one of the methods described on pages 72-73. You may also vote online and examine our shareholder list during the Annual Meeting by following the instructions provided on the meeting website during the Annual Meeting. To vote at the meeting, visit www.meetingcenter.io/246179169 and log in using the aforementioned information.

On or about October 6, 2020, we began mailing a Notice of Internet Availability of Proxy Materials to our shareholders informing them that our Proxy Statement, Integrated Annual Report – Executive Summary, and voting instructions are available on the Internet as of the same date.

Your vote is very important. Even if you plan to attend the virtual Annual Meeting, we hope that you will read the proxy statement and vote your proxy by telephone, via the Internet, or by signing, dating, and returning the proxy card in the envelope provided.

By Order of the Board of Directors,


Angela C. Hilt
Vice President – Corporate Secretary
& Deputy General Counsel

By Order of the Board of Directors,


Iké Adeyemi
Vice President – Corporate Secretary &
Associate General Counse
l

The Clorox Company
1221 Broadway
Oakland, California 94612

October 6, 2020

Important Notice Regarding the Availability of Proxy Materials for The Clorox Company Shareholders Meeting to be Held on November 18, 2020: The Notice of Annual Meeting, Proxy Statement, and 2020 Integrated Annual Report – Executive Summary will be available at www.edocumentview.com/CLX.
1221 Broadway
Oakland, California 94612

October 5, 2022

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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE CLOROX COMPANY 2022 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON NOVEMBER 16, 2022

The Notice of Annual Meeting, Proxy Statement, and 2022 Integrated Annual Report – Executive Summary will be available at www.edocumentview.com/CLX.

Pursuant to rules adopted by the United States Securities and Exchange Commission (the SEC), we are furnishing proxy materials to our shareholders primarily over the Internet. We believe that this process expedites shareholders’ receipt of these materials, lowers the costs of our Annual Meeting and reduces the environmental impact of mailing printed copies.

Accordingly, on or about October 5, 2022, we began mailing the Notice to our shareholders informing them that our Proxy Statement, 2022 Integrated Annual Report – Executive Summary, and voting instructions are available on the Internet. The Notice also contains instructions on how to receive a paper copy of the proxy materials and a proxy card or voting instruction form. If you received the Notice by mail or our proxy materials by e-mail, you will not receive a printed copy of the proxy materials unless you request one. If you received paper copies of our proxy materials, you may also view these materials on our website at www.proxyvote.com.

YOUR VOTE IS IMPORTANT, NO MATTER HOW MANY OR HOW FEW SHARES YOU OWNELECTRONIC DELIVERY OF PROXY MATERIALS
We encourage our shareholders to enroll in voluntary e-delivery of future proxy materials. We believe that this process expedites shareholders’ receipt of these materials, lowers the costs of our Annual Meeting and reduces the environmental impact of mailing printed copies.

If you are a Registered Shareholder (you own shares in your own name through our transfer agent, Computershare Trust Company, N.A.): visit www.computershare.comand log into your account to enroll.

If you are a Beneficial Owner (you own shares through a broker, bank or any other account): If you hold shares beneficially, please follow the instructions provided to you by your broker, bank, trustee or nominee.

If you have questions about how to vote your shares, or need additional assistance, please contact Innisfree M&A Incorporated, who is assisting us in the solicitation of proxies:


501 Madison Avenue, 20th Floor
New York, New York 10022

Shareholders may call toll-free at (877) 750-9499

Banks and brokers may call collect at (212) 750-5833


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THE CLOROX COMPANY - 2022 Proxy SummaryStatement

1
BOARD OF DIRECTORS5
Proposal 1: Election of Directors5
Who We Are: Our Director Nominees5
Shareholder Engagement14
Shareholder Outreach and Communications14
Shareholder Recommendations and Nominations of Director Candidates14
Director Communications14
How We Identify, Evaluate and Nominate Our Directors15
Director Skills & Experience15
Director Continuing Education and New Director Orientation16
Diverse Backgrounds & Experiences17
Board Diversity Policy18
Board Leadership Structure18
Annual Board and Director Evaluation Process19
How Our Directors Are Elected20
Vote Required20
Board’s Recommendation20
How Our Directors Govern20
The Clorox Company Governance Guidelines20
Our Corporate Governance Process21
The Board’s Role in Risk Management and Culture Oversight22
Board Meeting Attendance22
Director Independence23
Related Person Transaction and Conflict of Interest Policies and Procedures23
Code of Conduct24
Board Committees24
How Our Directors Are Paid26
Cash Compensation27
Equity Compensation27
Fiscal Year 2021 Compensation Changes28
Stock Ownership Philosophy and Guidelines for Directors28
OUR COMPANY29
Fiscal Year 2020 Performance29
IGNITE Strategy Guided by ESG Principles30
STOCK OWNERSHIP INFORMATION34
Beneficial Ownership of Voting Securities34
EXECUTIVE COMPENSATION36
Proposal 2: Advisory Vote to Approve Executive Compensation36
Board’s Recommendation36
Vote Required37



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COMPENSATION DISCUSSION AND ANALYSISProxy Summary     381
Voting Matters and Voting RecommendationsExecutive Summary381
Our Director Nominees1
Corporate Governance Strengths2
Executive Compensation Highlights3
Components of Our Executive Compensation Program394
Our CompanyFiscal Year 2020 Performance Highlights5
Snapshot5
Our Corporate Values and Purpose5
Our IGNITE Strategy and Integrated ESG Pillars6
Board of Directors8
Proposal 1: Election of Directors8
Our Director Nominees8
Shareholder Engagement21
Director Candidate Evaluation and Nomination22
Board Leadership Structure26
Annual Board and Director Evaluation Process27
Vote Required28
Board’s Recommendation28
Corporate Governance and Board Matters29
The Clorox Company Governance Guidelines29
Board Oversight of Risk Management and Culture29
ESG Governance32
Board Meeting Attendance33
Director Independence34
Related Person Transaction and Conflict of Interest Policies and Procedures34
Code of Conduct35
Board Committees35
Director Compensation37
Executive Officers40
How Pay Was Tied to the Company’s Performance in Fiscal Year 2020Information about our Executive Officers40
Fiscal Year 2020 Compensation of Our Named Executive Officers40
What We Pay: Components of Our Compensation Program41
Retirement PlansStock Ownership Information4641
Post-Termination CompensationBeneficial Ownership of Voting Securities4741
PerquisitesDelinquent Section 16(a) Reports4742

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Executive Compensation43
Compensation Philosophy47
What We Have and Don’t Have – Elements of Our Executive Compensation Program48
How We Make Compensation Decisions48
Roles and Responsibilities in SettingProposal 2: Advisory Vote to Approve Executive Compensation4843
Independence of the Compensation ConsultantBoard’s Recommendation4943
Our Peer GroupVote Required4944
Other Executive Compensation Policies and Practices50
The Management Development and Compensation Committee Report52
Compensation Committee Interlocks and Insider Participation52
Compensation Discussion and Analysis Tables53
Fiscal Year 2020 Summary Compensation Table5345
Fiscal Year 2020 Grants of Plan-Based Awards55
Outstanding Equity Awards at Fiscal 2020 Year-End56
Fiscal Year 2020 Option Exercises and Stock Vested58
Fiscal Year 2020 Pension Benefits Table59
Fiscal Year 2020 Nonqualified Deferred Compensation60
Potential Payments Upon Termination or Change in Control60
Potential Payments Upon Change in Control62
Fiscal Year 2020 Termination Table63
Fiscal Year 2020 CEO Pay Ratio Plan Information6578
EQUITY COMPENSATION PLAN INFORMATIONAudit Committee Matters6679
AUDIT COMMITTEE MATTERS67
Proposal 3:Ratification of Independent Registered Public Accounting Firm6779
Board’s Recommendation6779
Vote Required6779
Audit Committee Report6880
Fees of the Independent Registered Public Accounting Firm6981
ADDITIONAL ITEMS TO BE VOTED ON70
Proposal 4: Amendment toInformation About the Company’s Restated Certificate of Incorporation to Eliminate the Supermajority Voting Provision70
Board’s RecommendationVirtual Annual Meeting7182
Vote Required71
INFORMATION ABOUT THE VIRTUAL ANNUAL MEETING72
Delivery of Proxy Materials7282
Voting Information7283
Form 10-K, Financial Statements, and Integrated Annual Report – Executive Summary7485
Solicitation of Proxies7485
Shareholder Proposals and Director Nominations for the 20212023 Annual Meeting7586
Eliminating Duplicative Proxy Materials7687
Attending the Virtual Annual Meeting7788
Submitting Questions for the Virtual Annual Meeting7789
Appendix A  Proposed Amendment to the Company’s Restated Certificate of IncorporationA-1
Appendix BA: Management’s Discussion and Analysis of Financial Condition and Results of Operations Audited Financial Statements, and Other Selected Financial InformationA-1

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THE CLOROX COMPANY - 2022 Proxy Statement



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Proxy Summary

This summary highlights information contained elsewhere in this proxy statement and does not contain all of the information that you should consider. Please review the entire proxy statement before voting.


Proposals to be Voted onVoting Matters and Board Voting Recommendations


More
information
Board’s voting
recommendation
PROPOSAL 1Election of DirectorsPage 58FOR EACH NOMINEE
PROPOSAL 2Advisory Vote to Approve Executive CompensationPage 3643FOR
PROPOSAL 3Ratification of Independent Registered Public Accounting FirmPage 6779FOR
PROPOSAL 4Amendment to the Company’s Restated Certificate of Incorporation to Eliminate the Supermajority Voting ProvisionPage 70FOR

For more information on how to vote before and during the Annual Meeting, see Information About the Virtual Annual Meeting—Voting Information on pg 83 of this proxy statement.


Our Director Nominees

The following table provides summary information about each director nominee as of the date of the Annual Meeting.

NameAgeDirector
Since
Principal OccupationIndependentCommittee
Memberships
    Age    Director
Since
    Principal Occupation    Independent    Committee
Memberships
Amy Banse     61     2016     Senior Adviser to the Executive Committee, Comcast Corporation          
AC
Richard H. Carmona702007Chief of Health Innovations, Canyon Ranch
NGCRC (Chair)
MDCC
Benno Dorer562014Executive Chair, Clorox
Amy L. Banse632016Venture Partner, Mastry, Inc.
AC
Julia Denman512022Corporate Vice President and Head of Internal Audit, Enterprise Risk and Compliance, Microsoft Corporation
AC
Spencer C. Fleischer672015Managing Partner, FFL Partners, L.P.
MDCC (Chair)
692015Chairman, FFL Partners, L.P.
MDCC (Chair)
Esther Lee612013Executive Vice President – Global Chief Marketing Officer, MetLife Inc.
NGCRC
632013Former Executive Vice President – Global Chief Marketing Officer, MetLife Inc.
NGCRC (Chair)
A. D. David Mackay652016Former President and Chief Executive Officer, Kellogg Company
AC
MDCC
672016Former President and Chief Executive Officer, The Kellogg Company
AC
MDCC
Paul Parker57Senior Vice President, Strategy and Corporate Development, Thermo Fisher Scientific Inc.
(1)
592020Senior Vice President, Strategy and Corporate Development, Thermo Fisher Scientific Inc.
AC
Stephanie Plaines552022Chief Financial Officer, J.C. Penney
AC
Linda Rendle422020Chief Executive Officer, Clorox442020Chief Executive Officer, Clorox
Matthew J. Shattock582018Non-Executive Chairman, Beam Suntory Inc.
AC
602018Former Non-Executive Chairman, Beam Suntory Inc.
NGCRC
Kathryn Tesija572020Senior Adviser / Consultant, Simpactful LLC
MDCC
592020Former Executive Vice President and Chief Merchandising and Supply Chain Officer, Target Corporation
MDCC
NGCRC
Pamela Thomas-Graham
Lead Independent Director
572005Lead Independent Director, Clorox
NGCRC
Russell J. Weiner522017Chief Operating Officer and President of Domino’s US, Domino's Pizza, Inc.
AC
MDCC
542017Chief Executive Officer, Domino’s Pizza, Inc.
MDCC
Christopher J. Williams622015Chairman, Siebert, Williams, and Shank LLC
AC (Chair)
642015Chairman, Siebert, Williams, Shank & Co. LLC
AC (Chair)
(1)Mr. Parker’s committee memberships will be determined upon his election to the board of directors.

ACAudit Committee
NGCRC     Nominating, Governance and Corporate Responsibility Committee
MDCCManagement Development and Compensation Committee

Continues on next page

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IGNITE Strategy and ESG Highlights

Last year, we announced our IGNITE strategy which includes a commitment to Good Growth – profitable, sustainable and responsible growth. IGNITE also puts environmental, social and governance (ESG) priorities at the forefront of our decision-making to ensure Clorox remains a leader in corporate responsibility.

ESG Goals

Our ESG goals are organized around the themes of Planet, Product and People and are integrated with the strategic choices of our IGNITE strategy.

Planet: We strive to be a leader in environmental sustainability with a focus on plastic and other waste reduction and science-based climate action.

Product: We strive to be a leader in responsible product stewardship, with a focus on progressive actions to enhance our own and the consumer packaged goods industry’s practices.

People: We strive to help our consumers and employees through purpose-led choices that enhance well-being.

Our integrated IGNITE strategy is supported by an unwavering commitment to strong ESG performance overseen by the Board and NGCRC, and executed by our management team.

ESG Accomplishments and Recognition

Just a year after launching our IGNITE strategy, we are already making progress on our ESG goals – and being recognized for our performance to date.

During fiscal year 2020, we launched two major projects, bleach compaction (a conversion process that went forward despite the COVID-19 pandemic, demonstrating our commitment to sustainability) and conversion to 100% recycled fiber cartons in our Glad business, which is projected to contribute approximately 15% of our goal to reduce our virgin plastic and fiber packaging by 50%, by 2030. We also entered into a virtual power purchase agreement for the purchase of renewable energy starting in 2021, which is expected to help us achieve our goal of 100% renewable electricity in our U.S. and Canadian operations in 2021, four years ahead of our original plan.

We are also proud of the diversity across our organization. Our CEO is a woman – one of 38 among the Fortune 500 -- and our Lead Independent Director is a black woman. In 2020, Forbes also ranked Clorox as one of America’s Best Employers for Diversity, and Parity.org named Clorox one of The Best Companies for Women to Advance. As of the Annual Meeting date, women comprise 38% of our director nominees and 46% of our executive committee, and 31% of our director nominees and 23% of our executive committee are comprised of ethnic minorities. Two of our executive committee members openly identify as LGBTQ. As part of our continued commitment to transparency and progress in our inclusion and diversity efforts, we have shared our Employer Equal Opportunity data (EEO-1 data) which is submitted annually to the U.S. Equal Employment Opportunity Commission and is available in our 2020 integrated annual report.

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Proxy Summary


Corporate Governance Strengths

Board Structure and Independence
Board Structure and
Independence
All of our director nominees are independent, except for our CEO and Executive Chair
SplitSeparate chair and CEO roles – with independent chair
100% independent Boardboard committee members
Strong lead independent directorIndependent chair can call special meetings of the Boardindependent directors and actively supervises meeting materials, agendas and schedules
Board Composition
Diverse board of directors (Board) with effective mix of skills, experiences, and perspectives
Diverse Board leadership on committees
Adopted formal Board diversity policy in fiscal year 2020
Active Board refreshment – average Board tenure is approximately 4.5 years (as of the Annual Meeting date)
Effective annual Board, Board committee, and individual director evaluation process – which will periodically incorporate a third-party facilitator starting in fiscal year 2023
Majority voting and director resignation policy in uncontested director elections
Board Oversight
Robust processes for overseeing key enterprise risks
Board receives regular updates on key ESG topics from management and internal and external experts and consultants
Strong Board and management succession planning process
Shareholder Rights
and Accountability
Annual election of all directors
Special meeting right for shareholders
Proxy access right for shareholders
Proactive shareholder engagement
Good Governance
Practices
Robust code of conduct applicable to directors, officers and employees

Board Oversight and annual training and certification process
Strong Board and management succession planning process
Rigorous stock ownership guidelines for directors and executives
Employees, directorsDirectors and officers prohibited from hedging our stock, and Section 16 insiders are prohibited from pledging our stock under our insider trading policy
Shareholder Rights and Accountability
Both our annual and long-term incentive plans include clawback provisionSpecial meeting right for shareholders
Annual electionESG achievements are a component of all directors
Proactive shareholder engagement
Proxy access right for shareholders
Management proposalthe holistic assessment of our executives’ performance in relation to remove the supermajority voting provision from the Company’s charter, consistent with governance best practicescompensation

Board Composition

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Proxy Summary


Executive Compensation Highlights

Diverse Board leadership on committees and in lead independent director role

Adopted formal Board diversity policyClorox continued to experience unprecedented business disruption in fiscal year 20202022.
Active Board refreshmentIn fiscal year 2022, Clorox navigated through unprecedented inflationary pressures, supply chain challenges, and average board tenuremultiple COVID-19 waves. We implemented a broad set of 5.3 years (asactions within our control to address these issues; however, those actions couldn’t overcome the magnitude of the Annual Meeting date, assuming election of all director nominees)headwinds we faced.
Effective annual Board, Board committee, and individual director evaluation process
Majority voting and director resignation policy in uncontested director elections



Business Performance and Executive Compensation Highlights

FY2020 Business Performance

The past fiscal year was like no other in our 107-year history. In the first half of fiscal year 2020, we set the stage for growth with strong investments in our robust innovation and distribution plans. Amid a global health crisis and significant social change, our management team and dedicated global workforce successfully rose to the challenge to be a force for good for millions of consumers.

Successes for the Company in fiscal year 2020 included:

Net sales growth of 8%, reflecting gains across all reportable segments;
A 16% increase

Our incentive plan results reflect Company performance. Our significantly below-target payout on short-term incentives and below-target payout on long-term incentives align to the disappointing business outcomes in diluted earnings per share to $7.36 from $6.32 in the prior fiscal year;year 2022.

Continued focus on driving profitable

The Company multiplier for our short-term incentive for fiscal year 2022 was 50%. This result reflected declines in fiscal year 2022 for all three of our underlying metrics: net sales, growth, leveraging strong demand-building investmentsnet earnings attributable to Clorox, and product innovationgross margin. Although a material portion of the basis for the company multiplier was attributable to support category growthforces outside Clorox’s control, the Management Development and market share;Compensation Committee chose not to apply its discretion to increase the company multiplier.

Record cost savings

Performance share units from our long-term incentive awards vesting in 2022 paid out at 89%. The performance-based award vesting in fiscal year 2022 was based on economic profit (EP) growth during fiscal years 2020 through 2022, covering one breakout year with the Company’s 13th consecutiveextremely high EP growth, one year of cost savings in excesslower-than-expected EP growth, and one year of $100 million;below-threshold EP growth.

External recognition

The Management Development and Compensation Committee continues to evolve our program. As we look ahead to fiscal year 2023, anticipating continued volatility and unpredictability, we remain committed to our philosophy of pay for our leadership in corporate

responsibility (Axios-Harris Poll 100), inclusion and diversity (Forbes America’s Best Employersperformance. In consideration of target performance goals for Diversity), and sustainability efforts (Barron’s 100 Most Sustainable Companies in America); and
$533 million in cash dividends paid to stockholders, including a 5% increase in the quarterly dividend announced in May 2020

FY2020 Pay for Performance

We received strong shareholder support with approximately 92% say on pay support at the 2019 Annual Meeting of Shareholders. This vote is a positive endorsement of the Company’s pay for performance philosophy and executive compensation decisions.

Our fiscal year 2020 results and compensation decisions continue to illustrate the application of our pay-for-performance philosophy, with pay being driven by performance in the following ways:

Fiscal Year 2020 Annual Incentive Payout. The annual incentive payout for each of our named executive officers (NEOs) exceeded target fiscal year 2023 being set below historic Clorox norms due to the company funding atchallenging operating environment, we applied a payout ceiling equal to 75% of target for performance share units if a threshold adjusted EPS level is not attained over the maximum funding level with a 200% company multiplier.three-year performance period. The committee will continue to evaluate incentive plan changes based on the evolution of our competitive market and Clorox’s long-term transformational business plan.



For more information, see the Compensation Discussion and Analysis section of this proxy statement.

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Proxy Summary


Components of Our Compensation Program

A substantial portion of our target total direct compensation for our executives is variable, with 88% of compensation at risk for our CEO and 82% of compensation at risk on average for our other NEOs. Base salary is the only fixed component of direct compensation.

Component and RationaleThrough the efforts of our employees across the globe in response to the COVID-19 pandemic, the Company significantly over-delivered on all of its FY20 financial goals, growing net sales, net earnings and gross margins versus the prior fiscal year, as well as exceeding the annual targets established at the beginning of the 2020 fiscal year and generating very strong results on our ESG- and people-related goals as part of our IGNITE strategy, in addition to delivering strong shareholder returns.CEO
Proportion(1)
NEO(2)
Proportion(1)
Performance
Measures
Performance
Period
Characteristics

Base Salary
Fixed pay to attract and retain talent, based on role, level of responsibilities, and individual performance.

Impacts
N/A
N/AFixed cash

Annual Incentives
Variable pay to incent and recognize performance in areas of COVID-19 Pandemic on Compensation.short-term strategic importance.

When considering
Annual net sales (50%)
Net earnings (30%)
Gross margin (20%)
Individual performance goals

One Year

Performance-based cash

Long-Term Incentives
Equity-based pay to incent and recognize performance in areas of long-term strategic importance, promote retention and stability, and align executives with shareholders.

Three-year annual economic profit growth rate
Variation in underlying stock price due to overall business results
Three YearsPSUs, stock options, and RSUs
(1)Proportion represents the individual performance multiplier portion of theactual base salary, target annual incentive program,award, and grant date fair market value of actual long-term incentive awards granted in fiscal year 2022 (with PSUs measured at target). Percentages are rounded. Refer to the Board specifically considered the management team’s actions during the
COVID-19 pandemic, including their efforts to careSummary Compensation Table for our employees and our communities, as well as to maintain a safe and efficient supply of our products to benefit the greater population.further details on actual compensation.
(2)Fiscal Year 2020 Long-Term Incentive Payout. These awards were granted in September 2017, and payment was determined in August 2020, basedRepresents the average of all NEOs active on performance over the period commencing July 1, 2017, and ending June 30, 2020. Our three-year performance share results were above2022, other than the financial target for the three-year average annual economic profit growth rate and yielded a payout of 129% of target.CEO.

Additional elements of our executive compensation program include retirement plans, post-termination compensation, and perquisites as appropriate to support our executive compensation philosophy.

SeeFor more information, see the Compensation Discussion and Analysis section of this proxy statement for additional information.statement.



What We Pay: Components of Our Compensation Program

Compensation Mix. A substantial portion of our target total direct compensation for our executives is at-risk variable compensation, with 86% of compensation for our CEO and 76% of compensation for all of our other NEOs being at-risk. Base salary is the only fixed direct compensation component, as outlined in the following charts, which reflect target compensation for fiscal year 2020:

Compensation Mix - CEO(1)Compensation Mix - Average of All Other NEOs(1)

(1)Compensation mix represents the actual base salary, target annual incentive award, and actual long-term incentives granted in fiscal year 2020. Refer to the Fiscal Year 2020 Summary Compensation Table in the Compensation Discussion and Analysis section for further details on actual compensation.

Annual incentive. Our annual incentive program balances financial performance with the individual performance of each of our named executive officers. Our financial metrics include net sales (weighted at 50%), net earnings (weighted at 30%) and gross margin (weighted at 20%). Individual performance for each of our NEOs is evaluated holistically and for 2020 included how each executive addressed challenges posed by COVID-19, their management of human capital including diversity & inclusion, management of environmental risks, contributions to company operations and strategy, as well as position-specific business outcomes.
Long-term incentive. We orient our executive team towards long-term shareholder value creation by providing the majority of their target compensation through long-term equity awards. We align our executive team with our shareholders by providing each executive’s long-term incentive through performance shares and stock options, and starting in fiscal year 2021, restricted stock units. For fiscal year 2021, the composition of long-term incentive for executives will be 60% performance shares, 20% stock options and 20% restricted stock units. The performance shares are tied to economic profit, a measure of profitability that takes into account the expected return of all capital providers.

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Our Company

Snapshot

Clorox is a leading multinational manufacturer and marketer of consumer and professional products with fiscal year 2022 net sales of $7.1 billion and about 9,000 employees worldwide as of June 30, 2022. About 80% of the Company’s sales are generated from brands that hold the No. 1 or No. 2 market share positions in their categories, and our products are in nine out of 10 U.S. homes.

FY22
Snapshot:

$7.1 Billion
Net Sales

83%

U.S.

26+
Countries

~9000
Employees

17%

Rest of World

Sales by Segment

37% Health & Wellness
18% Lifestyle
17% International
28% Household


Our Corporate Values and Purpose

Clorox is led by our purpose to champion people to be well and thrive every single day, and we believe our purpose helps drive long-term value for our stakeholders. At the heart of our business success is a resolve to do this work while operating ethically, putting people at the center of our decision-making and always maintaining a competitive edge, which are encapsulated in our corporate values.

Do the Right ThingPut People at the CenterPlay to Win

Regardless of the external forces impacting our business, our corporate purpose and values guide our decision-making and are foundational in our relationship with our stakeholders, especially our shareholders.

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Our Company


Our IGNITE Strategy and Integrated ESG Pillars

Launched in 2019, Clorox’s integrated IGNITE strategy—the long-term strategic plan that guides our business—includes both financial goals, as well as ESG goals that are organized into three pillars—Healthy Lives, Clean World, and Thriving Communities. Underpinning our three ESG pillars is our strong governance. See the ESG Governance section of this proxy statement for information regarding our ESG governance structure and recent enhancements.

HEALTHY
LIVES

Improving people’s health
and well-being

CLEAN
WORLD

Taking climate action and
reducing plastic and other waste

THRIVING
COMMUNITIES

Investing in our people
and communities to contribute
to a more equitable world

Strong Governance

This past year brought ongoing challenges and volatility, but we continued to live our corporate purpose and values and to execute on our IGNITE strategy, including our ESG goals – as demonstrated by the highlights below from the past fiscal year. For more information about our ESG pillars and recent highlights, we invite you to read our Integrated Annual Report which is available on our website at investors.thecloroxcompany.com/investors/financial-information/annual-reports/.

Healthy Lives FY22 Highlights

Improving people’s health and well-being

Brita announced an expanded partnership program with municipalities across the U.S. with lead in their drinking water, to provide immediate water filtration solutions while these municipalities repair their water infrastructure and seek longer-term solutions for public access to safe water.

The Company was named U.S. Environmental Protection Agency Safer Choice Partner of the Year 2021 for outstanding achievement in the manufacturing of products with safer ingredients.

We also continued to support our employees’ well-being by introducing a new benefit providing paid time off to care for the physical and mental health of our employees and their dependents.

Clean World FY22 Highlights

Taking climate action and reducing plastic and other waste

We achieved our target of reducing our absolute scopes 1 and 2 emissions by 50% against our 2020 baseline.

We recently unveiled a climate action plan with a roadmap to achieve our 2050 net zero goal and interim milestones in achieving our science-based targets, including our goal of a 25% reduction in our absolute scope 3 emissions from purchased goods and services and use of sold products by 2030 (as compared to our 2020 baseline).


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Our Company

We signed our second virtual power purchase agreement to purchase renewable electricity beginning in calendar year 2023, reinforcing our long-term commitment to 100% renewable electricity in our operations and to help expand new renewable energy infrastructure in the U.S.

Thriving Communities FY22 Highlights

Investing in our people and communities to contribute to a more equitable world

Clorox remains committed to increasing diversity within our Board, management and workforce, consistent with the Company’s values and policies, as well as investor and other stakeholder expectations.

Our Board in fiscal year 2022 was comprised of 46% women and 31% people of color (compared to 27% and 18%, respectively, for Fortune 500 companies in 2020).

We recently expanded the scope of our I&D strategy (from I&D to Inclusion, Diversity, Equity and Allyship – IDEA), to acknowledge the importance of equity and allyship in the culture we expect and to formalize our efforts in these areas.

We welcomed our first-ever Chief Diversity and Social Impact Officer who is part of the Executive Committee and reports directly into the CEO, which, we believe, creates appropriate accountability and oversight given the importance of IDEA to our IGNITE strategy and goal of being a people-centered, purpose-driven company where every member of the Clorox team is actively creating an inclusive culture.

The Clorox Company Foundation launched the Healthy Parks Project, a new initiative to advance environmental justice through investment in community parks to help provide better access to green spaces in underserved communities.


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Board of Directors

Proposal 1:
Election of Directors

The Board, upon the recommendation of the Nominating, Governance and Corporate Responsibility Committee (NGCRC), has nominated the thirteen12 people listed below for election at the Annual Meeting to serve until the 20212023 Annual Meeting of Shareholders and until their respective successors are duly elected and qualified. All of the director nominees except Paul Parker, currently serve on the Board.

TheAs part of our ongoing, proactive efforts to implement effective corporate governance practices, the NGCRC annually examines the overall composition of the Board on an annual basis (or more frequently, if needed) to assess the skills and characteristics that are currently represented on the Board, and in incumbent Board members, as well as voting results in recent director elections, legislative and regulatory developments, corporate governance trends, and the skills and characteristics that the Board may find valuable in the future in light of the Company’s strategic and anticipated business needs.

Consistent with the foregoing, Kathryn Tesija was appointed to the Board during calendar year 2020, and both she and Mr. Parker are being nominated by the Board for election by the shareholders for the first time. In separate search processes, Ms. Tesija and Mr. Parker were recommended to the NGCRC, along with other candidates, through a targeted, Company-led internal search process, with guidance from the NGCRC as to the parameters and criteria for candidates for membership on the Board. The NGCRC reviewed and evaluated the qualifications of all candidates identified and referred to them through such search process.

Robert Matschullat,Dr. Richard Carmona, who has served on the Board since 1999,2007, is not being re-nominated for re-election in accordance with the Board’s retirement age policy and, therefore, will be retiring from the Board onas of the date of the Annual Meeting.


Unless otherwise directed, the persons named in the proxy as proxyholders intend to vote all proxies FOR the election of the nominees, as listed below. If, at the time of the Annual Meeting, any nominee is unable or declines to serve as a director, the discretionary authority provided in the enclosed proxy will be exercised to vote for a substitute candidate designated by the Board, unless the Board chooses to reduce its own size. The Board has no reason to believe that any of the nominees will be unable or will decline to serve if elected. Proxies cannot be voted for more than 12 persons since that is the total number of nominees.


Who We Are: Our Director Nominees

We invite you to read about our director nominees below. Our director nominees represent diverse perspectives and experiences and bring core strategic, operating, financial and governance skills as well as consumer product

expertise to our Board.experiences. Each of the director nominees has agreed to be named in this proxy statement and to serve as a director, if elected.

elected.We believe that our directors should satisfy a number of qualifications, including demonstrated integrity, a record of personal accomplishments, a commitment to participation in board activities, and other attributes discussed below in the Director Candidate Evaluation and Nomination section. We also endeavor to have a board that represents a range of qualifications, skills, and depth of experience in areas that are relevant to and contribute to the Board’s oversight of the Company’s activities. Each director biography includes the key experiences and qualifications the director nominee brings to the Board that we believe are important to our businesses and structure. The Board considered these key experiences and qualifications in determining to recommend that they be nominated for election.


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Proposal 1: Election of Directors


Director SinceName, Principal Occupation, and Other Information
2016

Amy L. Banse


Age: 63

Independent Director
Since: 2016

Committees:
Audit

   

Skills and Qualifications

Amy Banse has served as senior adviser to the executive committee of Comcast Corporation, a global media and technology company (including Comcast Ventures, LLC, its venture capital arm), since September 2020. She previously served as executive vice president, Comcast Corporation, from January 2020 to September 2020 and as managing director and head of funds at Comcast Ventures LLC from August 2011 to September 2020. Under her leadership, Comcast Ventures grew the size and diversity of its portfolio, making it one of the country’s most active corporate venture arms, investing in early-and later-stage companies across a wide spectrum of industries, including commerce, digital media, cybersecurity, SaaS, enterprise, and autonomous vehicles. From 2005 to 2011, Banse was senior vice president, Comcast Corporation and president, Comcast Interactive Media, a division of Comcast responsible for developing online strategy and operating the company’s digital properties. In this role, she drove the acquisition of a number of digital properties, including Fandango, and, together with her team, oversaw the development of Xfinity TV. Since joining Comcast in 1991, Banse has held various positions at the company, including content development, programming investments and overseeing the development and acquisition of Comcast’s cable network portfolio. Earlier in her career, Ms. Banse was an associate at Drinker, Biddle & Reath LLP.

Other Public Company Boards:
Banse serves as a director of Adobe, Inc. (May 2012 to present).

Nonprofit/Other Boards:
Banse serves on the boards of a number of Comcast Ventures’ portfolio companies and on the board of Tipping Point Community.

Director Qualifications:
L. Banse’s experience in starting, investing in and building businesses provides her with deep strategic and financial expertise, and her executive leadership roles contribute to her management and operational knowledge. Banse’s deep expertise in media and technology also enables her to contribute valuable insights into digital media and online business. Age: 61.

Experience Highlights

Mastry, Inc., an early-stage venture capital firm

Committee Membership:
Audit Committee.Venture Partner (March 2021 to present)

Comcast Corporation, a global media and technology company

Senior adviser to the executive committee (September 2020 to December 2021)
Executive vice president, Comcast Corporation (January 2020 to September 2020)
Managing director and head of funds, Comcast Ventures LLC (August 2011 to September 2020)
Under her leadership, Comcast Ventures grew the size and diversity of its portfolio, making it one of the country’s most active corporate venture arms.
President, Comcast Interactive Media, a division of Comcast responsible for developing online strategy and operating the company’s digital properties
Served in various positions, including content development, programming investments and overseeing the development and acquisition of Comcast’s cable network portfolio

Earlier in her career, Banse was an associate at Drinker, Biddle & Reath LLP.

Other Public Company Boards

Adobe, Inc. (May 2012 to present)
Lennar Corporation (February 2021 to present)
On Holding AG (September 2021 to present)

Nonprofit/Other Boards

Domestika Inc.
Quantifind, Inc.

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Proposal 1: Election of Directors

Julia Denman
Age: 51

Independent Director
Since: 2022

Committees:
Audit

Skills and Qualifications

Julia (Charter) Denman’s operational and risk management leadership, as well as her experience in executing transformation strategies enable her to provide valuable perspective on the Company’s growth strategy and capital allocation framework, as well as important contributions to the Board’s oversight of risk and compliance. She also brings deep financial and accounting expertise, having served as divisional chief financial officer of a publicly traded company, as well as highly relevant knowledge of the consumer packaged goods industry.

Experience Highlights

Microsoft Corporation, a global technology company

Corporate vice president and head of internal audit, enterprise risk and compliance (December 2019 to present)
Leading a team that provides independent and objective assessments of the company’s business strategies and operations, oversight of its governance and strategy for global risk management and compliance and leading investigations related to business conduct
Corporate vice president and chief financial officer of worldwide marketing and consumer business (August 2016 to November 2019)
Corporate vice president and chief financial officer of devices business

The Procter & Gamble Company, a global consumer goods company

Various leadership roles, including assistant treasurer and divisional finance director
During her 20-year tenure, oversaw the most strategic and central elements of treasury, including capital markets, cash management and risk management; developed product and marketing innovation strategies and cost savings initiatives, resulting in higher profits; and led the turnaround of a $3 billion division

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BoardProposal 1: Election of Directors

Spencer C.
Fleischer
Age: 69

Independent Director Since

Name, Principal Occupation, and Other Information
2007
Since: 2015
Richard H. Carmona, M.D., M.P.H., F.A.C.S.

Committees:
MDCC (Chair)

Richard Carmona has been chief of health innovations of Canyon Ranch Inc., a life-enhancement company, since August 2017. He previously served as vice chairman of Canyon Ranch, chief executive officer of the Canyon Ranch health division, and president of the nonprofit Canyon Ranch Institute from October 2006 to August 2017. He is the first distinguished professor of public health at the Mel and Enid Zuckerman College of Public Health at the University of Arizona. Prior to joining Canyon Ranch, Carmona served as the 17th Surgeon General of the United States from 2002 through 2006, achieving the rank of vice admiral. Previously, he was chairman of the State of Arizona Southern Regional Emergency Medical System, a professor of surgery, public health, and family and community medicine at the University of Arizona, and surgeon and deputy sheriff of the Pima County, Arizona, Sheriff’s Department. Carmona served in the United States Army and the Army’s Special Forces.

Other Public Company Boards:
Carmona serves as a director of Axon Enterprise, Inc. (formerly Taser International, March 2007 to present) and Herbalife Ltd. (October 2013 to present).

Nonprofit/Other Boards:
Carmona serves on the boards of NuvOX Pharma LLC, Compassionate Care, DSI (Digital Skin Imaging), TherimuneX Pharmaceuticals, Inc., Better Therapeutics, LLC, Ross University and Health Literacy Media.

Director Qualifications:
Carmona’s experience as the Surgeon General of the United States and extensive background in public health, including as CEO of a hospital and healthcare system, provide him with a valuable perspective on public health and wellness matters, as well as insight into regulatory organizations and institutions, all of which are important to the Company’s business strategy. In addition, his executive leadership background, including with a global lifestyle enhancement company, provides him with international experience and enables him to make valuable contributions to the Company’s international growth strategies. Carmona’s experience in the United States Army and in academia also strengthens the Board’s collective qualifications, skills and experience. Age: 70.

Committee Membership:
Nominating, Governance and Corporate Responsibility Committee (Chair); Management Development and Compensation Committee.


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Director SinceName, Principal Occupation, and Other Information
2014Benno Dorer

Benno Dorer is executive chair of the Board, a role he assumed on September 14, 2020. He served as chief executive officer (CEO) of the Company from November 2014 to September 2020, and became chair of the board effective August 2016. Prior to becoming CEO, Dorer was executive vice president and chief operating officer – Cleaning, International and Corporate Strategy since 2013, with responsibility for the Laundry, Home Care, and International businesses as well as Corporate Strategy and Growth. He previously served as senior vice president – Cleaning Division and Canada from 2011 through 2012, senior vice president – Cleaning Division from 2009 to 2011, and vice president & general manager – Cleaning Division from 2007 to 2009. Dorer joined Clorox in 2005 as vice president & general manager – Glad® Products. Prior to that role, he worked for The Procter & Gamble Company for 14 years, leading the marketing organization for the Glad® products joint venture since its inception and holding marketing positions across a range of categories and countries.

Other Public Company Boards:
Dorer serves as a director of VF Corporation (February 2017 to present).

Nonprofit/Other Boards:
Dorer serves as the vice chair of the board of CBA (Consumer Brands Association).

Director Qualifications:
Dorer’s leadership experience and his in-depth knowledge of the consumer packaged goods industry, the Company’s businesses and his leadership in developing the Company’s 2020 Strategy and its new IGNITE Strategy enable him to provide valuable contributions with respect to strategy, growth and long-range plans. Additionally, his extensive international background provides him with a broad perspective on international customer and consumer dynamics and business strategy. Age: 56.

2015

Spencer C. Fleischer

Spencer Fleischer is managing partner of FFL Partners, L.P. (FFL), a private equity firm, where he has served in various roles since co-founding FFL in 1997. Before co-founding FFL, Fleischer spent 19 years with Morgan Stanley & Company as an investment banker and manager. At Morgan Stanley & Company, he was a member of the worldwide Investment Banking Operating Committee and also held roles including head of investment banking in Asia and head of corporate finance for Europe.

Other Public Company Boards:
Fleischer is a director of Levi Strauss & Co. (July 2013 to present). He was previously a director of Banner Corporation (October 2015 to December 2016).

Nonprofit/Other Boards:
Fleischer is a director of Eyemart Express Holdings LLC and Americans for Oxford, Inc.

Director Qualifications:
Fleischer brings to the Board more than 3540 years of financial and operational expertise as well as deep international experience. His significant experience in both private equity and investment banking enables him to contribute valuable insights into strategic planning,to the Company on strategy, mergers and acquisitions and operating expertise to the Company.operations. His leadership role at FFL Partners, L.P. also allows him to provide significant experience in compensation matters. Age: 67.

Experience Highlights

FFL Partners, L.P., a private equity firm

Chairman (March 2021 to present)
Managing Partner (April 1998 to March 2021)

Committee Membership:
Morgan Stanley & Company
Management Development, an investment management and Compensation Committee (Chair).financial services company

Various leadership roles, including head of investment banking in Asia, head of corporate finance for Europe, and member of worldwide investment banking operating committee

Other Public Company Boards

Levi Strauss & Co. (July 2013 to present)
Banner Corporation (October 2015 to December 2016)

Nonprofit/Other Boards

Americans for Oxford, Inc.

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BoardProposal 1: Election of Directors

Director SinceName, Principal Occupation, and Other Information

2013

Esther Lee
Age: 63

Independent Director
Since: 2013

Committees:
NGCRC (Chair)

Skills and Qualifications

Esther Lee brings to the Company significant executive and marketing expertise. Her marketing expertise has served asbeen focused on developing customer strategies to drive growth, driving customer-centric innovation and business transformation, and building solutions in consumer engagement. As a senior executive, she has helped shape business strategy and operating models, define and drive company purpose and corporate culture, and build high-performing teams. Her significant executive and marketing expertise enable her to provide valuable contributions to the Company’s business strategies.

Experience Highlights

MetLife Inc., an insurance, annuities and employee benefits company

Executive vice president – global chief marketing officer at MetLife Inc.(January 2015 to June 2021)

AT&T Corporation, an insurance, annuities, and employee benefitsa global telecommunications company since January 2015. Previously, Lee served as senior

Senior vice president – brand marketing, advertising and sponsorships for AT&T from 2009 to December 2014. From 2007 to 2008 she served as CEO

Euro RSCG Worldwide, a French advertising agency

Chief executive officer of North America and president of global brands for Euro RSCG Worldwide. Prior to that, she served for five years as

The Coca Cola Company, a global beverage company

Global chief creative officer for The Coca-Cola Company.

Earlier in her career, Lee worked in several leadership positions in the advertising industry, including as co-founder of DiNoto Lee. In this capacity, Lee, where she worked with several consumer packaged goods companies, including The Procter & Gamble, Company, Unilever and Nestle.

Nonprofit/Other Boards:
Lee serves on the board of the MetLife Foundation.

Director Qualifications:
Lee brings to the Company significant executive and marketing expertise, focused on developing customer strategies to drive growth, building high-performing teams, and driving customer-centric innovation and transformation. Her current and prior executive leadership roles in global brand marketing, advertising, media and sponsorship have afforded her expertise in consumer engagement, creativity and digital transformation, as well as the operating models in these areas, that enable her to provide valuable contributions to the Company’s business strategies. Age: 61.

Committee Membership:
Nominating, Governance and Corporate Responsibility Committee.

2016A. D. David Mackay

David Mackay served as president and chief executive officer of Kellogg Company, a food manufacturing company, from 2006 until his retirement in 2011. From 2003 to 2006, he served as the company’s president and chief operating officer. Prior to that, Mackay held a number of other leadership positions at Kellogg, including roles at Kellogg Australia, United Kingdom and Republic of Ireland. He also previously served as managing director of Sara Lee Corporation in Australia and held various positions at Mars, Inc.

Other Public Company Boards:
Boards

Mackay is a director of Fortune Brands Home and Security (September 2011Pearson plc (February 2022 to present).

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THE CLOROX COMPANY - 2022 Proxy Statement



Table of Contents

Proposal 1: Election of Directors

A.D. David
Mackay previously served as a director of Keurig Green Mountain, Inc. (December 2012 to March 2016).
Age: 67

Nonprofit/Other Boards:Independent Director
Since: 2016

Committees:
Audit
MDCC

Mackay serves on the boards of FSHD Global Research Foundation Ltd., Facio Therapies,Skills and Tropic Sport LLC.Qualifications

Director Qualifications:
David Mackay brings significant strategic leadership and operational experience to the Board. His extensive consumer products background and his international experience allow him to contribute valuable insights regarding the Company’s industry, operations and international businesses. In addition, his previous leadership roles provide him with expertise in executive compensation and succession planning matters. Age: 65.

Experience Highlights

The Kellogg Company, a food and manufacturing company

Committee Membership:
Audit Committee; Management DevelopmentPresident and Compensation Committee.chief executive officer (December 2006 to January 2011)
President and chief operating officer (September 2003 to December 2006)
Executive vice president (November 2000 to September 2003)
Senior vice president and President of Kellogg USA (July 2000 to November 2000)
Served in various leadership positions, including at Kellogg Australia and Kellogg United Kingdom and Republic of Ireland

Sara Lee Corporation, a food and manufacturing company

Managing director, Australia

Mars, Incorporated, a multinational confections company

Various positions

Other Public Company Boards

Fortune Brands Home and Security, Inc. (September 2011 to present)
Keurig Green Mountain, Inc. (December 2012 to March 2016)

Nonprofit/Other Boards

FSHD Global Research Foundation Ltd.
Facio Therapies
Tropic Sport LLC

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Proposal 1: Election of Directors

Paul Parker
Age: 59

Independent Director Since
Since: 2020

Committees:
Audit

Name, Principal Occupation,Skills and Other Information

Qualifications

Paul Parker brings deep strategic

expertise Paul Parker has served as senior vice president, strategy and corporate development for Thermo Fisher Scientific Inc. since April 2020, with responsibility for corporate strategy, mergers and acquisitions, corporate social responsibility, government relations, and digital marketing.

Parker has 35 years of M&A banking experience in multiple sectors and geographies. Prior to joining Thermo Fisher, Parker served as Co-Chairman of the Global Mergers and Acquisitions Group for Goldman Sachs & Co. from August 2014 to March 2020, and also served on the firm's Partnership Committee and the Investment Banking Senior Leadership Council.

Prior to Goldman Sachs, Parker worked at Barclays from September 2008 to July 2014 where he served as Chairman and Head of Global M&A, and subsequently adding responsibilities as Head of Corporate Finance. From 1995 to 2008, Parker was an investment banker at Lehman Brothers in several leadership positions, ultimately serving as Head of Global M&A from January 2008 to September 2008. He served on the Executive Committee for the Investment Banking Division of both companies and on the Americas Management Committee for Barclays Group. Between 1985 to 1995, Parker held positions at a number of financial institutions.experience

Other Public Company Boards:
Parker does not serve on any other public company boards.

Nonprofit/Other Boards:
Parker has previously served on the Board of New York City Outward Bound and is active in philanthropy supporting veterans’ issues, domestic violence victim support, and women’s healthcare initiatives.

Director Qualifications:
Parker brings deep financial, accounting and strategic expertise to the Board based on 35 years working in the banking and finance industries, as well as his experience leading strategy, and corporate development and sustainability efforts for a major multi-nationalmultinational public company. His longextensive experience in investment banking and expertise in mergers and acquisitions enable him to provide important insights to the Company on strategy and growth. Age: 57.

Experience Highlights

Thermo Fisher Scientific Inc., a global supplier of scientific instrumentation, clinical trials and pharmaceutical development and manufacturing services

Senior vice president, strategy and corporate development (April 2020 to present)
Responsible for corporate strategy, mergers and acquisitions, integration management, corporate social responsibility and government relations

Goldman Sachs & Co., an investment bank and financial services company

Co-chairman of global mergers and acquisitions group (August 2014 to March 2020)
Served on the firm’s partnership committee and investment banking senior leadership council

Barclays PLC, an investment bank and financial services company

Chairman and head of global mergers and acquisitions, member of executive committee for investment banking division and Americas management committee
Head of global corporate finance

Lehman Brothers Holdings Inc., an investment bank and financial services company

Chairman and head of global mergers and acquisitions
Head of U.S. mergers and acquisitions and member of executive committee for investment banking division

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THE CLOROX COMPANYCommittee Membership:
- 2022 Proxy Statement
The Board will determine committee membership for Parker upon his election.



Table of Contents

Proposal 1: Election of Directors

2020Stephanie
Plaines
Age: 55

Independent Director
Since: 2022

Committees:
Audit

Skills and Qualifications

Stephanie Plaines brings extensive financial and accounting expertise gained from over 30 years of financial experience, including as chief financial officer of a publicly traded company. Her executive leadership experience across a wide variety of consumer, e-commerce and financial services companies also enables her to contribute unique insights to Clorox on strategy and growth. She also has experience with transformation agendas and leveraging consumer and data insights to drive growth, which provides valuable perspective for the Company’s brand-building, marketing and digital transformation efforts.

Experience Highlights

J. C. Penney, a department store chain

Chief financial officer (August 2022 to present)

Jones Lang LaSalle Inc., a global real estate services company

Chief financial officer (March 2019 to November 2020)

Starbucks Corporation, a global chain of coffee houses

Chief financial officer of U.S. retail division (April 2017 to December 2018)

Walmart, Inc. and Sam’s Club, a chain of department stores and retail warehouse clubs

Chief financial officer of e-commerce business

Koninklijke Ahold N.V., a retail and wholesale company

Chief financial officer of Stop & Shop division
Vice president of finance – business planning and performance for Ahold USA
Vice president of group treasury for Ahold Delhaize

Catalina Marketing, a media company

Head of international finance

PepsiCo, Inc., a global beverage company

Worked in global planning and analysis for Tropicana business and in corporate development

Plaines started her career in investment banking and mergers and acquisitions at UBS.

Other Public Company Boards

KKR Acquisition Holdings I Corp. (January 2022 to present)
Nielsen Holdings plc (April 2021 to present).

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Proposal 1: Election of Directors

Linda Rendle
Age: 44

Director Since: 2020

Skills and Qualifications

Linda Rendle

Linda Rendle is chief executive officer of the Company, a role she assumed September 14, 2020. Previously, she served as president of the Company from May 2020 to September 2020. Before becoming president, she served as executive vice president – Cleaning, International, strategy and operations from July 2019 to May 2020, and executive vice president – strategy and operations from January 2019 to July 2019. Previously, she was executive vice president – Cleaning and strategy from June 2018 to January 2019, and she served as senior vice president and general manager – Cleaning, from August 2016 to June 2018, with additional responsibility for Professional Products as of April 2017. She served as vice president and general manager – Home Care from October 2014 to August 2016. She began her Clorox career in 2003 in the Sales division, where she served in various positions of increasing responsibility in sales planning and supply chain, culminating in her role as vice president – Sales – Cleaning, from 2012 to 2014. Before joining Clorox, Rendle worked for Procter & Gamble, where she held several positions in sales management in the Boston and Charlotte markets.

Director Qualifications:
Rendle’s long tenure at the Company and deep understanding of the consumer packaged goods industry, the Company’s businesses and her instrumental role in developing the Company’s IGNITE Strategystrategy enable her to provide valuable contributions with respect to strategy, growth and long-range plans. Additionally, her track record of outstanding business resultstenure and values-led leadership across many of the Company’s businesses providebusiness units provides her with a diverse perspective on global sales, product innovation and business strategy. Age: 42.

Experience Highlights

The Clorox Company

Chief executive officer (September 2020 to present)
President (May 2020 to September 2020)
Executive vice president – Cleaning, international, strategy and operations (July 2019 to May 2020)
Executive vice president – strategy and operations (January 2019 to July 2019)
Executive vice president – Cleaning, Professional Products and strategy (June 2018 to January 2019)
Senior vice president and general manager – Cleaning and Professional Products (April 2017 to May 2018)
Senior vice president and general manager – Cleaning (August 2016 to April 2017)
Vice president and general manager – Home Care
Vice president of sales – Cleaning
Various positions in sales planning and supply chain

Earlier in her career, Rendle worked for Procter & Gamble, where she held several positions in sales management.

Other Public Company Boards

Visa Inc. (November 2020 to present)

Nonprofit/Other Boards

Vice chair of The Consumer Brands Association

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BoardProposal 1: Election of Directors

Director Since

Name, Principal Occupation, and Other Information

2018

Matthew J.
Shattock
Independent Chair
Age: 60

Independent Director
Since: 2018

Committees:
NGCRC

Skills and Qualifications

Matthew Shattock has served as non-executive chairman of the board of Beam Suntory Inc., the world’s third largest premium spirits company, since April 2019. He previously served as chairman and CEO of Beam Suntory, having joined Beam in March 2009 as president & CEO and led the company’s successful growth strategy transformation and subsequent integration of the Beam and Suntory spirits businesses following Beam’s acquisition by Suntory in 2014. Prior to joining Beam, he spent six years at Cadbury plc, an international confectionary manufacturer, where he led its businesses first in The Americas and then in the Europe, Middle East & Africa region. Prior to Cadbury, Shattock spent 16 years at Unilever, an international manufacturer of food, home care and personal care products, in various leadership roles, culminating in his role as chief operating officer of Unilever Best Foods North America.

Other Public Company Boards:
Shattock serves as a director of VF Corporation (February 2013 to present), and as Chairman of Domino’s Pizza Group plc (March 2020 to present).

Nonprofit/Other Boards:
Shattock serves as a director of Suntory Holdings Ltd. and Beam Suntory Inc. and is a member of the board of The Boys and Girls Club of Lake County, Illinois.

Director Qualifications:
J. Shattock brings significant operational and executive leadership experience in the consumer packaged goods industry to the Board. His current and prior leadership roles, including overseeing the successful growth, integration and strategic transformation of a global spirits company as CEO, enable him to provide valuable insights to the Company’s business. Shattock has a strong track record of driving growth through innovation, brand communication and operational excellence. Age: 58.

Experience Highlights

Beam Suntory Inc., a global premium spirits company

Committee Membership:
Audit Committee.Non-executive chairman of the board (April 2019 to December 2020)

2020

Kathryn Tesija

Kathryn (Kathee) Tesija has served as a senior adviser and consultant at Simpactful LLC, a consumer packaged goods and retail consultancy firm, since April 2016. Previously, she served as executive vice presidentChairman and chief merchandisingexecutive officer (April 2014 to April 2019)

President and supply chainchief executive officer, for Target Corporation,Beam, Inc. (October 2011 to April 2014)
President and chief executive officer, Beam Global Spirits and Wine, Inc. (March 2009 to October 2011)

During his tenure, Shattock led the second-largest discount retailercompany’s successful growth strategy transformation and subsequent integration of the Beam and Suntory spirits businesses following Beam’s acquisition by Suntory in 2014.

Cadbury plc, an international confectionary manufacturer

Regional president, where he led its businesses first in The Americas and then in the United States, from 2008 to 2015. In this role, she oversaw all functionsEurope, Middle East and Africa region

Unilever plc, an international manufacturer of product designfood, home care and development, sourcing, merchandising, presentation, inventory management, operations, and global supply chain for Target.com and nearly 1,800 retail stores. During her tenure at Target beginning in 1986, she served in numerous positions of responsibility, including director, merchandise planning and senior vice president, merchandising. She continued to serve Target as a strategic advisor from July 2015 to March 2016.personal care products

Chief operating officer, Unilever Best Foods North America
Various leadership roles

Other Public Company Boards:
Boards

Tesija serves on the board of Woolworths Group Limited (May 2016VF Corporation (February 2013 to present). She previously served on the board
Chairman of Verizon Communications (December 2012Domino’s Pizza Group plc (UK) (March 2020 to May 2020)present).

Nonprofit/Other Boards

Cooler Screens Inc.
Tropicale Foods Inc.
Reliefband Technologies LLC
Kendra Scott Design, Inc.
The Boys and Girls Club of Lake County, Illinois

THE CLOROX COMPANY - 2022 Proxy Statement

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Table of Contents

Proposal 1: Election of Directors

Kathryn Tesija
Age: 59

Independent Director Qualifications:
Since: 2020

Committees:
MDCC
NGCRC

Skills and Qualifications

Kathryn Tesija brings to Clorox large-scale global merchandising and supply chain experience as well as operational and strategic planning expertise. Her tenure as a retail industry executive allows her to provide insights into customer and consumer behavior. This experience, together with her expertise in digital, innovation and marketing, allows her to provide valuable perspective on the company’sCompany’s strategic priorities to innovate brand and shopping experiences. Age: 57.

Committee Membership:
Management Development and Compensation Committee.


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THE CLOROX COMPANYExperience Highlights - 2020 Proxy Statement

11Target Corporation



Table of Contents, a department store chain

Director Since

Name, Principal Occupation, and Other Information

2005

Pamela Thomas-Graham

Pamela Thomas-Graham is the lead independent director for the Company. She is the founder and chief executive officer of Dandelion Chandelier LLC, a private digital media enterprise focused on the world of luxury. Prior to founding Dandelion Chandelier in August 2016, she served as chair, new markets, of Credit Suisse Group AG, a global financial services company, from OctoberStrategic advisor (July 2015 to June 2016. She served as chief marketing and talent officer, head of private banking & wealth management new markets, and member of the executive board of Credit Suisse from January 2010 to October 2015. From 2008 to 2009, she served as a managing director in the private equity group at Angelo, Gordon & Co. From 2005 to 2007, Thomas-Graham held the position of group president at Liz Claiborne, Inc. She served as chairman,March 2016)

Executive vice president and chief executivemerchandising and supply chain officer (October 2012 to July 2015)
Oversaw all functions of CNBC from 2001 to 2005. Previously, Thomas-Graham served as an executiveproduct design and development, sourcing, merchandising, presentation, inventory management, operations, and global supply chain for Target.com and nearly 1,800 retail stores.
Executive vice president, merchandising (May 2008 to September 2012)
Numerous positions of NBCresponsibility, including director of merchandise planning and assenior vice president, and chief executive officer of CNBC.com. Prior to joining NBC, Thomas-Graham was a partner at McKinsey & Company.

merchandising

Other Public Company Boards:
Boards

Thomas-Graham serves on the boards of Bank of N.T. Butterfield & SonWoolworths Group Limited (May 2016 to present)
Verizon Communications (December 20172012 to present), Peloton Interactive, Inc. (March 2018 to present), and Norwegian Cruise Line Holdings Ltd. (April 2018 to present).May 2020)

Nonprofit/Other Boards:
Thomas-Graham serves on the boards of Bumble, an online dating company and Compass, a real estate technology company.

Director Qualifications:
Thomas-Graham brings to the Company significant experience as an executive, including as a current and former CEO. Her current and prior executive leadership roles enable her to provide valuable contributions with respect to management, operations, growth and long-range plans. In addition, Thomas-Graham brings to the Company significant expertise in branding. Her prior experience as a management consultant also enables her to provide valuable contributions to the Company’s business strategies and mergers and acquisitions activities. Additionally, her leadership experience in banking and private equity provides her with financial and accounting expertise, enabling her to contribute to the oversight of the Company. Age: 57.

Committee Membership:
Nominating, Governance and Corporate Responsibility Committee.


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Table of Contents

BoardProposal 1: Election of Directors

Director Since

Name, Principal Occupation, and Other Information

2017

Russell J.
Weiner
Age: 54

Independent Director
Since: 2017

Committees:
MDCC

Skills and Qualifications

Russell J. Weiner has served as chief operating officer for Domino’s Pizza, Inc., a restaurant chain, since July 2018, and president of Domino’s US since July 2020, having also served as president of the Americas from July 2018 to July 2020. Previously, he was chief operating officer and president of the Americas for Domino's Pizza, Inc. from July 2018 to July 2020. Before assuming this position, he served as president of Domino’s USA from September 2014 through June 2018. Prior to his role as president of Domino’s USA, he served as the company’s executive vice president, chief marketing officer, starting in 2008. Before joining Domino’s, he was vice president of marketing, Colas at Pepsi-Cola North America from 2005 to 2008. During his tenure at Pepsi-Cola North America, which commenced in 1998, Weiner held a number of leadership roles in marketing and brand management.

Director Qualifications:
Weiner’s executive leadership experience in the food and consumer packaged goods industries enables him to contribute his deep knowledge of brand building, marketing, operations and consumer insights. In addition, hisHis experience in digital innovation enablesallows him to helpoffer valuable contributions to the Company maintain itsas it transforms data into insights to build personalized brands and enhance consumer shopping experiences.

Experience Highlights

Domino’s Pizza, Inc., a restaurant chain

Chief executive officer (May 2022 to present)
President of Domino’s U.S. (July 2020 to April 2022)
Chief operating officer (July 2018 to April 2022)
President of the Americas (July 2018 to June 2020)
President of Domino’s USA (September 2014 to June 2018)
Executive vice president, chief marketing officer

PepsiCo, Inc., a global beverage company

Vice president of marketing, Colas at Pepsi-Cola North America
Various leadership positionroles in digital technology within the consumer packaged goods industry. Age: 52.

Committee Membership:
Audit Committee; Management Developmentmarketing and Compensation Committee.brand management


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Table of Contents

Proposal 1: Election of Directors

Christopher J.
Williams
Age: 64

Independent Director
Since: 2015

Committees:
Audit (Chair)

Skills and Qualifications

Christopher Williams is chairman of Siebert, Williams, and Shank LLC, an investment banking and financial services company. Previously, Williams was chairman and chief executive officer of The Williams Capital Group, L.P. and Williams Capital Management, LLC (Williams Capital), an investment banking and financial services firm, since the company’s formation in 1994 until it merged with Siebert Cisneros Shank to form Siebert, Williams, and Shank in November 2019. Prior to founding Williams Capital, Williams managed the derivatives and structured finance division of Jefferies & Company. He previously worked at Lehman Brothers, where his roles included managing groups in the corporate debt capital markets and derivatives structuring and trading.

Other Public Company Boards:
Williams is a director of Ameriprise Financial, Inc. (September 2016 to present) and of Union Pacific Corporation (November 2019 to present). He previously served on the boards of Caesars Entertainment Corporation (April 2008 to March 2019) and Wal-Mart Stores Inc. (June 2004 to June 2014).

Nonprofit/Other Boards:
Williams serves on the boards of Cox Enterprises Inc., Lincoln Center for the Performing Arts, and The Partnership for New York City.

Director Qualifications:
Williams brings a wealth of financial, accounting, and strategic expertise to the Board with his years of experience in investment banking and finance, and as the former chair of the audit committee of a Fortune 100 company. He also contributes important executive management and leadership experience as the chairman and chief executive officer of an investment management firm. As a current and former director of several public and private companies, he brings a valuable perspective for the Company’s strategy and operations as well as extensive customer insights. Age: 62.

Experience Highlights

Siebert, Williams, Shank & Co., LLC, an investment banking and financial services company, formed from the merger of The Williams Capital Group, L.P. and Williams Capital Management, LLC, with Siebert Cisneros Shank

Chairman (November 2019 to present)

The Williams Capital Group, L.P. and Williams Capital Management, LLC, an investment banking and financial services firm

Chairman and chief executive officer (1994 to 2019)

Jeffries & Company, an investment bank

Managed derivatives and structured finance division

Lehman Brothers Holdings Inc., an investment bank and financial services company

Managed groups in corporate debt capital markets and derivatives structuring and trading

Other Public Company Boards

Ameriprise Financial, Inc. (September 2016 to present)
Union Pacific Corporation (November 2019 to present)
Caesars Entertainment Corporation (April 2008 to March 2019)
Wal-Mart Stores Inc. (June 2004 to June 2014).

Nonprofit/Other Boards:

Cox Enterprises Inc.
Lincoln Center for the Performing Arts

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Table of Contents

Proposal 1: Election of Directors


Shareholder Engagement

We maintain active, year-round engagement with our shareholders. We aim to engage with shareholders representing at least one-third of our total shares outstanding, on an annual basis.

Who meets with shareholdersHow we interact with shareholders
Corporate Secretary and ESG team
Investor Relations team
NGCRC chair
Independent chair
Management, including CEO
In-person or virtual meetings
Investor conferences
Annual shareholder meeting
Shareholder proposals
Written correspondence with investors throughout the year

These interactions enable two-way dialogue between our shareholders and the Company and provide a forum for our Board members and leadership to listen to our shareholders’ perspectives, answer any questions and engage in dialogue on any feedback they may have. These engagements also inform and improve our disclosures, decision-making and commitments. The Board also considers shareholder feedback from these meetings in its deliberations and decision-making.

The table below sets forth recent changes we made after considering shareholder feedback, along with market standards and emerging best practices, in conjunction with our strategic and business priorities.

Executive compensationDiversity disclosures

Updated executive compensation clawback policy

Allows for recoupment of incentive compensation granted to current and former executive officers if the executive engages in conduct that is materially detrimental to Clorox, or in the event of a financial restatement.

Expanded the factors considered in executive compensation award determinations

For fiscal year 2022 and onwards, certain ESG-related goals from our IGNITE scorecard will be factored into the MDCC’s evaluation of each executive’s performance for their annual incentive awards.

Expanded our disclosures regarding diversity and inclusion

Our EEO-1 information is available on the Company’s website at thecloroxcompany.com/company/inclusion-diversity/.

We also further enhanced our disclosures by including representation data by Clorox job category starting in our 2021 Integrated Annual Report.

Third-party board and director evaluator

ESG Data Hub

Starting this fiscal year 2023, we plan to utilize a third-party facilitator periodically for our board and director evaluations in line with best practice, in order to add external perspective and insight to our evaluation process.

In response to shareholder feedback, this year, we launched the ESG Data Hub which will provide a centralized, more user-friendly information source to our stakeholders. The ESG Data Hub can be found at Committee Membership:
https://clorox.metrio.net/
Audit Committee (Chair).


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Shareholder EngagementProposal 1: Election of Directors

Climate action

We recently unveiled our climate action plan with a roadmap to achieving our science-based targets (SBTs) and net-zero commitments by 2050.

In September 2021, we announced our SBTs as part of our climate strategy, which will put the Company on a path to net zero emissions across scopes 1, 2 and 3 by 2050.

Shareholder Outreach and Communications

We maintain active, year-round engagement with our shareholders. During the past fiscal year, our directors and management met with many of our investors to discuss key corporate governance, executive compensation, corporate responsibility, culture and other important ESG topics. These meetings enable two-way dialogue between our shareholders and our Board and management, and for our leadership to listen to our shareholders’ perspectives and understand any concerns or feedback they may have.

The Board considers shareholder feedback from these meetings, along with emerging best practices, market standards, and policies at other companies in its perspectives. The feedback we have received from our shareholder engagement activities has informed the Board’s decisions and deliberations as well as our disclosures. For example, shareholder feedback helped inform the Board’s determination that elimination of the supermajority voting provision in our Company charter, as proposed in Proposal 4, is appropriate for the Company and our shareholders.

Our Board also considered shareholder input in reviewing the Company’s compensation plan design and metrics, as described in greater detail in the Compensation Discussion and Analysis section of this proxy statement, and in other key areas. Additionally, as part of the Company’s recent CEO succession process and the NGCRC’s evaluation of the Board’s leadership structure, as discussed in more detail on page 18, the NGCRC considered shareholder feedback as to whether separating the chief executive officer and chair roles would be in the Company’s best interest. We have also expanded some of our disclosures based on helpful feedback from our shareholders, including expanding our disclosures regarding diversity and inclusion, such as our EEO-1 data which is available in our 2020 integrated annual report, as well as regarding the skills and experience identified by the Board as being important in creating a diverse and well-rounded Board, among other areas.

Shareholder Recommendations and Nominations of Director Candidates

The NGCRC considers recommendations from many sources, including shareholders, regardingShareholders may recommend possible director candidates for director. Such recommendations, together withby sending the candidate’s biographical and business experience information (similar to that required to be disclosed under the applicable Securities and Exchange Commission (SEC)SEC rules and regulations) regarding the candidate, should be submitted to The Clorox Company, c/o Corporate Secretary, 1221

Broadway, Oakland, CA 94612-1888. The NGCRC evaluates all candidates for the Board in the same manner, including those suggestedrecommended by shareholders.

In addition, ourThe Clorox Company Amended and Restated Bylaws (the Bylaws) permit a shareholder or group of up to 20 shareholders who have owned at least 3% of the outstanding shares of the Company’s common stock (Common Stock) for at least three years to submit director nominees (up to 20% of the Board) for inclusion in the Company’s proxy statement and form of proxy used in connection with the Annual Meeting (proxy materials) ifMeeting. Notice of the shareholder(s) provide(s)nomination must be timely, written notice of such nomination(s) and the shareholder(s)shareholder and the nominee(s)nominee must satisfy the requirements specified in the Company’s Bylaws. Shareholders who wish to nominate directors for inclusion in the Company’s proxy materials or directly at an annual meeting of shareholders in accordance with the procedures in our Bylaws should follow the instructions under the Shareholder Proposals and Director Nominations for the 20212023 Annual Meeting section of this proxy statement.

Director Communications

Shareholders and interested parties may direct communications to individual directors, including the lead independent director,chair, to a Board committee, to the independent directors as a group, or to the Board as a whole, by addressing the communications to the appropriate party and sending them to The Clorox Company, c/o Corporate Secretary, 1221 Broadway, Oakland, CA 94612-1888. The Corporate Secretary will review allthese communications so addressed and will forward to the addressee(s) allany communications determined to bearthat they determine bears substantively on the business, management, or governance of the Company.


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Table of Contents

Board of Directors


How We Identify, EvaluateDirector Candidate Evaluation and Nominate Our DirectorsNomination

The NGCRC engages in continuous Board succession planning and evaluation of Board composition, working closely with our Board in determining the skills, experiences, and characteristics desired for the Board as a whole and for its individual members, and also screening and recommending candidates for nomination by the full Board.

While the Board has not established any specific minimum qualifications that a potential nominee must possess, director candidates, including incumbent directors, are assessed based uponon criteria established by the NGCRC in light of the Company’s long-term strategy, the skills and backgroundsexperience currently represented on the Board, legislative and regulatory developments, corporate governance trends, and any specific needs identified in the Committee’sNGCRC’s evaluation of Board composition.

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Proposal 1: Election of Directors

Criteria include broad-basedinclude:

Broad-based leadership and relevant business skills and experiences
Prominence and reputation in their professions
Global business and social perspective
Ability to effectively represent the long-term interests of our shareholders and other stakeholders
Ability to devote sufficient time to the Company’s affairs
Personal integrity and judgment
Diversity of thought, background and experience

The Board’s approach to refreshment is robust, combining experience and business skills and experience, prominence and reputation in their professions, global business and social perspective, ability to effectively represent the long-term interests of our shareholders and other stakeholders, personal integrity and judgment, and diversity of thought, background and experience.continuity with fresh perspectives. The Board also adopted a Board Diversity Policy during fiscal year 2020, which requires the NGCRC tostrongly believes that its composition should include longer-tenured directors who have institutional memory and to have any search firm they engage include, diverse candidates who meet the Board membership criteria set forth in the Governance

Guidelines, in any pool from which the NGCRC selects director candidates. See Board Diversity Policy below for more information.worked with different CEOs and management teams, middle-tenured directors, and newer directors.

The NGCRC focuses on achieving the right balance of director experience, diversity and tenure of ourin evaluating new director candidates and current directors to obtain a Board with a combination of fresh perspectives andfor nomination. Further, the institutional memory of longer-tenured directors who have seen issues arise over time and have worked with different CEOs and management teams to guideNGCRC carefully considers the Company.

The ability of incumbent directors to continue to contribute to the Board and the Company’s evolving needs, is also carefully considered in connection withas part of the renominatingrenomination process. Further, under the Company’s Corporate

The Governance Guidelines (Governance Guidelines),also provide that non-management directors whose personal circumstances change in a manner that affects their ability to contribute to the Company, including a change in their principal position, primary job responsibilities, or personal circumstances, must offer their resignation for the Board’s consideration, to ensure that the individual iscurrent directors are still qualified and have the capacity to perform their duties as a director, in light of other commitments.

The Board also adopted a Board Diversity Policy during fiscal year 2020, which requires the Company.NGCRC and any search firm they utilize to include diverse candidates who meet the Board membership criteria set forth in the Company’s Corporate Governance Guidelines (Governance Guidelines) in any director candidate pool. See Board Diversity Policy below for more information.


Director Skills & Experience

The following graphic summarizes the experience and skills among others,composition of the Board, with additional information in our director biographies in the Our Director Nominees section of this proxy statement. These attributes have been specifically identified by the NGCRC as being important in creating a diverse and well-rounded Board:Board.

Brand-building/marketing/digital/e-commerce experience

Consumer packaged goods or relevant industry expertise
Cybersecurity/information technology knowledge
Emerging technology/innovation experience
ESG experience (sustainability, social responsibility, public issues expertise)
Experience in product development or supply chain management
Human capital and culture experience
International experience
Operational experience
Regulatory, scientific or R&D experience
Retail/customer experience
Risk Management Oversight
Significant M&A/financial/accounting expertise


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Brand Building / Marketing Experience. Organic sales growth is one of our key financial metrics, and directors with experience in developing strategies to grow sales and market share and build brand awareness and equity, in addition to digital and social media and e-commerce experience, provide

Contributes important perspectives on fueling growth, one of the core strategic choices of our IGNITE strategy.

INTERNATIONAL EXPERIENCE

Supports key strategic decision-making in international markets, and helps us market and sell to our diverse consumer base.

Consumer Packaged Goods or Relevant Industry Expertise. CPG/RELEVANT INDUSTRY KNOWLEDGEAs a company that relies on the strengths of our branded consumer products, we seek directors who are familiar with the consumer packaged goods and health and wellness industries; they are able to provide

Provides guidance on the Company’s strategy and position in our industry, in addition to providing market insights.

Cybersecurity, Data Privacy and Information Technology Knowledge. Cyber and information security are vital to the Company’s operations, and experience and knowledge in this area allow directors to effectively oversee and advise on our risk management programs.
Emerging Technology and Innovation Experience. Directors with technology and innovation experience and knowledge (including digital and social media, e-commerce and the sharing economy) are able to identify and understand emerging technologies; have a deeper perspective on the disruptive forces in our industry; and can support the development of our business strategy, including with respect to corporate innovation.
Environmental, Social and Governance (ESG) Experience. ESG priorities form a core part of our IGNITE Strategy, and accordingly, we seek directors with sustainability, social responsibility, and public issues experience, allowing them to appropriately consider and address business, social and environmental challenges and the priorities of stakeholders, while also mitigating risks and unlocking opportunities for long-term sustainable growth.

Experience in Product Development / Supply Chain Management. OPERATIONAL EXPERIENCEInnovation, product development and supply chain management are critical areas for the Company in helping us continue to successfully develop and manufacture products to satisfy consumer demand and preferences.

Human Capital and Culture Experience. Experience in attracting, developing and retaining qualified personnel and fostering a corporate culture that reflects our values and encourages inclusion, diversity and performance is especially valuable to Clorox, especially within the context of the highly competitive talent market in which we operate and as we continue to reimagine work, a core strategic choice of our IGNITE strategy.
International Experience. Directors with global experience and perspective help us make key strategic and operational decisions in international markets, and help us market and sell to our diverse consumer base.
Operational Experience. We believe directors who have served in senior management roles can contribute

Contributes insight into strategy, and operations and provide market insights that can help deliver cost savings and fuel growth.growth


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Regulatory, Scientific or Research & Development Experience. 23


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Proposal 1: Election of Directors

We seek directors who have knowledgeCYBERSECURITY/IT KNOWLEDGE

Supports effective oversight and experience inguidance of our cyber and data privacy risk management programs.

REGULATORY/SCIENTIFIC/R&D EXPERIENCE

Provides insight into navigating regulatory environments both in the U.S. and globally, especially in health and wellness and other relevant regulated sectors.sectors

Retail or Customer Experience. ESG EXPERIENCEInnovating brand

Provides insights and shopping experiences is another core strategic choiceperspective in executing against our ESG priorities, while also mitigating risks and creating value for all stakeholders.

RETAIL/CUSTOMER EXPERIENCE

Provides insight into navigating regulatory environments both in the U.S. and globally, especially in health and wellness and other relevant regulated sectors

INNOVATION/DIGITAL KNOWLEDGE

Contributes perspectives on the disruptive forces in our industry (including digital, social media, e-commerce) and the development and execution of our IGNITEbusiness strategy, and directorsincluding with insights on consumer engagement and industry trends will be key in helping us execute this strategy.

respect to innovation

Risk Management Oversight. RISK MANAGEMENT EXPERIENCEDirectors with risk management experience guide

Supports the Board in executing its responsibility to understand and overseeoversight of the various risks facing the Company, and ensure there are appropriateincluding implementation of mechanisms and policies in place to mitigate and manage those risks.

Significant MergersPRODUCT/SUPPLY CHAIN EXPERIENCE

Provides insights into these critical areas in helping us continue to successfully develop and Acquisitions / Strategy Experiencemanufacture products to satisfy consumer demand and Financial / Accounting Expertise. preferences.

SIGNIFICANT M&A/FINANCIAL/ ACCOUNTING EXPERTISEM&A, partnerships, strategy, accounting and financial reporting experience enable a director to provide

Provides perspective on the Company’s strategic transactions andtransactions; ability to oversee the Company’s financial reporting and compliance.

HUMAN CAPITAL/CULTURE EXPERIENCE

Provides valuable perspective in talent acquisition, development and retention and fostering a corporate culture that reflects our values and encourages IDEA.

Director Continuing Education and New Director Orientation

To enhance and expand on the key skills and experiences relevant to the Company’s industry, we provide our directors with continuing education and presentations developed by both internal and external expert speakers. In addition to the regular ESG updates it reviews at each meeting, the NGCRC led a deep-dive session with the full Board on multiple ESG topics presented by management, our external advisers and ESG consultants. Topics included the evolving nature of stakeholder capitalism and interests from our multiple stakeholder groups, emerging proxy voting trends, Clorox’s approach to its ESG materiality assessment and how that informs its strategic priorities and reporting, among other areas.

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Proposal 1: Election of Directors

Additionally, we encourage our directors to participate in external continuing director education programs. New directors also participate in comprehensive orientation sessions that provide them with a thorough understanding of their fiduciary duties as well as a robust overview of the Company’s business and strategies, which allows new directors to begin making contributions to the Board at the start of their service.



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Board of Directors

Diverse Backgrounds & Experiences

Our director nominees represent diverse perspectives and experiences, and we regularly assess our Board to ensure that we have a mix of tenures balancing fresh perspectives with institutional memory of longer-tenured directors who have seen issues arise over time and have worked with different CEOs and management teams to guide the Company.teams.

5/13 women*4/13 ethnically diverse**11/13 independent5.3 average tenure

Average Director Tenure

Note: As of the Annual Meeting date, assuming election of all director nominees.4.5 Years

*The women on our Board are Ms. Banse, Ms. Lee, Ms. Rendle, Ms. Tesija and Ms. Thomas.3 Directors6 Directors3 Directors
**Dr. Carmona identifies as Hispanic/Latino. Ms. Lee identifies as Asian-American, and both Ms. Thomas-Graham and Mr. Williams identify as Black.0-2 years3-6 years7+ years

*

As of the Annual Meeting

As highlighted in our Governance Guidelines, the Board values diversity and recognizes the importance of having unique and complementary backgrounds and perspectives in the boardroom. The Board also actively seeks refreshment of the Board with directors who can provide diverse perspectives and add strong and unique value to our ever-evolving business through skills highly relevant to our corporate strategy.

The Company and the Board both have a long-standing commitment to inclusion and diversity -increasing representation across the company and fostering an inclusive environment where everyone can be their true self and do their best work—which, we believe, helps the Company attract and retain the best talent and also helps lead to a better business strategy and execution. The Board endeavors to bring together the following attributes that reflect the Company’s diverse stakeholders.


Diverse skills and perspectives
Professional experience
Age
Race
Ethnicity
Gender
Sexual identity and orientation
Cultural backgrounds

The Board believes that setting the tone at the top – that people of all backgrounds are welcome and empowered – helps the Company attract and retain the best talent and also helps lead to a better business strategy and execution. The Board endeavors to bring together diverse skills, professional experience, perspectives, age, race, ethnicity, gender, sexual identity and orientation, and cultural backgrounds that reflect the Company’s diverse stakeholders. The NGCRC assesses the effectiveness of these efforts by examining the overall composition of the Board, assessing how individual director candidates, including incumbent directors, can contribute to the overall success of the Board, and reviewing individual, committee, and Board evaluation results. Furthermore, we are very

proud that our commitment to diversity does not end with just representation; diverse directors hold key leadership roles on our Board – our Lead Independent Director is a Black woman, our NGCRC chair is Hispanic, and our Audit Committee Chair is Black.

Clorox’s commitment to inclusion and diversity also forms a key part of our IGNITE strategy. Ethnic minoritiesAs of June 30, 2022, people of color represent 34%42% of our nonproduction employees and 30%32% of our nonproduction managers in the US, and women represent 51%36% of our employees and 47% of our nonproduction employees and 44% of our nonproduction managers globally. We are committed to inclusion and diversity because we fundamentally believe that diversity leads to better outcomes for our business; we are in 9 of 10 US households and empowering diverse thinking enables us to better meet the needs of our loyal and diverse consumers.business. We have also seen the value of diversity during times of uncertainty when different ways of thinking enablesenable us to be nimble, creative, and step up to meet challenges.


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Proposal 1: Election of Directors

Board Diversity Policy

The Board regards diversity as an important consideration for determining the optimal Board composition and adopted a Board diversity policy during fiscal year 2020, formalizing and reinforcing the NGCRC’s long-existing practice of considering diversity as an important factor in the director selection process in accordance with our Board membership criteria.

The NGCRC has oversight overof the implementation and delivery of the Board Diversity Policy, which guides and helps drive the Board’s commitment to actively seek out diverse director candidates. This policy requires that women and people of color who meet the Board membership criteria set forth in our Governance Guidelines are included in each slate of potential

directors the Board considers in director searches.candidate pools. The policy recognizes that in considering director candidates for the Board, the NGCRC considers many forms of diversity such as, diversity of skills, professional experience, perspective, age, race, ethnicity, gender, sexual identity and orientation and cultural backgrounds, and considers whether the diversity of the Board is appropriately reflective of the diversity of the Company’s stakeholders.

The Board believes this policy supports the Company’s commitment to inclusion and diversity and its ability to adapt to ever-changing business and policy environments.



Board Leadership Structure

As part of our ongoing, proactive efforts to implement effective and progressive corporate governance practices, the NGCRC regularly reviews the leadership structure of the Board, taking into account the Company and its needs, market practices, board skills and experiences, investor feedback, and corporate governance perspectives, among other things. The Board believes it is in the best interests of the Company and its shareholders for the Board to have flexibility in determining the Board leadership structure of the Company. As part of our ongoing, proactive efforts to implement effective corporate governance practices, the NGCRC regularly reviews the leadership structure of the Board, taking into account the Company based on these factors.and its needs, legislative and regulatory developments, and corporate governance trends, among other things. Accordingly, over the years, the Board has had a variety of leadership structures.


In August 2020, as part

Independent Chair

Independent Committee Chairs

Matthew J. Shattock

Esther Lee

NGCRC Chair

Christopher J. Williams

Audit Committee Chair

Spencer C. Fleischer

MDCC Chair

Currently, we have separate board chair and CEO roles, which we believe aids in the Board’s oversight of the Company's recent CEO succession planning process, the Board created a new leadership structure, with a new executive chair, a continuing strong lead independent director, a new separate chief executive officer and continuingmanagement, supported by strong independent committee chairs.


After careful consideration Matthew Shattock has served as independent chair since February 2021 and brings strong board and executive leadership experience to the NGCRCrole having previously served as a non-executive board chair and the Board determined that having separate chief executive officer and chair roles, with Ms. Rendle serving as CEO and Mr. Dorer serving as Executive Chair, would be in the best interestsa former public company CEO.

Responsibilities of the Company and its shareholders at this time. As CEO, Ms. Rendle is responsible for developing and overseeing the Company's business strategy and culture as well as managing the day-to-day operations of the Company and the Company's relationships with stakeholders. With Mr. Dorer serving as Executive Chair, the Company continues to leverage his significant experience and strong working relationships with the independent members of the Board. This role allows him to facilitate effective communication between management and the Board and to bring key issues to the Board's attention.chair

Because our Executive Chair is not independent, in accordance with the Company’s Corporate Governance Guidelines, the independent Board members have appointed Ms. Thomas-Graham as Lead Independent Director. The Board believes that having a strong lead independent director and strong independent committee chairs, along with an executive chair and a separate chief executive officer, provides an effective balance between strong company leadership and independent oversight. The Board is committed to continuously evaluating this structure to ensure that it promotes effective governance.

The duties of the executive chair include advising the CEO in connection with matters relating to the Board. In addition, the executive chair, among other responsibilities:

presidesPresides at all meetings of the Board;Board and all executive sessions of independent directors;

is available for consultation and direct communication with major shareholders, if requested;Has the authority to call additional meetings of the independent directors;

works with the lead directorReviews and members of management to establishapproves Board meeting agendasmaterials and meeting schedules;

advises the CEO and other members of management on information sent to the Board; andaccordingly;

provides feedback on the CEO’s performance.Reviews and approves meeting agendas and schedules to ensure sufficient time for discussion of all agenda items;


Further, the Board believes that Ms. Thomas-Graham’s strong leadership and qualifications, including her executive experience and her tenure on the Board, among other factors, contribute to her ability to fulfill the role of lead independent director effectively. In order to ensure that the lead independent director has the skills and qualifications necessary to serve as a strong leader, the Company has created clearly delineated comprehensive duties and responsibilities for the lead independent director, as outlined below.


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BoardProposal 1: Election of Directors

The lead independent director is elected annually by and from the independent directors. The duties of the lead independent director include coordinating the activities of the independent directors and serving as a liaison between the CEO or Chair, and the independent directors. In addition, the lead independent director:

assists the Board, the CEO and other members of management in promoting compliance with and implementation of the Governance Guidelines;

presides at executive sessions of the independent directors and has the authority to call additional executive sessions or meetings of the independent directors;

presides at Board meetings in the Chair’s absence;

reviews and approves information sent to the Board;

reviews and approves Board agendas, including meeting schedules to ensure sufficient time for discussion of all agenda items;

is availableAvailable for consultation and direct communication with major shareholders, if requested; and

monitorsMonitors and evaluates the CEO’s performance, of the CEO, along with the members of the MDCC and the other independent directors.

In addition to

While the duties listed above, Ms. Thomas-Graham has taken an active role inindependent chair facilitates the Board’s oversight of management, promotes communication between management and our Board, and leads our Board’s consideration of key governance matters, Linda Rendle, as our CEO, is responsible for developing and overseeing the Company’s diversity efforts and outreach to employees, including participating in and speaking at events with our employee resource and affinity groups and meeting with high-potential employees of color. She also actively participates in discussions with shareholders, particularly around our ESG efforts, and shares feedback from these meetings withbusiness strategy, as well as managing the Board and executive committee. During the COVID-19 pandemic, Ms. Thomas-Graham has met at least weekly with the CEO, to ensure connectivity with and input from the Board.

Lastly, the Board is guided by strong, independent committee chairs, with Dr. Carmona leading the NGCRC, Mr. Fleischer leading the MDCC, and Mr. Williams serving as the Audit Committee chair.

Other than Mr. Dorer and Ms. Rendle, allday-to-day operations of the Company and the Company’s directors are “independent” as defined by the NYSE rules. relationships with stakeholders.

The Board believes that this structure promotes effective governance and that the leadership structure described above is in the best interests of the Company and its shareholders, in light of current circumstances.




Annual Board and Director Evaluation Process

The NGCRC is responsible for overseeing

In addition to regularly reviewing its leadership structure, the Board, committee, and individual director evaluation process. Under the Governance Guidelines, the Board committees and each Board committee are required toindividual director conduct an annual self-evaluation. The evaluations includeself-assessment of their performance, a rangeprocess that is overseen by the NGCRC. In fiscal year 2023, the evaluation will utilize a third-party facilitator in line with best practices to gain additional external perspective and insight.

Each director
considers self-
and board assessment
questions and any
peer feedback.

The NGCRC
chair (or a third-
party facilitator,
periodically) meets
with each director
to discuss their
feedback.

The NGCRC Chair
(or third-party
facilitator, in
conjunction with
the NGCRC Chair)
summarizes
the results and
any related
recommendations.

The Board reviews
and discusses the
findings and any
recommendations.

In these discussions, directors have the opportunity to provide feedback on a number of issues designed to assess Board performance and committee performance,effectiveness, including Board and committee composition, structure, adequacy of information received, accountability,appropriate oversight, and effectiveness, among other topics.


Evaluations are conducted through individual director interviews as part of its evaluation process. Each director provides an individual assessmentaccountability, as well as any feedback they may have on otherprovide peer feedback.

Each Board members’committee also conducts a separate self-evaluation that is designed to assess committee performance on an annual basis. The individual assessments are conducted by the chair of the NGCRC, who summarizes and reports the results and any related recommendations to the NGCRC and the full Board.

As a result of the evaluation process, the Board has made a number of changes, including, for example, adding regular cybersecurity updates to each quarterly Audit Committee meeting agenda many years ago, adding new topics or devoting more time to particular topics and businesses of interest, incorporating external speakers on certain topics, meeting with high potential employees below the executive level to develop relationships and become familiar with the potential internal management succession pipeline, revising the format and focus of Board materials, adding periodic updates that continue focusing on digital engagement and corporate development topics, and identifying the skills and expertise desired for future director candidates.


effectiveness.

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Proposal 1: Election of Directors

This multi-step evaluation process generates robust comments and discussion at all levels of the Board, and these evaluations have led to new and evolved practices designed to increase Board effectiveness and efficiency, including, for example:

Board meeting format and materials

Adjusting the Board meeting format to facilitate continued deep engagement on key strategic areas
Revising the format and focus of Board materials

Board and committee engagement

Increased engagement of committees in certain topics to facilitate deeper engagement, with periodic reporting to the full Board
Providing additional Company and industry updates to the Board between board meetings to increase connectivity to the Company

Board meeting agenda items

Adding regular cyber and data security updates to each quarterly Audit Committee meeting agenda, starting a few years ago
Providing additional updates on key strategic topics, including the Company’s digital transformation and portfolio review
Adding new topics or devoting more time to particular topics of interest
Incorporating external speakers when helpful and appropriate

How Our Directors Are ElectedVote Required

Vote Required

The Company’s Bylaws require each director to be elected by a majority of the votes cast with respect to such director in uncontested elections—the number of shares voted FOR a director must exceed the number of shares voted AGAINST that director.

The people designated in the proxy and voting instruction card intend to vote your shares represented by proxy FOR the election of each of these nominees, unless you include instructions to the contrary. In the event any director nominee is unable to serve or for good cause will not serve, the personsindividuals named as proxies may vote for a substitute nominee recommended by the Board, or the Board may reduce the size of the Board or leave a vacancy.

Under the Company’s Bylaws, any director who fails to be elected by a majority of the votes cast in an uncontested election must tender their resignation to the Board. The NGCRC would then make a recommendation to the Board as to whether to accept or reject the resignation, or whether other action should be taken. The Board would act on the NGCRC’s recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date the election results are certified. A director who tenders their resignation would not participate in the Board’s decision.



Board’s Recommendation

The Board unanimously recommends a vote FOR each of the Board’s thirteen12 nominees for director listed aboveabove. . The Board believes that each nominee listed above is highly qualified and has the background, skills, experience, and attributes that qualify each nominee to serve as a director of the Company. See each nominee’s

biographical information and the How We Identify, EvaluateDirector Nomination and Nominate our DirectorsEvaluation section above for more information. The Board’s recommendation is based on its carefully considered judgment that the background, skills, experience, and attributes of the nominees make them the best candidates to serve on the Board.


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Table of ContentsHow Our Directors Govern

Corporate Governance and Board Matters

The Clorox Company Governance Guidelines

The Board has adopted Governance Guidelines to reflect the Board’s views and the Company’s policies regarding significant corporate governance matters, which the Board believes are best practice. The Governance Guidelines present a framework for the governance of the Company by setting forth the Board’s and the Board committees’ responsibilities, qualifications, and operational matters and describing key matters, such as the evaluation of the CEO and ordinary-course and emergency succession planning.matters. The NGCRC reviews the Governance Guidelines on at least, an annual basis and recommends changes to the Board based on current corporate governance best practices.

The Governance Guidelines can be found in the Corporate Governance section on the Company’s website at https://www.thecloroxcompany.com/who-we-are/thecloroxcompany.com/company/corporate-governance/governance-guidelines/, and are available in print to any shareholder who requests them from The Clorox Company, c/o Corporate Secretary, 1221 Broadway, Oakland, CA 94612-1888.



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TableBoard Oversight of Contents

Board of Directors

Our Corporate Governance Process

We believe that a critical component of meaningful corporate governance is a robust annual process that includes active and transparent shareholder engagement. In addition to our regularly scheduled governance cadence described below, our Board reviews, considers, and acts, as necessary, upon ESG matters throughout the year.

Our annual engagement process typically includes the following:

Q1

Meeting with many large investors to seek feedback on ESG topics, with our Lead Independent Director participating in some of these meetings.

Board discussion of board and committee composition and succession.

Publication of proxy statement and integrated annual report.

Q2

Hosting shareholders (virtually or in person) at our annual meeting of shareholders.

Q3

Board review of key governance policies.

Annual committee self-assessment process.

Q4

Multi-day Board strategy meeting, focusing on talent, diversity, succession planning, ESG strategy and enterprise risks.

Annual director self-assessment process. The chair of the NGCRC meets with each director to receive feedback on the Board´s performance, discusses each director´s self-assessment and receives feedback on other directors.


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The Board’s Role in Risk Management and Culture Oversight

While the Company’s management is responsible for the day-to-day risk management process, the Board has ultimate responsibility for the oversight of the Company’s risk management, shaping effective corporate governance, and setting the right tone for integrity, ethics and culture.culture, for the benefit of the Company’s stakeholders, including shareholders, employees, and customers. This is in line with the Company’s purpose of championing people to be well and thrive every single day. The Board exercises direct oversight of strategic risks to the Company has instituted a robust, comprehensive enterpriseand the risk management program, which involves Board oversight,process to ensure that it is properly designed, well-functioning and an Enterprise Risk Management Steering Committee (ERM Committee), which consists of a cross-functional team of senior leaders and key executives. The ERM Committee oversees the annual key risk identification process, whereby it identifies the top risks that the Company facesconsistent with respect to its business, operations,our overall corporate strategy, and other factors, as well as key mitigation strategies andalso delegates certain risk owners. The Company’s management reports and discusses identified risks and risk mitigation and management efforts withareas to each of the Board at minimum, on an annual basis and typically in connection with the Board’s annual strategy meeting.committees.

TheRisk Oversight by Board also overseesCommittees

As part of executing its risk management through its committees by allocating certain matters tooversight responsibility, the Board committeesdelegates specific oversight duties to each Board committee based on expertise, and theseas set forth below. These committees report on risk exposure on and have oversight over these delegated areas during its regular reports to the full Board to facilitate proper risk oversight by the entirefull Board.

The

Audit Committee oversees the integrity

Integrity of the financial statements the Company’s accounting
Accounting and financial reporting matters and controls, including the independent and internal auditors risk
Risk management andpolicies, compliance relating to accounting and financial reporting matters
Data privacy, cybersecurity and receives quarterly cybersecurity updates.
IT risksThe

NGCRC

Corporate governance practices, director nominations, and Board, committee, director and peer evaluations
Supports the Board in reviewing, monitoring and engaging with management on climate change and environmental policies, programs, goals and progress
ESG program, including corporate citizenship, charitable giving, political participation, issue advocacy and lobbying
Shareholder engagement
Compliance and ethics program

MDCC

Management Development and Compensation Committee (MDCC) oversees management development, retention and succession planning processes below the CEO level
Individual performance, including ESG achievements, and approves compensation for executive officers and various benefit plans for the Company as a whole also assessing risks relating to our compensation structure.
The Company’s diversity, equity and inclusion initiatives, programs and key metrics

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Corporate Governance and Board Matters

Oversight of Key Risks

Culture

To aid its responsibility for oversight of the Company’s corporate culture, the Board receives information through a number of channels, including:

updates from the chief people officer and the chief diversity and social impact officer on data and metrics from periodic pulse surveys and IDEA updates,

The NGCRC oversees

our annual employee engagement survey which gauges employee perception of the Company’s corporate governance practices, director nominations, Board, Committee, directorCompany as a place to work as well as their sense of inclusion,

the activities of our employee resource groups,

Company and peer evaluations, corporate responsibility, sustainabilityindustry updates between board meetings,

updates from the chief legal officer on any significant compliance, discrimination and political contribution matters, shareholder engagement, and compliance and ethics program.harassment complaints.

Furthermore, asAs part of its responsibilities,their oversight, the Board also provides guidance to management regarding significant cultural challenges facing the Company and also evaluates management’s efforts to align corporate culture with the Company’s values and strategy.

Executive Compensation

The MDCC periodically reviews the Company’s compensation policies and programs to ensure thatour compensation design offers performance incentives to employees and executives, while mitigating excessive risk-taking. The overall executive compensation program contains various provisions thatto mitigate against excessive risk-taking, including:

Balancing cash compensation under the ExecutiveCompany’s Annual Incentive Compensation Plan (Annual Incentive Plan)(AIP) and equity compensation;

Capping the payouts under executive and non-executiveour incentive plans, which protect against executives taking short-term actions to maximize bonuses that are not supportive of long-term objectives;

UtilizingUsing weighted financial metrics under the Annual Incentive Plan that are intended to discourage revenue generation at the expense of profitability and profitable growth, and vice versa;vice-versa;

Using different financial metrics under our Annual Incentive Plan and long-term performance shares;

Including clawback provisions that allow the recapture of compensation paid to current and former executives, including in the event of a restatement of the Company’s financial statements or if the individual engages in conduct materially detrimental to the Company, which serve as a deterrent to inappropriate risk-taking activities; and

Implementing and enforcing stock ownership guidelines that require executive officers to accumulate meaningful levels of equity ownership in the Company, which align executives’ short- andshort-and long-term interests with those of the Company’s shareholders.

Based on its review and the analysis provided by its independent compensation consultant, Frederic W. Cook & Co., Inc. (FW Cook), the MDCC has determined that the risks arising from the Company’s compensation policies and practices for its employees, including executive officers, are not reasonably likely to have a material adverse effect on the Company.

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Corporate Governance and Board Matters

Enterprise Risk Management

The Company has instituted a robust, comprehensive enterprise risk management program, which involves Board oversight, and an Enterprise Risk Management Steering Committee (ERM Committee), which consists of a cross-functional team of senior leaders and key executives. The ERM Committee oversees the annual key risk identification process, which identifies the top risks that the Company faces with respect to its business, operations, strategy, and other factors, including cybersecurity and climate-related risks, as well as key mitigation strategies and risk owners. Our management discusses identified risks and risk mitigation and management efforts with the Board on an annual basis, at minimum, and typically in connection with the Board’s annual strategy meeting.

Reporting Protocol and Crisis Management

The Company also has formalized governance structure and reporting channel policies that require management to notify the Board of, among other things, any instances of significant threatened or actual litigation, significant governmental or regulatory inquiry or proceeding, and any events or occurrences that could materially impact the Company’s reputation, including any cybersecurity-related issues that could involve the significant misappropriation of personal or sensitive/valuable Company data, or that may have significant operational, financial, legal or reputational impacts. This reporting protocol is a key component of the Board’s oversight of the Company’s crisis management program.

Cybersecurity Risk Management and Preparedness

The Company’s cyber preparedness team is led by our chief information and enterprise analytics officer and overseen by our information security officer. Some components of our cybersecurity risk management program:

Leverages various frameworks from the National Institute of Standards and Technology (NIST) for managing cybersecurity risks.
Seeks to employ cybersecurity best practices, including implementing new technologies to proactively monitor new vulnerabilities and reduce risk, enhancing governance, risk and compliance management, maintaining security policies and standards, and continuously updating our response planning and protocols.
Cybersecurity insurance policy to cover the costs relating to a data breach.
Program maturity assessment performed every two years by our internal audit function.
Regular phishing and cyber hygiene training for all employees who have access to company email and connected devices.
Management consults regularly with external specialists and advisors on enhancements and opportunities for regular and continued strengthening of our cyber practices and policies.

The Audit Committee is responsible for oversight of data privacy, cybersecurity and IT risks. In order to fulfill its duties, the Audit Committee receives regular updates from our chief information and enterprise analytics officer, information security officer and CLO, including quarterly updates on topics related to information security and cyber risks and readiness. The Audit Committee includes directors with knowledge, skills and experience in data security, privacy, IT governance, and cyber risk.

Security and cybersecurity risks are presented to the full Board at least annually as part of the Board’s oversight of enterprise risk management.

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Corporate Governance and Board Matters


ESG Governance

Clorox’s ESG governance starts at the top—with robust oversight of our ESG strategy from the Board and implementation of our strategy through a cross-functional approach that allows us to effectively execute against our ESG priorities and drive long-term growth for our stakeholders. In line with our commitment to continuously strengthen our governance practices, we continue to evolve our ESG governance to ensure we are taking into account stakeholder expectations while executing against our IGNITE strategy.

ESG Governance Structure

Board of Directors

Responsible for overseeing the Company’s ESG strategy and risks and ensuring ESG priorities are integrated into long-term strategy
Receives regular updates and engages on key ESG topics
Ongoing director education on ESG matters from internal and external experts and stakeholders

ESG Executive Committee

Oversees execution against our ESG priorities and ensures that our ESG work is integrated into our business units

ESG Core Team

Senior cross-functional management team that helps to define and execute on our ESG priorities and guides periodic ESG strategy enhancements

Sustainability Center

Cross-functional working team that defines, drives and tracks progress against environmental goals and strategy, including Clorox’s climate stewardship ambitions and performance

ESG Disclosure Committee

Cross-functional team that meets at least quarterly to review and discuss ESG reporting and disclosures, monitors current and emerging ESG disclosure trends and best practices, and evaluates the effectiveness of ESG disclosure controls and procedures

Enterprise Risk Management Steering Committee

Overseen by the chief financial officer and chief legal officer
Proactively identifies, assesses, prioritizes, and continuously manages enterprise-wide risks, including climate risk, and updates the Board at least bi-annually on key ERM updates

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Corporate Governance and Board Matters

Recent Enhancements to ESG Governance

In overseeing culture, the Board also receives information throughrecent years, we have made a number of channels, including updates fromenhancements to further evolve governance of the chief people officer, such as dataCompany’s ESG progress and metrics fromactivities.

Board committee charters. In fiscal year 2022, we refreshed our annual employee engagement surveyBoard committee charters to provide further clarity on each committee’s roles and also relatingresponsibilities around ESG oversight and to inclusionensure coordinated coverage of ESG issues across the Board and diversity,committees. Although the NGCRC has historically overseen the Company’s sustainability policies, the NGCRC charter now explicitly includes oversight of the Company’s climate change and environmental policies, programs, goals and progress. The MDCC’s scope and responsibilities were similarly expanded to explicitly include oversight of the Company’s consideration of ESG matters in its compensation programs, as well as its key human capital policies and practices below the executive level. See theBoard Committees sectionof this proxy statement for more information about each Board committee’s scope, responsibilities and duties.

Director ESG education and ESG shareholder engagement. In fiscal year 2022, our directors had opportunities to continue to deepen their knowledge base on ESG topics relevant to the company. In addition to the regular ESG updates it reviews at each meeting, the NGCRC led a deep-dive session with the full Board on multiple ESG topics presented by management, our external advisers and ESG consultants. Topics included the evolving nature of stakeholder capitalism and interests from the general counsel on any significant compliance, discriminationour multiple stakeholder groups, emerging proxy voting trends, and Clorox’s approach to its ESG materiality assessment and harassment complaints.

The Company also has formalized governance structurehow that informs its strategic priorities and reporting, channel policies that require management to notify the Board of, among other things, any instancesareas. As part of significant threatened or actual litigation, significant governmental or regulatory inquiry or proceeding, and any events or occurrences that could materially impactthis discussion, we invited one of the Company’s reputation,largest shareholders to join the meeting and engage in a dialogue to share its perspective on emerging ESG topics of relevance to issuers like Clorox and perspective on board oversight of these issues. We also have regular in-depth discussions regarding our ESG priorities and progress with our shareholders during our annual as well as ad hoc shareholder engagement opportunities. See the Shareholder Engagement section of this proxy statement for more information.

Launch of ESG Data Hub. This past year, in response to stakeholder interest in easily accessible ESG data, we launched our ESG Data Hub. We believe that this new data hub resource will foster simpler, more transparent, and centralized access to our ESG information for our stakeholders.

Formation of ESG Disclosure Committee. In fiscal year 2022, we also formed a cross-functional ESG Disclosure Committee to enhance the processes around review of our ESG reporting and disclosures, including any cybersecurity-related issues that could involve the significant misappropriationour SEC filings, and monitoring of personal or sensitive/valuable company data, or that mayregulatory changes, as well as trends and best practices in ESG disclosure and reporting, including ESG disclosure controls and procedures. The committee meets at least quarterly and includes participants from our legal, internal audit, corporate communications, finance, financial reporting controls and human resources functions, as well as executives who have significant operational, financial, legal or reputational impacts.oversight of ESG matters.


Board Meeting Attendance

The Board held nineeight meetings during fiscal year 2020.2022. All incumbent directors attended at least 75% of the meetings of the Board and committees of which they were members during fiscal year 20202022 during the period in which they served on the Board. All members of the Board are expected to attend the Annual Meeting. Each of the eleven10 members of the Board at the time of the Company’s 20192021 Annual Meeting of Shareholders attended that meeting.



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Director Independence

TheUnder the Governance Guidelines, provide that a substantial majority of the Board must consist of a substantial majority of independent directors. The Board determines, in the exercise of its business judgment, in light of all facts and circumstances, whether individual Board members are independent, as defined by the New York Stock Exchange (NYSE). The Board has adopted and in accordance with the director independence standards which are set forth in the Governance Guidelines, to assist it in assessing the independence of directors.Guidelines. The Board makes an affirmative determination regarding the independence of each director annually, based upon the recommendation of the NGCRC.

The Board has determined that each of our directors (Messrs. Fleischer, Mackay, Matschullat, Shattock, Weiner,(during fiscal year 2022, including Dr. Richard H. Carmona) and Williams, Mmes. Banse, Lee, Tesija, and Thomas-Graham, and Dr. Carmona) and our director nominee (Mr. Parker) arenominees is independent under the NYSE listing standards and the independence standards set forth in the Governance Guidelines, except for Mr. Dorer and Ms.Linda Rendle as a result

of being employeessince she is an employee of the Company. In addition, Ms. Ticknor was independent under the NYSE listing standards and the independence standards set forth in the Governance Guidelines during the period in fiscal year 2020 during which she served. The Board’s determination considered the impact of tenure on a director’s independence, particularly with respect to directors with 10 or more years of Board service, and the Board concluded that such longer-tenured directors, based on their communications and interactions with management, their decisions, and their adherence to their fiduciary duties to shareholders, have demonstrated their independence from management.

100%

of our director nominees is
Independent
(excluding Linda Rendle)

Amy L. Banse
Julia Denman
Spencer C. Fleischer
Esther Lee
A. D. David Mackay
Paul Parker
Stephanie Plaines
Matthew J. Shattock
Kathryn Tesija
Russell J. Weiner
Christopher J. Williams

The independent directors generally meet in executive session at each regularly scheduled Board meeting without the presence of management directors or employees of the Company to discuss various matters related to the oversight of the Company, the management of the Board’s affairs, and the CEO’s performance. The lead independent director chairschair presides over the independent executive sessions.



Related Person Transaction and Conflict of Interest Policies and Procedures

The Company has a written policy regarding Audit Committee review and approval of related person transactions by the Audit Committee (Related Person Policy). The Related Person Policy defines anany Interested Transactions. An “Interested Transaction” asis any transaction, arrangement, or relationship or series of similar transactions, arrangements, or relationships (including any indebtednessdebt or guarantee of indebtedness)debt) in which (i) the aggregate amount involved since the beginning of the Company’s last completed fiscal year will or may be expected to exceed $120,000 (including any periodic payments or installments due on or after the beginning of the Company’s last completed fiscal year and, in the case of indebtedness, the largest amount expected to be outstanding and the amount of annual interest on that amount), (ii) the Company or any of its subsidiaries is a participant, and (iii) any Related Person (as defined below) has or will have a direct or indirect interest (other than solely as a result of being a director or a less than 10% beneficial owner of an equity interest in another entity).which:

A “Related Person” is (i) any person who is or was (since the beginning of the Company’s last fiscal year, even if they do not presently serve in that role) an executive officer, director, or nominee for election as a director, (ii) a beneficial owner of more than 5% of the Company’s Common Stock, or (iii) an immediate family member of any of the foregoing. For purposes of this definition, “immediate family member” includes a person’s spouse, parents, stepparents, children, stepchildren, siblings, mothers-and fathers-in-law, sons- and daughters-in-law, brothers-and sisters-in-law, and anyone residing in such person’s home (other than a tenant or employee).

Under the Related Person Policy, if a new Interested Transaction is identified for approval, it is brought to the Audit Committee to determine if the proposed transaction is reasonable and fair to the Company. The Audit Committee will review the material facts of all Interested Transactions that require its approval and either approve or disapprove of the entry into the Interested Transaction.

the aggregate amount will or may be expected to exceed $120,000,
the Company or any of its subsidiaries is a participant, and
any executive officer, director or director nominee; beneficial owner of 5% or more of our stock; or any immediate family member of the foregoing individuals (each, a Related Person) has or will have an interest (other than solely as a result of being a director or a less than 10% beneficial owner of an equity interest in another entity).

The Related Person Policypolicy also contains categories of preapproved transactionsInterested Transactions that the Board has identified as not having a significant potential for an actual or potential conflict of interest or improper benefit.

In determining whether to approve or ratify anreviewing any Interested Transaction, the Audit Committee will take into account, among other factors it deems appropriate,consider whether the Interested Transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the Related Person’s interest in the transaction. No director participates in any discussion or approval of an Interested Transaction for which he or she (or an immediate family member) is a Related Person, except that the director will provide all material information concerning the Interested Transaction to the Audit Committee. There have been no transactions considered to be an Interested Transaction (excluding any pre-approved transactions) since the beginning of the Company’s 20202022 fiscal year.


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Additionally, the Company’s Code of Conduct has a detailed provision prohibitingprohibits its directors, officers, and employees from entering into transactions that are an
actual or potential conflict of interest and is available on the Company’s website at https://www.thecloroxcompany.com/who-we-are/corporate-governance/thecloroxcompany.com/company/policies-and-practices/codes-of-conduct. The Governance Guidelines require the directors to adhere to the Code of Conduct.

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Code of Conduct

The Company has adopted a Code of Conduct, which sets forth the ethical and legal standards of behavior and business practices that are required of all our directors, executives and global employees and can be found in the Corporate Governance section of the Company’s website, https://www.thecloroxcompany.com/who-we-are/corporate-governance/thecloroxcompany.com/company/policies-and-practices/codes-of-conduct, or can be obtained in print by contacting The Clorox Company, c/o Corporate Secretary, 1221 Broadway, Oakland, CA 94612-1888.

The Code of Conduct applies to all of the Company’s employees, including executives, as well as directors. We require that all Board members and employees complete

training and certify compliance with the Code of Conduct annually. We also perform an annual audit of internal compliance with our Code of Conduct.

We also have established a separate Business Partner Code of Conduct outlining our standards and expectations of our suppliers and other business partners, which can also be found at https://www.thecloroxcompany.com/who-we-are/corporate-governance/thecloroxcompany.com/company/policies-and-practices/codes-of-conduct.



Board Committees

The Board has established three standing committees: the Audit Committee, the NGCRC, and the MDCC.

Each of these committees consists only of non-management directors whom the Board has determined are independent under the NYSE listing standards and the Board’s independence standards set forth in the Company’s Governance Guidelines. Directors who serve on the Audit Committee and the MDCC must meet additional, heightened

independence and qualification criteria applicable to directors serving on these committees under the NYSE listing standards.

The charters for these committees are available in the Corporate Governance section of the Company’s website at https://www.thecloroxcompany.com/who-we-are/thecloroxcompany.com/company/corporate-governance/committee-charters, or in print by contacting The Clorox Company, c/o Corporate Secretary, 1221 Broadway, Oakland, CA 94612-1888.


The table below indicates the current members of each standing Board committee as of the date of the Annual Meeting:

Director     Audit     Nominating,
Governance and
Corporate Responsibility
     Management
Development and
Compensation
Amy Banse  
Richard H. CarmonaChair
Benno Dorer  
Spencer C. FleischerChair
Esther Lee
A.D. David Mackay
Paul Parker* 
Linda Rendle
Matthew J. Shattock 
Kathryn Tesija
Pamela Thomas-Graham
Russell J. Weiner
Christopher J. WilliamsChair
Number of meetings in fiscal year 2020966

*The Boardwill determine committee assignments for Mr. Parker, upon his election to the Board.

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Audit Committee. The Audit Committee is the principal link between the Board and the Company’s independent registered public accounting firm. The Audit Committee has the functions and duties set forth in its charter, including:

Audit Committee

Met 9 times in FY2021.

Current Committee Members

Christopher J. Williams (Chair)
Amy L. Banse
Julia Denman
A.D. David Mackay
Paul Parker
Stephanie Plaines

representing and assisting

Primary Responsibilities

The Audit Committee is the principal connection between the Board in overseeing:

and the Company’s independent registered public accounting firm. Among its other functions and duties, the Audit Committee oversees:

the integrity of the Company’s financial statements;
the independent registered public accounting firm’s qualifications, independence, and performance;
the performance of the Company’s internal audit function;
function and independent registered public accounting firm;
the Company’s systemsystems of disclosure controls and procedures and system of internal control over financial reporting;
reporting that management has established;
thethe Company’s compliance with legal and regulatory requirements relating to accounting and financial reporting matters;matters, and data privacy, cybersecurity and IT risks;
the Company’s framework and guidelines with respect to risk assessment and risk management; and
the Company’s material financial policies and actions.

The Board has determined that, with respect to fiscal year 2022, there were three audit committee financial experts, as defined by SEC rules: Christopher J. Williams, A.D. David Mackay and Paul Parker, and each member of the Audit Committee is financially literate, as defined by NYSE rules.

For fiscal year 2023, there will be five audit committee financial experts: Christopher J.Williams, A.D. David Mackay, Paul Parker, Julia Denman and Stephanie Plaines.

Nominating, Governance and Corporate Responsibility Committee

Met 5 times in FY2021.

Current Committee Members

Esther Lee (Chair)
Richard H. Carmona
Matthew J. Shattock
Kathryn Tesija

preparing

Primary Responsibilities

The NGCRC has the report required by the SEC proxy rules to be includedfunctions and duties set forth in the Company’s annual proxy statement.

The Board has determined that, with respect to fiscal year 2020, director Mr. Williams is an audit committee financial expert, as defined by SEC rules, and each member of the Audit Committee is financially literate, as defined by NYSE rules.

its charter, including:

Nominating, Governance and Corporate Responsibility Committee. The NGCRC has the functions and duties set forth in its charter, including:

identifying and recruiting individuals qualified to become Board members and recruiting them for
members;
membership on the Board;
recommending to the Board individuals to be selected as director nominees for the annual meeting of shareholders and any individuals to be elected by the Board between annual meetings;
nominees;
reviewing and recommending to the Board changes in the Governance Guidelines and the Code of Conduct;
overseeing corporate responsibility (including corporate citizenship, charitable giving, political participation, issue advocacy and lobbying), governance of the Company’s ethicsESG program,
shareholder and compliance program, includingstakeholder engagement, and the Company’s compliance with legal and regulatory requirements relating to matters other than accounting and financial reporting matters;
ethics program.
performing a leadership role in shaping the Company’s corporate governance and overseeing the evaluation of thedirector, Board and its committees;
committee evaluations; and
assistingsupporting the Board in overseeingreviewing, monitoring and engaging with management on the Company’s corporate responsibilitydevelopment of climate change and sustainability program;environmental policies, programs, goals and
assisting the Board in overseeing the Company’s engagement efforts with shareholders and other key stakeholders. progress.

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Management DevelopmentTable of Contents

Corporate Governance and Compensation Committee. The MDCC has the functions and duties set forth in its charter, including:Board Matters

Management Development and Compensation Committee

Met 5 times in FY2021.

Current Committee Members

Spencer C. Fleischer (Chair)
Richard H. Carmona
A.D. David Mackay
Kathryn Tesija
Russell J. Weiner

The MDCC has the functions and duties set forth in its charter, including:

assisting the Board in discharging its responsibilities relating to compensation of the CEO and other executive officers;
reviewing, approving and approvingoverseeing the Company’s compensation policies, plans and goals and objectives for the executive officers and directors;
overseeing the Company’s management development and succession planning processes;processes below the CEO level;
review and
discuss with management the Company’s diversity, equity and inclusion initiatives programs and key metrics and review these matters with the Board at least annually; and
evaluating, making recommendations and taking appropriate action in response to the shareholders’ advisory “say on pay” vote.


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How Our Directors Are PaidDirector Compensation

Only our non-employee directors receive compensation for their service as directors. The Company’sdirectors in the form of:

cash compensation, and
an annual grant of deferred stock units.

As part of its oversight of non-employee director compensation, program is comprised of cash compensation and an annual grant of deferred stock units.

The MDCC has the responsibility for making recommendations regarding non-employee director compensation. The MDCC reviews the form and amount of compensation of non-employee directors at least once a yearannually to ensure that the Company’s non-employee directors are compensated appropriately relative to peer companies. The MDCC retains the services of an

independent compensation consulting firm to assist it in the performance of its duties. During fiscal year 2020,2022, the MDCC used the services of Frederic W.worked with FW Cook & Co., Inc. (FW Cook). FW Cook’s work with the MDCC includedfor data analysis, and guidance and recommendations regarding compensation levels relativeas compared to our compensation peer group (see discussion regardingas defined in the peer group in theCompensation Discussion and Analysis section below)of this proxy statement, as well as trends and recent developments in the area of non-employee director compensation. Clorox generally aims to compensate non-employee directors at or near the median of the compensation peer group.


The following table sets forth information regarding compensation for each of the Company’s non-employee directors during fiscal year 2020.2022.

Name     Fees Earned
or Paid in Cash
($)(2)
     Stock
Awards
($)(3)
     Total
($)
     Fees Earned
or Paid in Cash
($)(2)
     Stock
Awards
($)(3)
     Total
($)
Amy Banse102,250155,875258,125
Amy L. Banse103,000157,000260,000
Richard H. Carmona117,250155,875273,125103,000157,000260,000
Julia Denman13,016013,016
Spencer C. Fleischer122,250155,875278,125123,000157,000280,000
Esther Lee102,250155,875258,125118,000157,000275,000
A. D. David Mackay102,250155,875258,125103,000157,000260,000
Robert W. Matschullat102,250155,875258,125
Paul Parker103,000157,000260,000
Stephanie Plaines13,016013,016
Matthew J. Shattock102,250155,875258,125278,000157,000435,000
Kathryn Tesija12,451012,451103,000157,000260,000
Pamela Thomas-Graham152,250155,875308,125
Carolyn M. Ticknor(1)47,39138,12585,516
Pamela Thomas-Graham(1)38,90539,25078,155
Russell J. Weiner102,250155,875258,125103,000157,000260,000
Christopher J. Williams117,603155,875273,478128,000157,000285,000

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(1)Ms. TicknorPamela Thomas-Graham retired from the Board effective November 20, 2019.17, 2021.
(2)The amounts reported in the Fees“Fees Earned or Paid in CashCash” column reflect the total annual cash retainer and other cash compensation earned by each director in fiscal year 20202022 and include amounts deferred into cash or deferred stock units and/or amounts issued in Common Stockcommon stock in lieu of cash, as elected by the director. The annual cash retainer is paid to each director in quarterly installments.
(3)The amounts reported reflect the grant-date fair value for financial statement reporting purposes of the annual grant of deferred stock units. Deferred stock units are shares of the Company’s Common Stockcommon stock that the director receives only upon terminating their service with the Company. Awards are granted on an annual basis at the end of each calendar year. Refer to Note 14 of the Consolidated Financial Statements contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2020,2022, for a discussion of the relevant assumptions used in calculating the grant-date fair value under applicable accounting guidance. As of June 30, 2020,2022, the following directors had the indicated aggregate number of deferred stock units accumulated in their deferred accounts for all years of service as a director, which includes deferrals of cash compensation used to acquire deferred stock units, annual awards of deferred stock units made by the Company, and additional deferred stock units credited as a result of dividend equivalents earned with respect to the deferred stock units: Ms. Banse – 3,431 units; Dr.5,355; Carmona – 21,865 units; Mr.24,765; Fleischer – 8,719 units; Ms.11,216; Lee – 7,298 units; Mr.9,427; Mackay – 3,431 units; Mr. Matschullat5,355; Parker89,491 units; Mr.932; Plaines – 92; Shattock – 2,489 units; Ms.7,108; Tesija – 56 units; Ms. Thomas-Graham – 26,322 units; Ms. Ticknor – 12,427 units; Mr.2,622; Weiner – 5,202 units;8,466; and Mr. Williams – 8,779 units.12,509.

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Board of Directors

Cash Compensation

Directors receive cash compensation, which consists of annual cash retainer amounts and any special assignment fees. of:

annual cash retainer amounts, and
any special assignment fees.

The following table lists the various retainers paid for Board service and service asin the lead independent director or a committee chairpositions set forth below during fiscal year 2020:2022.

Annual director retainer(1)     $102,250103,000
Lead independent directorIndependent chair retainer50,000175,000
Committee chair retainers:
Nominating, Governance and Corporate Responsibility Committee15,000
Audit Committee(2)23,75025,000
Management Development and Compensation Committee20,000

(1)The annual director retainer through September 30, 2019 was $100,000. The annual director retainer was increased to $103,000 effective October 1, 2019. The aggregate amount of the annual retainer for board service in fiscal year 2020 was $102,250.
(2)The annual Audit Committee chair retainer through September 30, 2019 was $20,000. The annual Audit Committee chair retainer was increased to $25,000 effective October 1, 2019. The aggregate amount of the annual retainer for service as chair of the Audit Committee in fiscal year 2020 was $23,750.

Directors who serve as a Board member, independent chair, lead independent director, or committee chair for less than the full fiscal year receive pro-rated retainer amounts based on the number of days they served in such position during the fiscal year. In addition to the retainer amounts, each non-employee director is entitled to receive a fee of $2,500 per day for any special assignment requested by the Board. No special assignment fees were paid in fiscal year 2020.2022.

Payment ElectionsElections.

Under the Company’s Independent Directors’ Deferred Compensation Plan, a director may annually elect to receive all or a portion of their cash compensation in the form of cash, Common Stock,common stock, deferred cash, or deferred stock units.

Payment in Stock.Directors who elect to receive cash compensation amounts in the form of Common Stockcommon stock are issued shares of Common Stockcommon stock based on the fair market value of the Common Stockcommon stock as determined by the closing price of the Common Stockcommon stock on the last trading day of the quarter for which the fees were earned.

Elective Deferral Program: Deferred Cash.For directors who elect deferred cash, the amount deferred is credited to an unfunded cash account that is credited with interest at an annual interest rate equal to Wells Fargo Bank, N.A.’s prime lending rate in effect on January 1 of each year. Upon termination of service as a director, the amounts credited to the director’s deferred cash account are paid out in five annual cash installments or in one lump-sum cash payment, as elected by the director.

Elective Deferral Program: Deferred Stock Units.For directors who elect deferred stock units, the amount deferred is credited to an unfunded account in the form of units equivalent to the fair market value of the Common Stockcommon stock on

the last trading day of the quarter for which the fees were earned. When dividends are declared, additional deferred stock units are allocated to the director’s deferred stock unit account

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in amounts equivalent to the dollar amount of Common Stockcommon stock dividends paid by the Company divided by the fair market value of the Common Stockcommon stock on the date the dividends are paid. Upon termination of service as a director, the amounts credited to the deferred stock unit account, which include any elective deferrals and the annual deferred stock unit grants described above, are paid out in shares of Common Stockcommon stock in five annual installments or in one lump sum, as elected by the director. Deferred stock units may only be settled in shares of Common Stock.common stock.

Equity Compensation

Each non-employee director receives a majority of their annual compensation in the form of deferred stock units. Deferred stock units are shares of the Company’s Common Stockcommon stock that the director receives only upon terminating their service with the Company. Each non-employee director receives an annual grant of deferred stock units, the value of which was increased from $152,500 to $157,000 effective October 1, 2019.units. The aggregate value of the deferred stock unit award amount earned by a non-employee director serving for the full fiscal year 20202022 was $155,875.$157,000. Awards are made as of the last business day in the calendar year and represent payment for services provided during such calendar year.

The Company believes that the use of deferred stock units provides a stronger alignment between directors and the Company’s shareholders compared to outright stock ownership since directors have no ability to sell the deferred stock units while they remain on the Board. The Company has maintained the deferred stock unit program for its directors for over 20 years.



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Directors who serve as non-employee Board members for less than the full calendar year receive pro-rated awards based on the number of full fiscal quarters they served as a non-employee Board member during the calendar year. Deferred stock units accrue dividend equivalents, and the balance of a director’s deferred stock unit account is paid out in Common Stockcommon stock only following the director’s termination of service, as described in greater detail under Payment Elections above.

Fiscal Year 20212023 Compensation Changes

As discussed above, the MDCC reviews the form and amount of compensation of non-employee directors at least once a year to ensure that the Company’s non-employee directors are being compensated appropriately relative to peer companies. The MDCC again reviewed non-employee director compensation in September 2020.2022. As part of its review, the MDCC considered the data provided by FW Cook as well as its guidance and recommendations regarding compensation levels relative to our compensation peer group as well as trends and recent developments in the area of non-employee director compensation. After taking all of this information into account, the MDCC recommended, and the Board agreed, not to increase director compensation or make other changes to the director compensation program. No other changes were made to the Company’s director compensation program.

Stock Ownership Philosophy and Guidelines for Directors

The Board believes that the alignment of directors’ interests with those of shareholders is strengthened when Board members are also shareholders. The Board therefore requires that each non-employee director, within five years of first being elected, own Common Stockcommon stock or deferred stock units that are settled only in Common Stockcommon stock having a market value of at least five times their annual cash retainer. This program is designed to ensure that directors acquire a meaningful and significant ownership interest in the Company during their tenure on the Board. Furthermore, as directors must hold the deferred stock units until termination of their service on the Board, they have aligned interests and appropriate incentives to promote long-term value for shareholders during their service as a director. As of August 31, 2020,2022, each non-employee director was in compliance with the guidelines, and in fact, the majority of our directors held Common Stockcommon stock or deferred stock units with value far in excess of this amount.

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Executive Officers

Information about our Executive Officers

The names, ages, year first elected and current titles of each of the executive officers of the Company as of September 20, 2022, are set forth below. The Company made certain changes to its executive officers in the first quarter of fiscal year 2023 as part of the streamlining of its operating model.

Name     Age     Year First
Elected
     Title
Linda Rendle442016Chief Executive Officer
Stacey Grier592019Executive Vice President – Chief Growth and Strategy Officer
Angela Hilt502020Executive Vice President – Chief Legal Officer
Kevin B. Jacobsen562018Executive Vice President – Chief Financial Officer
Kirsten Marriner502016Executive Vice President – Chief People and Corporate Affairs Officer
Eric Reynolds522015Executive Vice President – Chief Operating Officer

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Our Company

Clorox is a leading multinational manufacturer and marketer of consumer and professional products with fiscal year 2020 net sales of $6.7 billion and approximately 8,800 employees worldwide as of June 30, 2020. Clorox sells its products primarily through mass retailers, grocery outlets, warehouse clubs, dollar stores, home hardware centers, drug, pet stores, military stores, third-party and owned e-commerce channels, and distributors. Clorox markets some of the most trusted and recognized consumer brand names, including its namesake bleach and cleaning products; Pine-Sol® cleaners; Liquid-Plumr® clog removers; Poett® home care products; Fresh Step® cat litter; Glad® bags and wraps; Kingsford® grilling products; Hidden
Valley® dressings; Brita® water-filtration systems and filters; Burt’s Bees® natural personal care products; and RenewLife®, Rainbow Light®, Natural Vitality®, NeoCell® and Stop Aging Now® vitamins, minerals and supplements. The Company also markets industry-leading products and technologies for professional customers, including those sold under the CloroxPro™ and Clorox Healthcare® brand names. More than 80% of the Company’s sales are generated from brands that hold the No. 1 or No. 2 market share positions in their categories. The Company was founded in Oakland, California, in 1913 and is incorporated in Delaware.



Fiscal Year 2020 Performance

The Company’s role as a health and wellness company has never been clearer. The global COVID-19 pandemic has created unprecedented demand for our products as consumers turn to trusted sources and brands to support their safety.

Thanks to the heroic work of our entire Clorox team, especially our production employees on the front lines making and shipping our products, we were able to rise to the occasion and contribute to the safety and wellbeing of people around the globe. Our product supply team reacted early to increase production and simplify our product assortment, and we partnered with our suppliers and retailers to get product where it’s needed most.

Our performance in fiscal year 2020 was strong – we delivered sales growth of 8% and organic sales growth of 10%.

Our efforts and hard work during the COVID-19 pandemic earned us high marks among rankings and ratings organizations. We were named to the No. 1 spot in the Axios-Harris Poll 100 reputation rankings, which lists the top 100 most visible companies in the U.S. based on consumer polling, largely due to our response to the COVID-19 pandemic, and the No. 2 spot in The Harris Poll Essential 100, a ranking of corporate response to the global pandemic.




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We have also continued to demonstrate a strong trend of cash returned to shareholders2, with nearly $4 billion returned over the past five years. We also have a long track record of strong shareholder returns, as shown in the graph below.


Note: $1 invested on June 1, 2000, in Clorox stock compared to the S&P 500 index, including reinvestment of dividends

IGNITE Strategy Guided by ESG Principles

Last year, we announced our IGNITE strategy with the objective of maximizing economic profit while maintaining a commitment to Good Growth — profitable, sustainable and responsible growth. Under IGNITE, we laid out four strategic choices integrated with our ESG goals—organized around the themes of Planet, Product and People— to

sustain Good Growth over the long term. IGNITE has been a beacon helping us navigate through the uncharted territory of the COVID-19 pandemic, guiding our decision-making and allowing us to pivot quickly and respond to unprecedented demand.


IGNITE Strategic Choices

Our IGNITE Strategy centers around four strategic choices:

Fuel Growth in our brands
Innovate brand and shopping
Experiences of the future
Reimagine how we Work
Evolve our Portfolio

IGNITE ESG goals:

Our ESG goals — organized around the themes of Planet, Product, People — are integrated with the four strategic choices set forth above and guide the Company in pursuing innovative ways to meet consumer needs, helping to address some of the planet’s most pressing environmental challenges, doing more with less, and doing more to create value for all stakeholders.

Planet: We strive to be a leader in environmental sustainability with a focus on plastic and other waste reduction and science-based climate action.

Virgin packaging reduction. During fiscal year 2020, we set a goal of a 50% combined reduction in virgin plastic and fiber packaging by 2030 and launched two major projects, bleach compaction — a conversion


2

Cash returned to shareholders is defined as cash dividends paid plus treasury stock purchased, as outlined in the statements of cash flows


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Our Company

process that went forward despite the pandemic, demonstrating our commitment to sustainability – and a move to 100% recycled fiber cartons in our Glad business, which is projected to contribute approximately 15% of our reduction target.

Zero waste to landfill. 38% of our plants are currently zero waste to landfill, with a goal of 100% global plants achieving zero-waste-to-landfill status by 2025.

Renewable energy. As part of our IGNITE Strategy, we have committed to achieving 100% renewable electricity in our operations in the US and in Canada by 2025, and in November 2019, we signed a 12-year, 70-megawatt virtual power purchase agreement (VPPA) for the purchase of renewable energy beginning in 2021. This VPPA represents about half of our 100% renewable electricity goal for our operations in the U.S. and Canada and is expected to help us achieve our goal of 100% renewable electricity in our U.S. and Canadian operations in 2021, four years ahead of our original plan.

Greenhouse gas emission reduction. We’ve committed to setting and achieving greenhouse gas emission reduction targets in our operations and across our value chain that are consistent with climate science and the goals of the 2015 Paris Agreement. Reduction goals will be set in coordination with and be approved by the Science-Based Target Initiative (a partnership between UN Global Compact and other environmental non-governmental organizations) by October 2021.

Product: We strive to be a leader in responsible product stewardship, with a focus on progressive actions to enhance our own and the consumer packaged goods industry’s practices.

End animal testing. For decades, Clorox has been actively working toward a future where animal testing has no role in product development. Clorox participates in U.S. government activities to develop predictive toxicity methods to replace animal tests and holds meetings with state regulatory agencies to facilitate acceptance of animal testing alternatives. We have recently set our sights on eliminating the current regulation that requires conducting animal testing on EPA-registered disinfecting products. For example, Clorox is currently leading efforts to develop alternatives for certain safety testing protocols in collaboration with scientific experts, regulatory agencies and industry stakeholders.

Ingredient transparency. We transitioned ingredient listings for our U.S. cleaning products to the online industry portal SmartLabel, where users will now find ingredient information as well as expanded directions for use and safety data sheets. We also announced a commitment to voluntarily list ingredients on the labels of our household disinfecting products, which goes above and beyond the labeling law requirement that will take effect in 2021.

People: We strive to help our consumers and employees through purpose-led choices that enhance well-being.

Consumer well-being. Clorox is a health and wellness company at heart, and since fiscal year 2019 the number of our wellness-related product categories in U.S. households has grown by 6.5 million.

Board and executive committee diversity. Our board and executive committee are highly diverse by race, ethnicity, gender and other protected categories. Our CEO is a woman – one of 38 among the Fortune 500 -- and our Lead Independent Director is a Black woman. As of the Annual Meeting date, women comprise 38% of our director nominees and 46% of our executive committee, and 31% of our director nominees and 23% of our executive committee are comprised of ethnic minorities. Two of our executive committee members openly identify as LGBTQ.

Workforce diversity. Our 8,800 employees come from diverse backgrounds – 30% of our nonproduction managers and more than one-third of our nonproduction employees in the U.S. are ethnic minorities, and globally 44% of our nonproduction managers and over half of our nonproduction employees are women. In fact, in 2020 Forbes ranked Clorox as one of America’s Best Employers for Diversity, and Parity.org named Clorox one of The Best Companies for Women to Advance.

Clorox is committed to an inclusive and diverse workplace where people feel respected, valued and seen at all levels of the company – from our Board to our production teams. As part of our continued commitment to transparency and progress in our inclusion and diversity efforts, we have shared our Employer Equal Opportunity data, or EEO-1 data, which is submitted annually to the U.S. Equal Employment Opportunity Commission. Clorox’s EEO-1 data is available in our 2020 integrated annual report atannualreport.thecloroxcompany.com



Continues on next page

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Employee health and safety. During fiscal year 2020, we continued to invest in our No. 1 resource – our people – through wellness initiatives, such as enhanced benefits to support our employees’ total well-being, including operational safety, inclusion and engagement in the workplace, and retirement readiness. During the COVID-19 pandemic, we have prioritized our employees’ health and safety, and also offered a special incentive for our frontline teams who have been working around the clock to make and ship products to our consumers.

Employee engagement. During fiscal year 2020, we again had best-in-class employee engagement – 88% of our employees reported that they have pride in the Company, intend to stay, get intrinsic motivation from their work and would refer to the Company as a good place to work, based on our annual employee engagement survey.4

Community investment. During fiscal year 2020, Clorox donated more than $25 million in cash and product to COVID-19 relief, racial justice initiatives and community building in fiscal year 2020 in communities where we have facilities and our employees live and work.

Standing up for racial justice. Clorox has deep roots in Oakland, California (our corporate headquarters for 107 years) and Atlanta, Georgia (home of our largest manufacturing operations). In fiscal year 2020, we pledged financial donations of $3.1 million to support Black businesses in our communities, engage Black youth who represent our future and accelerate Black community access to justice and criminal justice reform. We have also developed good governance practices to determine when and how we speak out as a company on social issues, in consultation with our Board and senior management. It is important to us that when Clorox and our brands choose to take a public stance on a social issue, it demonstrates our

core value, Do the Right Thing, is undertaken with our strategic goals in mind and is impactful to our business interests.

As part of our commitment to trust and transparency, in our integrated annual report we have chosen to report our ESG performance against voluntary frameworks – namely, the Sustainability Accounting Standards Board (SASB), Task Force on Climate-Related Financial Disclosures (TCFD) and the United Nations Global Compact’s (UNGC) Ten Principles.

Governance

Our integrated IGNITE strategy is supported by an unwavering commitment to strong ESG performance overseen by the Board and NGCRC, and executed by our management team.

The NGCRC has primary responsibility for oversight of ESG matters – a responsibility that we formalized in fiscal year 2017 when we expanded the name of this committee to include “corporate responsibility” and account for the work that was already being done by this committee.
In addition to supporting the Board in its oversight of ESG progress and risk management, the NGCRC meets with management to review and discuss ESG initiatives, challenges and opportunities, so that it can advise on key ESG matters that affect all of Clorox’s stakeholders, and also briefs the Board on ESG priorities and progress on a periodic basis.
This process also incorporates feedback from shareholders and other key stakeholders on ESG priorities that we gather during our year-round engagement with our shareholders and others.

We believe that this structure reflects our long-standing values and commitment to best practices in ESG.


4As compared to 84% for consumer goods companies and 85% for Fortune 500 Perceptyx benchmark.

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Our Company

Our governance guidelines, code of conduct and other company policies, consistent with our focus on Good Growth, also establish a framework to guide our decisions and lead with our actions. Our governance profile includes these features:

Board Structure and Independence
All of our director nominees are independent, except for our CEO and Executive Chair
Split chair and CEO roles
100% independent Board committee members
Strong lead independent director can call special meetings of the Board and actively supervises meeting materials, agendas and schedules
Robust code of conduct applicable to directors, officers and employees

Board Oversight
Strong Board and management succession planning process
Rigorous stock ownership guidelines for directors and executives
Employees, directors and officers prohibited from hedging our stock, and Section 16 insiders are prohibited from pledging our stock under our insider trading policy
Shareholder Rights and Accountability
Special meeting right for shareholders
Annual election of all directors
Proactive shareholder engagement
Proxy access right for shareholders
Management proposal to remove the supermajority voting provision from the Company’s charter, consistent with governance best practices

Board Composition
Diverse Board with effective mix of skills, experiences, and perspectives
Diverse Board leadership on committees and in lead independent director role
Adopted formal Board diversity policy in fiscal year 2020
Active Board refreshment and average board tenure of 5.3 years (as of the Annual Meeting date, assuming election of all director nominees)
Effective annual Board, Board committee, and individual director evaluation process
Majority voting and director resignation policy in uncontested director elections


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Stock Ownership Information

Beneficial Ownership of Voting Securities

The following table shows asthe holdings of common stock (as of August 31, 2020 (except2022, except as otherwise indicated below), the holdings of Common Stock by (i) any entity or person known to the Company to be the beneficial owner of more than 5% of the outstanding shares of Common Stock,common stock, (ii) each director and director nominee and each of the five individualsnamed executive officers (NEOs) named in the Summary Compensation Table (the NEOs), and (iii) all directors and executive officers of the Company as a group.

As discussed in the Director Compensationsection of this proxy statement, the majority of director compensation is delivered in the form of deferred stock units, which are paid out in Common Stockcommon stock following a director’s termination of service. Because the directors cannot dispose of those shares while they serve on the Board, they are not reflected in this table. See footnote 2 below.

The address of each individual listed in the table below is 1221 Broadway, Oakland, California 94612-1888.

Name of Beneficial OwnerAmount and
Nature
of Beneficial
Ownership
(1)(2)
Percent
of Class(3)
The Vanguard Group, Inc.(4)
100 Vanguard Blvd.
Malvern, PA 19355
14,500,03411.77
BlackRock, Inc.(5)
55 East 52nd Street
New York, NY 10055
10,774,8428.74
State Street Corporation(6)
One Lincoln Street
Boston, MA 02111
8,240,9206.69
Amy Banse(2)     0     *
Richard H. Carmona(2)(7)0*
Julia Denman0*
Rebecca Dunphey20,513*
Spencer C. Fleischer(2)1,305*
Kevin Jacobsen92,218*
Esther Lee(2)0*
A. D. David Mackay(2)600*
Kirsten Marriner68,499*
Paul Parker251*
Stephanie Plaines(2)0*
Linda Rendle177,726*
Eric Reynolds114,829*
Matthew J. Shattock(2)0*
Kathryn Tesija(2)0*
Russell J. Weiner(2)0*
Christopher J. Williams(2)0*
All directors and executive officers as a group (18 persons)(8)510,191*

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Name of Beneficial Owner     Amount and Nature
of Beneficial Ownership(1)(2)
     Percent of Class(3)
The Vanguard Group, Inc.(4)
    100 Vanguard Blvd.
    Malvern, PA 1935515,841,01212.57
BlackRock, Inc.(5)
    55 East 52nd Street
    New York, NY 1005510,685,2188.48
State Street Corporation(6)
    One Lincoln Street
    Boston, MA 021118,463,9836.72
Amy Banse(2)0*
Richard H. Carmona(2)0*
Benno Dorer643,279*
Spencer C. Fleischer(2)317*
Kevin Jacobsen68,347*
Esther Lee(2)0*
A. D. David Mackay(2)1,600*
Paul Parker(7)10*
Linda Rendle84,952*
Eric Reynolds72,287*
Matthew J. Shattock(2)0*
Laura Stein219,638*
Kathryn Tesija(2)0
Pamela Thomas-Graham(2)1,778*
Russell J. Weiner(2)0*
Christopher J. Williams(2)0*
All directors and executive officers as a group (25 persons)(8)1,385,8811.09

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Stock Ownership Information

*

Does not exceed 1% of the outstanding shares.

(1)

Unless otherwise indicated, each beneficial owner listed has sole voting and dispositive power concerning the shares indicated. These totals include the following numbers of shares of Common Stockcommon stock that such persons have the right to acquire through stock options exercisable within 60 days of August 31, 2020,2022, or with respect to which such persons have shared voting or dispositive power: Mr. Dorer – 568,461 options; Mr. Jacobsen – 58,58473,373 options and shared voting and dispositive power with respect to 3,145 shares held in family trust; Ms. Marriner – 49,775 options; Ms. Rendle – 78,495149,844 options; Mr. Reynolds – 59,287 options; Ms. Stein – 186,757101,257 options; and all directors and executive officers as a group – 1,176,604413,075 options. The numbers in the table above do not include the following numbers of shares of Common Stockcommon stock that the executive officers have the right to acquire upon the termination of their service as employees pursuant to vested performance unitsat a later date that were deferred at the executive officers’ election: Mr. Dorer – 43,327; Mr. Jacobsen – 6,769;11,202; Ms. Rendle – 4,806;14,785; Mr. Reynolds – 6,993; Ms. Stein – 34,194;11,064 and all executive officers as a group – 114,539.37,051.

(2)

The numbers in the table above do not include the following numbers of shares of Common Stockcommon stock that the non-management directors have the right to acquire upon the termination of their service as directors pursuant to deferred stock units granted under the Independent Directors’ Stock-Based Compensation Plan: Ms. Banse – 3,431 shares of Common Stock;5,355; Dr. Carmona – 21,865 shares of Common Stock;24,765; Mr. Fleischer – 8,579 shares of Common Stock;11,216; Ms. Lee – 7,298 shares of Common Stock;9,427; Mr. Mackay – 3,431 shares of Common Stock;5,355; Mr. Parker – 932; Ms. Plaines – 92; Mr. Shattock – 2,489 shares of Common Stock;7,108; Ms. Tesija – 56 shares of Common Stock; Ms. Thomas-Graham – 26,322 shares of Common Stock;2,622; Mr. Weiner – 5,202 shares of Common Stock;8,446; and Mr. Williams – 8,779 shares of Common Stock.12,509. Deferred stock units are shares of the Company’s Common Stockcommon stock that the director receives only upon terminating their service with the Company. Please refer to the Director Compensation section inof this proxy statement for further details on the deferred stock units held by non-management


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Stock Ownership Information

directors. The total financial commitment of each non-management director in the Company’s Common Stockcommon stock is more fully appreciated if the number of shares of Common Stockcommon stock listed above in the column entitled “Amount and Nature of Beneficial Ownership” is added to the number of deferred stock units set forth in this footnote.

(3)

On August 31, 2020,2022, there were 125,977,040123,238,543 shares of Common Stockcommon stock outstanding.

(4)

Based on information contained in a report on Schedule 13G/A filed with the SEC on February 11, 2020,9, 2022, The Vanguard Group reported, as of December 31, 2019, sole voting power with respect to 193,921 shares,2021, sole dispositive power with respect to 15,606,56513,982,415 shares, shared voting power with respect to 50,352206,184 shares and shared dispositive power with respect to 234,447517,619 shares.

(5)

Based on information contained in a report on Schedule 13G/A filed with the SEC on February 5, 2020,1, 2022, BlackRock, Inc. reported, as of December 31, 2019,2021, sole voting power with respect to 9,258,7899,425,292 shares and sole dispositive power with respect to all shares reported.

(6)

Based on information contained in a report on Schedule 13G filed with the SEC on February 14, 2020,2022, State Street Corporation reported, as of December 31, 2019,2021, shared voting power with respect to 6,941,4726,540,255 shares and shared dispositive power with respect to 8,450,0878,225,556 shares.

(7)

Mr. ParkerRichard Carmona is not being re-nominated for re-election in accordance with the Board’s retirement age policy and, therefore, will become a director, effective be retiring from the Board as of November 18, 2020, upon his election to the Board.date of the Annual Meeting.

(8)

Pursuant to Rule 3b-7 of the Securities Exchange Act of 1934, as amended (Exchange Act), executive officers include the Company’s CEO and all executive vice presidents and senior vice presidents.This figure reflects ownership, as of August 31, 2022, except as indicated above, of the executive officers as of the date of this proxy statement, who are set forth in the Executive Officers section of this proxy statement.



Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act and SEC regulations require the Company’s directors, certain officers, and holders of more than 10% of the Company’s common stock to file reports of ownership on Form 3 and changes in ownership on Form 4 or 5 with the SEC. The reporting directors, officers, and 10% shareholders are also required by SEC rules to furnish the Company with copies of all Section 16(a) reports they file. Based solely on its review of copies of such reports received and written representations from its directors and such covered officers, the Company believes that its directors and officers complied with all applicable Section 16(a) filing requirements during fiscal year 2022, with the exception of four late Form 4s to report one transaction each for Eric Reynolds, Matt Gregory, Tony Matta and Eric Schwartz, all of which were not reported in a timely manner due to an administrative oversight.



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Executive Compensation

Proposal 2:
Advisory Vote to Approve Executive Compensation

We are seeking a non-binding, advisory vote from our shareholders to approve the compensation of our NEOs that are listed in the Compensation Discussion and Analysis section of this proxy statement. This proposal gives our shareholders the opportunity to express their views on the Company’s executive compensation and is commonly referred to as a “say-on-pay” proposal. This vote is only advisory and will not be binding upon the Company or the Board. However, the MDCC, which is responsible for designing and administering the Company’s executive compensation program, values the opinions expressed by shareholders and encourages all shareholders to vote their shares on this matter.

As discussed in the Compensation Discussion and Analysis section of this proxy statement, which begins on page 3845, the Company’s compensation programs are designed to align pay with short-performance, by delivering the majority of executive pay through “at-risk” incentive awards that help ensure realized pay is tied to attaining operation goals and long-term financial and strategic objectives to buildsustainable appreciation in shareholder value, while providing


a competitive level of compensation to recruit, retain, and motivate talented executives.value. The Board urges you to consider the factors discussed in the Compensation Discussion and Analysis section when deciding how to vote on this Proposal 2.

At our 20192021 Annual Meeting of Shareholders, our shareholders overwhelmingly approved our executive compensation policies, with approximately 92% of votes cast in favor of our proposal. We value this positive endorsement by our shareholders and believe that the outcome signals our shareholders’ support of our compensation program, and we continued our general approach to compensation for fiscal year 2020.2022. We provide our shareholders the opportunity to vote on the compensation of our named executive officersNEOs every year. It is expectedyear and expect that the next vote on executive compensation will be at the 20212023 Annual Meeting of Shareholders.



Board’s Recommendation

The Board unanimously recommends a vote FOR the advisory vote to approve executive compensation. The Company is asking its shareholders to support the compensation of the named executive officersNEOs as described in this proxy statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officersNEOs in fiscal year 20202022 and the philosophy, policies, and practices underlying that compensation, which are described in this proxy statement. The Board believes that the Company’s overall compensation process effectively implements its compensation philosophy and achieves its goals.

Accordingly, the Board recommends a vote FOR the adoption of the following advisory resolution, which will be presented at the Annual Meeting:

“RESOLVED, that the shareholders of The Clorox Company approve, on an advisory basis, the compensation of the named executive officers, as disclosed in The Clorox Company’s Proxy Statement for the 20202022 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the Summary Compensation Table, and the other related tables and disclosure.”



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Proposal 2: Advisory Vote to Approve Executive Compensation


Vote Required

The affirmative vote of a majority of the votes present in person or represented by proxy and entitled to vote on the matter is required to approve this proposal.

This vote is advisory, and therefore not binding on the Company, the Board, or the MDCC. However, the Board and the MDCC value the opinions of the Company’s shareholders and, to the extent there is any significant vote against the named executive officers’NEOs’ compensation as disclosed in the proxy statement, we will consider such shareholders’ concerns, and the MDCC will evaluate whether any actions are necessary to address thoseshareholder concerns.

The people designated in the proxy and voting instruction card will vote your shares FOR approval unless you include instructions to the contrary.



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Compensation Discussion and Analysis

Executive SummaryIntroduction

This Compensation Discussion and Analysis (CD&A) describes our executive compensation philosophy and program, the compensation decisions made under this program, and the specific factors we considered in making those decisions. This CD&A focuses on the compensation of our “named executive officers”NEOs for fiscal year 2020,2022, who were:

NameBenno Dorer(1)– Chair and Title
Linda RendleChief Executive Officer (CEO)
Kevin JacobsenKevin B. JacobsenExecutive Vice President and Chief Financial Officer (CFO)
Eric ReynoldsLinda Rendle(2) – President
Laura Stein Executive Vice President – General Counsel and Corporate AffairsChief Operating Officer
Kirsten MarrinerEric Reynolds(3)Executive Vice President and Chief People & Corporate Affairs Officer
Rebecca Dunphey(1)Senior Vice President and General Manager Household and LifestyleSpecialty Division
(1)Ms. Dunphey was hired on March 21, 2022.


Table of Contents

(1)

Executive Summary

Mr. Dorer stepped down as Chief Executive Officer and began serving as Executive Chair of the Board effective September 14, 2020.

46

(2)

Overview

Ms. Rendle was promoted to Executive Vice President, Cleaning, International, Strategy and Operations in July 2019 and subsequently promoted to President in May 2020. Ms. Rendle was appointed as Chief Executive Officer and elected to the Board of Directors effective September 14, 2020.

46

(3)

Our Company

Mr. Reynolds was promoted to

46
Fiscal Year 2022 Business Highlights47
Looking Ahead48
Our Executive Vice President, HouseholdCompensation Program48
Executive Compensation Philosophy48
How We Make Compensation Decisions49
Executive Compensation Governance52
Executive Compensation Framework55
Fiscal Year 2022 Compensation of Our Named Executive Officers56
Base Salary56
Annual Incentives56
Long-Term Incentives59
Retirement Plans60
Post-Termination Compensation61
Perquisites62
The Management Development and Lifestyle in July 2019. Mr. Reynolds was named Executive Vice President - Chief Operating Officer effective September 14, 2020.

Compensation Committee Report
62
Compensation Committee Interlocks and Insider Participation62

The Clorox Company was founded more than a century ago. We have successfully managed through significant global challenges during our 107-year history, although the last fiscal year was like no other. With the world experiencing a growing and extreme health crisis, along with significant social issues, our Company rose to the challenge. Early in the fiscal year, we introduced the Company’s IGNITE strategy, designed to continue delivering Good Growth – profitable, sustainable and responsible. Building on the previous 2020 Strategy, IGNITE aims to strengthen our advantage through strategic business choices and fully integrated ESG goals. At the beginning of our third quarter, we saw the early signs of COVID-19. As a result, we anticipated potential increases in demand and started building supply in January, before COVID-19 grew into a global pandemic. As demand grew in March, we quickly responded through substantive efforts across our businesses and every one of our functions. We supplied 100  million more disinfecting products in the first half of 2020 than we did in the same period last year – a 50% increase – along with other essential household products from our trusted brands including Brita®, Glad®, Kingsford®, and more.

We are extremely proud of the role we play, the broad set of stakeholders we’ve served and we’ve been guided by our core values to improve the lives of millions of consumers. We’ve been a force for good, contributing to the well-being of people around the world and prioritizing organizations that serve the public health. We increased our charitable company match this year so that employees could make even more meaningful contributions to the causes they support and we gave more than $25 million in foundation and cash grants, cause marking, and product donations in fiscal year 2020. Simultaneously we have cared for our own employees, over half of whom have done essential on-site work throughout the pandemic. In

these unprecedented times, we quickly responded to the evolving physical, financial and emotional needs of our employees. We provided premium pay to our frontline employees working on-site, paid broad-based incremental cash recognition bonuses, ensured employees had access to company-sponsored health insurance, assumed full cost of coverage for COVID-related testing and treatment, established a COVID relief fund, and enhanced our benefit offerings with additional tools and resources to support the health and emotional wellness of our employees and their families. And, we engaged in strong partnership with customers and supply chain partners (e.g., extending more flexible credit terms to suppliers). During this time, we were recognized as No. 1 in the Axios-Harris Poll 100 corporate reputation rankings, a testament to the breadth of positive impact across all our stakeholders.

Clorox has a long history of principles-based reward decisions and a strong pay-for-performance philosophy. Alignment of executive and employee rewards with shareholder interests is a critical principle of our longtime pay-for-performance philosophy. Over time, awards have fluctuated significantly in line with financial results, resulting in strong collective and individual accountability. In the past ten years, funding (as a percent of target) for our Annual Incentive Plan has ranged from a low of 28% to this year’s high of 200%, with average funding at 114%. Performance share unit payouts for the past 10 cycles have also varied from a 0% payout to 150% of target shares, with an average payout of 95%. While performance share payouts are formulaic, annual incentive awards are a function of both individual and company performance. For each of our named executive officers, individual performance is evaluated holistically and for 2020 included how each executive addressed challenges posed by COVID-19, their management of human capital including inclusion &


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Compensation Discussion and Analysis


Executive Summary

Overview

Clorox continued to experience unprecedented business disruption in fiscal year 2022. In fiscal year 2022, Clorox navigated through unprecedented inflationary pressures, supply chain challenges, and multiple COVID-19 waves. We implemented a broad set of actions within our control to address these issues; however, those actions couldn’t overcome the magnitude of the headwinds we faced.
Our incentive plan results reflect company performance. Our significantly below-target payout on short-term incentives and below-target payout on long-term incentives align to the disappointing business outcomes in fiscal year 2022.
The company multiplier for our short-term incentive for fiscal year 2022 was 50%. This result reflected declines in fiscal year 2022 for all three of our underlying metrics: net sales, net earnings attributable to Clorox, and gross margin. Although a material portion of the basis for the company multiplier was attributable to forces outside Clorox’s control, the Management Development and Compensation Committee chose not to apply its discretion to increase the company multiplier.
Performance share units from our long-term incentive awards vesting in 2022 paid out at 89%. The performance-based award vesting in fiscal year 2022 was based on economic profit (EP) growth during fiscal years 2020 through 2022, covering one breakout year with extremely high EP growth, one year of lower-than-expected EP growth, and one year of below-threshold EP growth.
The Management Development and Compensation Committee continues to evolve our program. As we look ahead to fiscal year 2023, anticipating continued volatility and unpredictability, we remain committed to our philosophy of pay for performance. In consideration of target performance goals for fiscal year 2023 being set below historic Clorox norms due to the challenging operating environment, we applied a payout ceiling equal to 75% of target for performance share units if a threshold adjusted EPS level is not attained over the three-year performance period. The committee will continue to evaluate incentive plan changes based on the evolution of our competitive market and Clorox’s long-term transformational business plan.

Fiscal 2022 Net Sales

$7,107M

-3% from prior fiscal year

Fiscal 2022 Net Earnings Attributable to Clorox

$462M

-35% from prior fiscal year

Fiscal 2022 Gross Margin

35.8%

-780 basis points from prior fiscal year

Three-Year Total Shareholder Return1

-2.4%

Our Company

Clorox is a leading multinational manufacturer and marketer of consumer and professional products with about 9,000 employees worldwide as of June 30, 2022. Clorox markets some of the most trusted and recognized consumer brand names, including our namesake bleach and cleaning products; Pine-Sol cleaners; Liquid-Plumr clog removers; Poett home care products; Fresh Step cat litter; Glad bags and wraps; Kingsford grilling products; Hidden Valley dressings, dips, seasonings, and sauces; Brita water-filtration products; Burt’s Bees natural personal care products; and RenewLife, Rainbow Light, Natural Vitality, and NeoCell vitamins, minerals and supplements. We also market industry-leading products and technologies for professional customers, including those sold under the CloroxPro and Clorox Healthcare brand names. More than 80% of our net sales are generated from brands that hold the No. 1 or No. 2 market share positions in their categories.

____________________

1Overall change in price per share, plus dividends, during the three fiscal years beginning July 1, 2019 and ending June 30, 2022.

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Compensation Discussion and Analysis

diversity, management of environmental risks, contributionsOur ongoing IGNITE strategy accelerates innovation in key areas to Company operationsdrive growth and strategy, as well as position-specific business outcomes.

As described above, through the efforts ofdeliver value for both our employees across the globe, we significantly over-deliveredshareholders and society. Specifically, IGNITE focuses on all of our fiscal year 2020 financialfour strategic choices to achieve long-term, profitable growth: Fuel Growth, Innovate Experiences, Reimagine Work, and Evolve Portfolio. Integrated goals and generated very strong results on our ESG- and people-related goals in addition to delivering strong shareholder returns. The payouts for our incentive compensation programs reflect those results. Our Annual Incentive Plan generated a 200% company multiplier, which represents the maximum funding level and reflects significant overachievement on all threeESG performance metrics - net sales, net earnings and gross margin. Performance share units granted in fiscal year 2017 paid out at 129% of target based on overachievement of the economic profit growth target for fiscal years 2018, 2019 and 2020.

In addition to our proactive and comprehensive response to the pandemic and evolving social issues and our outstanding overall financial and strategic performance, we continued our work on leadership succession, which culminatedare focused in the promotionareas of Linda Rendle to CEO effective September 14, 2020 following two earlier promotions that occurred during fiscal year 2020.Healthy Lives, Clean World, and Thriving Communities. See Our prior CEO, Benno Dorer, remains Executive Chair of the Board, which enables a smooth leadership transition. In addition, we promoted

Eric Reynolds to Executive Vice President, HouseholdIGNITE Strategy and Lifestyle Integrated ESG Pillars in July 2019 and to Executive Vice President - Chief Operating Officer, which was also effective on September 14, 2020. These promotions reflect our deep commitment to talent development and succession planning, which the Board views as one of its highest priorities, and ensures that the Company has the depth of leadership in place to continue our strong performance into the future.this proxy statement for more information about IGNITE.

Effective with his transition to Executive Chair on September 14, 2020, Mr. Dorer’s compensation arrangement will include the following: his base salary will remain at $1,230,000, annual incentive target will remain at 150% of base salary, and he will continue to be eligible for the same level of benefits and perquisites. In addition, he received a one-time grant of restricted stock units (RSU) valued at $500,000 that will vest over four years in equal annual installments. The RSU award was granted on September 22, 2020 at the same time as long-term incentives awards for other executives.

With her appointment to CEO, Ms. Rendle will receive a salary of $1,075,000 with an annual incentive target of 150% of base salary. Her long-term incentive award of $5,000,000 was granted on September 22, 2020 with long-term incentive awards for other executives given in conjunction with the Company’s annual year-end compensation.


Components of Our Executive Compensation ProgramFiscal Year 2022 Business Highlights

The table below outlines the components of our executive compensation program, their characteristics and summary description of these components.

ComponentCharacteristicsDescription
Base SalaryFixed component.Based on roleIn fiscal year 2022, the ongoing COVID-19 pandemic continued to cause economic and level of responsibilities,societal disruptions as well as individual performance.ongoing volatility. Significant supply chain challenges and, more recently, the conflict in Ukraine contributed to rising cost inflation and ongoing uncertainties in the marketplace.
Annual Incentives(1)Performance-based cash bonus opportunity.Based on the Company’s annualIn fiscal year 2022, our net sales (50%), net earnings from continuing operations (30%)decreased 3% and gross margin (20%) with funding ranging from 0diluted EPS decreased 33% compared to 200%the prior fiscal year in which there was elevated demand for essential household products, especially cleaning and disinfecting products, as a result of targetthe COVID-19 pandemic. Other conditions factoring into the volatile environment included ongoing uncertainty related to the global pandemic, persistently high manufacturing and individual awards modified based on individual performance.logistics costs, commodity costs, and the conflict in Ukraine, which further exacerbated supply chain challenges.
Long-Term Incentives(1)Performance share grantsWe continued our longtime commitment to providing value to shareholders through regular dividends. During fiscal year 2022, Clorox paid $571 million in dividends to shareholders. In July 2022, we announced an increase of 2% in our quarterly dividend, continuing our established trend of annual increases to the quarterly dividend for more than 20 consecutive years, and stock option awards. (2)Initial grant is based on individual performance and potential. Value at vesting is based on actual company financial and stock price performance.annual dividend payments for more than 50 consecutive years.
Guided by our IGNITE strategy, we remained focused on making significant investments in our strong brands and strategic digital capabilities to drive long-term value creation. These investments were made to support category growth and market share improvements. Clorox launched new products in 28 categories in fiscal year 2022, including Clorox disinfecting mists; Clorox multipurpose cleaner concentrate; Glad ForceFlexPlus trash bags in Cherry Blossom scent; Glad ForceFlexPlus with Clorox trash bags in Eucalyptus and Peppermint scent; Glad compostable drawstring bags (Canada); Glad to Be Green 50% ocean bound plastic recycled trash bags (Australia); Fresh Step Outstretch cat litter; Kingsford Signature Flavors charcoal, pellets and flavor boosters for charcoal and pellet grills; and Neocell collagen powders and gummies.
Other programs provided include Retirement Plans, Post-Termination CompensationAs announced in August 2021, a significant long-term investment in digital capabilities and Perquisitesproductivity enhancements—our Digital Transformation—will continue to shape our outlook for fiscal year 2023 and beyond. Clorox is investing approximately $500 million over five years beginning in fiscal year 2022 on these operating and capital expenditures. Our Digital Transformation includes replacing our enterprise resource planning system and transitioning to a cloud-based platform as well as implementing a suite of other digital technologies to generate efficiencies and better position Clorox in supply chain, digital commerce, innovation, and brand building over the long term.

(1)

Payouts underIn international markets, Clorox delivered net sales growth in fiscal year 2022 behind ongoing consumer demand for cleaning and disinfecting products, as well as other household essentials including cat litter, bags and wraps, and water-filtration products. Our international business continues to play an important strategic role, with brands holding the annualNo. 1 or No. 2 market share positions in the majority of categories and long-term incentive planscountries where we operate.

We continued to make progress on our ESG goals, which are determined based onintegrated into the achievement of objectives established byIGNITE strategy and throughout the MDCC atbusiness. Notably, to advance the beginningClean World pillar, we created an internal roadmap for our net zero and science-based targets, including engaging key business units and activating a plan to engage top suppliers to reduce emissions. Additionally, a second 12-year virtual power purchase agreement was announced, continuing Clorox’s commitment to 100% renewable electricity for our U.S. and Canadian operations. Efforts to reduce packaging waste advanced, including internal initiatives to deliver more recycle-ready materials and address post-consumer recycled content material cost and availability, as well as influence ongoing dialogue with the recycling industry through Clorox’s membership in the U.S. Plastics Pact. In support of the performance period. The performance period is one year for the cash awarded under the Annual Incentive Plan and three years for the performance shares awarded under the long-term incentive plan, both of which are further described in What We Pay: Components of Our Compensation Program. Specific financial goals cannot be changed during the performance period, except in accordance with principles set by the MDCC at the time the goals were established, which, in the case of our performance share awards, provide for adjustments in limited circumstances, including acquisitions, restructuring charges, or significant changes to generally accepted accounting principles, and only if the adjustments exceed a specified minimum financial impact to the Company.

(2)

Beginning with fiscal year 2021, the MDCC approved a change in the composition of long-term incentives for executive officers including all named executive officers, increasing the weighting on performance shares to 60%, introducing restricted share units and reducing the weighting on stock options.

Thriving Communities pillar,

Continues on next page

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this year we launched an environmental justice initiative to provide better access to green spaces for underserved communities. Through the Healthy Parks Project, The Clorox Company Foundation plans to invest in community parks in support of Clorox’s purpose and ESG focus on the interconnectedness of environmental and social sustainability.
Clorox has been broadly recognized for our corporate responsibility efforts. This includes recognition in the Human Rights Campaign Foundation’s Corporate Equality Index 2022 as one of the Best Places to Work for LGBTQ+ Equality; being listed on the 2022 Bloomberg Gender-Equality Index, which tracks the performance of public companies committed to transparency in gender-data reporting; and inclusion on Barron’s 100 Most Sustainable U.S. Companies list.

Fiscal Year 2020 Performance HighlightsLooking Ahead

In fiscal year 2023, we anticipate ongoing challenges that may impact our sales and margins, including continued uncertainty related to the COVID-19 pandemic, persistently high manufacturing, logistics, and commodity costs, continued effects from the conflict in Ukraine, evolving consumer behaviors, high levels of competition in select categories, a more competitive and evolving retail environment, changes in foreign currency exchange rates, and an uncertain macroeconomic environment in the U.S. and in many international markets.

As announced in August 2022, we will be implementing a streamlined operating model beginning in the first halfquarter of fiscal year 2020, we set the stage for growth in the back half behind strong investments in2023 to advance our robust innovationIGNITE strategy and distribution plans. We had delivered five consecutive quarters of gross margin expansion, and were on track for record annual cost savings and strong cash flow. As COVID-19 spread and was declared a global pandemic in March, our management team and committed global workforce collectively addressed spikes in demand, rising manufacturing and logistics costs, disruptions to the supply chain, safety and hygiene protocols, and more. Our product supply organization increased capacityas part of our portfolioresponse to these challenges. Our goal is to be closer to our consumers and customers so we can more effectively anticipate what’s coming and better meet their increasing expectations, understand the end-to-end implications of cleaningour choices, and disinfecting products,execute better—all while reducing costs to be a more streamlined and efficient company. The changes are essential to position Clorox for long-term success.


Our Executive Compensation Program

Executive Compensation Philosophy

A core principle of our compensation philosophy is to align pay with performance. We do so by delivering the majority of executive pay through a variety“at-risk” incentive awards that help ensure realized pay is tied to attainment of strategies including identification of additional suppliers, additional shifts, a simpler product assortmentcritical operational goals and consolidated linessustainable appreciation in shareholder value. This approach is designed to reduceaccomplish the line variation and accelerate output. The Company continued to maintain focus on operational efficiencies through record cost savings and a commitment to strong environmental, social and governance practices in a macroeconomic environment that was dominated by significantly higher demand for essential household products, in which we grew market share as consumers disproportionately chose our trusted brands.following:

Other successes for the Company in fiscal year 2020 included:

ObjectiveNet sales growth of 8%, reflecting gains across all reportable segments;How we achieve this
Pay for PerformanceA 16% increase

We reward performance that drives achievement of Clorox’s short- and long-term goals and, ultimately, shareholder value.

Align Management and
Shareholder Interests

We provide long-term, equity-based incentives and encourage a culture of ownership with stock retention guidelines. We reward executive officers for sustained company performance as measured by operating results and total shareholder return.

Attract, Retain, and Motivate
Talented Executives

We maintain market-based pay targets and a program design that allows Clorox to be a magnet for high-performing executives.

Address Risk-Management
Considerations

We motivate our executives to create long-term shareholder value and discourage behavior that could lead to unnecessary or excessive risk-taking by providing a balance of fixed and at-risk pay, with short-term and long-term performance horizons, using a variety of metrics tied to key drivers of sustainable value creation.

Support Financial Efficiency

We ensure that cash- and equity-based incentive payouts are appropriately driven by performance, and design awards to minimize unnecessary accounting charges.


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Compensation Discussion and Analysis

How We Make Compensation Decisions

Roles and Responsibilities in diluted EPSSetting Executive Compensation

Management
Development and
Compensation
Committee

The MDCC regularly reviews the design and implementation of our executive compensation program and reports on its discussions and actions to $7.36the Board. The MDCC oversees our executive compensation program; approves the performance goals and strategic objectives for our NEOs and evaluates results against those targets each year; determines and approves the compensation of our CEO (after consulting with the other independent members of the Board), our other NEOs, and other executives, including those covered by Section 16 of the Exchange Act; and approves the structure of overall incentive and equity-based plans.

The MDCC makes its determinations regarding executive compensation based on a variety of factors, including Clorox’s performance, individual executives’ performance, peer group data, and input and recommendations from $6.32the independent compensation consultant and management.

The MDCC evaluates individual performance based on the performance of the business or operations for which the executive is responsible, including the individual’s contribution to achieving ESG-related goals (as described in the prior fiscal year;

Continued focus on driving profitable sales growth, leveraging strong demand-building investments and product innovation to support category growth and market share;
Record cost savings with the Company’s 13th consecutive year of cost savings in excess of $100 million;
External recognition for our leadership in corporate responsibility (Axios-Harris Poll 100), inclusion and diversity (Forbes America’s Best Employers for Diversity), and sustainability efforts (Barron’s 100 Most Sustainable Companies in America); and
$533 million in cash dividends paid to stockholders, including a 5% increase in the quarterly dividend announced in May 2020.

How Pay Was Tied to the Company’s Performance in Fiscal Year 2020

Our fiscal year 2020 results and compensation decisions continue to illustrate application of our pay-for-performance philosophy, with pay being driven by performance in the following ways:

Fiscal Year 2020 Annual Incentive Payout.2022 Compensation of Our Named Executive Officers The annual incentive payoutsection of this proxy statement), the individual’s skill set relative to industry peers, overall experience and time in the position, the critical nature of the individual’s role, difficulty of replacement, expected future contributions, readiness for promotion to a higher level, and role relative to that of other executives.

In determining the compensation package for each of our named executive officers exceeded target dueNEOs other than our CEO, the MDCC receives input and recommendations from our CEO and our Executive Vice President and Chief People & Corporate Affairs Officer. NEOs do not have a role in the determination of their own compensation.

Board of Directors

The independent members of the Board undertake a thorough process to review our CEO’s annual performance, with each independent director providing candid feedback and observations that are then shared in aggregate with our CEO. The Board considers a variety of substantive factors it has identified as being most important for effective CEO performance, with a focus on strategy, people, and operations. The full Board discusses the evaluations of our CEO’s performance against these factors and then provides its input on CEO compensation to the company funding atMDCC.

The MDCC, after evaluating input from the maximum funding levelBoard and its independent compensation consultant, makes a final determination on our CEO’s compensation. Our CEO does not have a role in her own compensation determination other than participating in a discussion with a 200% company multiplier. Through the efforts of our employees across the globe in responseBoard regarding her performance relative to the COVID-19 pandemic, the Company significantly over-delivered on all of its FY20 financial goals, growing net sales, net earningsspecific targets and gross margins versus the prior fiscal year, as well as exceeding the annual targets establishedstrategic objectives set at the beginning of the 2020 fiscal year, which the Board considers in both its compensation determination and generating very strong resultswhen setting performance targets for the upcoming fiscal year.


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Independent
Compensation
Consultant

The MDCC retains the services of an independent compensation consulting firm to assist it in the performance of its duties. During fiscal year 2022, the MDCC used the services of FW Cook. FW Cook’s work with the MDCC included data analysis, guidance, and recommendations on the following topics: compensation levels relative to our ESG-peers, market trends in incentive plan design, risk and people-related goals as partreward structure of executive compensation plans, and other policies and practices, including the policies and views of third-party proxy advisory firms.

FW Cook has provided the MDCC with appropriate assurances and confirmation of its independent status in accordance with the MDCC’s charter and other considerations, including factors specified in the NYSE listing standards. The MDCC believes FW Cook has been independent throughout its service to the MDCC and that there is no conflict of interest between FW Cook or individuals at FW Cook and the MDCC, Clorox’s executive officers, or Clorox. FW Cook does not work for Clorox apart from its services to the MDCC.

Chief Executive Officer

Our CEO makes compensation recommendations to the MDCC for all executive officers other than herself. In making these recommendations, our IGNITE strategy, in addition to delivering strong shareholder returns established atCEO evaluates the beginningperformance of the 2020 fiscal year.executive officers and considers their responsibilities as well as the compensation analysis provided by the independent compensation consultant.

Other Members of
Management
Senior human resources management provides analyses regarding competitive practices and pay ranges, compensation and benefit plans, policies and procedures for equity awards, perquisites, general compensation, and benefits philosophy. Senior human resources, legal, and finance executives attend non-executive sessions of the MDCC meetings to provide additional perspective and expertise.

Say-on-Pay Vote and Shareholder Engagement

At our 2021 Annual Meeting of Shareholders, we asked our shareholders to approve, on an advisory basis, our fiscal year 2021 compensation awarded to our NEOs, commonly referred to as a “say-on-pay” vote. Our shareholders overwhelmingly approved the compensation to our NEOs, with approximately 92% of votes cast in favor of our proposal. We believe this outcome signals our shareholders’ support of our compensation program. We continued our general approach to compensation for fiscal year 2022, specifically our pay-for-performance philosophy and our efforts to attract, retain, and motivate our NEOs. We value the opinions of our shareholders and will continue to consider the results from advisory votes on executive compensation, as well as feedback received from our shareholders throughout the year, when making compensation decisions for our NEOs.

Use of Market Data

The MDCC uses a peer group of consumer products companies (the compensation peer group) to help determine competitive compensation rates for our executive officers, including the NEOs. The compensation peer group was selected by the MDCC, with input from FW Cook. The compensation peer group is used to evaluate both the levels of executive compensation and compensation practices within the consumer products industry.

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The MDCC reviews the compensation peer group annually, and makes adjustments as needed, to ensure the companies included continue to meet relevant criteria. To determine the compensation peer group for each year, the MDCC considers companies that:

Hold leadership positions in branded consumer products.

Fiscal Year 2020 Long-Term Incentive Payout. These awards were granted in September 2017, and payment was determined in August 2020,Are of reasonably similar size based on performance over the period commencing July 1, 2017,market capitalization and ending June 30, 2020. Our three-year performance share results were above the financial targetrevenue.

Compete with Clorox for the three-year average annual economic profit growth rateexecutive talent.
Have executive positions similar in breadth, complexity, and yielded a payoutscope of 129%responsibility to those of target.

Clorox.



Fiscal Year 2020 Compensation of Our Named Executive Officers

For fiscal year 2020, management2022, the compensation peer group was composed of the following 18 companies:

Campbell Soup CompanyGeneral Mills, Inc.McCormick & Company, Inc.
Church & Dwight Co., Inc.The Hershey CompanyNewell Brands Inc.
Colgate-Palmolive CompanyHormel Foods CorporationPost Holdings, Inc.
Conagra Brands, Inc.The J.M. Smucker CompanyRevlon, Inc.
Edgewell Personal Care CompanyKellogg CompanyReynolds Consumer Products Inc.
The Estée Lauder Companies Inc.Keurig Dr Pepper Inc.S.C. Johnson & Son Inc.

At the time of our peer group review in May 2022, Clorox was at the 34th percentile for revenue and 45th percentile for market capitalization compared with the compensation peer group in effect for the fiscal year 2022 compensation analysis.

Management engaged Aon Hewitt to obtain and aggregate compensation data for the compensation peer group.group in fiscal year 2022. This data was used to advise the MDCC on setting target compensation for our named executive officers.NEOs for fiscal year 2022. FW Cook reviewed this information and performed an independent compensation analysis of the compensation peer group data to advise the MDCC. Although each individual component of executive

compensation is reviewed, particular emphasisour overall goal is placed on targeting total direct compensation within 15% of the medianto target total direct compensation competitive with the median of the compensation peer group, which we view to be a competitive range around our target positioning.group. Other factors, such as an executive’s level of experience, may result in target total direct compensation for individual named executive officersNEOs being set above or below this median range.


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Executive Compensation Governance

We are focused on creating an effective compensation program that successfully aligns our key strategic objectives with the interests of our shareholders. We believe our executive pay is reasonable and provides appropriate incentives to our executive officers to achieve our financial and strategic goals without encouraging them to take excessive risks in their business decisions. To reinforce this, we have adopted policies that guide our compensation practices as summarized below.

We Do…We Do Not…
Vary our incentive plans: We use different metrics and performance horizons for the goals within our annual and long-term incentive plans.
Focus on financial measures relevant to shareholder value: We use economic profit as a rigorous long-term incentive metric and net sales, net earnings, and gross margin for our annual incentive metrics.
Require meaningful ownership: We apply stringent stock ownership and retention guidelines for all our executives.
Operate clawback provisions: Both our annual and long-term incentive plans include clawback provisions.
Use a double-trigger: Change-in-control provisions for all equity awards require both change in control and termination.
Engage with shareholders: We have ongoing discussions with key institutional investors, including on the topic of compensation.
Engage an independent consultant: The MDCC engages a consultant and assesses their independence annually.
Provide employment contracts: All executives are employed at will.
Reprice stock options: Any stock option re-pricing would require shareholder approval in advance.
Pay unearned dividends: No dividends or dividend equivalents are paid on unvested equity awards.
Pay tax gross-ups: No tax gross-ups are provided by Clorox to executives under any circumstances.
Provide excessive benefits or perquisites: Benefits and perquisites are limited, reflecting market benchmarks.
Permit hedging or pledging: Our policy prohibits hedging and pledging of Clorox stock.
Encourage inappropriate risk-taking: The MDCC and its independent consultant annually review incentive design for unintended consequences.

Tally Sheets. To help ensure our executive compensation design is aligned with our overall compensation philosophy of pay for performance and total compensation levels are appropriate, the MDCC annually reviews compensation tally sheets for each of our NEOs. These tally sheets outline current target total compensation, the potential wealth creation of long-term incentive awards granted to our officers under various potential stock prices, and the potential value of payouts under various termination scenarios. These tally sheets help provide the MDCC with a comprehensive understanding of all elements of our compensation program and enable the MDCC to consider changes to our compensation program, arrangements, and plans considering best practices and emerging trends.

Stock Award Granting Practices. Clorox grants long-term incentive awards each September at a regularly scheduled MDCC meeting, which typically occurs during the third week of the month. The meeting date is the effective grant date for the awards, and the exercise/grant price is equal to the closing price of our common stock on that date.

The MDCC may also occasionally grant equity-based awards at other times to recognize, retain, or recruit executive officers.

Executive Stock Ownership Guidelines. To maintain alignment of the interests of our executive officers and our shareholders, all executive officers are expected to build and maintain a significant level of direct stock ownership. Ownership levels may be achieved over time in a variety of ways, such as by retaining

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stock received upon the exercise of stock options or the vesting of stock awards or by purchasing stock in the open market. At a minimum, executive officers are expected to establish and maintain direct ownership of common stock having a value equal to a multiple of each executive officer’s annual base salary: six times base salary for the CEO, three times base salary for NEOs and non-NEO members of the Clorox Executive Committee, and two times base salary for other executives. The following table reflects the guidelines and our NEOs’ ownership requirement status, as of September 19, 2022:

NameOwnership Guideline
(Salary Multiple)
Guideline Met
Linda Rendle(1)6xNo
Kevin Jacobsen3xYes
Eric Reynolds3xYes
Kirsten Marriner3xYes
Rebecca Dunphey(2)3xNo
(1)Ms. Rendle became subject to a higher ownership requirement upon her appointment as CEO effective September 14, 2020 (from three times to six times base salary).
(2)Ms. Dunphey was hired on March 21, 2022, and the ownership requirement of three times base salary became effective immediately.

Ownership levels are based on shares of common stock owned by the NEO or held pursuant to Clorox plans, including performance share units (PSUs) that have vested and been deferred for settlement. Unexercised stock options and units that have not vested due to time or performance restrictions are excluded from the ownership calculations.

Retention Requirements. Executive officers are required to retain a certain percentage of shares obtained upon either the exercise of stock options or the release of restrictions on PSUs and restricted stock units (RSUs). All executive officers are expected to retain 75% of net shares acquired after tax withholding until the minimum ownership level is met. After attaining the minimum ownership level, our CEO must retain 50% of net shares acquired after tax withholding until retirement or termination, and other executive officers must retain 25% of net shares acquired after tax withholding for one year after receipt.

Securities Trading Policy and Prohibition on Hedging and Pledging. To ensure alignment of the interests of our shareholders with all of our directors, officers, employees, and consultants, our Insider Trading Policy does not permit any director, officer, employee, or consultant of Clorox either (1) to trade in the stock or other securities of any company when aware of material nonpublic information about that company, including Clorox as well as any customers or suppliers of Clorox or firms with which Clorox may be negotiating a major transaction, or (2) to engage in short-term or speculative transactions or derivative transactions involving Clorox stock. This policy includes prohibitions on options trading and hedging and restrictions and cautions on pledging Clorox stock as collateral.

The Insider Trading Policy’s prohibition on engaging in hedging transactions in Clorox securities covers the purchase of a financial transaction instrument, or otherwise engaging in a transaction that hedges or offsets, or is designed to hedge or offset, any decrease in the market value of Clorox’s equity securities that were granted as part of the individual’s compensation or that the individual holds directly or indirectly. The following transactions are expressly prohibited by this policy:

Short sales (selling Clorox securities you do not own).
Transactions involving publicly traded options or other derivatives whose value is tied to Clorox securities, including trading in or writing puts or calls on Clorox securities.
Pre-paid forward contracts.
Collars.

Directors, executive officers, the principal accounting officer, and 10% beneficial owners of Clorox common stock are also prohibited from borrowing against the value of any Clorox stock they own using a margin account or other pledge of Clorox stock as collateral.

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What We Pay: ComponentsTable of Our Contents

Compensation ProgramDiscussion and Analysis

Trading of Clorox’s securities by directors, executive officers and certain other employees who are so designated from time to time (collectively, Insiders) is permitted only during announced trading periods or in accordance with a previously established trading plan that meets SEC requirements. At all times, including during announced trading periods, Insiders are required to obtain preclearance from our chief legal officer or corporate secretary prior to executing any transactions in Clorox securities, unless those sales occur in accordance with a previously established trading plan that meets SEC requirements.

Clawback Provisions. Effective February 9, 2021, the MDCC adopted a Clawback Policy related to incentive compensation granted, promised, or paid to certain current and former executive officers (and others as the MDCC may determine) on or after the effective date. Under the terms of the Clawback Policy:

In the event a covered individual engages in conduct materially detrimental to Clorox (including, but not limited to, the name, business interests, or corporate, brand, business, or other reputation of Clorox), the MDCC may recoup incentive compensation paid to such individual at any time up to three years after the end of the year in which it vested or was paid.
In the event of a restatement of Clorox financial statements, the MDCC may recoup incentive compensation paid to a covered individual during the three-year period preceding the announcement of the restatement that would not have been paid based upon the restated results if the covered individual’s fraud or intentional misconduct was a significant contributing factor to the restatement.

Certain of our existing compensation plans and agreements, including the AIP and our long-term incentive plan award agreements, contain a provision providing for clawback of the incentive compensation following a restatement of Clorox financial statements. The Clawback Policy incorporates such existing provisions without any material changes, to consolidate all clawback-related provisions into a single policy.

Tax Deductibility Limits on Executive Compensation. Section 162(m) of the Internal Revenue Code (IRC) limits the federal income tax deductibility of compensation paid to our covered employees to $1 million per year. In setting executive compensation, the MDCC does not take this limit on deductibility into account.

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THE CLOROX COMPANYCompensation Mix. - 2022 Proxy StatementA substantial portion of our target total direct compensation for our executives is at-risk variable compensation, with 86% of compensation for our CEO and 76% of compensation for all of our other named executive officers being at-risk. Base salary is the only fixed direct compensation component, as outlined in the following charts, which reflect target compensation for fiscal year 2020.



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Compensation Discussion and Analysis

Executive Compensation Framework

A substantial portion of our target total direct compensation for our executives is variable, with 88% of compensation at risk for our CEO and 82% of compensation at risk on average for our other NEOs. Base salary is the only fixed component of direct compensation.

Component and RationaleCompensation Mix - CEO
Proportion(1)
     Compensation Mix - Average of All Other NEOsNEO(2)
Proportion(1)
Performance
Measures
Performance
Period
Characteristics

Base Salary

Fixed pay to attract and retain talent, based on role, level of responsibilities, and individual performance.

N/A
N/AFixed cash

Annual Incentives

Variable pay to incent and recognize performance in areas of short-term strategic importance.

Annual net sales (50%)
Net earnings (30%)
Gross margin (20%)
Individual performance goals

One Year

Performance-based cash

Long-Term Incentives

Equity-based pay to incent and recognize performance in areas of long-term strategic importance, promote retention and stability, and align executives with shareholders.

Three-year annual economic profit growth rate
Variation in underlying stock price due to overall business results
Three YearsPSUs, stock options, and RSUs

(1)Compensation mixProportion represents the actual base salary, target annual incentive award, and grant date fair market value of actual long-term incentivesincentive awards granted in fiscal year 2020.2022 (with PSUs measured at target). Percentages are rounded. Refer to the Summary Compensation Table below for further details on actual compensation.
(2)Represents the average of all NEOs active on June 30, 2022, other than the CEO.

Additional elements of our executive compensation program include retirement plans, post-termination compensation, and perquisites as appropriate to support our executive compensation philosophy. Further detail about each element is provided in the discussion below:

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Fiscal Year 2022 Compensation of Our Named Executive Officers

Base Salary. Salary

The MDCC generally seeks to establish base salaries for our named executive officers within 15% ofNEOs competitive with the median of the compensation peer group, which we view to be a sufficiently wide competitive range to ensure that salariesgroup. Salaries vary in relation to each executive’s specific role, level of experience, and sustained performance.performance over time. For fiscal year 2020,2022, base salary changes within this target pay range were approved by the MDCC in September 20192021 and went into effect in September 2019.2021.

Name     FY 2022
Base Salary(1)
     Increase in
FY 2022(2)
Linda Rendle$1,125,000         4.7%
Kevin Jacobsen$740,0005.7%
Eric Reynolds$740,0005.7%
Kirsten Marriner$650,0004.0%
Rebecca Dunphey(3)$600,000
(1)Annualized salary as of June 30, 2022.
(2)Increase relative to salary as of June 30, 2021.
(3)Salary upon hire, as of March 21, 2022.

After conducting a review for Mr. Dorer and evaluating hisBased on company performance and overall Company performanceduring fiscal year 2022, management has proposed holding NEO salaries at their current level (with no increases for fiscal year 2019 in light of his competitive pay positioning,2023), and the MDCC approved a base salary increasehas agreed. Instead of 2.5%increases to $1,230,000 effective September 2019. The annual base salary increases for our other named executive officers represented a combination of merit increases and market adjustments in light of competitive pay positioning and ranged from 2.5% to 12.2% with an average increase

of 6.5%. The actual base salaries earned by our named executive officersguaranteed compensation, in fiscal year 2020 are listed2023 our NEOs’ opportunity for increased compensation will be focused on at-risk, performance-based pay from the short- and long-term incentive programs.

In addition to her annual salary, Ms. Dunphey received a one-time cash sign-on payment of $750,000 as part of her hire, subject to clawback upon resignation or termination for cause prior to completing one year of employment, to compensate for expected compensation she would otherwise have received in the Salary column of the Summary Compensation Table.short term from her former employer had she not terminated her employment there to join Clorox.

Annual Incentives. IncentivesThe Company

Clorox provides annual incentive awards to our named executive officersNEOs under the Annual Incentive Plan.AIP. Payouts under the Annual Incentive PlanAIP are based on the level of achievement of Companycompany performance goals set annually by the MDCC, notsubject to exceed the stockholder-approvedshareholder-approved maximums. These performance goals are tied to Board-approved corporate financial performance goals and individual objectives, which are described below.objectives.

Annual Incentive Design. Our annual incentive programThe AIP balances financial performance with the individual performance of each of our named executive officers. Financial metrics include net sales (weighted at 50%), net earnings (weighted at 30%) and gross margin (weighted at 20%).NEOs. The amounts actually paid under the Annual Incentive PlanAIP are based on the following factors:

(1)A target awardvalue for each named executive officer,NEO, which is the base salary multiplied by thean annual incentive target (Target Award).


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(2)The Company’sClorox’s performance measured against pre-established corporate financial goals (Financial Performance(Company Multiplier). The Financial PerformanceCompany Multiplier can range from 0% to 200% based on an objective assessment of Companycompany performance versus goals established by the MDCC at the beginning of the year.
(3)The named executive officer’s individual performance (Individual Performance Multiplier) is based primarily on the performance of the operations or functions under the individual’sNEO’s responsibility and(Individual Multiplier). The Individual Multiplier can range from 0% to 150%. The Individual Multiplier is determined by the MDCC and typically has a narrow range, which makes its impact on the total payout significantly smaller than the Company Multiplier: Over the past three years, the range for Individual Multipliers for the NEOs was 90% to 115%, compared to 50% to 200% for the Company Multiplier during the same period.

0% to 150%. The Individual Performance Multiplier is also determined by the MDCC and typically has a much narrower range, which makes its impact on the total payout significantly smaller than the Financial Performance Multiplier. Historically, the MDCC approved individual multipliers for the CEO at no more than 110% over the previous fiveTarget Award years. For fiscal year 2020, the MDCC approved individual multiplier for the CEO was 100%.

The final individual Annual Incentive Plan payout is determined by the following formula:


Over the past three years, the range for the Individual Performance Multipliers for the named executive officers was 90% to 115%. By comparison, the range for the Financial Performance Multiplier during this same time period was 67% to 200%.

Each element of the annual incentive formula is further described below.

Base Salary. The named executive officer’s actual fiscal year 2020 base salary is the starting point for the annual incentive calculation.

Annual Incentive Target. Each year, the MDCC sets an annual incentive target level for each named executive officerNEO as a percentage of their base salary, based on an assessment of median bonusshort-term incentive targets in the compensation peer group and other factors such as individual experience, as noted above.experience. The annual incentive target level is generallytypically set near the median of bonusshort-term incentive targets for comparable positions in the compensation peer group. The table below sets forth the targets for the fiscal year 2020 annual incentive awards.



Named Executive OfficerAnnual Incentive
Target (% of
Base Salary)
Benno Dorer – Chair and Chief Executive Officer                    150%
Kevin B. Jacobsen – Executive Vice President – Chief Financial Officer85%
Linda Rendle – President(1)125%
Laura Stein – Executive Vice President, General Counsel and Corporate Affairs70%
Eric Reynolds – Executive Vice President, Household & Lifestyle(2)100%

(1)Ms. Rendle’s target increased from 80% to 95% effective July 2019 with her promotion to Executive Vice President, Cleaning, International, Strategy and Operations, and from 95% to 125% with her promotion to President in May 2020. Effective September 14, 2020, Ms. Rendle was appointed to Chief Executive Officer and her annual incentive target increased to 150% at that time.
(2)Mr. Reynolds’ target increased from 75% to 85% effective July 2019 with his promotion to Executive Vice President, Household & Lifestyle, and from 85% to 100% in May 2020. Effective September 14, 2020, Mr. Reynolds was named Executive Vice President - Chief Operating Officer.

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Financial PerformanceCompany Multiplier. At the beginning of each fiscal year, the MDCC sets financial goals for the Annual Incentive PlanAIP based on targets approved by the Board. At the end of the year, the MDCC reviews the Company’sClorox’s results against the goals set at the beginning of the year.year and approves the final Company Multiplier.

For fiscal year 2020,2022, the MDCC established financial goals to drivefor net sales, net earnings, and gross margin as described in greater detail below, in order to drive sustainable, profitable growth and short- and long-term total stockholdershareholder returns. The Financial Performance Multiplier is based on the following metrics.

Net sales weighted at 50%,
Net earnings weighted at 30% and
Gross margin weighted at 20%.

The MDCC believes this mixThis combination of metrics effectively balances a focus on both top-line and bottom-line performance. In selectingConsistent with our standard practice for over a decade, fiscal year 2022 targets for our AIP metrics were set equal to our Board-approved fiscal year 2022 budget. Setting targets equal to budget aligns the AIP with the Board’s approval of an appropriate expected outcome for the year and Clorox’s financial outlook as communicated to investors at the beginning of each fiscal year.

While fiscal year 2022 targets for all three AIP metrics were lower in absolute terms compared to fiscal year 2021 results, this was the due to an unprecedented year-over-year comparison, with fiscal year 2021 impacted by COVID-driven sales volumes, and settinguncertainty around the financial goalsvolatility of the Annual Incentive Plan,business environment, including supply chain conditions and inflation. Our actions to rebuild share and mitigate cost inflation were expected to be incorporated by stages throughout the MDCC carefully considered whetheryear, versus the goals appropriately align withsteep and immediate impacts of inflation we experienced starting as the goals of the long-term

incentive program so that the overall compensation design does not encourage participants to take unnecessary or excessive risk or actions that are inconsistent with the Company’s short- and long-term strategic and financial objectives.fiscal year opened.

Fiscal year 2020 targets for net sales and net earnings were set slightly above prior year’s actual results, and gross margin target was the same as prior year’s target, reflecting increasingly competitive retail landscape, focus on strategic business choices and driving operational efficiencies. Our strong management planning and crisis management capabilities, our quick response to growing demand, and the heroic efforts of our people around the world to make and ship unprecedented amounts of our products drove performance significantly above those targets and generated commensurate funding for our incentive compensation programs. We funded our Annual Incentive Plan at the maximum funding level with a 200% company multiplier, with significant overachievement on all three performance metrics - net sales, net earnings and gross margin.


Fiscal year 20202022 financial goals for the Annual Incentive Plan,AIP, the potential range of payouts for achieving those goals, and the actual results as determined by the MDCC were as follows:

Annual Incentive
Financial Goals (in millions)
Goal     0%
(Minimum)
     100%
(Target)
     200%
(Maximum)
     Actual(1)
Net Sales (weighted 50%)   $6,115$6,264    $6,390$6,740
Net Earnings (weighted 30%)$769$800$832$922
Gross Margin (weighted 20%)41.6%43.6%45.1%45.6%

2022 Annual Incentive Financial Goals
(in millions)
   Weight   Threshold
(0%)
   Target
(100%)
   Maximum
(200%)
   Actual(1)   Result(2)
Net Sales50%$6,693$7,120$7,547$7,107100%
Net Earnings30%$543$662$782$4620%
Gross Margin20%36.3%40.3%44.3%35.8%0%
Company Multiplier50%
(1)Results exclude the fiscal year 2022 net impact of the change in accounting for share-based payments (ASU 2016-09), US and Argentina tax reform, hurricane insurance claim, Nutranext acquisition, and Aplicare and Healthlink divestituresfollowing items on net sales, net earnings, and gross margin.margin: variance from budget in our Digital Transformation, foreign exchange, and accounting for equity-based compensation (based on Accounting Standards Update 2016-09). For fiscal year 2022, the impact of these exclusions was too small to affect the final payout.
(2)Due to the volatility of our business environment starting in FY20 and the resulting unpredictability of results, the funding curve for each of the three AIP metrics includes a flat slope around the target value (a “landing pad”) where results slightly above and below target result in 100% funding. For fiscal year 2022, the landing pads were plus or minus 1% variance versus target for Net Sales, plus or minus 2% variance versus target for Net Earnings, and plus or minus 50 basis points versus target for Gross Margin. Actual results for Net Sales were within the landing pad range for that metric, resulting in 100% funding.

Individual Performance Multiplier. Consistent with our pay-for-performance philosophy, the annual incentiveAIP payouts are determined by financial results multiplied bythe Company Multiplier and an Individual Performance Multiplier. Based on its evaluation of individual performance, the MDCC reviewed and approved the Individual Performance Multiplier for each named executive officerNEO to reflect the officer’s individual contributions in fiscal year 2020.2022. In determining the multiplier for individual performance, the MDCC carefully

evaluates several performance factors against objectives established at the beginning of the year. Individual performance for each of our named executive officersNEOs is evaluated holistically and for 20202022 included how each executive addressed continuing challenges posed by COVID-19, theirCOVID-19; ESG-related achievements such as management of human capital including diversity &and inclusion and management of environmental risks,risks; contributions to company operations and strategy, as well asstrategy; and position-specific business outcomes.



Beginning in fiscal year 2022, as part of the holistic performance assessment of each member of the Clorox Executive Committee (including NEOs), the MDCC determined our executives’ annual performance will be assessed in part based on each executive’s contribution toward certain ESG-related metrics from our IGNITE scorecard for the applicable fiscal year. The IGNITE scorecard is an internal list of metrics (both ESG-related and otherwise) selected annually by the Board, reflecting areas we plan to prioritize during the year, and is intended to help align our near-term focus and facilitate incremental progress toward our long-term strategic objectives. The IGNITE scorecard measures progress toward objectives through quantitative and qualitative key performance indicators supporting our IGNITE strategy, and, while our IGNITE scorecard is not publicly available, our progress on many of these objectives is reported publicly

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on the Clorox Company ESG Data Hub. Clorox has integrated ESG into our IGNITE strategy because we believe in the strategic link between our societal impact and value creation. We strive to maintain top-third ESG leadership among our peer companies by driving continued progress against our goals while considering emerging stakeholder expectations. See Our IGNITE Strategy and Integrated ESG Pillars in this proxy statement for more information about IGNITE.

We hold ourselves accountable by ensuring ESG components of our IGNITE scorecard link to executive compensation. The full board assesses the company’s performance on the IGNITE scorecard, including our ESG accomplishments. At the beginning of fiscal year 2022, goals related to ESG metrics from the IGNITE scorecard relevant to each NEO’s role and responsibilities were embedded in each NEOs’ fiscal year 2022 priorities. Scorecard results, and the executive’s role in achieving such results, informed the MDCC’s assessment of individual multipliersperformance and the Individual Multiplier for each executive. We expect the MDCC’s philosophy on the incorporation of ESG-related metrics into the assessment of individual performance will evolve over time as we consider ways to best align the compensation of our NEOs with our long-term goals.

A performance summary for each NEO for fiscal year 2020 are2022 is provided in the table below along with a performance summary for each named executive officer. While under normal circumstances, individual multipliers would have averaged above 100% given the outstanding individual contributionsbelow.

by our named executive officers throughout the year, the MDCC elected to apply negative discretion to the Annual Incentive Plan award for the named executive officers by capping the cash awards at a 100% individual multiplier, in recognition of the broader macroeconomic outlook.



Named Executive OfficerName     Individual
Performance
Multiplier
     Performance Summary
Benno Dorer – Chair and Chief Executive OfficerLinda
Rendle
100%LedLinda provided strong leadership in a year of unprecedented inflation and volatility, taking a set of decisive actions to set up the organization through turnarounds on key businesses and proactive preparedness and real-time responsecompany not only to rebuild margin over time but also strengthen its capabilities in the wide-ranging impactslong run. Clorox delivered top line results that met expectations. While we generated profitability below expectations, we returned to margin expansion in the second half of the pandemic, resulting in significantyear as the benefit from price increases in productionstarted to addressflow through. Despite the in-year challenges, Clorox maintained strategic focus on delivering its IGNITE strategy, including record-high results on its consumer demand while keepingvalue metric (CVM) and critical ESG-related progress, such as signing a second virtual power purchase agreement, gaining approval for science-based targets, achieving pay equity globally, and maintaining our people safe. Delivered outstanding financial results, strong progress across ESG-related goals and successfully completed development of his successor.superior safety track record.
Kevin B.
Jacobsen – Executive Vice President, Chief Financial Officer
100%Provided strong stewardship related to our success on all financialKevin guided the company through the most challenging inflationary period, facing historic volatility and cost savings targets in FY20. Createdincreases. He created significant value through capital management, restructuringkey actions that delivered accelerated free cash flow, including extending supplier payment terms and refinancing $1.1B outstanding debt and completing the sale of several properties. We delivered two quarters of sequential margin improvement driven by pricing and cost savings. Kevin oversaw the execution of another virtual power purchase agreement and serves as the executive sponsor for our credit facility, executing a $500M debt offering and extending our payment terms. Led work to accelerate our achievement of 100% renewable energy by a few years to FY21.HOLA employee resource group (ERG).
Linda Rendle – PresidentEric
Reynolds
100%Led development and rollout of the IGNITE strategy, positioning the companyEric led gains in operational performance, returning supply to accelerate growth while further embedding ESG priorities in the business. Provided outstanding leadership throughdeliver our best customer service levels since the pandemic began while driving speedgross margin improvement via cost savings, pricing, and agility while keeping people atsupply chain rationalization. Retail execution also improved, with five straight quarters of increases in distribution points. Under his leadership, many of our business units launched sustainable innovation and we transitioned eight plants to Zero Waste to Landfill. Eric is leading Elevate, our $500 million digital and productivity transformation with progress and value delivery on track. He also serves as the center. Delivered outstanding results across the businesses.chair of our I&D Committee and an executive sponsor for two ERGs.
Laura Stein – Executive Vice President, General Counsel and Corporate AffairsKirsten
Marriner
100%Led significant workKirsten continued to successfully managelead our people agenda, keeping people safe and well through optimized benefits (e.g., new flexible time off program, expanded health benefits, etc.). She championed the impactsevolution of our inclusion and diversity agenda into inclusion, diversity, equity & allyship (IDEA) and recruited a new leader while delivering on our commitment to fair and equitable pay, resulting in continued achievement of pay equity globally. Kirsten has led one of the pandemic, including strong collaboration with a varietyElevate pillars, driving our future of external stakeholders. Delivered significant value through various legal cases. Led strong progress onwork that includes our ESG prioritiesapproach to hybrid work, talent, culture, and had an active role in our company’s response to racial injustice, leading key elements of our action plan.overall experience.
Eric Reynolds – Executive Vice President, Household & LifestyleRebecca
Dunphey
100%Successfully led turnarounds on key businesses (e.g., KingsfordBecca joined Clorox at the end of Q3. The business results of her division were strong. Her early impact has been very positive including design and Glad), with outstanding results across mostimplementation of hissuccessful pricing, adjustment of business units. Was a strong contributorunit strategies in response to developingmarket conditions and operationalizing the IGNITE strategy, driving Fuel Growth and multi-type innovation. Serves as executive sponsor for sustainability, and progress is strong on key metrics.

Final Individual Annual Incentive Plan Payouts. In accordance with the formula described above, the final annual incentive calculations and payouts for our named executive officers in fiscal year 2020 are found in the table below. The Financial Performance Multiplier was 200% in fiscal year 2020, which resulted in final payouts that exceeded target. These payouts are also reflected in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table.

Named Executive Officer     Base Salary     Annual Incentive
Target (As a %
of Base Salary)
     Financial
Performance
Multiplier
     Individual
Performance
Multiplier
     Final Annual
Incentive
Plan Payout
Benno Dorer – Chair and Chief Executive Officer   $1,230,000                    150%             200%             100%    $3,690,000
Kevin B. Jacobsen – Executive Vice President
– Chief Financial Officer
$600,00085%200%100%$1,020,000
Linda Rendle – President(1)$800,000125%200%100%$1,343,262
Laura Stein – Executive Vice President,
General Counsel and Corporate Affairs
$670,00070%200%100%$938,000
Eric Reynolds – Executive Vice President,
Household & Lifestyle(2)
$700,000100%200%100%$1,028,350

(1)Ms. Rendle’s target is prorated for fiscal year 2020 dueadjusting commercial strategies to her promotions: from 80% to 95% effective July 2019 with her promotion to Executive Vice President, Cleaning, International, Strategy and Operations and from 95% to 125% with her promotion to Presidentpreserve sales in May 2020.
(2)Mr. Reynolds’ target is prorated for fiscal year 2020 due to his promotion: from 75% to 85% effective July 2019 with his promotion to Executive Vice President, Household & Lifestyle, and from 85% to 100% in May 2020.spite of severe new supply disruptions.

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Final AIP payouts. We funded the AIP at a 50% Company Multiplier, reflecting our achievement on each of the three performance metrics.

NEO     Base Salary     Annual
Incentive
Target
(% of Salary)
     Company
Multiplier
     Individual
Multiplier
     Final Annual
Incentive
Plan Payout
Linda Rendle$1,125,000           150%         50%      100%$843,750
Kevin Jacobsen$740,00090%50%100%$333,000
Eric Reynolds$740,000100%50%100%$370,000
Kirsten Marriner$650,00080%50%100%$260,000
Rebecca Dunphey(1)$600,00070%50%100%$58,685
(1)Ms. Dunphey’s AIP payment for fiscal year 2022 is prorated based on her hire date of March 21, 2022.

Long-Term Incentives. IncentivesEach year, we

We provide long-term, equity-based incentive compensation to our named executive officers. These awards have been made in the form of performance shares and stock options,NEOs, which we believe align Companyaligns Clorox performance and executive officer compensation with the interests of our stockholders.shareholders. These incentive awards also support the achievement of our long-term corporate financial goals. Equity awards are granted under Clorox’s 2005 Stock Incentive Plan.

The MDCC annually reviews the costs of, and potential shareholder dilution attributable to, our long-term incentive program to ensure the overall program is financially efficient and aligned with those of our compensation peer group. The MDCC also seeks to calibrate the long-term incentive program design to drive performance and deliver awards that are competitive with the median of the compensation peer group. Actual long-term incentive award targets for individual NEOs may vary from the median based on a variety of factors, such as the NEO’s performance over time, individual experience, critical nature of their role, and expected future contributions.

Name     Target Value
Linda Rendle$6,100,000
Kevin Jacobsen$2,000,000
Eric Reynolds$2,300,000
Kirsten Marriner$1,300,000
Rebecca Dunphey(1)$2,500,000
(1)Represents a one-time RSU award of $2,500,000, reflecting primarily a buyout of existing equity awards Ms. Dunphey forfeited upon termination of her prior employment plus an inducement to join Clorox.

Like annual incentive awards, actual long-term incentive award payouts vary from the target based on how Clorox performs against pre-established targets. The value of payouts also varies based on changes in the market price of our common stock.

For fiscal year 2020, the MDCC determined that our named executive officers would receive 50%2022, NEOs received 60% of the value of their total annual long-term incentive award granted in performance shares and 50%PSUs, 20% in stock options. Beginning with fiscal year 2021, the MDCC approved a changeoptions, and 20% in the composition of long-term incentives for executive officers including all named executive officers, to increase the weighting on performance shares from 50% to 60%, reduce the weighting on stock options to 20% and introduce restricted share units at 20% weighting. The newRSUs. This equity mix provides additional balance in the long-term incentive program, increasing the program’s efficiency, improvingbalancing retention value and more closely aligningalignment to peers’ weighting for stock options while continuing to reinforceof equity types with reinforcement of long-term company performance.

From time to time, we grant additional time-based restricted stock unitsRSUs for special purposes for both executive and non-executive officers, such as in connection with a promotion or as a replacement for compensation forfeited by an externally recruited executive at a prior employer.

The MDCC annually reviewsPerformance share units. PSUs align the costs of, and potential stockholder dilution attributable to, our long-term incentive program to ensure that the overall program is financially efficient and in line with thatinterests of our compensation peer group. The MDCC also seeks to calibrateNEOs with the long-term incentive program design to drive performanceinterests of our shareholders because the number of shares earned and deliver appropriate rewards relativethe shares’ potential value are tied to the compensation peer group. In determining the total value of the long-term incentive opportunity for each named executive officer, the MDCC reviews the compensation peer group data presented by both management and the independent compensation consultant for each role and considers recommendations by our CEO for the other named executive officers.

The MDCC’s goal is to make long-term incentive awards that are generally competitive with the median of the compensation peer group. Actual long-term incentive award target levels for individual named executive officers may vary from the median based on a variety of factors, such as the named executive officer’s sustained performance, individual experience, critical nature of their role, and expected future contributions. Like annual incentive awards, actual long-term incentive award payouts vary from the target based on how the Company performs against pre-established targets. The value of payouts will also vary based on changes in the market price of our Common Stock. The MDCC does not consider the amount of outstanding performance shares,

stock options, and restricted stock currently held by a named executive officer when making annual awardsachievement of performance shares and stock options because such amounts represent compensation attributable to prior years.

Long-Term Incentive Award. The long-term incentive awards granted to our named executive officers for fiscal year 2020 were made in September 2019. The MDCC considered factors such as the executive’s role, level of experience, and sustained performance,targets, as well as the compensation peer group market data,changes in determining each named executive officer’s long-term incentive award. For fiscal year 2020, the long-term incentives for our named executive officers, excluding our CEO, ranged in value from $1,250,000 to $2,000,000. Mr. Dorer received a long-term incentive award valued at $5,900,000. The long-term incentives awarded to our named executive officers in fiscal year 2020 are listed in the Stock Awards and Option Awards columns of the Summary Compensation Table.

Performance Shares. Performance shares are grants of restrictedClorox stock units thatprice. PSUs pay out after a three-year performance period only if the CompanyClorox meets pre-established financial performance goals.

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The performance metric for the fiscal year 2022 awards, granted in September 2021, is EP growth during the performance period of July 2021 through June 2024. This metric directly supports our corporate strategy and long-term financial goals which are described below. Economic profit (EP)and correlates to stock price performance is measured relative to a three-year average annual growth rate that is established atover the beginning of the cycle and held constant. Forlong term.

Solely for purposes of the PSU performance shares,metric, EP is defined as earnings before interest and taxes, adjusted for non-cash restructuring charges, times one minus the tax rate, less capital charge. The potential payout can range from 0% to 200%This internal calculation of target.

We believe thatEP for the PSU performance shares align the interests of our named executive officersmetric holds management accountable for asset impairments, aligning payouts with the interestsimpact of balance sheet-related decisions. It differs from, and therefore may not reconcile with, the external calculation of EP used in our stockholders because the number of shares earnedpress releases and the shares’ potential value are tied to the achievement of performance targets. As discussed above, the performanceSEC filings.

The EP target for the awards granted in September 2019 isfirst year of the performance period was set as a three-year annualbase dollar value, with EP growth rate target informed by our three-year financial long-range plan and the budget developed by management, which is reviewed and approved by the Board. In setting the performance targets set for the performance shares,second and third years. Performance against target (whether dollar value or growth rate) will be measured for each year, generating three annual payout percentages. The three annual payout percentages will be averaged to determine the MDCC reviewsfinal payout percentage for the budget and long-range plan and seeks to appropriately align the performance goals with the objectives of the Annual Incentive Plan, so that the overall compensation design does not encourage participants to take unnecessary or excessive risk or actions that are inconsistent with the Company’s short- and long-term strategic and financial objectives. The MDCC believes its use of growth in EP as a metric provides rigor and an ability to align performance with pay over the three-year performance period.

The payout of the performance share awards granted in September 2019 is subject solely to the Company’s achievement of a three-year EP annual growth rate target



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during the performance period of July 2019 through June 2022.fiscal year 2022 awards. The payout percentage ranges from 0%, if the minimumthreshold EP value or growth target is not met,achieved, to a maximum of 200% of the target number of shares.

For the grant madefiscal year 2020 awards, granted in September 2017,2019, the performance metric was EP growth during the performance period of July 2019 through June 2022. EP performance was measured relative to a three-year average annual growth rate target established at the beginning of the cycle and held constant throughout the three-year period. The MDCC approved payout levels tied to 5.6%a 1.6% average annual EP growth target for the three-year performance period commencingfrom July 20172019 through June 2020. The MDCC believes this metric directly supports the Company’s corporate strategy and long-term financial goals and correlates to stock price performance. The 3-year average annual EP target was subsequently adjusted to 6.5% in accordance with predetermined criteria established by the MDCC at the time initial grants2022.

were approved as set forth in the grant agreements for the impact of the Nutranext acquisition in April 2018, fiscal year 2018 net impact of hurricanes, Argentina tax reform, Healthlink divestiture, the Tax Cuts and Jobs Act that went into effect January 1, 2018, the adoption of Accounting Standard Codification 842 - Leases, and certain net adjustments related to certain trade expenses. In August 2020,2022, the MDCC certified thata final payout for the 2019 awards of 89% of target, based on the average of the annual EP growth ratepayout percentages for the three-year performance period was 10.9%, inclusive of the predetermined adjustments, which exceeded the adjusted growth rate of 6.5%, resultingthree fiscal years in the MDCC certifying a payout of 129% of target for the 2017 grants.performance period.

Annual EP GrowthAdjusted(1)
Actual EP
Growth
Payout
Performance share unitsThreshold
(0%)
Target
(100%)
Maximum
(200%)
FY20 Economic Profit Growth Rate   -13.4%     1.6%     9.1%     17.0%     200%
FY21 Economic Profit Growth Rate-13.4%1.6%9.1%-3.4%66%
FY22 Economic Profit Growth Rate-13.4%1.6%9.1%-56.1%0%
Three-Year Average Annual Economic Profit Growth Rate1.6%89%
(1)

In accordance with predetermined criteria established by the MDCC at the time initial awards were approved, annual growth rates were adjusted for the impacts of the following Events (as defined in the 2019 PSU award agreements): a fiscal year 2021 non-cash impairment charge in the Better Health Vitamins, Minerals and Supplements business and acquisition of a majority share in a joint venture in the Kingdom of Saudi Arabia in July 2020. For the three-year performance period ended June 30, 2022, the impact of other defined Events—a fiscal year 2021 non-cash charge related to investments and arrangements made with a Professional Products business unit supplier, the fiscal year 2021 net impact of an insurance settlement for hurricanes during fiscal year 2018, and the fiscal year 2021 closure of our Dominican Republic business—was too small to affect the final payout.


Performance Shares     Target     Adjusted
Target
     Achievement     Payout
3-Year Annual Economic Profit Growth Rate5.6%6.5%10.9%129%

Stock Optionsoptions. Stock options align the interests of our named executive officersNEOs with those of our stockholdersshareholders because the options only have value if the price of the Company’sClorox stock increases after the stock options are granted. Stock options vest in 25% increments over a four-year period, (beginningbeginning one year from the date of grant)grant, and expire ten years from the date of grant. In fiscal year 2020,

Restricted stock units. RSUs align the MDCC awarded stock options to our named executive officers as partinterests of our annual long-term incentive plan. Information on allNEOs with those of our shareholders because the value of RSUs increases or decreases as the price of Clorox stock option grants is shownchanges. RSUs vest in 25% increments over a four-year period, beginning one year from the Grantsdate of Plan-Based Awards table.grant.

Retirement Plans

Our named executive officersNEOs participate in the same tax-qualified retirement benefit programs available to all other United States-based salaried and non-collectively bargained hourly employees. The Company’semployees, plus an additional executive-only plan. Our retirement plans are designed to provide replacement income upon retirement and to be competitive with programs offered by our peers.

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In addition, becauseTable of Contents

Compensation Discussion and Analysis

Because the Internal Revenue Code (IRC)IRC limits the amount of benefitsbenefit value that canmay be contributed to and paid from a tax-qualified retirement plan, the CompanyClorox also provides our executive officers, including our named executive officers,NEOs, with additional retirement benefits intended to restore amounts that would otherwise be payable under the Company’sour tax-qualified retirement plans if the IRC did not have limits on includable compensation and maximum benefits. We call these plans “restoration plans” because they restore total executive retirement benefits to the same percentage level provided to our salaried employees who are not limited by IRC restrictions.

ABelow are brief descriptiondescriptions of each of our retirement programs is set forth below.programs. Each of our named executive officersNEOs participates in these retirement programs, withexcept for the exception of the Supplemental Executive RetirementClorox Company Pension Plan.

The Clorox Company Pension Plan. Plan. The Clorox Company Pension Plan (the Pension Plan) is a cash balance pension plan that was frozen effective June 30, 2011. This freeze did not affect the benefits previously accrued under the Pension Plan, which remain fully funded.

In fiscal year 2023, we will begin to transition administration of the Pension Plan to an insurance company specializing in pension fund management. All benefits earned under the Pension Plan will be protected during this change, meaning it will not impact the value of individual plan participants’ benefits. This transition is regulated by the IRS through a standard pension plan termination process and typically takes 18 to 24 months.

The Clorox Company 401(k) Plan. Plan. After the Pension Plan was frozen in June 2011, the Clorox Company 401(k) Plan (the 401(k) Plan) became the primary retirement plan for the Company. The CompanyClorox. Clorox makes an annual fixed contribution of 6% of eligible pay and a matching contribution of up to 4% of eligible pay to eligible employees.

Nonqualified Deferred Compensation Plan. Plan. Under the Nonqualified Deferred Compensation Plan (the NQDC), eligible employees may voluntarily defer receipt of up to 50% of base salary and up to 100% of their annual incentive awards. In fiscal year 2020, deferredDeferred amounts couldcan be invested in a manner that generally mirroredmirrors the funds available in the 401(k) Plan. The NQDC permits the CompanyClorox to contribute amounts that exceed the IRC compensation limits in the tax-qualified plansplan through a 401(k) restoration provision for those employees deferring at required levels in the plan.

Supplemental Executive Retirement Plan. The Supplemental Executive Retirement Plan (the SERP), a defined benefit plan, was closed to new participants effective April 2007 and, effective June 30, 2011, was frozen with regard to pay and offsets, while still accruing age and service credits. Benefits under the SERP have historically been calculated as an annuity based on a percentage of average compensation adjusted by age and years of service and offset by the annuity value of Company contributions to the tax-qualified retirement plans and by Social Security. Effective July 1, 2011, the SERP was replaced by. Only our executive officers participate in the Executive Retirement Plan (the ERP), which is described below. Moving from the SERP to the ERP created a defined contribution structure that is more closely aligned with the benefits provided by the


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Company’s compensation peer group. In March 2018, the SERP was amended to provide that designated participants whose service as an executive of the Company is succeeded by service as a consultant or advisor will be entitled to receive age and service credits while serving as a consultant or advisor for purposes of accruing an early retirement benefit under the SERP, provided that they have attained a minimum of 25 years of service and be at least 50 years old at the time that service as a consultant or advisor commences. As of July 1, 2020, only two of our named executive officers are still eligible for the SERP.

Executive Retirement Plan. Our executive officers (including named executive officers) participate in the ERP.(ERP). Under the ERP, the CompanyClorox makes an annual contribution of 5% of an eligible participant’s base salary and annual incentive award into the plan.

Further details about the provisions of the Pension Plan, NQDC, SERP, and ERP are provided in the Overview of Pension Benefits and the Overview of the Nonqualified Deferred Compensation Plans sections below.

Post-Termination Compensation

The CompanyClorox has a severance plan (the Severance Plan) that provides our named executive officersNEOs with post-termination payments if the named executive officers’NEOs’ employment is terminated by the CompanyClorox other than for cause. These payments are intended to provide a measure of financial security following the loss of employment, which we believe is important to attract and retain executives. The severance benefits are designed to be competitive with the compensation peer group and external market practices.

The CompanyClorox also has an Executive Change in Control Severance Plan (the CIC Plan), which provides severance benefits to certain eligible executives of the Company,Clorox, including all of the Company’s named executive officers,NEOs, if their employment with the CompanyClorox is involuntarily terminated

in connection with a change in control of the Company.Clorox. In addition to helping mitigate the financial impact associated with termination after a change in control, these benefits further align the interests of our executive officers with the interests of our stockholdersshareholders by providing incentives for retention, for business continuity purposes. Under the CIC Plan, a named executive officer isNEOs are eligible for change in control severance benefits if their employment is terminated in connection with a change in control, either by the CompanyClorox without cause or by the named executive officerNEO for good reason. See the Potential Payments Upon Termination or Change in Control section of the CD&A for additional information.

Perquisites

We provide our named executive officers with other limited benefits we believe are competitive with the compensation peer group and consistent with the Company’s overall executive compensation program. These benefits allow our named executive officers to proactively manage their health, work more efficiently, and, in the case of the financial planning program, help them optimize the value received from our compensation and benefits programs. These perquisites are a Company car or car allowance, paid parking at the Company’s headquarters, an annual executive physical exam, reimbursement for health club membership, and financial planning services.

Compensation Philosophy

A core principle of our compensation philosophy is to align pay with performance. We do so by delivering the majority of executive pay through “at-risk” variable incentive awards that help ensure realized pay is tied to attainment of critical operational goals and sustainable appreciation in stockholder value. In fiscal year 2020, approximately 86% of the targeted compensation for our CEO and approximately 72% of the targeted compensation for our other named executive officers was directly tied to the achievement of short- and long-term operating goals and total stockholder return. This approach is designed to accomplish the following:


ElementObjective
Pay for PerformanceReward performance that drives achievement of the Company’s short- and long-term goals and, ultimately, stockholder value.
Align Management and Stockholder InterestsAlign the interests of our executive officers with our stockholders by using long-term, equity-based incentives, encourage a culture of ownership with stock retention guidelines, and reward executive officers for sustained Company performance as measured by operating results and total stockholder return.
Attract, Retain, and Motivate Talented ExecutivesMaintain market-based pay targets and program design that allow the Company to be a magnet for high-performing executives.
Address Risk-Management ConsiderationsMotivate our executives to create long-term stockholder value and discourage behavior that could lead to unnecessary or excessive risk-taking by providing a balance of fixed and at-risk pay, and short-term and long-term performance horizons, using a variety of metrics tied to key drivers of sustainable value creation.
Support Financial EfficiencyHelp ensure that cash- and equity-based incentive payouts are appropriately supported by performance, and design awards in a way that is intended to minimize unnecessary accounting charges and maximize the extent to which compensation payments are tax-deductible to the Company.

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What We Have and Don’t Have – Elements of Our Executive Compensation Program

The following elements of our executive compensation program reflect our continued commitment to our compensation philosophy:

What We Have

An executive compensation program designed to further the Company’s strategy and mitigate inappropriate risk;
Different metrics and performance horizons for the goals within our annual and long-term incentive plans;
Use of economic profit as a rigorous long-term incentive metric and net sales, net earnings and gross margin for our annual incentive metrics;
Stringent stock ownership and retention guidelines for all of our executives;
A prohibition on speculative transactions involving the Company’s stock, including hedging and pledging;
Stock options that vest over a four-year period and have an exercise price equal to fair market value of our Common Stock on the date of grant;
Clawback provisions in both our annual and long-term incentive plans;
Double-trigger change-in-control provisions for all equity awards;
Reasonable cash severance provisions to support talent retention and attraction objectives, promote orderly succession planning, and avoid individual negotiation with exiting executives, thus eliminating the need for individual employment agreements;
Modest perquisites supported by sound business rationale;
Annual review of our executive compensation program by the MDCC; and
Use of an independent compensation consultant who does not provide any additional consulting services to the Company.

What We Don’t Have

Employment contracts for any executives;
Stock option re-pricing without stockholder approval;
Payment of dividends or dividend equivalents on unvested or unearned performance shares or restricted stock; and
Tax gross-ups for any executive officers.



How We Make Compensation Decisions

Roles and Responsibilities in Setting Executive Compensation

Management Development and Compensation Committee. The MDCC is made up entirely of independent directors as defined by our Governance Guidelines and NYSE listing standards. The MDCC regularly reviews the design and implementation of our executive compensation program and reports on its discussions and actions to the Board. In particular, the MDCC (i) oversees our executive compensation program, (ii) approves the performance goals and strategic objectives for our named executive officers, evaluates results against those targets each year, and determines and approves the compensation of our CEO (after consulting with the other independent members of the Board) and our other named executive officers, as well as other executive officers and any other officers covered by Section 16 of the Exchange Act, and (iii) makes recommendations to the Board with respect to the structure of overall incentive and equity-based plans.

The MDCC makes its determinations regarding executive compensation after consulting with management and the MDCC’s independent compensation consultant (as further described below), and its decisions are based on a variety of factors, including the Company’s performance, individual executives’ performance, peer group data, and input and recommendations from the independent compensation consultant.

The MDCC evaluates individual performance based on the performance of the business or operations for which the executive is responsible, the individual’s skill set relative to industry peers, overall experience and time in the position, the critical nature of the individual’s role, difficulty of replacement, expected future contributions, readiness for promotion to a higher level, and role relative to that of other executive officers.

In determining the compensation package for each of our named executive officers other than our CEO, the MDCC receives input and recommendations from our CEO and our Executive Vice President – Chief People Officer. Named executive officers do not have a role in the determination of their own compensation, but named executive officers other than our CEO do discuss their individual performance objectives and results with our CEO.

Board of Directors. The independent members of the Board undertake a thorough process during which they review our CEO’s annual performance, and each independent director provides candid feedback and observations that are shared in aggregate with our CEO. The Board considers a variety of substantive factors it has identified as being most important for effective CEO performance, with a focus on strategy, people, and operations. The full Board discusses the evaluations of our CEO’s performance against these factors and then provides its compensation recommendations to the MDCC.


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The MDCC, after evaluating the Board’s recommendations and receiving input from the independent compensation consultant, then makes a final determination onPerquisites

We provide our CEO’s compensation. Our CEO does not have a role in his own compensation determinationNEOs with other than participating in a discussion with the Board regarding his performance relative to specific targets and strategic objectives set at the beginning of the fiscal year, which the Board considers in both its compensation determination and when setting performance targets for the upcoming fiscal year.

Independent Compensation Consultant. The MDCC retains the services of an independent compensation consulting firm to assist it in the performance of its duties. During fiscal year 2020, the MDCC used the services of FW Cook. FW Cook’s work with the MDCC included data analysis and guidance and recommendations on the following topics: compensation levels relative to our peers, market trends in incentive plan design, risk and reward structure of executive compensation plans, and other policies and practices, including the policies and views of third-party proxy advisory firms. See the Independence of the Compensation Consultant section below for a discussion of FW Cook’s independence from management.

Chief Executive Officer. Our CEO makes compensation recommendations to the MDCC for all executive officers other than himself. In making these recommendations, our CEO evaluates the performance of each executive officer and considers their responsibilities as well as the compensation analysis provided by the independent compensation consultant.

Other Members of Management. Senior human resources management provides analyses regardinglimited benefits competitive practices and pay ranges, compensation and benefit plans, policies and procedures for equity awards, perquisites, general compensation, and benefits philosophy. Senior human resources, legal, and, from time to time, finance executives attend non-executive sessions of the MDCC meetings to provide additional perspective and expertise.

Independence of the Compensation Consultant

Pursuant to its charter, the MDCC is authorized to retain, oversee, and terminate any consultants as it deems necessary, as well as to approve the fees and other

retention terms of any such consultants. Prior to retaining a compensation consultant or any other external advisor, from time to time as the MDCC deems appropriate but at least annually, the MDCC assesses the independence of the advisor from management. In evaluating FW Cook, the MDCC’s compensation consultant, the MDCC took into consideration all factors relevant to FW Cook’s independence, including the following factors specified in the NYSE listing standards:

other services provided to the Company by FW Cook or any of its affiliates;
the fees paid by the Company to FW Cook as a percentage of FW Cook’s total revenue;
the policies and procedures of FW Cook that are designed to prevent a conflict of interest;
any business or personal relationship between individuals at FW Cook performing consulting services for the MDCC and an MDCC member;
any ownership of Company stock by the individuals at FW Cook performing consulting services for the MDCC; and
any business or personal relationship between FW Cook or individuals at FW Cook performing consulting services for the MDCC and an executive officer of the Company.

FW Cook has provided the MDCC with appropriate assurances and confirmation of its independent status in accordance with the MDCC’s charter and other considerations. The MDCC believes that FW Cook has been independent throughout its service to the MDCC and that there is no conflict of interest between FW Cook or individuals at FW Cook and the MDCC, the Company’s executive officers, or the Company.

Our Peer Group

The MDCC uses a peer group of consumer products companies (the compensation peer group) to help determine competitive compensation rates for the Company’s executive officers, including the named executive officers. The compensation peer group was selected by the MDCC based on the factors described below, with input from FW Cook. The compensation peer group is used to evaluate both the levels of executive compensation and compensation practices within the consumer products industry.


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For fiscal year 2020, the compensation peer group was composed of the following 18 companies:

Avon Products, Inc.(1)General Mills, Inc.McCormick & Company, Incorporated
Campbell Soup CompanyThe Hershey CompanyMolson Coors Beverage Company(1)
Church & Dwight Co., Inc.Hormel Foods CorporationNewell Rubbermaid Inc.
Colgate-Palmolive CompanyThe J.M. Smucker CompanyRevlon, Inc.
Edgewell Personal CareKellogg CompanyS.C. Johnson & Son, Inc.
The Estee Lauder Companies Inc.Keurig Dr. PepperTupperware Brands Corporation(1)

(1)In May 2020, the Committee approved changes in the peer group by adding Conagra Brands, Post Holdings and Reynolds Consumer Products, and removing Avon Products Inc., Molson Coors Beverage and Tupperware Brands Corporation, with changes taking effect for fiscal year 2021 and executive compensation decision-making starting with that cycle.

As of June 30, 2020, the Company was at the 35th percentile for revenue, 69th percentile for net income, and 75th percentile for market capitalization compared with the compensation peer group in effect for the fiscal year 2020 compensation analysis.

The MDCC annually reviews and adjusts the compensation peer group as appropriate to ensure that the companies continue to meet the relevant criteria. To determine the compensation peer group for each year, the MDCC considers companies that:

hold leadership positions in branded consumer products;
are of reasonably similar size based on market capitalization and revenue;
compete with the Company for executive talent; and
have executive positions similar in breadth, complexity, and scope of responsibility to those of the Company.

Other Executive Compensation Policies and Practices

Tally Sheets. To help ensure that our executive compensation design is alignedconsistent with our overall compensation philosophy of pay for performance and that total compensation levels are appropriate, the MDCC annually reviews compensation tally sheets for each of our named executive officers. These tally sheets outline current target total compensation (including the compensation elements described above), the potential wealth creation of long-term incentive awards granted to our officers under various potential stock prices, and the potential value of payouts under various termination scenarios. As such, these tally sheets help provide the MDCC with a comprehensive understanding of all elements of the Company’s compensation program and enable the MDCC to consider changes to the Company’s compensation program, arrangements, and plans in light of best practices and emerging trends. The MDCC may consider the information presented in the tally sheets in determining future compensation.

Results of 2019 Advisory Vote on Executive Compensation. At our 2019 Annual Meeting of Stockholders, we asked our stockholders to approve, on an advisory basis, our fiscal year 2019 compensation awarded

to our named executive officers, commonly referred to as a “say-on-pay” vote. Our stockholders overwhelmingly approved the compensation to our named executive officers, with approximately 92% of votes cast in favor of our proposal. We value this positive endorsement by our stockholders of our 2019 executive compensation policiesprogram: an annual executive physical exam, reimbursement for health club membership, a company car or car allowance, paid parking at our headquarters, and believe thatfinancial planning services. These perquisites are market-competitive and beneficial to Clorox by enabling our NEOs to proactively manage their health, work more efficiently, and optimize the outcome signals our stockholders’ support ofvalue received from our compensation program. We continued our general approach to compensation for fiscal year 2019, specifically our pay-for-performance philosophy and our efforts to attract, retain, and motivate our named executive officers, taking into account the say-on-pay results as well as specific feedback from our stockholders. We value the opinions of our stockholders and will continue to consider the results from this year’s and future advisory votes on executive compensation, as well as feedback received throughout the year, when making compensation decisions for our named executive officers.

Stock Award Granting Practices. The Company awards long-term incentive grants each September at a regularly scheduled MDCC meeting, which typically occurs during the third week of the month, or about six weeks after the Company has publicly reported its annual earnings. The meeting date is the effective grant date for the awards, and the exercise/grant price is equal to the closing price of our Common Stock on that date.

The MDCC may also make occasional grants of stock options and other equity-based awards at other times to recognize, retain, or recruit executive officers.

Executive Stock Ownership Guidelines. To maintain alignment of the interests of the Company’s executive officers and our stockholders, all executive officers, including the named executive officers, are expected to build and maintain a significant level of direct stock ownership. Ownership levels can be achieved over time in a variety of ways, such as by retaining stock received upon the exercise of stock options or the vesting of stock awards or by purchasing stock in the open market. At a minimum, executive officers are expected to establish and maintain direct ownership of Common Stock having a value, based on the closing market price of the


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stock on the first business day of fiscal year 2020, equal to a multiple of each executive officer’s annual base salary. The current minimum ownership guidelines are as follows.

Chief Executive Officer and Executive Chair of the Board6x annual base salary
Executive Officers3x annual base salary
Other Senior Executives2x annual base salary

Ownership levels are based on shares of Common Stock owned by the named executive officer or held pursuant to Company plans, including performance shares that have vested and been deferred for settlement. Unexercised stock options and shares that have not vested due to time or performance restrictions are excluded from the ownership calculations.

As of the date of this proxy statement, Messrs. Dorer, Jacobsen and Reynolds and Ms. Stein have met the required ownership levels. Ms. Rendle became subject to a higher threshold with her promotion to the Executive Committee in fiscal year 2017 and her ownership threshold increased from 2 times annual base salary to 3 times annual base salary required for executive officers other than the CEO. In addition, with her appointment to Chief Executive Officer effective September 14, 2020, Ms. Rendle is now subject to the stock ownership requirement at 6 times her annual base salary.

Retention Ratios. Executive officers, including our named executive officers, are required to retain a certain percentage of shares obtained upon either the exercise of stock options or the release of restrictions on performance shares and restricted stock, after satisfying applicable taxes. Our CEO and Executive Chair of the Board are expected to retain 75% of shares acquired (after taxes) until the minimum ownership level is met. After attaining the minimum ownership level, our CEO and Executive Chair of the Board must retain 50% of any additional shares acquired (after taxes) until retirement or termination. Other executive officers must retain 75% of shares acquired (after taxes) until the minimum ownership levels are met and thereafter must retain 25% of shares acquired (after taxes) for one year after receipt.

Securities Trading Policy; Prohibition on Hedging and Pledging. To ensure alignment of the interests of our stockholders with all of our directors, officers, employees and consultants, including our named executive officers, the Company’s Insider Trading Policy does not permit any director, officer, employee or consultant of the Company, including any of the Company’s executive officers, either (1) to trade in the stock or other securities of any company when aware of material nonpublic information about that company, including the Company as well as any customers or suppliers of the Company or firms with which the Company may be negotiating a major transaction or (2) to engage in short-term or speculative transactions or derivative transactions involving the Company’s stock and

includes prohibitions on options trading and hedging. Restrictions and cautions have also been set forth in this Policy on pledging the Company’s stock as collateral.

The Policy’s prohibition on engaging in hedging transactions in Company securities covers the purchase of a financial transaction instrument, or otherwise engaging in a transaction that hedges or offsets, or is designed to hedge or offset, any decrease in the market value of the Company’s equity securities that were granted as part of the individual’s compensation or that the individual holds directly or indirectly. The following transactions are expressly prohibited by the Policy: (1) short sales (selling Company securities you do not own), (2) transactions involving publicly traded options or other derivatives whose value is tied to the Company’s securities, including trading in or writing puts or calls on the Company’s securities, (3) pre-paid forward contracts and (4) collars. Directors, executive officers, the principal accounting officer and 10% beneficial owners of the Company’s common stock are also prohibited from borrowing against the value of any Company stock that they own through the use of a margin account or other pledge of Company stock as collateral.

Trading of the Company’s securities by directors, executive officers and certain other employees who are so designated from time to time and are informed of their status by the office of the Company’s general counsel is permitted only during announced trading periods or in accordance with a previously established trading plan that meets SEC requirements. At all times, including during announced trading periods, directors, executive officers and certain other employees notified by the office of the Company’s general counsel are required to obtain preclearance from the Company’s general counsel or corporate secretary prior to entering into any transactions in Company securities, unless those sales occur in accordance with a previously established trading plan that meets SEC requirements.

Clawback Provisions. Under our Annual Incentive Plan and long-term incentive plan, in the event of a restatement of financial results to correct a material error or other factors as described in the long-term incentive plan, the MDCC is authorized to reduce or recoup an executive officer’s award, as applicable, to the extent that the MDCC determines such executive officer’s fraud or intentional misconduct was a significant contributing factor to the need for a restatement.

Tax Deductibility Limits on Executive Compensation. Section 162(m) of the IRC limits the federal income tax deductibility of compensation paid to our covered employees to $1  million per year. In setting executive compensation, the MDCC considers Company performance, individual performance and other factors identified in more detail in How We Make Compensation Decisions and does not take this limit on deductibility into account.


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Table of Contentsbenefits programs.


The Management Development and Compensation Committee Report

As detailed in its charter, the Management Development and Compensation CommitteeMDCC of the Board oversees the Company’sClorox’s executive compensation program and policies. As part of this function, the MDCC discussed, and reviewed with management, the CD&A. Based on this review and discussion, we have recommended to the Board that the CD&A be included in the proxy statement.

THE MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE as of June 30, 2022

Spencer C.
Spencer C.
Fleischer, Chair
Richard H. CarmonaA. D. David MackayKathryn TesijaRussell J. Weiner

Richard H. Carmona
David Mackay
Kathryn Tesija
Russell J. Weiner


Compensation Committee Interlocks and Insider Participation

Each of Dr. Carmona, and Messrs. Fleischer, Mackay, and Weiner, and Ms. Tesija each served as a member of the MDCC during part or all of fiscal year 2020.2022. None of the members was an officer or employee of the CompanyClorox or any of its subsidiaries during fiscal year 20202022 or in any prior fiscal year. No executive officer of the CompanyClorox served on the board of directorsBoard or compensation committee of any other entity that has or had one or more executive officers who served as a member of the Board or MDCC during fiscal year 2020.2022.

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Compensation Discussion and Analysis


Compensation Discussion and Analysis Tables

FISCAL YEAR 2020 SUMMARY COMPENSATION TABLE – FISCAL YEAR 2022

The following table sets forth the compensation earned, paid, or awarded to our named executive officersNEOs for the fiscal years ended June 30, 2020, 2019,2022, 2021, and 2018.2020.

Name and Principal
Position
YearSalary
($)(1)
Stock
Awards
($)(2)(3)
Option
Awards
($)(2)
Non-Equity
Incentive Plan
Compensation
($)(4)
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)(5)
All Other
Compensation
($)(6)
Total
($)
Benno Dorer
Chair and Chief
Executive Officer
  2020  $1,269,231  $2,949,972   $2,950,287         $3,690,000         $1,161,950           $402,459  $12,423,899
20191,166,3462,874,5212,874,8161,206,000859,528381,5049,362,715
20181,061,5382,624,6352,625,8291,269,840131,210420,0158,133,067
Kevin Jacobsen
Executive Vice President
— Chief Financial Officer
2020609,615699,930700,0591,020,0005,999154,6443,190,247
2019536,539649,918649,958331,6504,612122,0772,294,753
2018388,463349,952350,091168,0407,476107,9651,371,987
Linda Rendle(7)
President
2020686,346999,9671,000,0991,343,2621,313167,4224,198,409
2019523,965600,194600,006291,1821,572144,8202,161,739
2018435,923563,379312,577271,9001,401117,1811,702,362
Laura Stein
Executive Vice President
— General Counsel and
Corporate Affairs
2020687,692624,960625,044938,0001,119,609139,8984,135,203
2019632,461549,697549,965315,168787,857133,7212,968,869
2018607,288500,253500,093321,300177,9332,106,867
Eric Reynolds(8)
Executive Vice President
Household & Cleaning
2020601,923649,846650,0491,028,3502,597142,9523,075,718
2019462,788450,587450,016231,0713,120119,0351,716,617
 

Name and
Principal Position
YearSalary
($)(1)
Bonus
($)(2)
Stock
Awards
($)(3)(4)
Option
Awards
($)(3)
Non-Equity
Incentive Plan
Compensation
($)(5)
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)(6)
All Other
Compensation
($)(7)
Total
($)
Linda Rendle
Chief Executive
Officer
    2022    1,111,538        4,919,815    1,229,989    843,750    1,098    428,618    8,534,808
20211,006,2503,999,7531,000,1801,526,132833366,1617,899,309
2020523,965600,194600,006291,1821,572144,8202,161,739
Kevin Jacobsen
Executive Vice
President and
Chief Financial
Officer
2022729,2311,599,869399,996333,000231,8093,293,904
2021654,0381,361,356340,450617,4007,423277,1873,257,854
2020609,615699,930700,0591,020,0005,999154,6443,190,247
 
 
Eric Reynolds
Executive Vice
President
and Chief
Operating Officer
2022  729,2311,839,792459,998370,0001,844239,7853,640,651
2021700,0001,679,713420,084720,3002,245286,9073,809,250
2020601,923649,846650,0491,028,350110,3783,040,546
 
 

Kirsten Marriner
Executive Vice
President and
Chief People
and Corporate
Affairs Officer

2022643,2691,039,776259,989260,000204,9132,407,947
2021587,885959,958240,048489,992250,3102,528,192
 
 
 
 
Rebecca Dunphey
Senior Vice
President and
General Manager –
Specialty Division
2022138,462750,0002,499,94158,6858,2383,455,326
(1)

Reflects actual salary earned for fiscal years 2020, 2019,2022, 2021, and 2018.2020.

(2)

Ms. Dunphey received a one-time cash sign-on payment at hire to compensate for a portion of expected cash and equity compensation she would otherwise have received from her former employer had she not terminated her employment there to join Clorox.

(3)

The amounts reflected in these columns are the values determined under FASB ASC Topic 718 for the awards granted in the fiscal years ended June 30, 2020, 2019,2022, 2021, and 2018,2020, in accordance with the applicable accounting standard. The assumptions made in valuing stock awards and option awards reported in these columns are discussed in Note 14,1, Summary of Significant Accounting Policies under subsection “Stock-Based Compensation”, and in Note 14, Stock-Based Compensation Plans, to the Company’sClorox consolidated financial statements for the three years in the period ended June 30, 2020,2022, included in the Company’sour Annual Report on Form 10-K for the fiscal year ended June 30, 2020.2022. Additional information regardingregarding the stock awards and option awards granted to our named executive officersNEOs during fiscal year 20202022 is set forth in the Grants of Plan-Based Awards Table.table.

(3)(4)

The grant date fair value of the performance sharePSU awards reflected in this column is the target payout based on the probable outcome of the performance-based conditions, determined as of the grant date. The maximum potential payout of the stockPSU awards would be 200% of the target shares awarded on the grant date. The maximum value of the performance sharePSU award for 20202022 determined as of the date of grant would be as follows for each respective named executive officer: Mr. Dorer – $5,899,944; Mr. Jacobsen – $1,399,860; Ms. Stein – $1,249,920; Ms. Rendle – $1,999,934; and Mr. Reynolds – $1,299,692.NEO is presented in the following table. See the Grants of Plan-Based Awards Tabletable for more information about the performance sharesPSUs granted under the 2005 Stock Incentive Plan.

(4)

Reflects annual incentive awards earned for fiscal years 2020, 2019, and 2018, and paid out in September 2020, September 2019, and September 2018, respectively, under the Annual Incentive Plan. Information about the Annual Incentive Plan is set forth in the Compensation Discussion and Analysis under the Annual Incentives section of this CD&A.


Linda
Rendle
Kevin
Jacobsen
Eric
Reynolds
Kirsten
Marriner
Rebecca
Dunphey
Maximum PSU Value     $7,379,804     $2,399,886     $2,759,852     $1,559,745     

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Compensation Discussion and Analysis Tables

(5)

Reflects annual incentive awards earned for fiscal years 2022, 2021, and 2020 and paid out in September 2022, September 2021, and September 2020, respectively, under the AIP. Information about the AIP is set forth in the Compensation Discussion and Analysis under “Annual Incentives”.

(6)

The amounts reflect the aggregate change in the present value of accumulated benefits during fiscal years 2022, 2021, and 2020 2019, and 2018 under the SERP, the Pension Plan and the cash balance restoration benefitprovision of the NQDC (note that the SERP, theNQDC. The Pension Plan and the cash balance restoration benefitprovision of the NQDC are all frozen benefits; referbenefits. Refer to the Pension Benefits Tabletable for further information).information. Each plan amount in fiscal year 20202022 is set forth in the following table:

     Benno
Dorer
     Kevin
Jacobsen
     Linda
Rendle
     Laura
Stein
     Eric
Reynolds
The Pension Plan  $1,456     $3,465  $1,313 $3,607    $2,570
SERP1,146,3881,096,626
Cash Balance Restoration Benefit14,1062,53419,37627
Total$1,161,950$5,999$1,313$1,119,609$2,597
Linda
Rendle
Kevin
Jacobsen
Eric
Reynolds
Kirsten
Marriner
Rebecca
Dunphey
The Pension Plan     $1,098         $2,899         $2,150          
Cash Balance Restoration-9,820-306
Total $1,098$-6,921$1,844
(7)
(6)

The amounts shown in the All Other Compensation column represent (i) actual Companycompany contributions under the Company’s 401(k) Plan, (ii) nonqualified contributions under the NQDC and ERP, and (iii) perquisites utilized byprovided to our named executive officers of the Company:

NEOs:

     Benno
Dorer
     Kevin
Jacobsen
     Linda
Rendle
     Laura
Stein
     Eric
Reynolds
The Clorox Company 401(k) Plan  $28,133     $27,832  $28,200 $28,586    $32,574
Nonqualified Deferred Compensation Plan and ERP334,39198,548104,27889,75283,960
Company Paid Perquisites39,93528,26334,94421,56026,418
Total$402,459$154,644$167,422$139,898$142,952
Linda
Rendle
Kevin
Jacobsen
Eric
Reynolds
Kirsten
Marriner
Rebecca
Dunphey
The Clorox Company 401(k) Plan     $29,600     $28,411     $35,062     $31,638     
Nonqualified Deferred Compensation Plan363,207170,320185,884139,263
Company-Paid Perquisites35,81133,07818,84034,0128,238
Total$428,618  $231,809 $239,785 $204,913    $8,238

The following table sets forth the perquisites utilized byprovided to our named executive officersNEOs and the cost to the CompanyClorox for providing these perquisites during fiscal year 2020. The amounts shown in the Other Perquisites row consist of paid parking at the Company’s headquarters, health club reimbursement, and an annual executive physical where applicable.2022.

     Benno
Dorer
     Kevin
Jacobsen
     Linda
Rendle
     Laura
Stein
     Eric
Reynolds
Executive Automobile Program  $13,200     $7,683  $13,200 $13,200    $13,200
Basic Financial Planning21,12516,50016,5003,5609,768
Non-Business Use of Company Aircraft
Other Perquisites5,6104,0805,2444,8003,450
Total$39,935$28,263$34,944$21,560$26,418
(7)In May 2020, Ms. Rendle was promoted to President, and effective September 14, 2020, she was named Chief Executive Officer.
(8)In July 2020, Mr. Reynolds was promoted to Executive Vice President, Household and Lifestyle, and effective September 14, 2020, he was named Executive Vice President - Chief Operating Officer.
Linda
Rendle
Kevin
Jacobsen
Eric
Reynolds
Kirsten
Marriner
Rebecca
Dunphey
Executive Automobile Program     $13,200     $8,988     $13,200     $13,200     $3,300
Basic Financial Planning16,97116,97112,8534,578
Paid Parking at Oakland Headquarters4,2003,3604,2004,200
Health Club Allowance1,4401,4401,4401,440360
Annual Executive Physical2,3192,319
Total$35,811    $33,078   $18,840 $34,012    $8,238

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Table of Contents

Compensation Discussion and Analysis Tables

FISCAL YEAR 2020 GRANTS OF PLAN-BASED AWARDS – FISCAL YEAR 2022

This table shows grants of plan-based awards to the named executive officersNEOs during fiscal year 2020.2022.

Estimated Possible Payouts
Under Non-Equity Incentive
Plan Awards
 
 
 
Estimated Possible Payouts
Under Equity Incentive Plan
Awards
All Other
Stock
Awards:
Number
of Shares
if Stock or
Units
(#)
 All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
 Exercise
or Base
Price of
Option
Awards
($/Sh)
 Grant Date
Fair Value
of Stock
and Option
Awards
($)
Name  Grant
Date
  Threshold
($)
  Target
($)
 Maximum
($)
 Threshold
(#)
  Target
(#)
  Maximum
(#)
  
Benno Dorer
Annual Incentive Plan(1)$1,845,000$5,535,000
Performance Shares(2)9/17/2019 18,96637,932  $2,949,972
Stock Options(3)9/17/2019147,367  $155.542,950,287
Kevin Jacobsen
Annual Incentive Plan(1)510,0001,530,000
Performance Shares(2)9/17/20194,5009,000699,930
Stock Options(3)9/17/201934,968$155.54700,059
Linda Rendle
Annual Incentive Plan(1)671,6312,014,893
Performance Shares(2)9/17/20196,42912,858999,967
Stock Options(3)9/17/201949,955$155.541,000,099
Laura Stein
Annual Incentive Plan(1)469,0001,407,000
Performance Shares(2)9/17/20194,0188,036624,960
Stock Options(3)9/17/201931,221$155.54625,044
Eric Reynolds
Annual Incentive Plan(1)514,1751,542,525
Performance Shares(2)9/17/20194,1788,356649,846
Stock Options(3)9/17/201932,470$155.54650,049

Estimated Possible Payouts
Under Non-Equity Incentive
Plan Awards


Estimated Possible Payouts
Under Equity Incentive Plan
Awards
All Other
Stock
Awards:
Number
of Shares
of Stock or
Units
(#)
 All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
 Exercise
or Base
Price of
Option
Awards
($/Sh)
 Grant
Date
Fair Value
of Stock
and
Option
Awards
($)
Name  Grant
Date
  Threshold
($)
  Target
($)
  Maximum
($)
  Threshold
(#)
  Target
(#)
  Maximum
(#)
  
Linda Rendle
Annual Incentive Plan(1)1,687,5005,062,500
Performance Share
Units(2)
9/21/202122,53145,0623,689,902
Restricted Stock Units(3)9/21/20217,5101,229,913
Stock Options(4)9/21/202155,224163.771,229,989
Kevin Jacobsen
Annual Incentive Plan(1)666,0001,998,000
Performance Share
Units(2)
9/21/20217,32714,6541,199,943
Restricted Stock Units(3)9/21/20212,442399,926
Stock Options(4)9/21/202117,959163.77399,996
Eric Reynolds
Annual Incentive Plan(1)740,0002,220,000
Performance Share
Units(2)
9/21/20218,42616,8521,379,926
Restricted Stock Units(3)9/21/20212,808459,866
Stock Options(4)9/21/202120,653163.77459,998
Kirsten Marriner
Annual Incentive Plan(1)520,0001,560,000
Performance Share
Units(2)
9/21/20214,7629,524779,873
Restricted Stock Units(3)9/21/20211,587259,903
Stock Options(4)9/21/202111,673163.77259,989
Rebecca Dunphey
Annual Incentive Plan(1)117,370352,110
Performance Share
Units(2)
Restricted Stock Units(3)3/21/202218,6732,499,941
Stock Options(4)
(1)Represents estimated possible payouts of annual incentive awards for fiscal year 20202022 under the Annual Incentive PlanAIP for each of our named executive officers.NEOs. The Annual Incentive PlanAIP is an annual cash incentive opportunity and, therefore, awards are earned in the year of grant. The target amounts represent the potential payout if both Companycompany performance, including financial and strategic metrics, and individual performance are at target levels. The maximum amount represents the maximum payout inunder the Annual Incentive Plan utilizingAIP using a Company performance multiplierMultiplier of 200% and an individual performance multiplierIndividual Multiplier of 150% for all executive officers.each NEO. See the Summary Compensation Table for the actual payout amounts in fiscal year 20202022 under the Annual Incentive Plan.AIP. See “Annual Incentives” in the Compensation Discussion and Analysis for additional information about the Annual Incentive Plan. Annual incentive target for Ms. Rendle and Mr. Reynolds are based on pro-ration of different target percentages throughout the year due to their promotions.AIP.
(2)Represents possible future payouts of Common StockClorox common stock underlying performance sharesPSUs awarded in fiscal year 20202022 to each of our named executive officersNEOs as part of their participation in the 2005 Stock Incentive Plan. These awards will vest upon the achievement of performance measures based on average economic profit growth over a three-year period, with the threshold, target, and maximum awards equal to 0%, 100%, and 200%, respectively, of the number of performance sharesPSUs granted. If the minimum financial goals are not met at the end of the three-year period, no PSU awards will be paid out under the 2005 Stock Incentive Plan. See “Long-Term Incentives” in the Compensation Discussion and Analysis for additional information.
(3)Represents RSUs awarded to each of our NEOs under the 2005 Stock Incentive Plan. All RSUs vest in equal installments on the first, second, third, and fourth anniversaries of the grant date other than the one-time off-cycle award of 18,673 RSUs granted to Ms. Dunphey when she was hired as Senior Vice President and General Manager – Specialty Division, effective March 21, 2022, which vest 100% on the third anniversary of the grant date.
(4)Represents stock options awarded to each of our named executive officersNEOs under the 2005 Stock Incentive Plan. All stock options vest in equal installments on the first, second, third, and fourth anniversaries of the grant date.

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Table of Contents

Compensation Discussion and Analysis Tables

OUTSTANDING EQUITY AWARDS AT FISCAL 2020 YEAR-END – 2022

The following equity awards granted to our named executive officersNEOs were outstanding as of the end of fiscal year 2020.2022.

Option AwardsStock AwardsOption AwardsStock Awards
Name Number of
Securities
Underlying
Unexercised
Options-
Exercisable
(#)
 Number of
Securities
Underlying
Unexercised
Options-
Unexercisable
(#)
Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
 Option
Exercise
Price
($)
 Option
Expiration
Date
 Number of
Shares or
Units of Stock
That Have Not
Vested
(#)

Market
Value of
Shares
or Units
of Stock
That
Have Not
Vested
($)

Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
(#)
Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
($)(1)
  Number of
Securities
Underlying
Unexercised
Options-
Exercisable
(#)
  Number of
Securities
Underlying
Unexercised
Options-
Unexercisable
(#)
  Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
  Option
Exercise
Price
($)
  Option
Expiration
Date
  Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)
  Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)
  Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
(#)
  Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
($)(1)
Benno Dorer 
Linda Rendle
Stock Options(2) 165,400  $111.609/15/20252,93584.459/17/2023
129,63743,213(3) $123.099/13/2026
85,98085,980(4) $135.579/12/2027
32,20096,600(5) $151.859/18/2028
147,367(6) $155.549/17/2029
Performance
Shares(2)
24,974(9)      $5,478,634
18,930(10) $4,152,674
18,966(11) $4,160,571
Stock Options(2)7,85089.829/17/2024
12,360111.609/15/2025
14,560123.099/13/2026
20,470135.579/12/2027
14,2804,760(3)151.859/18/2028
5,1991,733(4)154.881/7/2029
24,97724,978(5)155.549/17/2029
8,07924,237(6)212.389/22/2030
     55,224(7)163.779/21/2031
5,722(8)806,661
Performance Share
Units(2)
14,125(9)1,991,343
    22,531(10)3,176,420
3,531(11)497,800
Restricted Stock Units(2)   7,510(12)1,058,760
              
Stock Options(2) 11,410$111.609/15/20252,458135.579/12/2027
8,1902,730(3) $123.099/13/2026
4,9154,915(4) $135.579/12/2027
5,5805,580(7) $128.694/2/2028
7,28021,840(5) $151.859/18/2028
34,968(6) $155.549/17/2029
Performance
Shares(2)
1,432(9) 314,116
2,000(12) 438,630
4,280(10) 938,904
4,500(11) 987,165
Linda Rendle
Stock Options(2) 1,697$72.119/11/20225,580128.694/2/2028
2,935$84.459/17/2023
7,850$89.829/17/2024
12,360$111.609/15/2025
10,9203,640(3) $123.099/13/2026
10,23510,235(4) $135.579/12/2027
4,76014,280(5) $151.859/18/2028
1,7335,199(8) $154.881/7/2029
49,955(6) $155.549/17/2029
Performance
Shares(2)
2,980(9) 653,701
2,800(10) 614,236
1,130(13) 247,888
6,429(11) 1,410,330
Restricted Shares(2) 1,850(14) $405,835
Stock Options(2)21,8407,280(3)151.859/18/2028
17,48417,484(5)155.549/17/2029
2,7508,250(6)212.389/22/2030
17,959(7)163.779/21/2031
4,005(8)564,625
4,808(9)677,832
Performance Share
Units(2)
7,327(10)1,032,960
1,148(11)161,845
      2,442(12)344,273    
Eric Reynolds
Stock Options(2)15,210111.609/15/2025
15,470123.099/13/2026
16,380135.579/12/2027
10,0803,360(3)151.859/18/2028
4,4561,486(4)154.881/7/2029
16,23516,235(5)155.549/17/2029
3,39310,180(6)212.389/22/2030
20,653(7)163.779/21/2031
Performance Share
Units(2)
3,718(8)524,223
5,932(9)836,293
8,426(10)1,187,897
Restricted Stock Units(2)1,431(11)201,742
      2,808(12)395,872

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Table of Contents

Compensation Discussion and Analysis Tables

Option AwardsStock Awards
Name  Number of
Securities
Underlying
Unexercised
Options-
Exercisable
(#)
  Number of
Securities
Underlying
Unexercised
Options-
Unexercisable
(#)
Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
  Option
Exercise
Price
($)
  Option
Expiration
Date
  Number of
Shares or
Units of Stock
That Have Not
Vested
(#)
  

Market
Value of
Shares
or Units
of Stock
That
Have Not
Vested
($)

  

Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
(#)
Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
($)(1)
Laura Stein
Stock Options(2) 39,960$84.459/17/2023
41,670$89.829/17/2024
30,420$111.609/15/2025
22,5157,505(3) $123.099/13/2026
16,37516,375(4) $135.579/12/2027
6,16018,480(5) $151.859/18/2028
31,221(6)   $155.549/17/2029
Performance
Shares(2) 
4,760(9) 1,044,223
3,620(10) 794,119
4,018(11) 881,429
Eric Reynolds
Stock Options(2) 15,210$111.609/15/2025
11,6023,868(3) $123.099/13/2026
8,1908,190(4) $135.579/12/2027
3,36010,080(5) $151.859/18/2028
1,4854,457(8) $154.881/7/2029
32,470(6) $155.549/17/2029
Performance
Shares(2) 
2,374(9) 520,697
1,980(10) 434,353
968(13) 212,350
4,178(11) 916,528
Option AwardsStock Awards
Name Number of
Securities
Underlying
Unexercised
Options-
Exercisable
(#)
 Number of
Securities
Underlying
Unexercised
Options-
Unexercisable
(#)
 Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
 Option
Exercise
Price
($)
 Option
Expiration
Date
 Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)
 Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)
 Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
(#)
 Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
($)(1)
Kirsten Marriner              
Stock Options(2)6,143135.579/12/2027
14,2804,760(3)151.859/18/2028
11,86411,864(5)155.549/17/2029
1,9395,817(6)212.389/22/2030
        11,673(7)163.779/21/2031
Performance Share
Units(2)
2,717(8)383,067
3,390(9)477,922
       4,762(10)671,347
Restricted Stock Units(2)848(11)119,551
              1,587(12)223,735
Rebecca Dunphey
Restricted Stock Units(2)18,673(13)2,632,520
(1)Represents the unvested “target” number of performance sharesPSUs under the 2005 Stock Incentive Plan multiplied by the closing price of our Common Stockcommon stock on June 30, 2020,2022, except as noted below in footnote (9)(8). The ultimate value will depend on whether performance criteria are met and the value of our Common Stockcommon stock on the actual vesting date.
(2)GrantsAwards were madegranted under the 2005 Stock Incentive Plan.
(3)Represents unvested portion of stock options that vest in four equal installments beginning one year from the grant date of September 13, 2016.
(4)Represents unvested portion of stock options that vest in four equal installments beginning one year from the grant date of September 12, 2017.
(5)Represents unvested portion of stock options that vest in four equal installments beginning one year from the grant date of September 18, 2018.
(6)(4)Represents unvested portion of stock options that vest in four equal installments beginning one year from the grant date of September 17, 2019.
(7)Represents unvested portion of off-cycle stock options granted to Mr. Jacobsen when he was promoted to Senior Vice President, Chief Financial Officer, effective April 1, 2018. Options vest in four equal installments beginning one year from the grant date of April 2, 2018.
(8)Represents unvested portion of off-cycle stock options granted to Ms. Rendle and Mr. Reynolds when they were promoted to Executive Vice President, Strategy and Operations and Executive Vice President, Cleaning and Burt’s Bees, respectively, effective January 7, 2019. Options vest in four equal installments beginning one year from the grant date of January 7, 2019.
(9)(5)Represents the unvested portion of stock options that vest in four equal installments beginning one year from the grant date of September 18, 2019.
(6)Represents the unvested portion of stock options that vest in four equal installments beginning one year from the grant date of September 22, 2020.
(7)Represents the unvested portion of stock options that vest in four equal installments beginning one year from the grant date of September 22, 2021.
(8)Represents the actual number of performance sharesPSUs that were paid out under our 2005 Stock Incentive Plan. The grants from the plan have a three-year performance period (fiscal years 2018 through 2020). Performance is based on achievement of the three-year average annual economic profit growth. After completion of fiscal year 2020, the MDCC determined whether the performance measures had been achieved and based on the results, on August 13, 2020, the MDCC approved the payout of this award at 129% of target.
(10)Represents the “target” number of performance shares that can be earned under our 2005 Stock Incentive Plan. The grants from the plan have a three-year performance period (fiscal years 2019 through 2021). Performance is based on achievement of average annual economic profit growth. The MDCC will determine whether the performance measures have been achieved after the completion of fiscal year 2021.

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THE CLOROX COMPANY - 2020 Proxy Statement

57


Table of Contents

(11)Represents the “target” number of performance shares that can be earned under our 2005 Stock Incentive Plan. The grants from the planawards have a three-year performance period (fiscal years 2020 through 2022). Performance is based on achievement of average annual economic profit growth. The MDCC will determine whether the performance measures have been achieved after the completion of fiscal year 2022.
(12)Represents the actual number of performance shares that were paid out under our 2005 Stock Incentive Plan. The off-cycle grants from the plan, which was granted to Mr. Jacobsen when he was promoted to Senior Vice President, Chief Financial Officer, effective April 1, 2018, have a three-year performance period (fiscal years 2018 through 2020). Performance is based on achievement of average annualcumulative economic profit growth. After completion of fiscal year 2020,2022, the Committee determined whether the performance measures had been achieved and based on the results, on August 13, 2020,11, 2022, the Committee approved the payout of this award at 129%89% of target.
(13)(9)Represents the “target” number of performance sharesPSUs that can be earned under our 2005 Stock Incentive Plan. The off-cycle grants from the plan, which were granted to Ms. Rendle and Mr. Reynolds when they were promoted to Executive Vice President, Strategy and Operations and Executive Vice President, Cleaning and Burt’s Bees, respectively, effective January 7, 2019,awards have a three-year performance period (fiscal years 20192021 through 2021)2023). Performance is based on achievement of average economic profit growth.growth goals. The MDCCCommittee will determine whether the performance measures have been achieved after the completion of fiscal year 2023.
(10)Represents the “target” number of PSUs that can be earned under our 2005 Stock Incentive Plan. The awards have a three-year performance period (fiscal years 2022 through 2024). Performance is based on achievement of economic profit growth goals. The Committee will determine whether the performance measures have been achieved after the completion of fiscal year 2024.
(11)Represents unvested portion of RSUs that vest in four equal installments beginning one year from the grant date of September 22, 2020.
(12)Represents unvested portion of RSUs that vest in four equal installments beginning one year from the grant date of September 21, 2021.
(14)(13)Represents unvested one-time off-cycle restricted stock grant that wasRSU award granted to Ms. RendleDunphey when she became the Executivewas hired as Senior Vice President and General Manager Cleaning & StrategySpecialty Division, effective June 29, 2018. Restricted stock unitsMarch 21, 2022. These RSUs vest three years from100% on the third anniversary of the grant date.

THE CLOROX COMPANY - 2022 Proxy Statement

67


Table of ContentsFISCAL YEAR 2020

Compensation Discussion and Analysis Tables

OPTION EXERCISES AND STOCK VESTED – FISCAL YEAR 2022

This table shows stock options exercised and stock vested for the named executive officersNEOs during fiscal year 2020.2022.

Option AwardsStock Awards
NumberNumber of
of SharesValueSharesValue
AcquiredRealized onAcquiredRealized on
on ExerciseExerciseon VestingVestingOption AwardsStock Awards
Name       (#)       ($)(1)       (#)       ($)(2)   Number of
Shares Acquired
on Exercise
(#)(1)
     Value
Realized on
Exercise
($)(2)
     Number of Shares
Acquired on
Vesting
(#)(3)
     Value
Realized
on Vesting
($)(4)
Benno Dorer271,950(3)$19,307,02822,777(4)  $5,199,989
Linda Rendle1,697146,230           5,176(5)755,384
Kevin Jacobsen19,215(3)2,263,6121,353(4)(5)308,8904,787815,691
Linda Rendle(3)3,382(4)772,111
Laura Stein(3)3,954(4)902,698
Eric Reynolds(3)1,920(4)(5)438,3363,535(6)510,987
Kirsten Marriner3,116530,573
Rebecca Dunphey
(1)The number of shares represents the exercise of nonqualified stock options granted in previous years under Clorox’s 2005 Stock Incentive Plan.
(2)The dollar value realized reflects the difference between the market price of the Common StockClorox common stock upon exercise and the stock option exercise price.
(2)(3)The number of shares represents the vesting of RSUs, PSUs, and dividend equivalent units granted through participation in Clorox’s 2005 Stock Incentive Plan.
(4)The dollar value realized reflects the market value of the vested shares and dividend equivalent units based on the closing price of the Common StockClorox common stock on the vesting date.
(3)The number represents For deferred shares, the exercisedollar value realized reflects the market value of nonqualified stock options granted in previous years under the Company’s 2005 Stock Incentive Plan.
(4)The number of stock awards listed represent the vesting of performancevested shares and dividend equivalent units at 104% of target, granted through participation in the Company’s 2005 Stock Incentive Plan. The grant from the plan had a three-year performance period (fiscal years 2016 through 2019). Performance is based on the achievementclosing price of cumulative economic profit growth. On August 15, 2019, the MDCC approved the payout of this award at 104% of target and the award was settledClorox common stock on August 26, 2019.June 30, 2022.
(5)These shares have been deferred and will be distributed over 5five annual installments immediately after separation for Mr. Jacobsen(subject to any required delay in payment due to IRC Section 409a).
(6)These shares have been deferred and in a single installment 3will be distributed over five annual installments starting five years after the vesting for Mr. Reynolds.date.

Overview of Pension Benefits

Historically, pension benefits have been paid to the named executive officers under the following plans: (i) the Pension Plan, (ii) the cash balance restoration provision in the NQDC, and (iii) the SERP. Effective June 30, 2011, the Pension Plan and the cash balance restoration provision under the NQDC were frozen. The SERP was also frozen as of June 30, 2011, with regard to pay and offsets, while still allowing age and service credits, as most recently amended in March 2018, as described in the Retirement Plans section of the CD&A.


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PENSION BENEFITS – FISCAL YEAR 2020 PENSION BENEFITS TABLE2022

The following table sets forth each named executive officer’s pension benefits under the Company’s pension plans for fiscal year 2020.

Number of YearsPresent ValuePayments
of Creditedof AccumulatedDuring Last
ServiceBenefitFiscal Year
Name       Plan Name       (#)(1)       ($)(2)       ($)
Benno DorerThe Clorox Company Pension Plan(3)15       $58,325           $—
SERP(4)154,622,393
Cash Balance Restoration(5)15171,227
Name(1)     Plan Name     Number of Years
of Credited
Service
(#)(2)
     Present Value
of Accumulated
Benefit
($)
     Payments
During Last
Fiscal Year
($)
Linda RendleThe Clorox Company Pension Plan(3)1954,533
Kevin JacobsenThe Clorox Company Pension Plan(3)24138,812The Clorox Company Pension Plan(3)26143,907
SERP(4)24
Cash Balance Restoration(5)2452,927
Linda RendleThe Clorox Company Pension Plan(3)1752,602
SERP(4)17
Cash Balance Restoration(5)17
Laura SteinThe Clorox Company Pension Plan(3)23144,536
SERP(4)236,163,073
Cash Balance Restoration(5)23312,043Cash Balance Restoration(4)2648,334
Eric ReynoldsThe Clorox Company Pension Plan(3)21102,952The Clorox Company Pension Plan(3)2310,6731
SERP(4)21Cash Balance Restoration(4)232,285
Cash Balance Restoration(5)211,975
Kirsten MarrinerThe Clorox Company Pension Plan(3)
Rebecca DunpheyThe Clorox Company Pension Plan(3)
(1)Only Messrs. Jacobsen and Reynolds participate in the cash balance restoration provision of the NQDC. Mses. Marriner and Dunphey do not participate in any of the pension plans.
(2)Number of years of credited service is rounded down to the nearest whole number.
(2)Present value of the accumulated benefit was calculated using the following assumptions: mortality table: MILES-CGFD; discount rate: 2.40%; and age at June 30, 2020.
(3)The Pension Plan was frozen effective July 1,June 30, 2011. Participants keep their accumulated pay credits and receive only quarterly interest credits after that date.
(4)The SERP was frozen with regards to pay and offsets effective June 30, 2011. Age and service credits continue to accrue. Mr. Dorer and Ms. Stein are the only named executive officers eligible for the SERP.
(5)The cash balance restoration provision in the NQDC was eliminated effective July 1,June 30, 2011, when the Pension Plan was frozen. Participants keep their accumulated pay credits but no contributions were made under this provision after July 1,June 30, 2011.

Overview of Pension Benefits

Pension benefits may be paid to the NEOs under the Pension Plan or the cash balance restoration provision of the NQDC. Effective June 30, 2011, the Pension Plan and the cash balance restoration provision under the NQDC were frozen.

In fiscal year 2023, we will begin to transition administration of the Pension Plan to an insurance company specializing in pension fund management. All benefits earned under the Pension Plan will be protected during this change, meaning it will not impact the value of individual plan participants’ benefits. This transition is regulated by the IRS through a standard pension plan termination process and typically takes 18 to 24 months.

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NONQUALIFIED DEFERRED COMPENSATION – FISCAL YEAR 2022

The following table provides information regarding the accounts of the NEOs under the NQDC and ERP in fiscal year 2022.

Name     Executive
Contributions
in Last FY
($)(1)
     Registrant
Contributions
in Last FY
($)(2)
     Aggregate
Earnings
in Last FY
($)(3)
     Aggregate
Balance
at Last FYE
($)(4)(5)
Linda Rendle105,507363,207-217,2551,575,375
Kevin Jacobsen644,367170,320-110,7942,586,285
Eric Reynolds190,768185,884-210,7031,138,191
Kirsten Marriner37,365139,263-139,455803,744
Rebecca Dunphey3,692-1383,554
(1)Amounts represent the annual base salary and incentive award that each executive deferred during fiscal year 2022. Deferred base salary is also reported in the Summary Compensation Table – Salary. Deferred annual incentive awards are also reported in the Summary Compensation Table – Non-Equity Incentive Plan Compensation.
(2)Represents that portion of the 401(k) Plan company match and annual contribution of up to 10% of eligible compensation that is in excess of IRC compensation limits, pursuant to the 401(k) restoration provision of the NQDC and Clorox’s contribution under the ERP. These contributions are also reported in the Summary Compensation Table – All Other Compensation and are included under the caption “Nonqualified Deferred Compensation Plan” in footnote (7) to the Summary Compensation Table.
(3)Earnings are based on an array of investment options that generally mirror the 401(k) Plan. Earnings vary based on participant investment elections.
(4)Reflects aggregate balances under the restoration provision of the NQDC and any deferred base salary and annual incentive awards as of the end of fiscal year 2022.
(5)The executive and registrant contribution total amounts in the table below are also reported as compensation in the Summary Compensation Table in the years indicated:

      Fiscal Year     Linda
Rendle
     Kevin
Jacobsen
     Eric
Reynolds
     Kirsten
Marriner
     Rebecca
Dunphey
2022$468,714 $814,687$376,651 $176,628   $3,692
2021394,957518,257287,062230,049
2020$104,278$98,548$83,960

Overview of Nonqualified Deferred Compensation Plans

Executive Retirement Plan. Our executive officers (including each of our named executive officers) are eligible for participation in the ERP. The ERP provides that the Company will make an annual contribution of 5% of an eligible participant’s base salary plus an annual incentive payment into the plan. Company contributions will vest over a three-year period and will fully vest upon the participant’s attainment of age 62 with 10 years of service with the Company (at which time the individuals are considered retirement-eligible under the ERP). An eligible participant can elect distribution in a lump sum or up to 15 annual installments upon a qualifying payment event.

Nonqualified Deferred Compensation Plan. Plan

Under the NQDC, participants including each of our named executive officers, may voluntarily defer the receipt of up to 50% of their base salary and up to 100% of their annual incentive award. In addition, the NQDC offers a 401(k) restoration provision for those who defer at a required

level. All CompanyClorox retirement contributions are made in the form of (i) a fixed 6% employer annual contribution and (ii) an employer match of up to 4% of pay into the 401(k) Plan, subject to IRC compensation limits. Contributions on eligible compensation that exceed the IRC compensation limits are contributed into a participant’s NQDC account under the 401(k) restoration provision.

Participants in the NQDC may elect to receive benefits from the NQDC either in a lump sum or up to 15 annual payments upon a qualifying payment event. Participants may choose from an array of investment crediting rates that generally mirror the investment fund options available in the 401(k) Plan. The NQDC uses the same benefit formulas, types of compensation to determine benefits, and vesting requirements as our tax-qualifiedthe 401(k) plan.Plan. The responsibility to pay benefits under the NQDC is an unfunded and unsecured obligation of Clorox.

Executive Retirement Plan

Our executive officers are eligible for participation in the Company.ERP. The ERP provides that Clorox will make an annual contribution of 5% of an eligible participant’s base salary plus annual incentive payment into the ERP. Clorox contributions vest over a three-year period and individuals are considered retirement-eligible under the ERP upon attainment of age 62 with 10 years of service with Clorox. An eligible participant may elect distribution in a lump sum or up to 15 annual installments upon a qualifying payment event.

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POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL – FISCAL YEAR 2022

The following table provides information regardingreflects the accountsestimated amount of compensation payable to each of our NEOs upon termination of the named executive officersNEO’s employment under various scenarios. The amounts exclude earned amounts such as vested or accrued benefits.

The amounts shown are calculated using an assumed termination date of the NQDC and ERP inlast business day of fiscal year 2020.2022 (June 30, 2022) and the closing price of our common stock on that date ($140.98). Although the calculations are intended to provide reasonable estimates of the potential compensation payable upon termination, they are based on assumptions outlined in the footnotes of the table and may not represent the actual amount the NEO would receive if an eligible termination event were to occur.

The table does not include compensation or benefits provided under plans or arrangements that are generally available to all salaried employees. Amounts reflected for change in control assume that each NEO is involuntarily terminated by Clorox without cause or voluntarily terminates for good reason within two years after a change in control.

Name and Benefits     Involuntary
Termination
Without Cause
($)
     Involuntary
Termination
After Change
In Control
($)
     Resignation or
Retirement
($)
Disability or
Death
($)
Linda Rendle     
Cash Payment6,468,750(1)10,125,000(2)(3)(4)
Stock Options1,418,752(5)1,418,752(6)2,311,880(7)
Restricted Stock Units1,556,560(8)1,556,560(8)
Performance Share Units6,343,927(9)6,343,927(10)
Retirement Plan Benefits
Health & Welfare Benefits29,794(11)44,690(12)
Financial Planning16,500(13)
Total Estimated Value7,917,29519,505,42910,212,367
Kevin Jacobsen
Cash Payment2,146,000(14)3,478,000(15)(3)(4)
Stock Options1,557,482(5)1,557,482(6)1,557,482(5)1,557,482(7)
Restricted Stock Units506,118(16)513,661(8)506,118(16)506,118(8)
Performance Share Units1,519,834(17)2,464,190(9)1,519,834(17)2,464,190(10)
Retirement Plan Benefits
Health & Welfare Benefits28,809(11)28,809(12)
Financial Planning16,500(13)
Total Estimated Value  5,758,2438,058,641  3,583,4344,527,790
Eric Reynolds
Cash Payment       2,220,000(14)     3,700,000(15)     (3)     (4)
Stock Options2,453,639(5)2,453,639(6)  2,453,639(5)2,453,639(7)
Restricted Stock Units597,614(16)604,910(8)597,614(16)597,614(8)
Performance Share Units1,635,024(17)2,741,028(9)1,635,024(17)2,741,028(10)
Retirement Plan Benefits
Health & Welfare Benefits10,726(11)10,726(12)
Financial Planning16,500(13)
Total Estimated Value6,917,0049,526,8034,686,2785,792,282

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FISCAL YEAR 2020 NONQUALIFIED DEFERRED COMPENSATIONCompensation Discussion and Analysis Tables

ExecutiveRegistrantAggregateAggregate
ContributionsContributionsEarningsBalance
in Last FYin Last FYin Last FYat Last FYE
Name       ($)(1)       ($)(2)       ($)(3)       ($)(4)(5)
Benno Dorer         $97,117         $334,391   $349,239  $4,585,978
Kevin Jacobsen105,66898,54866,9271,128,871
Linda Rendle37,870104,27834,466633,703
Laura Stein33,50089,752177,7825,263,670
Eric Reynolds80,08883,96019,967507,903

Name and Benefits     Involuntary
Termination
Without Cause
($)
     Involuntary
Termination
After Change
In Control
($)
     Resignation or
Retirement
($)
Disability or
Death
($)
Kirsten Marriner
Cash Payment1,690,000(14)2,860,000(15)(3)(4)
Stock Options33,234(5)33,234(6)411,016(7)
Restricted Stock Units343,216(8)343,286(8)
Performance Share Units1,660,701(9)1,660,701(10)
Retirement Plan Benefits
Health & Welfare Benefits28,809(11)28,809(12)
Financial Planning16,500(13)
Total Estimated Value1,752,0424,942,4592,415,003
Rebecca Dunphey
Cash Payment1,515,000(14)2,460,000(15)(3)(4)
Stock Options(5)(6)(7)
Restricted Stock Units2,632,520(8)2,632,520(8)
Performance Share Units(9)(10)
Retirement Plan Benefits
Health & Welfare Benefits(11)(12)
Financial Planning16,500(13)
Total Estimated Value1,515,0005,109,0202,632,520
(1)Amounts represent the annual

This amount reflects two times Ms. Rendle’s current base salary and incentiveplus two times 75% of her target AIP award. In addition, the amount includes 100% of her current year target AIP award, that each executive deferred during fiscal year 2020. Deferred base salary is also reported inpro-rated to the Summary Compensation Table – Salary. Deferred annual incentive awards are also reported in the Summary Compensation Table – Non-Equity Incentive Plan Compensation.date of termination.

(2)Represents that portion of the Company’s 401(k) match and Company contribution of up to 10% of eligible compensation that is in excess of IRC compensation limits pursuant

This amount represents three times Ms. Rendle’s current base salary, plus three times her target AIP award, plus her current-year AIP award, pro-rated to the 401(k) restorationdate of termination, subject to the excise tax cut back provision of the NQDC and the Company’s contribution under the ERP. These contributions are also reported in the Summary Compensation Table – All Other Compensation and are included under the caption “Nonqualified Deferred Compensation Plan” in footnote (6) to the Summary Compensation Table.CIC Plan.

(3)Earnings

Messrs. Jacobsen and Reynolds are eligible for retirement, including a pro-rata AIP award upon retirement. Mses. Rendle, Marriner, and Dunphey are not eligible for retirement, nor for a pro-rata annual incentive award upon retirement. However, all AIP-eligible employees active as of June 30, 2022 are eligible to receive an annual incentive award for the full fiscal year. This means, based on an arraythe assumed termination date of investment options that generally mirror the 401(k) Plan. Earnings vary based on participant investment elections.June 30, 2022, no employee would be eligible for a pro-rata AIP award, regardless of retirement eligibility.

(4)Reflects aggregate balances under

NEOs whose termination is the restoration provisionresult of disability or death are eligible to receive a pro-rata AIP award through the date of termination. However, all AIP-eligible employees active as of June 30, 2022 are eligible to receive an annual incentive award for the full fiscal year. This means, based on the assumed termination date of June 30, 2022, no employee would be eligible for a pro-rata AIP award, regardless of retirement status.

(5)

For Messrs. Jacobsen and Reynolds, who are retirement-eligible, this amount represents the expected value of the NQDCaccelerated vesting of all outstanding stock options, and any deferredassumes a five-year expected life or the remaining original term, whichever is shorter. For Mses. Rendle, Marriner, and Dunphey, this amount represents the intrinsic value of vested stock options at termination, based on the provision that non-retirement eligible executives exercise stock options within 90 days of termination, calculated as the difference between the June 30, 2022 closing Clorox common stock price of $140.98 and the exercise price for each option.

(6)

For Messrs. Jacobsen and Reynolds, who are retirement-eligible, this amount represents the expected value of the accelerated vesting of all outstanding stock options, and assumes a five-year expected life or the remaining original term, whichever is shorter. For Mses. Rendle, Marriner, and Dunphey, this amount represents the intrinsic value of the accelerated vesting of all outstanding stock options, based on the provision that non-retirement eligible executives exercise stock options within 90 days of termination, calculated as the difference between the June 30, 2022 closing Clorox common stock price of $140.98 and the exercise price for each option.

(7)

For Messrs. Jacobsen and Reynolds, who are retirement-eligible, this amount represents the expected value of the accelerated vesting of all outstanding stock options upon the NEO’s termination of employment due to disability or death, and assumes a five-year expected life or the remaining original term, whichever is shorter. For Mses. Rendle, Marriner, and Dunphey, this amount represents the expected value of the accelerated vesting of all outstanding stock options, based on the provision that non-retirement eligible executives exercise stock options within one year of death or disability, calculated as the difference between the June 30, 2022 closing Clorox common stock price of $140.98 and the exercise price for each option.

(8)

This amount represents the value of the accelerated vesting of RSUs upon change in control, death, or disability.

(9)

PSUs will vest based on actual performance through the date of the change in control. This amount assumes a prorated target payout and is valued at the closing price of Clorox common stock on June 30, 2022 of $140.98.


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(10)

This amount represents the value of the accelerated vesting of PSUs upon a death or disability, assuming a target payout and valued at the closing price of Clorox common stock on June 30, 2022 of $140.98. Upon termination for death or disability, the entire PSU award will vest immediately. The actual payout will be determined after the end of the performance period, based on actual performance.

(11)

This amount represents the estimated cost to Clorox of providing welfare benefits, including medical, dental, and vision, for the two-year period following termination.

(12)

This amount represents the estimated cost to Clorox of providing welfare benefits, including medical, dental, and vision, for the two-year period (three-year period for Ms. Rendle) following a qualifying termination after a change in control.

(13)

This amount represents the cost of providing financial planning for the year of termination.

(14)

This amount reflects two times the NEO’s current base salary. In addition, for Messrs. Jacobsen and Reynolds, who are eligible for retirement, this amount includes 100% of their current year target AIP award, pro-rated to the date of termination. For Mses. Rendle, Marriner, and Dunphey, this amount includes 75% of their current year’s target AIP award, pro-rated to the date of termination.

(15)

This amount represents two times the NEO’s current base salary, plus two times the target AIP award, subject to the excise tax cut back provision in the CIC Plan. For Messrs. Jacobsen and annual incentive awardsReynolds, who are eligible for retirement, this amount also includes 100% of their current year target AIP award, pro-rated to the date of termination. For Mses. Rendle, Marriner, and Dunphey, this amount includes the target AIP award, pro-rated to the date of termination.

(16)

Messrs. Jacobsen and Reynolds are retirement-eligible and all unvested RSUs held longer than six months will continue to vest after termination. This amount represents the expected value of the continued vesting of such RSUs.

(17)

Messrs. Jacobsen and Reynolds are eligible for retirement and are entitled to receive a pro-rata portion of all PSUs for the September 2018, 2019, and 2020 awards. This value represents the full vesting of eligible shares from the September 2019 award, since they would have completed the entire performance period as of the assumed termination date of June 30, 2022, and the pro-rata vesting of the eligible shares from the September 2020 and 2021 awards, assuming a target payout and valued at the closing price of Clorox common stock on June 30, 2022 of $140.98. The actual payout of the shares will not be determined until the end of fiscal year 2020.

(5)The executive and registrant contribution total amounts in the table belowperformance period. NEOs who are also reported as compensation in the Summary Compensation Table in the years indicated:not retirement-eligible forfeit shares upon termination under these scenarios.


BennoKevinLindaLauraEric
Fiscal Year       Dorer       Jacobsen       Rendle       Stein       Reynolds
2020  $334,391  $98,548  $104,278  $89,752   $83,960
2019329,89968,69483,56286,87463,278
2018423,145113,227 112,495172,578

Potential Payments Upon Termination or Change in Control

Payments Upon Termination

Severance Plan for Named Executive Officers.

Under the terms of the Severance Plan, our named executive officersNEOs are eligible to receive benefits if their employment is terminated by the CompanyClorox without cause, (otherother than in connection with a change in control).control. No benefits are payable under the terms of the Severance Plan if the CompanyClorox terminates the employment of the named executive officerNEO for cause or if the named executive officerNEO voluntarily resigns.

Regardless of the manner in which a named executive officer’s employment terminates, each named executive officer wouldnature of any NEO’s termination, NEOs retain the amounts he or she had earned over the course of their employment prior to the termination event, such as balances under the NQDC, vested and accrued retirement benefits, and previously vested stock options, except as outlined below under Termination for Misconduct.Misconduct. For further information about amounts previously earned, amounts, see the Summary Compensation Table and Outstanding Equity Awards at Fiscal 2020 Year-End, Table, Option Exercises and Stock Vested Table, , Pension Benefits Table,, and Nonqualified Deferred Compensation Table.tables.

Under the Severance Plan, each named executive officerNEO agrees to return and not to use or disclose proprietary information of the CompanyClorox and, for two years following any such termination, the named executive officerNEO is also prohibited from soliciting for employment any employee of the Company.Clorox.

Termination benefits under the Severance Plan for our named executive officersNEOs are as follows:

Involuntary Termination Without CauseCause. . If the CompanyClorox terminates the employment of a named executive officer (otherNEO other than the CEO)CEO without cause, the Severance Plan entitles the named executive officerNEO to receive a lump-sum severance payment after termination equal to two times the named executive officer’sNEO’s then-current base salary. In the case of the CEO, the severance amount is equal to the sum of (i) two times the CEO’s base salary and (ii) two times the CEO’s three-year averagetarget annual bonusshort-term incentive for that fiscal year, multiplied by 75%.

Under the Severance Plan, a named executive officer (otherNEOs other than the CEO) isCEO are also entitled to an amount equal to 75% of their Annual Incentive Plan awardAIP awards for the fiscal year in which he or she was terminated.they are terminated, prorated to the date of termination. The CEO is entitled to an amount equal to 100% of his Annual Incentive Planher AIP award for the fiscal year in which heshe was terminated.terminated, prorated to her date of termination. In each case, the AIP award calculation uses the actual Company Multiplier for the fiscal year in which the executive is terminated and is paid after the end of the fiscal year at the same time AIP awards are paid to active employees.



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The amount of severance paid is calculated using the actual Company Financial Performance Multiplier and assumes an Individual Performance Multiplier of 100%, prorated to the date of termination. If the named executive officer isNEOs who are retirement-eligible under the terms of the Annual Incentive Plan, the executive would beAIP are eligible for either the treatment under the Severance Plan (75% for NEOs or 100% for the CEO) or retirement treatment (an Individual Multiplier determined at the discretion of Clorox) for purposes of the Annual Incentive PlanAIP award payout. The MDCC decides which treatment to apply; in either case, the AIP award payout (retirement treatment would be 100%, versus 75%, of their Annual Incentive Plan award for the fiscal year in which he or she was terminated,remain prorated to the date of termination). It is the MDCC’s decision as to which treatment to apply.termination.

The Severance Plan provides that the named executive officer is entitled to continue to participateNEOs with a lump-sum cash payment in the Company’slieu of continued participation in our medical, vision, and dental insurance programs for up to two years followingprograms. The cash payment represents the value of the monthly employer contribution toward those benefits in which the NEO was enrolled at termination, on the same terms as active employees.times 24 months. In addition, at the end of this coverage, a named executive officerNEOs will be eligible to participate in the Company’sany combination of our medical, vision, and/orand dental plans offered to former employees who retire at age 55 or older, provided the executive has completed at least 10 years of service, on the same terms as such other former employees. If eligible,employees, provided the NEO has completed at least 10 years of service. Where applicable, this coverage will continuecontinues until the named executive officerNEO turns age 65. Thereafter, the named executive officerNEO may participate in the Company’sour general retiree health plan as it may exist in the future, if otherwise eligible. If the named executive officerNEO will be age 55 or older and will have completed at least 10 years of service at the end of, and including, the two-year period following termination, the named executive officerNEO will be deemed to be age 55 and/orand to have 10 years of service under any pre-65 retiree health plan as well as the SERP.plan.

The above severance-related benefits are provided only if the named executive officer executes a general release prepared by the Company.

Termination Due to Retirement. Under the Company’sClorox’s policy applicable to all employees, upon retirement the named executive officer is entitled to their salary through the last day of employment and is eligible for a pro-rata portion of the Annual Incentive Plan award for the fiscal year in which their retirement occurs. Based on the provisions of the respective plans, he or she will also be eligible to receive SERP, ERP, and other benefits under applicable Company retirement plans. In addition to the amounts that the named executive officer has earned or accrued over the course of their employment under the Company’s qualified and nonqualified plans, a named executive officerNEOs who is at least age 55 with 10 years of service or who has 20 years of service regardless of age on the date of termination is eligible to receive retirement-related benefits under the long-term incentive program. StockBeginning with the fiscal year 2021 awards, granted in September 2020, stock options held for longer thanat least six months will vest in full in accordance with the original vesting schedule and remain exercisable for five years following the named executive officer’sNEO’s retirement or until the expiration date, whichever is sooner, and performance

sharessooner. PSUs will be paid out on a pro-rata basis at the end of the relevant performance period based on the actual level of performance achieved during that period. Beginning with the fiscal year 2021 grant, restricted stock unitsawards, granted in September 2020, RSUs held for longer thanat least six months will vest in full in accordance with the original vesting schedule.

Severance-related benefits are provided only if the NEO executes a general release prepared by Clorox.

Termination Due to Death or DisabilityRetirement. . Under the Company’sClorox’s policy applicable to all employees, if the named executive officer’s employment is terminated due to their death, the named executive officer’s beneficiary or estate is entitled to (i) the named executive officer’s salary through the date of their death, (ii)upon retirement, NEOs are eligible for a pro-rata portion of the named executive officer’s actual Annual Incentive PlanAIP award for the fiscal year in which their retirement occurs. Based on the provisions of the respective plans, they also will be eligible to receive ERP and other benefits under applicable Clorox retirement plans, including our general retiree health plan as it may exist in the future, if otherwise eligible.

In addition to the amounts that the NEO has earned or accrued over the course of their death, (iii)employment under our qualified and nonqualified plans, under Clorox’s policy applicable to all employees, a NEO who is at least age 55 with 10 years of service or who has 20 years of service regardless of age on the date of termination is eligible to receive retirement-related benefits under the long-term incentive program. Beginning with the fiscal year 2021 awards, granted in September 2020, stock options held for at least six months will vest in full in accordance with the original vesting schedule and remain exercisable for five years following the NEO’s retirement or until the expiration date, whichever is sooner. PSUs will be paid out on a pro-rata basis at the end of the relevant performance period based on the actual level of performance achieved during that period. Beginning with the fiscal year 2021 awards, granted in September 2020, RSUs held for at least six months will vest in full in accordance with the original vesting schedule.

Termination Due to Disability or Death. If a NEO begins to receive benefits under our long-term disability plan, Clorox may terminate the NEO’s employment at any time, in which case the NEO will receive a pro-rata portion of the named executive officer’sAIP award and a pro-rata portion of the NEO’s 6% annual contribution to the 401(k) plan for the fiscal year of their death, and (iv) benefits pursuant to the Company’s life insurance plan.termination. Stock options and restricted stock units will vest in full, and all vested options will remain exercisable for an additional year following the named executive officer’s deathNEO’s disability or until the expiration date, whichever is earlier, and all performance sharesPSUs will be paid out at the end of the relevant performance period based on the actual level of performance achieved during that period.

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Under Clorox’s policy applicable to all employees, if a NEO’s employment is terminated due to death, the named executive officer beginsNEO’s beneficiary or estate is entitled to receive benefits under the Company’s long-term disability plan, the Company may terminate the named executive officer’s employment at any time, in which case the named executive officer will receive their salary through the date of their termination and will also be entitled to(i) a pro-rata portion of theirthe NEO’s actual Annual Incentive PlanAIP award for the fiscal year of their termination.death, (ii) a pro-rata portion of the NEO’s 6% annual contribution to the 401(k) plan for the fiscal year of death, and (iii) benefits pursuant to our life insurance plan. Stock options and RSUs will vest in full, and all vested options will remain exercisable for an additional year following the named executive officer’s disabilityNEO’s death or until the expiration date, whichever is earlier, and all performance sharesPSUs will be paid out at the end of the relevant performance period based on the actual level of performance achieved during that period.

Termination for Misconduct. The CompanyClorox may terminate a named executive officer’sNEO’s employment for misconduct at any time without notice. Upon the named executive officer’sNEO’s termination for misconduct, the named executive officer is entitled to their salary through the date of their termination, butNEO is not entitled to any Annual Incentive PlanAIP award for the fiscal year in which their termination for misconduct occurs. “Misconduct” under the Severance Plan means:means any act or omission of the NEO through which the NEO: (i) the willful and continued neglect ofwillfully neglects significant duties he or willful and continued violation ofshe is required to perform or willfully violates a material CompanyClorox policy, and, after having beenbeing warned in writing, continues to neglect such duties or continues to violate the specified Clorox policy; (ii) commits a material act of dishonesty, fraud, misrepresentation or other act of moral turpitude,turpitude; (iii) acts (or omits to act) with gross negligence in the course of employment,employment; (iv) the failurefails to obey a lawful direction of the Board or, for NEOs other than the CEO, a corporate officer to whom the named executive officerhe or she reports, directly or indirectly,indirectly; or (v) an action that isacts in any other manner inconsistent with the Company’sClorox’s best interests and values.


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All outstanding stock optionoptions and restricted stock units grantsRSUs awards are forfeited upon a termination for misconduct. In addition, any retirement-related benefits a named executive officerNEO would normally receive related to performance sharesPSUs are also forfeited upon a termination for misconduct.

Voluntary Termination. A named executive officerNEO may resign from their employment at any time. Upon the named executive officer’sa NEO’s voluntary resignation, the named executive officer is entitled to their salary through the date of termination, butNEO is not entitled to any Annual Incentive PlanAIP award for the fiscal year of termination. All unvested outstanding stock options, restricted stock units,RSUs, and performance share grantsPSUs are forfeited upon voluntary termination.

The Company also maintains the CIC Plan for the benefit of each of our named executive officers. Please see the Potential Payments Upon Termination or Change in Control section below for further details on the CIC Plan.

Potential Payments Upon Change in Control

Executive Change in Control Severance Plan for Named Executive Officers.

Under the CIC Plan, executives are eligible for change in control severance benefits, subject to the execution of a waiver and release, if they are terminated without cause or resign for good reason (each as defined under the CIC Plan and as further described below) during (i) the two-year period following a change in control or (ii) a period of up to one year prior to the change in control in limited circumstances where the executive’s termination is directly related to or in anticipation of a change in control.

The severance benefits under the CIC Plan include (i) a lump-sum severance payment equal to two times (or,times—or, in the case of the CEO, three times) times—the sum of (a) the executive’s base salary and (b) average Annual Incentive PlanAIP award for the three completed fiscal years prior to termination, (ii) a lump-sum amount equal to the difference between the actuarial equivalent of the benefit the named executive officerNEO would have been entitled to receive if their employment had continued until the second anniversary of the date of termination and the actuarial equivalent of the aggregate benefits paid or payable as of the date of termination under the qualified and nonqualified retirement plans, (iii) a payment equal to the cost of applicable healthcare benefits for a maximum of two (or,two—or, in the case of the CEO, three) three—years following a severance-qualifying termination, (iv) continued financial planning services for the year of termination, (v) vesting of all outstanding equity awards granted prior to the change in control, and (vi) an amount equal to the average Annual Incentive PlanAIP award for the three completed fiscal years preceding termination prorated for the number of days employed in the fiscal year during which termination occurred.

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Compensation Discussion and Analysis Tables

In addition, the CIC Plan

provides for an excise tax cutback such that the excise tax under Sections 280G and 4999 of the IRC would not apply, (unlessunless the executive would receive a greater amount of severance benefits on an after-tax basis without a cutback, in which case the cutback would not apply).apply. The CIC Plan permits the MDCC to make changes to the CIC Plan that are adverse to covered executives with 12 months’ advance notice. If a change in control of the CompanyClorox occurs during that 12-month period, then such changes would not become effective. Each participant under the CIC Plan is subject to certain restrictive covenants including confidentiality and non-disparagement provisions and a non-solicitation and non-diversion of business provision during the term of their employment and for two years thereafter.

“Cause” is generally defined as (i) willful and continued failure to substantially perform duties upon written demand or (ii) willfully engaging in illegal conduct or gross misconduct that is materially and demonstrably injurious to the Company.Clorox. A termination for cause requires a vote of 75% of the Board at a meeting after notice to the executive has been given and the executive has had an opportunity to be heard.

“Good Reason” is generally defined as (i) an assignment of duties inconsistent in any material respects with the executive officer’s position (including offices and reporting requirements), authority, duties, or responsibilities (ii) any failure to substantially comply with, or any reduction by the CompanyClorox in, any of the material provisions of compensation plans, programs, agreements, or arrangements as in effect immediately prior to the change in control, including any material reduction in base salary, cash incentive compensation target bonus opportunity, equity compensation opportunity in the aggregate, or employee benefits or perquisites in the aggregate, (iii) relocation of principal place of employment that increases the executive officer’s commuting distance by more than 35 miles, (iv) termination of employment by the CompanyClorox other than as expressly permitted by the CIC Plan, or (v) failure of a successor company to assume the CIC Plan.

Estimated Potential Payments Upon Termination or Change in Control

The following table reflects the estimated amount of compensation payable to each of the Company’s named executive officers upon termination of the named executive officer’s employment under various scenarios. The amounts exclude earned amounts such as vested or accrued benefits, other than benefits vested under the Company’s SERP. If a named executive officer is eligible for their SERP benefit as of the assumed termination date, the respective SERP benefit amount reported under the Retirement column is also included in the scenarios for Involuntary Termination Without Cause and Involuntary Termination After Change in Control on the Retirement Plan Benefits line.



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Compensation Discussion and Analysis Tables

The amounts shown are calculated using an assumed termination date effective as of the last business day of fiscal year 2020 (June 30, 2020) and the closing trading price of our Common Stock of $219.37 on such date. Although the calculations are intended to provide reasonable estimates of the potential compensation payable upon termination, they are based on assumptions outlined in the footnotes of the table and may not represent the actual amount the named executive officer would receive if an eligible termination event were to occur.

The table does not include compensation or benefits provided under plans or arrangements that are generally available to all salaried employees. Amounts reflected for change in control assume that each named executive officer is involuntarily terminated by the Company without cause or voluntarily terminates for good reason within two years after a change in control.


FISCAL YEAR 2020 TERMINATION TABLE

The following table sets forth the compensation earned, paid or awarded to our named executive officers for the fiscal years ended June 30, 2020.

Name and Benefits     Involuntary
Termination
Without Cause
     Involuntary
Termination
After Change
In Control
 Retirement     Disability     Death
Benno Dorer
Cash Payment     $7,072,500(1)    $11,070,000(2)$(3)$(4)$(4)
Stock Options23,947,633(16)23,947,633(5)23,947,633(16)23,947,633(6)23,947,633(6)
Restricted Stock
Performance Shares8,719,807(17)12,962,881(7)8,719,807(17)12,962,881(8)12,962,881(8)
Retirement Plan Benefits5,369,911(18)5,698,108(19)5,369,911(18)4,680,718(9)2,910,445(10)
Health & Welfare Benefits22,860(11)34,290(12)
Financial Planning16,500(13)
Total Estimated Value$45,132,711$53,729,412$38,037,351$41,591,232$39,820,959
Kevin Jacobsen
Cash Payment$1,710,000(14)$2,730,000(15)$(3)$(4)$(4)
Stock Options4,331,530(16)4,331,530(5)4,331,530(16)4,331,530(6)4,331,530(6)
Restricted Stock
Performance Shares1,589,512(17)2,580,288(7)1,589,512(17)2,580,288(8)2,580,288(8)
Retirement Plan Benefits
Health & Welfare Benefits36,648(11)36,648(12)
Financial Planning16,500(13)
Total Estimated Value$7,667,690$9,694,966$5,921,042$6,911,818$6,911,818
Linda Rendle
Cash Payment$2,350,000(14)$4,600,000(15)$(3)$(4)$(4)
Stock Options5,696,249(5)5,438,016(6)5,438,016(6)
Restricted Stock405,835(20)405,835(20)405,835(20)
Performance Shares2,851,303(7)2,851,303(8)2,851,303(8)
Retirement Plan Benefits
Health & Welfare Benefits22,008(11)22,008(12)
Financial Planning16,500(13)
Total Estimated Value$2,372,008$13,591,894$$8,695,153$8,695,153

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Name and Benefits     Involuntary
Termination
Without Cause
    Involuntary
Termination
After Change
In Control
     Retirement     Disability     Death
Laura Stein
Cash Payment     $1,809,000(14)   $2,747,000(15)$(3)$(4)$(4)
Stock Options4,689,547(16)4,689,547(5)4,689,547(16)4,689,547(6)4,689,547(6)
Restricted Stock
Performance Shares1,693,697(17)2,563,132(7)1,693,6972,563,132(8)2,563,132(8)
Retirement Plan Benefits7,333,051(18)7,691,598(19)7,333,051(18)6,307,609(9)3,097,848(10)
Health & Welfare Benefits13,680(11)13,680(12)
Financial Planning16,500(13)
Total Estimated Value$15,538,974$17,721,457$13,716,294$13,560,288$10,350,527
Eric Reynolds
Cash Payment$2,100,000(14)$3,500,000(15)$(3)$(4)$(4)
Stock Options3,638,324(16)3,638,324(5)3,638,324(16)3,638,324(6)3,638,324(6)
Restricted Stock
Performance Shares1,177,812(17)2,019,943(7)1,177,812(17)2,019,943(8)2,019,943(8)
Retirement Plan Benefits
Health & Welfare Benefits12,240(11)12,240(12)
Financial Planning16,500(13)
Total Estimated Value$6,928,376$9,187,007$4,816,136$5,658,267$5,658,267

(1)This amount reflects two times Mr. Dorer’s current base salary plus two times 75% of his target Annual Incentive Plan award. In addition, the amount includes 100% of his current year target Annual Incentive Plan award, pro-rated to the date of termination.
(2)This amount represents three times Mr. Dorer’s current base salary, plus three times the target Annual Incentive Plan award, plus the Annual Incentive Plan award, pro-rated to the date of termination, subject to the excise tax cut back provision in the Change in Control Severance Plan.
(3)Messrs. Dorer, Jacobsen and Reynolds, and Ms. Stein are retirement-eligible and thus are eligible for a pro-rata Annual Incentive Plan award upon retirement. However, all bonus-eligible employees active as of June 30, 2020 are eligible to receive an annual incentive award, and as such a pro-rata Annual Incentive Plan award would not be applicable as of this date as the assumed termination date is June 30, 2020. Ms. Rendle is not retirement-eligible and thus not eligible for an annual incentive award upon retirement.
(4)Named executive officers whose termination is the result of disability or death are eligible to receive a pro-rata Annual Incentive Plan award through the date of termination. However, all bonus-eligible employees active as of June 30, 2020 are eligible to receive an annual incentive award, and as such a pro-rata Annual Incentive Plan award would not be applicable since the assumed termination date is June 30, 2020.
(5)For Messrs. Dorer, Jacobsen and Reynolds, and Ms. Stein who are retirement-eligible, this amount represents the expected value of the accelerated vesting of all outstanding stock options, and assumes a five-year expected life, or the remaining original term, whichever is sooner. For Ms. Rendle, this amount represents the intrinsic value of the accelerated vesting of all outstanding stock options (based on the provision that non-retirement eligible executives exercise stock options within 90 days of termination), calculated as the difference between the June 30, 2020 closing Common Stock price of $219.37 and the exercise price for each option.
(6)For Messrs. Dorer, Jacobsen and Reynolds, and Ms. Stein who are retirement-eligible, this amount represents the expected value of the accelerated vesting of all outstanding stock options upon the named executive officer’s termination of employment due to disability or death, and assumes a five-year expected life, or the remaining original term, whichever is sooner. For Ms. Rendle, this amount represents the expected value of the accelerated vesting of all outstanding stock options (based on the provision that non-retirement eligible executives exercise stock options within one-year of death or disability), calculated as the difference between the June 30, 2020 closing Common Stock price of $219.37 and the exercise price for each option.
(7)Performance shares will vest based on performance through the day of the change in control. This amount assumes a pro-rated targeted payout and is valued at the closing price of our Common Stock on June 30, 2020 of $219.37.
(8)This amount represents the value of the accelerated vesting of performance shares upon a death or disability, assuming a target payout and valued at the closing price of our Common Stock on June 30, 2020 of $219.37. Upon a death or disability termination, the entire performance share grant will vest. The actual payout will not be determined until the end of the performance period.
(9)This amount represents the present value of the SERP benefit payable to the named executive officer at the time of termination due to disability.
(10)This amount represents the present value of the SERP benefit payable to the named executive officer’s beneficiary at the time of death.
(11)This amount represents the estimated Company cost of providing welfare benefits, including medical, dental, and vision, for the two-year period following termination.
(12)For Messrs. Jacobsen and Reynolds, and Mses. Stein and Rendle, this amount represents the estimated Company cost of providing welfare benefits, including medical, dental, and vision, for the two-year period following a qualifying termination after a change in control. For Mr. Dorer, this amount represents the estimated Company cost of providing welfare benefits, including medical, dental, and vision, for the three-year period following a qualifying termination after a change in control.
(13)This amount represents the cost of providing financial planning for the year of termination.
(14)This amount reflects two times the named executive officer’s current base salary. In addition, for Messrs. Jacobsen and Reynolds and Ms. Stein who are retirement-eligible, this amount includes 100% of their current year target Annual Incentive Plan award pro-rated to the date of termination. For Ms. Rendle, this amount includes 75% of their current year's target Annual Incentive Plan award, pro-rated to the date of termination.

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(15)This amount represents two times the named executive officer’s current base salary, plus two times the average Annual Incentive Plan awards for the preceding three years, subject to the excise tax cut back provision in the Change in Control Severance Plan. For Messrs. Jacobsen and Reynolds and Ms. Stein who are retirement-eligible, this amount also includes 100% of their current year target Annual Incentive Plan award, pro-rated to the date of termination. For Ms. Rendle, this amount includes the average Annual Incentive Plan awards for the preceding three years, pro-rated to the date of termination.
(16)Messrs. Dorer, Jacobsen and Reynolds and Ms. Stein are retirement-eligible and, thus, all unvested stock options held greater than six months will automatically vest upon termination. This amount represents the expected value of the accelerated vesting of the stock options, and assumes a five-year expected life, or the remaining original term, whichever is sooner.
(17)Messrs. Dorer, Jacobsen and Reynolds and Ms. Stein are retirement-eligible and, thus, are entitled to receive a pro-rata portion of all performance shares held at least one year at the date of termination for the September 2016 award and a pro-rata portion of all performance shares for the September 2017 and September 2018 awards, for which no holding period is required. This value represents the full vesting of eligible shares from the September 2017 grant, as with the assumed termination date of June 30, 2020 they would have completed the entire performance period and the pro-rata vesting of the eligible shares from the September 2018 and September 2019 grants, assuming a target payout and valued at the closing price of our Common Stock on June 30, 2020 of $219.37. The actual payout of the shares will not be determined until the end of the performance period. Named executive officers who are not retirement-eligible forfeit shares upon termination under these scenarios.
(18)This amount represents the present value of the Company SERP per the provisions of the Severance Plan for Clorox Executive Committee Members.
(19)This amount represents the difference between the actuarial equivalent of the benefit Mr. Dorer and Ms. Stein would have been eligible to receive if their employment had continued until the second anniversary of the date of termination or the first day of the month following their 65th birthday, if earlier, under the qualified and nonqualified retirement plans and the actuarial equivalent of their actual aggregate benefits paid or payable, if any, as of the date of termination under the qualified and nonqualified retirement plans.
(20)This amount represents value of the restricted stock held by Ms. Rendle that will vest upon change in control, death or disability.


Fiscal Year 20202022 CEO Pay Ratio

Under rules adopted by the SEC under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the Dodd-Frank Act), we are required to disclose the ratio of the annual total compensation of our Chair & CEO to the annual total compensation of our median compensated employee. To identify our median employee for purposes of this disclosure, we first determined the pool of all individuals employed by us (other than the CEO) on June 20, 2019. We did not make any assumptions, adjustments, or estimates with respect to total cash compensation and no exclusions were utilized during this process. We selected our median employee from that pool in accordance with the SEC rules as explained in our proxy statement for fiscal year 2019. We believe there has been no change to our employee population and compensation arrangements, or the circumstances of the median employee used in fiscal year 2019 that we believe would result in a significant change to our pay ratio disclosure. Accordingly, as permitted under SEC rules, we are using the same median employee for the pay ratio for fiscal year 2020 by examining the total cash compensation utilizing data as of June 30, 2020.

We calculated annual total compensation for that employee using the same methodology we use for our named executive officersNEOs as set forth in the Summary Compensation Table in this proxy statement.

Total compensation for our median compensated employee is $75,157.was $63,866.
Our CEO to median compensated employee pay ratio is 165:134:1.

The pay ratio reported here is a reasonable estimate calculated in a manner consistent with SEC rules basedrules.

To identify our median compensated employee for purposes of this disclosure, we first determined the pool of all individuals employed by us, other than the CEO, on June 30, 2022. Subsequently, we reviewed the total cash compensation earned by each such individual during fiscal year 2022. All employees (full-time, part-time, and temporary) other than the CEO were included in this analysis. We did not make any assumptions, adjustments, or estimates with respect to total cash compensation and no exclusions were used during this process. Finally, we selected as our payroll and employment records andmedian compensated employee the methodology described above.individual whose total cash compensation for fiscal year 2022 was closest to the median total cash compensation of the entire pool.

The SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies, including our compensation peer group, may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilizeuse different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.



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Equity Compensation Plan Information

The following table sets out the number of shares of Common Stockcommon stock to be issued upon exercise of outstanding options, warrants, and rights, the weighted-average

exercise price of outstanding options, warrants, and rights, and the number of securities available for future issuance under equity compensation plans as of June 30, 2020.2022.


     [a]  [b]  [c]

[a]

[b]

[c]

Plan categoryNumber of securities to
be issued upon exercise
of outstanding options,
warrants, and rights
(in thousands)
Weighted-average
exercise price per share of
outstanding options,
warrants, and rights
Number of securities
remaining for future
issuance under non-
qualified stock-based
compensation programs
(excluding securities
reflected in column [a])
(in thousands)

Number of
securities to
be issued
upon exercise
of outstanding
options,
warrants,
and rights
(in thousands)

Weighted-average
exercise price
per share of
outstanding
options, warrants,
and rights

Number of
securities
remaining
for future
issuance under
non-qualified
stock-based
compensation
programs
(excluding
securities
reflected in
column [a])
(in thousands)

Equity compensation plans approved by
security holders
5,759                                  $1277,026     5,068                            $144     4,320
Equity compensation plans not approved by
security holders
Total5,759$1277,0265,068$1444,320

Column [a] includes the following outstanding equity-based awards (in thousands):

4,8614,198 stock options
414313 performance shares and deferred shares
190145 deferred stock units for non-employee directors
294412 restricted stock awards

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Audit Committee Matters


Proposal 3:
Ratification of Independent Registered Public Accounting Firm

The Audit Committee has the authority to appoint, retain, compensate, and oversee the Company’s independent registered public accounting firm, and the Company’s shareholders must ratify the Audit Committee’s selection and appointment. The Audit Committee has selected Ernst & Young LLP (E&Y)(EY) as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2021. E&Y2023. EY has been engaged since February 15, 2003.


Board’s Recommendation

The Board unanimously recommends that shareholders vote FOR the ratification of the selection of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2021.2023. While we are not required by law to obtain such ratification from our shareholders, the Board believes it is good practice to do so. The Audit Committee and the Board believe that the continued retention of E&YEY as the Company’s independent registered public accounting firm is in the best interests of the Company and its shareholders.

Representatives of E&YEY are expected to be present at the Annual Meeting to respond to appropriate questions and to make a statement should they desire to do so.


Vote Required

The affirmative vote of a majority of the votes present in person or represented by proxy and entitled to vote on the matter is required to ratify the appointment of E&Y.EY. If shareholders fail to ratify the appointment of E&Y,EY, the Audit Committee will reconsider the appointment.

The people designated in the proxy and voting instruction card will vote your shares represented by proxy FOR ratification unless you include instructions to the contrary.



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Audit Committee Report

The Audit Committee assists the Board in its oversight of corporate governance by overseeing the quality and integrity of the accounting, auditing, and financial reporting practices of the Company, including:

review of reports filed by the Company on Form 10-Q and Form 10-K,
oversight of the financial reporting process,
assessment of the effectiveness of the Company’s internal control over financial reporting and the review of the performance of the internal audit function, and
oversight of the Company’s framework and guidelines with respect to risk assessment and risk management, including the Company’s cybersecurity and information technology risks and initiatives, and disclosure controls and procedures.

The Audit Committee operates in accordance with a written charter, which was adopted and is periodically updated by the Board. Each member of the Audit Committee is “independent,” as required by the applicable listing standards of the NYSE and the rules of the SEC.

While the Company’s management has primary responsibility for the financial statements, the reporting process and the Company’s internal control over financial reporting, the independent registered public accounting firm is responsible for performing an integrated audit of the Company’s financial statements and internal control over financial reporting in accordance with the auditing standards of the Public Company Accounting Oversight Board (the PCAOB). The Audit Committee members are not professional accountants or auditors, and their functions are not intended to duplicate or to certify the activities of management or the Company’s independent registered public accounting firm.Company.

The Audit Committee is responsible for the appointment, retention, compensation, and oversight of the Company’s independent registered public accounting firm, including the review of their qualifications, independence and performance, and approval of the audit fee. In this regard, the Audit Committee appointed Ernst & Young LLP (E&Y)EY to audit the Company’s financial statements as of and for the year ended June 30, 2020,2022, and the effectiveness of the Company’s internal control over financial reporting as of June 30, 2020. E&Y2022. EY has served as the Company’s independent registered public accounting firm since February 2003. The Audit Committee considered several factors in selecting E&YEY as the Company’s independent registered public accounting firm for the year ended June 30, 2020,2021, including the firm’s independence and internal quality controls, the overall depth of talent, their experience with the Company’s industry, and their familiarity with the

Company’s businesses and internal control over financial reporting. In determining whether to reappoint E&YEY as the Company’s independent registered public accounting firm for the year ending June 30, 2021,2023, the Audit Committee again took those factors into consideration along with its evaluation of the past performance of E&YEY and determined that the continued retention of E&YEY as the Company’s independent registered public accounting firm is in the Company’s best interests.

The Audit Committee has a policy that requires it to consider and approve, in advance, any audit and permissible non-audit services to be performed by the independent registered public accounting firm. Among the assurance and related services provided by E&YEY in fiscal year 2020, E&Y2022, EY has issued reports on its review of certain corporate responsibility and sustainability metrics and information provided in the Company’s 2022 Integrated Annual Report – Executive Summary.Report. The Audit Committee obtained from E&YEY the written disclosures and the letter required by the applicable requirements of the PCAOB regarding https://www.thecloroxcompany.com/who-we-are/corporate-governance/committee-charters communications with the Audit Committee concerning independence of the auditors and discussed with the auditors their independence. In evaluating E&Y’sEY’s independence, the Audit Committee considered whether the firm’s provision of any non-audit services impaired or compromised the firm’s independence and concluded that they did not.

Further, in conjunction with the mandated rotation of the auditing firm’s coordinating partner, the Audit Committee and its chairperson oversee and are directly involved in the selection of E&Y’sEY’s new coordinating partner. The Audit Committee periodically considers rotation of the registered independent public accounting firm.

In fulfilling its oversight responsibilities, the Audit Committee meets regularly with management and E&YEY to discuss, prior to their release to the public, the Company’s financial statements and earnings releases and, as appropriate, other Company public communications containing Company financial information or performance measures. The Audit Committee’s meetings with the independent registered public accounting firm, which are both with and without management present, include discussions about the results of the independent registered public accounting firm’s examinations and evaluations of the quality of the Company’s financial statements and the Company’s internal control over financial reporting.

In this regard, the Audit Committee reviewed and discussed with management the audited financial statements included in the Annual Report on Form 10-K for the fiscal year ended


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Audit Committee Report

June 30, 2020.2022. This review included a discussion of the quality and the acceptability of the Company’s financial reporting and system of internal controls, including the clarity of disclosures in the financial statements, reasonableness of significant contingency accruals, reserves, allowances and other judgments, critical accounting policies and estimates, and risk assessment. In addition, the Audit Committee reviewed and discussed with the Company’s independent registered public accounting firm the scope and plans for their audit, the audited financial statements of the Company for the fiscal year ended June 30, 2020,2022, the independent registered public accounting firm’s judgments as to the quality and acceptability of the

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Audit Committee Report

Company’s financial reporting, E&Y’sEY’s discussion about critical audit matters in its report on the audited financial statements for the fiscal year ended June 30, 2020,2022, the Company’s critical accounting policies and estimates, the effectiveness of the Company’s

internal control over financial reporting and such other matters as are required to be discussed by the applicable requirements of the PCAOB and SEC.

In addition to the regular meetings with the independent registered public accounting firm and management noted above, the Audit Committee meets periodically with the internal audit team to discuss the scope, plans and results of their audits and holds private sessions with each of the Company’s General Counsel, Chief Financial Officer, and Vice President of Internal Audit.

Based upon the review and discussions referred to above, the Audit Committee recommended to the Board that the Company’s audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2020,2022, for filing with the SEC.


THE AUDIT COMMITTEE as of June 30, 20202022

Christopher J. Williams, Chair
Amy Banse
A.D. David Mackay
Matthew J. Shattock
Russell J. Weiner

Christopher J. Williams,
Chair
Amy L. BanseA.D. David MackayPaul Parker

Fees of the Independent Registered Public Accounting Firm

The table below includes fees related to fiscal years 20202022 and 20192021 of the Company’s independent registered public accounting firm, Ernst & Young LLP:EY:

2020201920222021
Audit Fees(1)$6,187,000$5,842,000     $5,425,000     $5,751,000
Audit-Related Fees(2)114,000130,000184,000149,000
Tax Fees(3)63,000117,000187,000182,000
All Other Fees(4)145,0005,0003,0003,000
Total$6,509,000$6,094,000$5,799,000$6,085,000

(1)

Consists of fees for professional services rendered for the audit of the Company’s annual financial statements and internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002, included in the Company’s Annual Reports on Form 10-K for each of the fiscal years ended June 30, 20202021 and 2019,2020, and for review of the financial statements included in the Company’s Quarterly Reports on Form 10-Q during those fiscal years.

(2)

Consists of fees for assurance and related services (including sustainability assurance, the Company’s employee benefit plans)plans and other attestation services) not included in the Audit Fees listed above.

(3)

Consists of fees for tax compliance, tax advice and tax planning for the fiscal years ended June 30, 20202022 and 2019.2021. These services included advisory services on tax return preparationmatters and review services for foreign subsidiaries and affiliates and advisory services on tax matters.affiliates.

(4)

Consists of fees for all other services not included in the three categories set forth above and are primarily related to permissible strategic advisory services and subscriptions to online content for fiscal years ended June 30, 20202022 and 2019.2021.

The Audit Committee has established a policy that requires it to approve all services provided by the Company’s independent registered public accounting firm before services are provided. The Audit Committee has pre-approved the engagement of the independent registered public accounting firm for audit services, and certain specified audit-related services and tax services within defined limits. The Audit Committee has not pre-approved engagement of the independent registered public accounting firm for any other non-audit services.


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Additional Items to be Voted On

Proposal 4:
Amendment to the Company’s Restated Certificate
of Incorporation to Eliminate the Supermajority
Voting Provision

Article Six of the Company’s Restated Certificate of Incorporation (Certificate of Incorporation) currently requires that certain transactions between the Company and a beneficial owner of more than 5% of the Company’s Common Stock (Interested Stockholder) be approved by a vote of 80% of the outstanding shares of Common Stock at the time of the transaction unless (a) the transaction is approved by the Board or (b) the transaction meets certain pricing requirements.

This “interested stockholder” business combination provision, which is the only provision in the Company’s Certificate of Incorporation that requires approval of more than a majority of outstanding shares of Common Stock, requires a vote of 80% of the outstanding shares of Common Stock to be removed from the Company’s Certificate of Incorporation. This supermajority provision is a legacy provision that was designed to protect minority shareholders under circumstances in which a party would seek to acquire the Company through the open market accumulation of shares.

This year, the Company is again submitting a proposal to eliminate the supermajority provisions in the Certificate of Incorporation by deleting in its entirety the text of Article Six. The Company previously submitted an identical proposal for shareholder approval at the Company’s 2018 and 2019 Annual Meeting of Shareholders. However, the proposal was not approved by the Company’s shareholders as it did not receive the requisite number of votes in 2018 and 2019. After revisiting this topic again this year, the Board continues to believe that this supermajority provision does not substantively enhance the Company’s defense profile. The Board also continues to be mindful of the fact that during the Company’s previous shareholder

engagements, shareholders have expressed disapproval of the Company’s supermajority provisions for “interested stockholder” business combinations, as well as for similar provisions at other companies. The Board also notes that the majority of S&P 500 Companies have, over the past several years, eliminated such supermajority provisions for business combinations.

Further, the Company continues to be subject to and benefit from Section 203 of the Delaware General Corporation Law, which provides that once a stockholder reaches a 15% ownership threshold, such stockholder is prohibited for a period of three years from consummating a broad range of business combination transactions with the Company, unless (a) the business combination is approved by the Board, (b) the business combination is approved by the holders of 2/3 or more of the outstanding voting stock not held by such stockholder, or (c) such stockholder is able to obtain at least 85% of the outstanding shares in one step. Though there are some differences between the Company’s supermajority provision and Section 203, the Board believes that Section 203 provides the Company appropriate protection from unfair acquisition attempts.

Accordingly, the Board is again asking the Company’s shareholders to vote in support of this proposal.

The full text of the proposed amendment to the Certificate of Incorporation, marked to show the proposed deletion of Article Six, is set forth in Appendix A to this Proxy Statement. The general description of the Certificate of Incorporation and the proposed amendment set forth herein are qualified in their entirety by reference to the text of Appendix A.


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Additional Items to be Voted On


Board’s Recommendation

The Board unanimously recommends a vote FOR this proposal to amend the Company’s Certificate of Incorporation to eliminate this supermajority voting provision for the reasons stated above. If the shareholders do not approve the amendment to the Company’s
Certificate of Incorporation eliminating this supermajority voting provision, the provision will continue to remain in existence, and certain “Interested stockholder” business combinations will continue to require the approval of 80% of the outstanding shares of Common Stock at the time of the transaction.



Vote Required

The affirmative vote of at least 80% of the then-outstanding voting stock, voting together as a single class, is required to approve this proposal.

The people designated in the proxy and voting instruction card will vote your shares FOR this proposal unless you include instructions to the contrary.

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Information About the Virtual Annual Meeting

This proxy statement is furnished in connection with the solicitation of proxies by the Board of The Clorox Company, (Clorox or the Company), a Delaware corporation, for use at the Annual Meeting, to be held at 9:00 a.m. Pacific time on Wednesday, November 18, 2020.16, 2022.

The Annual Meeting will be virtual and held online via live webcast at www.meetingcenter.io/246179169 (password: ‘CLX2020’)meetnow.global/MXNXWKW. Please refer to the Attending the Virtual Annual Meeting section of this proxy statement for more information about procedures for attending the virtual Annual Meeting. There will not be an option to attend the meeting in person.


For purposes of the following sections, you are a registered shareholder if your shares are registered in your name with Computershare, and you are a beneficial owner if you hold your shares through a broker, bank or other holder of record.


Delivery of Proxy Materials

Providing accessPursuant to rules adopted by the SEC, we are furnishing proxy materials via the Internet allows us to communicate with our shareholders inprimarily over the wayInternet. We believe that is most efficient and convenient for them, and supports us inthis process expedites shareholders’ receipt of these materials, lowers the costs of our efforts to conserve natural resourcesAnnual Meeting and reduces the costsenvironmental impact of printing and distributing the proxy materials. Onmailing printed copies. Accordingly, on or about October 6, 2020,5, 2022, we began mailing athe Notice of Internet Availability of Proxy Materials (the Notice) to our shareholders (other than those shareholders who previously requested electronic or paper delivery of communications from us), informing them that our Proxy Statement, 2022 Integrated Annual Report – Executive Summary, and voting

instructions are available on the Internet as of the same date.

As a shareholder, you may access these materials and vote your shares via the Internet or by telephone; youtelephone. You may also request that a printed copy of the proxy materials be sent to you. You will not receive a printed copy of the proxy materials unless you request one in the manner described in the Notice.

The Notice of Annual Meeting, Proxy Statement, and 2022 Integrated Annual Report – Executive Summary are available at www.edocumentview.com/CLX.CLX.

Electronic Delivery of Proxy Materials

We encourage our shareholders to enroll in voluntary e-delivery of future proxy materials. We believe that this process expedites shareholders’ receipt of these materials, lowers the costs of our Annual Meeting and reduces the environmental impact of mailing printed copies.

Registered shareholders

Visit computershare.com and log into your account to enroll.

Beneficial owner

Please follow the instructions provided to you by your broker, bank, trustee or nominee.


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Information About the Virtual Annual Meeting


Voting Information

Who Is Entitled to Vote

Only shareholders of record at the close of business on September 25, 202023, 2022 (the Record Date) are entitled to vote at the Annual Meeting. On that date, there were 126,034,560123,355,706 shares of Common Stockcommon stock outstanding and entitled to vote. Holders of Common Stockcommon stock as of the close of business on the Record Date are entitled to one vote per share on each matter submitted to a vote of shareholders.

How to Vote Before the Annual Meeting

Even if you plan to virtually attend the Annual Meeting, we strongly urge you to vote in advance. If you are a registered shareholder (i.e., your shares are registered in your name with Clorox’s transfer agent Computershare), you may vote via the Internet or by telephone by following the instructions on your proxy card, voting instruction form or Notice or (if you received a printed copy of the proxy materials) by completing and returning a proxy card or voting instruction form by mail. If you are the beneficial owner of shares held in “street name” (that is, you hold your shares through a broker, bank or other holder of record), you must follow that nominee’s instructions to vote.


72       Registered shareholders

    ��

THE CLOROX COMPANY - 2020 Proxy StatementYou may vote via the Internet or by telephone by following the instructions on your proxy card, voting instruction form or Notice or (if you received a printed copy of the proxy materials) by completing and returning a proxy card or voting instruction form by mail.

Beneficial owner

You must follow your broker, bank or other holder of record’s instructions to vote.



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Information About the Virtual Annual Meeting

Please note that if you received a Notice, you cannot vote your shares by filling out and returning the Notice. Instead, you should follow the instructions contained in the Notice on how to cast your vote.

How to Vote During the Annual Meeting

You may vote your shares at the Annual Meeting if you attend the meeting virtually and vote electronically during the Annual Meeting. Shareholders may participate in the Annual Meeting by visiting www.meetingcenter.io/246179169, entering the password ‘CLX2020’ and following the instructions on the website. To access and participate in the meeting you

Registered shareholders

You will need the 15-digit control number included on your Notice of Internet Availability of Proxy Materials, on your proxy card (if you received a printed copy of the proxy materials), or on the instructions that accompanied your proxy materials. If you vote by proxy and also attend the Annual Meeting, you do not need to vote again at the Annual Meeting unless you wish to change your vote.

Beneficial owner

You may need register with Computershare by 5:00 p.m. Eastern Time on November 11, 2022 to gain access to the Annual Meeting and to vote your shares or ask questions during the Annual Meeting. Please see the Attending the Virtual Annual Meeting section on pg 88 of the proxy statement for more information.

15-digit control number included on your Notice of Internet Availability of Proxy Materials, on your proxy card (if you received a printed copy of the proxy materials), or on the instructions that accompanied your proxy materials. If you vote by proxy and also attend the Annual Meeting, you do not need to vote again at the Annual Meeting unless you wish to change your vote.

Voting Shares Held in the Clorox 401(k) Plan

401(k) plan participants

You will receive a voting instruction card to direct Vanguard, as trustee of our 401(k) plan, how to vote the shares attributable to your individual account. Vanguard will vote shares as instructed by participants prior to 12:00 p.m. Eastern time on November 14, 2022. If you do not provide voting directions to Vanguard by that time, the shares attributable to your account will not be voted. Shares held in our 401(k) plan cannot be voted electronically during the Annual Meeting – please ensure that you complete the voting instruction card to direct the 401(k) plan trustee how to vote the shares attributable to your account prior to 12:00 p.m. Eastern time on November 14, 2022.


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If you are a participant in our 401(k) plan, you will receive a voting instruction card to direct Vanguard, as trustee of our 401(k) plan, how to voteInformation About the shares attributable to your individual account. Vanguard will vote shares as instructed by participants prior to 11:59 p.m. Eastern time on November 17, 2020. If you do not provide voting directions to Vanguard by that time, the shares attributable to your account will not be voted. Shares held in our 401(k) plan cannot be voted electronically during theVirtual Annual Meeting – please ensure that you complete the voting instruction card to direct the 401(k) plan trustee how to vote the shares attributable to your account prior to 11:59 p.m. Eastern time on November 17, 2020.

How to Revoke Your Proxy or Change Your Vote

If you are a shareholder of record, you

Registered shareholders

You may change your vote or revoke your proxy at any time before it is exercised at the Annual Meeting by taking any of the following actions:

submitting written notice of revocation to the Corporate Secretary of the Company;
voting again electronically by telephone or via the Internet or by submitting another proxy card with a later date; or
participating in the Annual Meeting and voting your shares electronically during the Annual Meeting.

Beneficial owner

You must follow the instructions of your bank, broker or other nominee to revoke your voting instructions.

If you are the beneficial owner of shares held in “street name,” you must follow the instructions of your bank, broker or other nominee to revoke your voting instructions.

Effect of Not Providing Voting Instructions to Your Broker

Beneficial owner

You have the right to direct your bank or broker how to vote your shares, and it is required to vote those shares in accordance with your instructions. Under applicable NYSE rules, if you do not give instructions to your bank or brokerage firm, it will have discretion to vote your shares on “routine” matters, but it will not be permitted to vote your shares on “non-routine” matters. In the case of a non-routine matter, your shares will be considered “broker non-votes” on that proposal.

Proposal 3 (Ratification of Independent Registered Public Accounting Firm) is the only routine matter on the agenda at this year’s Annual Meeting. Thus, the broker is entitled to vote your shares on Proposal 3 even if you do not provide voting instructions to your broker. The broker is not entitled to vote your shares on Proposal 1 or 2 without your instructions.

If you are the beneficial owner of shares held in “street name,” you have the right to direct your bank or broker how to vote your shares, and it is required to vote those shares in accordance with your instructions. Under applicable NYSE rules, if you do not give instructions to your bank or brokerage firm, it will have discretion to vote your shares on “routine” matters, but it will not be permitted to vote your shares on “non-routine” matters. In the case of a non-routine matter, your shares will be considered “broker non-votes” on that proposal.

Proposal 3 (Ratification of Independent Registered Public Accounting Firm) is the only routine matter on the agenda at this year’s Annual Meeting. Thus, the broker is entitled to vote your shares on Proposal 3 even if you do not provide voting instructions to your broker. The broker is not entitled to vote your shares on Proposal 1, 2, or 4 without your instructions.

Quorum

We must have a “quorum” to conduct the Annual Meeting. A quorum is a majority of the outstanding shares of Common Stockcommon stock entitled to vote at the meeting, present in person or by proxy. Abstentions and broker non-votes (described above) will be counted for the purpose of determining a quorum.

Votes Required; Effect of Abstentions and Broker Non-Votes

Proposal 1 (Election of Directors). A director nominee will be elected if he or she receives a majority of the votes cast in person or represented by proxy. A majority of the votes cast means that the number of shares voted FOR a director must exceed the number of shares voted AGAINST that director. An abstention or a broker non-vote on Proposal 1 will not have any effect on the election of directors and will not be counted in determining the number of votes cast. Your broker is not entitled to vote your shares on Proposal 1 unless you provide voting instructions.

Proposals 2 (Advisory Vote on Executive Compensation) and 3.3 (Ratification of Independent Public Accounting Firm). Approval of each of Proposals 2 and 3 requires the affirmative vote of a majority of the votes present in person or represented by proxy and entitled to vote on the matter. Abstentions will have the same effect as a vote against the proposal. Broker non-votes will have no effect and will not be counted, with respect to Proposal 2. There shouldWe expect there will be no broker non-votes with respect to Proposal 3, since brokers have discretionary voting authority with respect to this proposal.

Proposal 4. Approval of Proposal 4 requires the affirmative vote of 80% of the then-outstanding voting stock, voting together as a single class. Abstentions and broker non-votes will have the same effect as a vote against the proposal.


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Information About the Virtual Annual Meeting

Board’s Recommendations

The Board recommends that you vote:

FOR the election of each of the thirteen12 nominees for director named in this proxy statement (Proposal 1);
FOR the proposal to approve (on an advisory basis) the compensation of the Company’s named executive officers (Proposal 2); and
FOR the ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 20212023 (Proposal 3); and
FOR the amendment to the Company’s charter to eliminate the supermajority provision (Proposal 4).

Other Matters

Management of the Company is not aware of any matters other than those described in this proxy statement that may be presented for action at the Annual Meeting. If any other matters are properly presented at the Annual Meeting for consideration, the proxy holders will have discretion to vote for you on those matters.

Counting Votes; Vote Results

Votes will be counted by Computershare Trust Company, N.A., our inspector of election appointed for the Annual Meeting. We will report final results in a filing with the SEC on Form 8-K, which will be filed within four business days following the Annual Meeting.




Form 10-K, Financial Statements, and Integrated Annual Report – Executive Summary

The following portions of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2020,2022, are attached as Appendix BA to this proxy statement: Management’s Discussion and Analysis of Financial Condition and Results of Operations; Management’s Report on Internal Control over Financial Reporting; Report of Independent Registered Public Accounting Firm; Consolidated Financial Statements; and Reconciliation of Economic Profit. The Company’s Form 10-K has been

filed with the SEC and posted on the Company’s website and a copy may be obtained, without charge, by calling Clorox Investor Relations at 800-756-8200(510) 271-7767 toll-free or by contacting The Clorox Company, c/o Corporate Secretary, 1221 Broadway, Oakland, CA 94612-1888. The 20202022 Integrated Annual Report – Executive Summary is available with the proxy statement at www.edocumentview.com/CLX.edocumentview.com/CLX.




Solicitation of Proxies

We will pay for the entire cost of soliciting proxies on behalf of the Company. We will also reimburse brokerage firms,brokers, banks, and other agents for the cost of forwarding the Company’s proxy materials to beneficial owners. Our directors and employees may also solicit proxies in person, by telephone, via the Internet, or by other means of communication, for which they will not be paid any additional compensation. We have retained Innisfree M&A Incorporated (Innisfree) to assist in soliciting proxies for the Annual Meeting at an estimated cost of $50,000$20,000 plus out-of-pocket expenses and have agreed to indemnify Innisfree against certain liabilities arising out of or in connection with their engagement.

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Information About the Virtual Annual Meeting


Shareholder Proposals and Director Nominations for the 20212023 Annual Meeting

Shareholder Proposals for Inclusion in the Proxy Statement for the 20212023 Annual Meeting

In the event that a shareholder wishes to have a proposal considered for presentation at the 20212023 Annual Meeting and included in the Company’s proxy statement and form of proxy used in connection with such meeting pursuant to Exchange Act Rule 14a-8, the proposal must be received by the Company’s Corporate Secretary no later than the close of business on June 8, 2021.7, 2023. Any such proposal must comply with the requirements of Rule 14a-8.

Director Nominations for Inclusion in the Proxy Statement for the 20212023 Annual Meeting

The Board has adopted proxy access, which allows a shareholder or group of up to 20 shareholders who have owned at least 3% of the Company’s Common Stockcommon stock for at least three years to submit director nominees (up to 20% of the Board) for inclusion in the Company’s proxy materials if the shareholder or group provides timely written notice of such nomination and the shareholder or group, and the nominee(s) satisfy the requirements specified in the Company’s Bylaws. To be timely for inclusion in the Company’s proxy materials, notice must be received by the Corporate Secretary at the principal executive offices of the Company no earlier than the close of business on May 9, 2021,8, 2023, and no later than the close of business on June 8, 2021.7, 2023. The notice must contain the information required by the Company’s Bylaws, and the shareholder or group and its nominee(s) must comply with the information and other requirements in our Bylaws relating to the inclusion of shareholder nominees in the Company’s proxy materials.

Other Proposals and Director Nominations for Presentation at the 20212023 Annual Meeting

Our Bylaws also establish an advance notice procedure for shareholders who wish to present a proposal, including the nomination of directors, before an annual meeting of shareholders but do not intend for the proposal to be included in our proxy statement. Under our Bylaws, if a shareholder, rather than seeking to include a proposal or director nomination in the proxy statement as discussed above, seeks to nominate a director or propose other business for consideration at that meeting, notice must be received by the Corporate Secretary at the principal executive offices of the Company not later than the close of business on the 90th day or earlier than the close of business on the 120th day prior to the first anniversary of the preceding year’s annual meeting. To be timely for the 20212023 Annual Meeting, the notice must be received by the Corporate Secretary on any date beginning no earlier than the close of business on July 21, 2021,19, 2023, and ending no later than the close of business on August 20, 2021.18, 2023. However, in the event that the date of the annual meeting is advanced by more than 30 days, or delayed by more than 60 days from such anniversary date, notice by the shareholder to be timely must be so delivered not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. The notice must contain the information required by the Company’s Bylaws. If a shareholder does not meet these deadlines, or does not satisfy the requirements of Rule 14a-4 of the Exchange Act, the persons named as proxies will be allowed to use their discretionary voting authority when and if the matter is raised at the annual meeting.

In addition to satisfying the requirements of the Bylaws, including the earlier notice deadlines set out above and therein, to comply with universal proxy rules, shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must also provide notice that sets forth the information required by Rule 14a-10 of the Exchange Act, no later than September 17, 2023.

All notices of proposals or nominations, as applicable, must be addressed to The Clorox Company, c/o Corporate Secretary, 1221 Broadway, Oakland, CA 94612-1888.



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Information About the Virtual Annual Meeting


Eliminating Duplicative Proxy Materials

A single Notice of Annual Meeting and Proxy Statement or Notice of Internet Availability of Proxy Materials will be delivered to shareholders who share an address, unless otherwise requested. This procedure reduces printing and mailing costs. If you share an address with another shareholder, have received only one set of proxy materials and wish to receive a separate copy, or if you are currently receiving multiple copies of the proxy materials at the same address and wish to receive a single copy in the future, you may call us at Clorox Investor Relations at 800-756-8200 toll-free, or write to us at The Clorox Company, c/o Corporate Secretary, 1221 Broadway, Oakland, CA 94612-1888.future:

If you are a beneficial owner (i.e., your shares are held in the name of a bank, broker, or other holder of record), the bank, broker, or other holder of record may deliver only one copy of the proxy materials to shareholders who have the same address unless the bank, broker, or other holder of record has received contrary instructions from one or more of the shareholders. If you wish to receive a separate copy of the proxy materials, now or in the future, you may contact us at the address or telephone number above, and we will promptly deliver a separate copy. Beneficial owners sharing an address who are currently receiving multiple copies of the proxy materials and wish to receive a single copy in the future should contact their bank, broker, or other holder of record to request that only a single copy be delivered to all shareholders at the shared address in the future.



76       Registered shareholders

Contact Computershare to make your request.9

Computershare Investor Services
P.O. Box 43078
Providence, RI 02940-3078
Shareholders may call toll-free at (800) 756-8200

Beneficial owners

Contact your bank, broker, or other holder of record to make your request.


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Attending the Virtual Annual Meeting

The Annual Meeting will be held on Wednesday, November 18, 2020,16, 2022, at 9:00 a.m. Pacific time. The Annual Meeting will be held onlinetime, via live webcast at www.meetingcenter.io/246179169. The meeting password is ‘CLX2020’meetnow.global/MXNXWKW.

To attend the Annual Meeting, you must be a shareholder of the Company as of the close of business on the Record Date and have a 15-digit control number to access the virtual Annual Meeting. Please see the more detailed information below.



You are a registered shareholder if your shares are registered in your name with Computershare. You are a beneficial owner if you hold your shares through a broker, bank or other holder of record.

How to access and participate in the Annual Meeting online

Registered shareholders

1.

Visit the Annual Meeting website at www.meetingcenter.io/246179169,meetnow.global/MXNXWKW.

Please note that you may not use the Internet Explorer browser to access the meeting, as it is no longer supported.

2.

Enter the Annual Meeting password ‘CLX2020’, and

3.Enter the 15-digit control number included on your Notice of Internet Availability of Proxy Materials, on your proxy card (if you received a printed copy of the proxy materials), or on the instructions that accompanied your proxy materials.

Beneficial owners

You may beginhave two options to log intobe able to attend the meeting platform beginning at Annual Meeting.

1.

8:30 a.m. Pacific time on November 18, 2020. The meeting will begin promptly at 9:00 a.m. Pacific time on November 18, 2020.

If you are the beneficial owner of shares held in “street name” (that is, you hold your shares through a broker, bank or other holder of record), you must registerRegister in advance to gain access toof the Annual Meeting to vote your shares during the meeting or ask questions during the Annual Meeting.
To register, you will need to send your name, email address and an image of proof of your proxy power (i.e., a legal proxyproxy) reflecting your Clorox shareholding to Computershare at legalproxy@computershare.com, with the subject line, “Legal Proxy.” Such requests must be received no later than 5:00p.m.00 p.m. Eastern time on November 13, 2020.11, 2022.

To attend the Annual Meeting, visit the Annual Meeting website at meetnow.global/MXNXWKW and enter the unique control number provided to you by Computershare.

2.

Register at the Annual Meeting
You may not need to pre-register with Computershare and may, instead, be able to use the control number received with your voting instruction form from your bank, broker or other holder or record.
Please note, however, that this option is provided as a convenience to beneficial owners only, and there is no guarantee this option will be available to you.

To attend the Annual Meeting, visit the Annual Meeting website at meetnow.global/MXNXWKW and enter the control received with your voting instruction form from your bank, broker or other holder or record.We encourage you to access the Annual Meeting website prior to the Annual Meeting date, to confirm that you are able to attend the Annual Meeting without pre-registering with Computershare.

You may begin to log into the meeting platform beginning at 8:30 a.m. Pacific time on November 16, 2022. The meeting will begin promptly at 9:00 a.m. Pacific time on November 16, 2022.


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Attending the Virtual Annual Meeting

How to examine our shareholder list during the Annual Meeting

Follow the instructions provided on the meeting website during the Annual Meeting to examine the shareholder list. Only those participants who log-onlog on by using their unique control number will be able to examine the list.

For help with technical difficulties during the Annual Meeting

Call Computershare Investor Services at (800) 756-8200 (U.S. toll-free) for assistance. If you need additional shareholder support, please email investorrelations@clorox.com or call (510) 271-7767 for assistance.
Please note that you may not use the Internet Explorer browser to access the meeting, as it is no longer supported.

Any additional questions

Email Clorox Investor Relations at investorrelations@clorox.com or call (510) 271-7767.



Submitting Questions for the Virtual Annual Meeting

We are committed to ensuring, to the extent possible, that shareholders will be afforded the ability to participate at the virtual meeting similarly to how they would participate at an in-person meeting. The question and answer session will include questions submitted in advance of and submitted live during the Annual Meeting.

How to submit questions before the Annual Meeting

     

Questions may be submitted prior to the Annual Meeting at the meeting website (www.meetingcenter.io/246179169)meetnow.global/MXNXWKW). To submit a question in advance of the Annual Meeting, you must have the meeting password ‘CLX 2020’ and the 15-digit control number included on your Notice of Internet Availability of Proxy Materials, on your proxy card (if you received a printed copy of the proxy materials), or on the instructions that accompanied your proxy materials.

How to submit questions during the Annual Meeting

Questions may be submitted during the Annual Meeting by logging into the meeting website (www.meetingcenter.io/246179169) (meetnow.global/MXNXWKW) and will be addressed during the Q&A portion of the Annual Meeting. You may only submit a question if you have the 15-digit control number included on your Notice of Internet Availability of Proxy Materials, on your proxy card (if you received a printed copy of the proxy materials), or on the instructions that accompanied your proxy materials.

If you are the beneficial owner of shares held in “street name” (you hold your shares through a broker, bank or other holder of record), you may need to register in advance to obtain a unique control number. See the How to access and participate in the Annual Meeting online section above for more information.


If you would like to submit a question before or during the Annual Meeting, please ensure that you have a 15-digit control number, which can be found on your Notice of Internet Availability of Proxy Materials, on your proxy card (if you received a printed copy of the proxy materials), or on the instructions that accompanied your

proxy materials. If you are the beneficial owner of shares held in “street name” (that is, you hold your shares through a broker, bank or other holder of record), you must register in advance to obtain a unique control number. See the How to access and participate in the Annual Meeting online section above for more information.



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Questions pertinent to meeting matters that comply with the meeting rules of conduct will be answered during the meeting, subject to time constraints. However, we reserve the right to exclude questions that are not pertinent to meeting matters, irrelevant to the business of the Company, derogatory or in bad taste, or relate to pending or threatened litigation, personal grievances or are otherwise inappropriate. Questions that are substantially similar may be grouped and answered once to avoid repetition. If there are any questions pertinent to meeting matters that cannot be answered during the meeting due to time constraints, management will post answers to all questions on the “Investor Relations” section of the Company’s website at https://investors.thecloroxcompany.comas soon as practicable after the meeting. If there are matters of individual concern to a shareholder and not of general concern to all shareholders, shareholders are encouraged to contact us separately after the Annual Meeting through the “Investor Relations” section of the Company’s website at https://investors.thecloroxcompany.com.

A replay of the Annual Meeting will be made available at “Investor Relations” section of the Company’s website at https://investors.thecloroxcompany.com as soon as practicable after the meeting.



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Appendix A

PROPOSED AMENDMENT TO THE COMPANY’S RESTATED CERTIFICATE OF INCORPORATION TO
ELIMINATE THE SUPERMAJORITY VOTING PROVISION

Set forth below is the text of Article Six of the Company’s Restated Certificate of Incorporation. Proposal 4 submitted for the consideration of stockholders would amend the Certificate to delete Article Six in its entirety (the deletion is indicated in blacklining) and replace the deleted text with “[Reserved]”:

ARTICLE SIX

Part I

Vote Required For Certain Business Combinations

A. In addition to any affirmative vote required by law or this Restated Certificate of Incorporation, and except as otherwise expressly provided in Part II of this Article Six, the following transactions:

(i)     any merger or consolidation of this corporation or any Subsidiary (as hereinafter defined) into or with
(a)   any Interested Stockholder (as hereinafter defined); or
(b)   any other corporation (whether or not it is an Interested Stockholder) which is, or after such merger or consolidation would be, an Affiliate (as hereinafter defined) of an Interested Stockholder; or
(ii)    any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) to or with any Interested Stockholder or any Affiliate of any Interested Stockholder of any assets of this corporation or any Subsidiary having an aggregate Fair Market Value (as hereinafter defined) of more than ten percent (10%) of the Fair Market Value of the consolidated total assets of this corporation; or
(iii)   the issuance or transfer by this corporation or any Subsidiary (in one transaction or a series of transactions) of any securities of this corporation or any Subsidiary to any Interested Stockholder or any Affiliate of any Interested Stockholder in exchange for cash, securities or other property having an aggregate Fair Market Value of more than ten percent (10%) of the Fair Market Value of the consolidated total assets of this corporation; or
(iv)   the adoption of any plan or proposal for the liquidation of this corporation proposed by or on behalf of an Interested Stockholder or any Affiliate of any Interested Stockholder; or
(v)   any reclassification of this corporation’s securities (including any reverse stock split), or recapitalization of this corporation, or any merger or consolidation of this corporation with any of its Subsidiaries or any other transaction (whether or not with or into or otherwise involving an Interested Stockholder) which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of equity or convertible securities of this corporation or any Subsidiary which is directly or indirectly owned by any Interested Stockholder;

shall require the affirmative vote of the holders of at least eighty percent (80%) of the voting power of the then outstanding shares of stock of this corporation entitled to vote regularly in the election of directors (the “Voting Stock”) voting as a single class (it being understood that for purposes of this Article Six, each share of the Voting Stock other than Common Stock shall have the number of votes granted to it pursuant to Article Four of this Restated Certificate of Incorporation). Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser percentage may be specified, by law or in any agreement with any national securities exchange or otherwise.

B. The term “Business Combination” as used in this Article Six shall mean any transaction which is referred to in any one or more of clauses (i) through (v) of paragraph A of Part I.

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Part II

When Higher Vote Is Not Required

The provisions of Part I of this Article Six shall not be applicable to any particular Business Combination, and such Business Combination shall require only such affirmative vote as is required by law and any other provision of this Restated Certificate of Incorporation, if all of the conditions specified in either of the following paragraphs A and B are met:

A. The Business Combination shall have been approved by a majority of the Disinterested Directors (as hereinafter defined).

B. All of the following conditions shall have been met:

(i)    The aggregate amount of the cash and the Fair Market Value as of the date of the consummation of the Business Combination of consideration other than cash to be received per share by holders of Common Stock in such Business Combination shall be at least equal to the higher of the following:
(a)   (if applicable) the highest per share price paid by the Interested Stockholder for any shares of Common Stock acquired by it (1) within the two year period immediately prior to the first public announcement of the proposal of the Business Combination (the “Announcement Date”) or (2) in the transaction in which it became an Interested Stockholder, whichever is higher; and
(b)   the Fair Market Value per share of Common Stock on the Announcement Date or on the date on which the Interested Stockholder became an Interested Stockholder (such latter date is referred to in this Article Six as the “Determination Date”), whichever is higher.
(ii)   The aggregate amount of the cash and the Fair Market Value on the date of the consummation of the Business Combination of consideration other than cash to be received per share by the holders of shares of any other class of outstanding Voting Stock shall be at least equal to the highest of the following (it being intended that the requirements of this paragraph B (ii) shall be required to be met with respect to every class of outstanding Voting Stock, whether or not the Interested Stockholder has previously acquired any shares of a particular class of Voting Stock):
(a)   (if applicable) the highest per share price paid by the Interested Stockholder for any shares of such class of Voting Stock acquired by it (1) within the two-year period immediately prior to the Announcement Date or (2) in the transaction in which it became an Interested Stockholder, whichever is higher;
(b)   (if applicable) the highest preferential amount per share to which the holders of shares of such class of Voting Stock are entitled in the event of any voluntary or involuntary liquidation, dissolution or winding up of this corporation; or
(c)   the Fair Market Value per share of such class of Voting Stock on the Announcement Date or on the Determination Date, whichever is higher.
(iii)   The consideration to be received by holders of a particular class of outstanding Voting Stock (including Common Stock) shall be in cash or in the same form as the Interested Stockholder has previously paid for shares of such class of Voting Stock. If the Interested Stockholder has paid for shares of any class of Voting Stock with varying forms of consideration, the form of consideration for such class of Voting Stock shall be either cash or the form used to acquire the largest number of shares of such class of Voting Stock previously acquired by it. The price determined in accordance with paragraphs B(i) and B(ii) shall be subject to appropriate adjustment in the event of any stock dividend, stock split, combination of shares or similar event.

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(iv)   After such Interested Stockholder has become an Interested Stockholder except as approved by a majority of the Disinterested Directors, there shall have been:
(a)   no failure to declare and pay at the regular date therefor any full quarterly dividends (whether or not cumulative) on the outstanding Preferred Stock, if any; and
(b)   no reduction in the effective annual rate of dividends paid on the Common Stock.
(v)    After such Interested Stockholder has become an Interested Stockholder, such Interested Stockholder shall not have received the benefit, directly or indirectly (except proportionately as a stockholder), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantages provided by the corporation, whether in anticipation of or in connection with such Business Combination or otherwise.

Part III

Certain Definitions

For the purpose of this Article Six:

A. A “person” shall mean any individual, firm, corporation or other entity.

B. “Interested Stockholder” shall mean any person (other than this corporation, any Subsidiary or any compensation plan of this corporation) who or which:

(i)    is the beneficial owner, directly or indirectly, of more than 5% of the voting power of the outstanding Voting Stock; or
(ii)   is an Affiliate of this corporation and at any time within the two-year period immediately prior to the date in question was the beneficial owner, directly or indirectly, of more than five percent (5%) of the voting power of the then outstanding Voting Stock; or
(iii)   is an assignee of or has otherwise acquired or succeeded to any shares of Voting Stock which were at any time within the two-year period immediately prior to the date in question beneficially owned by any Interested Stockholder, if such assignment or succession shall have occurred in the course of a transaction or series of transactions not involving a public offering within the meaning of the Securities Act of 1933.

C. A person shall be a “Beneficial Owner” of any Voting Stock:

(i)    which such person or any of its Affiliates or Associates (as hereinafter defined) beneficially owns, directly or indirectly; or
(ii)    which such person or any of its Affiliates or Associates has:
(a)   the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or
(b)   the right to vote pursuant to any agreement, arrangement or understanding; or
(iii)   which are beneficially owned, directly or indirectly, by any other person with which such person or any of its Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of Voting Stock.
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D. For the purpose of determining whether a person is an Interested Stockholder pursuant to paragraph B of this Part III, the number of shares of Voting Stock deemed to be outstanding shall include shares deemed owned through application of paragraph C of this Part III but shall not include any other shares of Voting Stock which may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise.

E. “Affiliate” or “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as in effect on March 1, 1984.

F. “Subsidiary” means any corporation of which a majority of any class of equity securities is owned, directly or indirectly, by this corporation; provided, however, that for the purposes of the definition of Interested Stockholder set forth in paragraph B of this Part III, the term “Subsidiary” shall mean only a corporation of which a majority of each class of equity securities is owned, directly or indirectly, by this corporation.

G. “Disinterested Director” means any member of the board of directors of this corporation (the “Board”) who is unaffiliated with the Interested Stockholder by whom or on whose behalf, directly or indirectly, the Business Combination is proposed or was a member of the Board prior to the time that such Interested Stockholder became an Interested Stockholder, and any successor of a Disinterested Director who is unaffiliated with such Interested Stockholder and is recommended to succeed a Disinterested Director by a majority of Disinterested Directors then on the Board.

H. “Fair Market Value” means:

(i)    In the case of stock, the highest closing sale price during the 30-day period immediately preceding the date in question of a share of such stock as reported in the principal consolidated transaction reporting system for securities listed or admitted to trading on the New York Stock Exchange, or, if such stock is not listed on such Exchange, on the principal United States securities exchange, registered under the Securities Exchange Act of 1934 on which stock is listed, or, if such stock is not listed on such an exchange, the highest closing bid quotation with respect to a share of such stock during the 30-day period immediately preceding the date in question on the National Association of Securities Dealers, Inc. Automated Quotation System or any system then in use, and
(ii)   in the case of property other than cash or stock valued under (i) above, the fair market value of such property on the date in question as determined in good faith by a majority of the Disinterested Directors.

I. In the event of any Business Combination in which this corporation is the surviving corporation, the phrase “consideration other than cash to be received” as used in clauses (i) and (ii) of paragraph B of Part II of this Article Six shall include the Fair Market Value of the shares of Common Stock and/or the shares of any other class of outstanding Voting Stock retained by the holders of such shares.

Part IV

Powers of The Board of Directors

A majority of the Disinterested Directors of this corporation shall have the power and duty to determine for the purposes of this Article Six, on the basis of information known to them after reasonable inquiry:

A. whether a person is an Interested Stockholder;

B. the number of shares of Voting Stock beneficially owned by any person;

C. whether a person is an Affiliate or Association of another; and

D. whether the assets which are the subject of any Business Combination have, or the consideration to be received for the issuance or transfer of securities by this corporation or any Subsidiary in any Business Combination has, an aggregate Fair Market Value of more than ten percent (10%) of the Fair Market Value of the consolidated total assets of this corporation.

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Appendix A

Part V

Fiduciary Obligations

Nothing contained in this Article Six shall be construed to relieve any Interested Stockholder from any fiduciary obligation imposed by law.

Part VI

Amendment Or Repeal

The provisions set forth in this Article Six may not be amended or repealed in any respect, unless such action is approved by the affirmative vote of the holders of not less than eighty percent (80%) of the then outstanding Voting Stock, voting as a single class.

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Appendix BA

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Clorox Company
(Dollars in millions, except share and per share data)

Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is designed to provide a reader of The Clorox Company’s (the Company or Clorox) financial statements with a narrative from the perspective of management on the Company’s financial condition, results of operations, liquidity and certain other factors that may affect future results. In certain instances, parenthetical references are made to relevant sections of the Notes to Consolidated Financial Statements to direct the reader to a further detailed discussion. This section should be read in conjunction with the Consolidated Financial Statements and Supplementary Data included in this Annual Report on Form 10-K.

The following sections are included herein:

Executive Overview
Results of Operations
Financial Position and Liquidity
Contingencies
Quantitative and Qualitative Disclosures about Market Risk
Recently Issued Accounting Standards
Critical Accounting Policies and Estimates
Summary of Non-GAAP Financial Measures

EXECUTIVE OVERVIEW

Clorox is a leading multinational manufacturer and marketer of consumer and professional products with fiscal year 20202022 net sales of $6,721$7,107 and approximately 8,8009,000 employees worldwide as of June 30, 2020.2022. Clorox sells its products primarily through mass retailers, grocery outlets, warehouse clubs, dollar stores, home hardware centers, drug, pet and military stores, third-party and owned e-commerce channels and distributors. Clorox markets some of the most trusted and recognized consumer brand names, including its namesake bleach and cleaning products,products; Pine-Sol® cleaners; Liquid-Plumr® clog removers; Poett® home care products; Fresh Step® cat litter; Glad® bags and wraps; Kingsford® grilling products; Hidden Valley® dressings; dressings, dips, seasonings and sauces; Brita® water-filtration products; Burt’s Bees® natural personal care products; and RenewLife,®, Rainbow Light,®, Natural Vitality®, and NeoCell® and Stop Aging Now® vitamins, minerals and supplements. The Company also markets industry-leading products and technologies for professional customers, including those sold under the CloroxPro™CloroxPro and the Clorox Healthcare® brand names. The Company has operations in more than 25 countries or territories and sells its products in more than 100 markets.

The Company primarily markets its leading brands in midsized categories considered to be financially attractive. Most of the Company’s products compete with other nationally advertised brands within each category and with “private label” brands.

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The Company operates through strategic business units (SBUs) whichthat are also the Company’s operating segments. These SBUs are then aggregated into four reportable segments. In the fourth quarter of fiscal year 2020, the Company realigned its reportable segments following operational and systems integration. The Digestive Health and Dietary Supplements SBUs, previously included in the Household and Lifestyle reportable segments, respectively, were combined into a new Vitamins, Minerals and Supplements (VMS) SBU, and the Home Care and Laundry SBUs, previously included in the Cleaning reportable segment, were combined to create the Cleaning SBU. These newly established SBUs,

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along with the Professional Products SBU, now make up the newsegments: Health and Wellness, reportable segment due to their shared economicHousehold, Lifestyle and qualitative characteristics. All periods presented have been recast to reflect this change. TheInternational. These four reportable segments consist of the following:

Health and Wellness consists of cleaning products, professional products and vitamins, minerals and supplement productssupplements mainly marketed and sold in the U.S. Products within this segment include cleaning products such as laundry additives including bleach products under the Clorox® brand and Clorox 2® stain fighter and color booster; home care products, primarily under the Clorox,®, Clorox® Clorox2, Scentiva,®, Pine-Sol, Liquid-Plumr, Tilex and Formula 409®, Liquid-Plumr®, Pine-Sol® and Tilex® brands; professional cleaning and disinfecting products under the CloroxPro™,CloroxPro and Clorox Healthcare®, and Clorox® Total 360® brands and brands; professional food service products under the Hidden Valley® brand; and vitamins, minerals and supplement productssupplements under the RenewLife,®, Natural Vitality, NeoCell and Rainbow Light®, Natural Vitality®, NeoCell® and Stop Aging Now® brands.
  
Household consists of grilling products; bags and wraps;wraps, grilling products and cat litter products marketed and sold in the U.S. Products within this segment include grilling products under the Kingsford® and Kingsford® Match Light® brands; bags and wraps under the Glad® brand; grilling products under the Kingsford brand; and cat litter productsprimarily under the Fresh Step®, and Scoop Away® and Ever Clean® brands.
  
Lifestyle consists of food, products, water-filtration systems and filters, and natural personal care products and water-filtration products marketed and sold in the U.S. Products within this segment include dressings, dips, seasonings and sauces, primarily under the Hidden Valley® brand; water-filtration systems and filters under the Brita® brand; and natural personal care products under the Burt’s Bees® brand; and water-filtration products under the Brita brand.
  
International consists of products sold outside the U.S. Products within this segment include laundry additives; home care products; water-filtration systems and filters;products; digestive health products; grilling products; cat litter products; food products;litter; food; bags and wraps; natural personal care products; and professional cleaning and disinfecting products marketed primarily under the Clorox,®, Ayudin,®, Clorinda,®, Poett,®, Pine-Sol,®, Glad,®, Brita,®, RenewLife,®, Ever Clean® and Burt’s Bees® brands.

Non-GAAP Financial Measures

This Executive Overview, the succeeding sections of MD&A and Exhibit 99.2 may include certain financial measures that are not defined by accounting principles generally accepted in the United States of America (U.S. GAAP). These measures, which are referred to as non-GAAP measures, are listed below:

Free cash flow and free cash flow as a percentage of net sales. Free cash flow is calculated as net cash provided by operations less capital expenditures.
  
Earnings before interest and taxes (EBIT) margin (the ratio of EBIT to net sales)
  
Earnings before interest, taxes, depreciation and amortization and non-cash asset impairment charges (Consolidated EBITDA, as defined in our Credit Agreement) to interest expense ratio (Interest Coverage ratio)
Economic profit (EP) is calculateddefined by the Company as earnings before income taxes, excluding non-cashcertain U.S. GAAP restructuringitems (such as asset impairments, charges related to digital capabilities and intangible asset impairment charges,productivity enhancements investment, significant losses/(gains) related to acquisitions and other non-recurring or unusual items) and interest expense; less income taxes (calculated utilizingbased on the Company’s effective tax rate)rate excluding the identified U.S. GAAP items), and less after tax profit attributable to noncontrolling interests, and less a capital charge (calculated as average capital employed multiplied by a cost of capital percentage rate).
  
Organic sales growth / (decrease) is defined as net sales growth excluding the effect of foreign exchange rate changes and any acquisitions and divestitures.

For a discussion of these measures and the reasons management believes they are useful to investors, refer to Summary of Non-GAAP Financial Measures” Measuresbelow. To the extent applicable, this MD&A and Exhibit 99.2 include reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP.

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Appendix BA

Fiscal Year 20202022 Financial Highlights

A detailed discussion of strategic goals, key initiatives and results of operations is included below. Key fiscal year 20202022 financial results are summarized as follows:

The Company’s fiscal year 20202022 net sales increaseddecreased by 8%3% to $6,721$7,107 from $6,214$7,341 in fiscal year 2019,2021, reflecting an increase from higherlower shipments primarily in the Health and Wellness reportable segment. The variance between volume and net sales was primarily due to the impact of favorable price mix, partially offset by the impact from unfavorable foreign currency exchange rates.
  
Gross margin increaseddecreased by 170780 basis points to 45.6%35.8% in fiscal year 20202022 from 43.9%43.6% in fiscal year 2019, reflecting strong volume growth and the benefit of cost savings, partially offset2021. The decrease was primarily driven by higher manufacturing and logistics costs.costs, increased commodity costs and unfavorable mix, partially offset by the benefit of price increases and cost savings.
  
The Company reported earnings before income taxes of $939$607 in fiscal year 2020,2022, compared to $820$900 in fiscal year 2019.2021. The Company reported earnings before income taxesattributable to Clorox of $1,185$462 in fiscal year 2020,2022, compared to $1,024$710 in fiscal year 2019.2021.
  
The Company delivered diluted net earnings per share (EPS) of $7.36$3.73 in fiscal year 2020, an increase2022, a decrease of approximately 16%33%, or $1.04,$1.85, from fiscal year 20192021 diluted net EPS of $6.32.$5.58. The increasedecrease was primarily due to net sales growth andlower gross margin expansion,and the one-time, noncash remeasurement gain recognized on the previously held equity interest in the Saudi joint venture in the prior period, partially offset by higher sellingthe noncash impairment charges on assets held by the Vitamins, Minerals and administrative expenses and advertising investments.Supplements (VMS) business in the prior period.
  
EP increaseddecreased by 16%58% to $706$282 in fiscal year 2020,2022, compared to $610$672 in fiscal year 20192021 (refer to the reconciliation of EP to earnings before income taxes in Exhibit 99.2).
  
The Company’s net cash provided by operations was $1,546$786 in fiscal year 2020,2022, compared to $992$1,276 in fiscal year 2019, driven by decreases in working capital, profitable sales growth, and prior fiscal year’s voluntary contribution in the Company’s contributions to the domestic employee retirement income plans.2021. Free cash flow was $1,292$535 or 19.2%7.5% of net sales in fiscal year 2020,2022, compared to $786$945 or 12.6%12.9% of net sales in fiscal year 20192021 (refer to the reconciliation of net cash provided by operations to free cash flow in “Financial Position and Liquidity - Investing - Free Cash Flow”).
  
The Company paid $533$571 in cash dividends to stockholders in fiscal year 2020,2022, compared to $490$558 in cash dividends in fiscal year 2019.2021. In May 2020,July 2022, the Company announced an increase of 5%2% in its quarterly cash dividend from the prior year.
In fiscal year 2020, the Company repurchased 577 thousand shares of its common stock at an aggregate cost of $85 under the Open-market purchase program and 954 thousand shares of its common stock at an aggregate cost of $157 under the Evergreen Program.

Strategic Goals and Initiatives

As announced in October 2019, the IGNITE strategy is intended to accelerate innovation in key areas of the business to drive growth and deliver value for both the Company’s shareholders and society. Specifically, IGNITE focuses on four strategic choices to sustain Good Growth — which is defined as profitable, sustainable and responsible growth — over the long term:deliver purpose-driven growth: Fuel Growth, Innovate Experiences, Reimagine Work and Evolve Portfolio. Goals forPerformance goals within the environmental, social and governance or ESG, performance in the areaspillars of Healthy Lives, Clean Planet Product, People and GovernanceThriving Communities, all underpinned by strong governance also are integrated into the strategy. The Company’s long-term financial goals reflected in IGNITE include annual net sales growth of 3% to 5% — increased from 2% to 4%, in 2021 — annual EBIT margin expansion of 25 to 50 basis points and annual free cash flow of 11% to 13%.

Recent Events RelatedAdditionally, in fiscal year 2021 the Company announced a strategic investment of approximately $500 over a five-year period for digital capabilities and productivity enhancements. This investment, which began in the first quarter of fiscal year 2022, includes replacement of the Company’s enterprise resource planning system and transitioning to COVID-19

The novel coronavirus (COVID-19) pandemic has caused a severe global health crisis, along with economiccloud-based platform as well as the implementation of a suite of other digital technologies. This investment will generate efficiencies and societal disruptionsbetter position the Company in supply chain, digital commerce, innovation, brand building and uncertainties. As a result, we have taken an active role in addressingmore over the ongoing pandemic’s impact on our employees, operations, customers, consumers, and communities, including taking precautionary measures, such as implementing contingency plans, making operational adjustments where necessary, and providing support tolong term.

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Appendix BA

organizationsRecent Events Affecting the Company

For the fiscal year ended June 30, 2022, the effects of the on-going novel coronavirus (COVID-19) pandemic continued to cause economic and social disruptions. These disruptions led to ongoing uncertainties, heightened by the conflict in Ukraine that support front-line workers. The impactbegan in the back half of COVID-19the fiscal year.

Demand for many of the products across the Company’s portfolio remained elevated compared to pre-pandemic levels, but moderated versus the previous fiscal year. An inflationary environment marked by higher manufacturing and responses of governments, consumers, and others to the pandemic are affecting our business in many ways; however, we believe that the actions we are taking will help us emerge from this global pandemic operationally sound, and well-positioned for continued long-term growth.

Our top priorities, from the beginning of this pandemic, have been the health and safety of our employees, our consumers, workers at healthcare facilities, and our communities,logistics costs as well as maximizing the supply of our essential products.

Commitmentincreased commodity costs is expected to Support People and Public Health

We have taken many steps to enhance the well-being of our global workforce and our community and to protect public health. For example,continue into fiscal year 2023. While we have taken extra precautions at our offices and manufacturing and distribution facilities, consistent with guidance from global, federal and local health authorities, such as enhanced cleaning and sanitation protocols, social distancing, thermal scanning and partitionsdid not experience significant disruptions in our facilities,operations during fiscal year 2022, the risks of future negative impacts due to transportation, logistical or supply constraints and we will continue to augment and reevaluate these measures based on the latest guidance from such health authorities. We have also implemented global travel restrictions and work-from-home policieshigher commodity costs for those employees who have the ability to work remotely. In addition, we have enhanced pay for our production employees, provided greater flexibility around sick-pay and work hours and established an employee emergency relief fund to provide COVID-19 related support to our employees. Furthermore, we and our foundations have made cash and product donations to various organizations to help front-line workers and communities respond to COVID-19.

Increasing our Capacity to Provide Needed Products and Changes in Costs

We have significantly increased our manufacturing production capacity for disinfecting and other cleaning products that are needed during this global health crisis, while sustaining our safety standards with respect to our manufacturing operations, and we expect to continue to expand our production capacity for such products over the balance of the calendar year. We have done this, in part, by prioritizing and reducing the number of different types and sizes of disinfecting products currently produced at our manufacturing facilities and by our third-party contract manufacturers. While we have experienced temporary closures of certain facilities, we have not experienced a material impact from a plant closure to date, and all of our plantsraw materials remain present, and the vast majority of our contract manufacturers and suppliers continueCompany continues to operate.

Our ability to continue to manufacture and distribute our products will depend on our ability to protect the health and safety of our employees and our supply chain. To date, we have had no material disruption in our access to necessary raw materials and other supplies or with our distribution network; however, we have experienced higher costs in certain areas as a result of COVID-19, such as transportation, logistics and production employee compensation, as well asexperience corresponding incremental costs associated with newly added health screenings and enhanced cleaninggross margin pressures.

Throughout fiscal year 2022, our focus has been on addressing supply-chain disruptions and sanitation protocols to protect our employees at our facilities,volatility in commodity costs and we may face disruptions in obtaining raw materials in the future. In addition, we may decide to implement additional precautionary measures or operational adjustments as we deem prudent to meet consumer demand or help further ensure employee safety, which may result in additional or increased costs.foreign exchange markets and countering inflationary pressures through pricing actions and cost-cutting measures.

Other COVID-19 Items

Beginning in the fiscal quarter ended March 31, 2020, we experienced increased demand for many of our products, especially our disinfecting products, in response to COVID-19, and strong demand for those products continued throughout the end of the fiscal year. The extent of COVID-19’s effect on ourthe Company’s operational and financial performance in the future will depend on future developments, including the duration, spread, intensity and intensityphase of the pandemic ourin different countries, the emergence of COVID-19 variants and the effectiveness of vaccines against these variants, the Company’s continued ability to manufacture and distribute ourits products, as well as any future government actions affecting consumers, andour business operations, including any vaccine mandates, or the economy generally, allin general, and effectiveness of whichglobal vaccines. Additionally, the impact of certain geopolitical events, specifically the conflict in Ukraine, and continued inflationary pressures have increased global economic and political uncertainty due to the uncertainty around the duration and resolution of the conflict and potential economic and global supply chain disruptions. All of these factors are uncertain and difficult to predict considering the rapidly evolving landscape.

COVID-19 has also impacted financial markets, andlandscape as such, in third and fourth quarter fiscal year ended June 30, 2020, we took certain actions to provide the Company with additional liquidity and flexibility, as described in the “Financial Position and Liquidity” section below. We will continuecontinues to actively monitor the potential impacts of COVID-19 on the commercial paper, credit and capital markets.expect a variable operating environment going forward.

For further discussion of the possible impacts of the COVID-19 pandemic and other recent events on our business, financial conditions and results of operations, see “Risk Factors” in Part I, Item 1A of this Report.

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Appendix B

RESULTS OF OPERATIONS

Unless otherwise noted, MD&A compares results of operations from fiscal year 20202022 to fiscal year 2019, and fiscal year 2019 to fiscal year 2018,2021, with percentage and basis point calculations based on rounded numbers, except for per share data and the effective tax rate. All periods presented have been recast to reflectDiscussions of fiscal year 2020 items and year-to-year comparisons between fiscal years 2021 and 2020 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Exhibit 99.1 of the changes in reportable segments noted above.Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2021.

CONSOLIDATED RESULTS

% Change
2020201920182020 to
2019
2019 to
2018
Net sales     $6,721     $6,214     $6,124     8%     1%
     2022      2021      % Change
2022
to
2021
Net sales$     7,107$     7,341(3)%

Year Ended June 30, 2020
Percentage change versus the year-ago period
Reported (GAAP)
Net Sales Growth /
(Decrease)
Reported
Volume
Acquisitions &
Divestitures
Foreign
Exchange
Impact
Price/Mix/
Other(1)
Organic Sales
Growth /
(Decrease)
(Non-GAAP)(2)
Organic
Volume(3)
Health and Wellness     14%     15%     %      %     (1)%     14%     15%
Household13(2)13
Lifestyle1091109
International59(10)6159
Total                          8%        10%                  —%          (2)%          — %                 10%         10%

(1)

This represents the net impact on net sales growth / (decrease) from pricing actions, mix and other factors.

(2)

Organic sales growth / (decrease) is defined as net sales growth / (decrease) excluding the effect of any acquisitions and divestitures as well as changes in foreign exchange rates. See “Non-GAAP Financial Measures” below for reconciliation of organic sales growth / (decrease) to net sales growth, the most directly comparable GAAP financial measure.

(3)

Organic volume represents volume excluding the effect of any acquisitions and divestitures.

Net sales in fiscal year 2020 increased by 8%, reflecting higher shipments across all reportable segments, led by the Health and Wellness reportable segment, driven by increased demand due to COVID-19 and consumers spending more time at home. Volume increased by 10% versus the prior period. The variance between volume growth and net sales growth was mainly due to the impact of unfavorable foreign currency exchange rates.

Net sales in fiscal year 2019 increased by 1%, reflecting sales growth in the Health and Wellness and Lifestyle reportable segments, partially offset by lower sales in the Household and International reportable segments. Volume increased by 2%, primarily driven by higher shipments in the Health and Wellness reportable segment, which included the benefit from the Nutranext acquisition in April 2018, partially offset by lower shipments in the Household reportable segment. The variance between volume growth and net sales growth was primarily due to the impact of unfavorable foreign currency exchange rates, unfavorable mix and higher trade promotion spending, partially offset by the benefit of price increases.

% Change
2020201920182020 to
2019
2019 to
2018
Gross profit$3,063$2,728$2,675     12%       2%
Gross margin     45.6%     43.9%     43.7%          

Gross margin, defined as gross profit as a percentage of net sales, in fiscal year 2020 increased by 170 basis points from 43.9% to 45.6%. The increase was primarily driven by higher volume, and cost savings, partially offset by higher manufacturing and logistics costs.

Gross margin in fiscal year 2019 increased 20 basis points from 43.7% to 43.9%. The increase was primarily driven by the benefit of price increases and cost savings, partially offset by higher manufacturing and logistics costs, unfavorable commodity costs, the impact of unfavorable foreign currency exchange rates and higher trade promotion spending.

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Appendix B

Expenses

% Change% of Net sales
     2020     2019     2018     2020
to
2019
     2019
to
2018
     2020     2019     2018
Selling and administrative expenses$969$856$837  13%       2%14.4%13.8%13.7%
Advertising costs67561257010710.09.89.3
Research and development costs145136132732.22.22.2

Selling and administrative expenses, as a percentage of net sales, increased by 60 basis points in fiscal year 2020. The increase in selling and administrative expenses reflected higher year-over-year incentive compensation expenses, consistent with the Company’s performance-based compensation philosophy.

Selling and administrative expenses, as a percentage of net sales, were essentially flat in fiscal year 2019. The dollar increase in selling and administrative expenses was primarily due to the impact of the Nutranext business, which was acquired in April 2018, and the related integration costs, partially offset by the benefit from ongoing productivity initiatives, as well as lower incentive compensation expenses, consistent with the Company’s performance-based compensation philosophy.

Advertising costs, as a percentage of net sales, increased by 20 basis points in fiscal year 2020. The increase in advertising expenses reflected the Company's continued support behind its brands. The Company’s U.S. retail advertising spend was approximately 11% of U.S. retail sales for fiscal year 2020.

Advertising costs, as a percentage of net sales, increased by 50 basis points in fiscal year 2019, primarily due to increased investments across a majority of the U.S. portfolio. The Company’s U.S. retail advertising spend was approximately 11% of U.S. retail sales for fiscal year 2019.

Research and development costs, as a percentage of net sales, were essentially flat in fiscal years 2020 as compared to 2019. The Company continues to focus on product innovation and cost savings initiatives.

Interest expense, Other (income) expense, net, and the effective tax rate on earnings

     2020     2019     2018
Interest expense$99$97$85
Other (income) expense, net(10)3(3)  
Effective tax rate on earnings20.8%19.8%21.8%

Interest expense was essentially flat in fiscal year 2020 and increased by $12 in fiscal year 2019. The increase in fiscal year 2019 was primarily due to incremental interest incurred on senior notes issued in May 2018 to fund the Nutranext acquisition, partially offset by the impact of lower interest from senior notes issued in September 2017 to refinance senior notes that matured in October 2017.

Other (income) expense, net of ($10) in fiscal year 2020 included $20 of income from equity investees and an indemnity settlement of $15 related to a past acquisition, partially offset by $15 of amortization of trademarks and other intangible assets and net period benefit cost of $9. See Notes to Consolidated Financial Statements for more information.

Other (income) expense, net of $3 in fiscal year 2019 included $17 of amortization of trademarks and other intangible assets, partially offset by $15 of income from equity investees. Additionally, $14 of net period benefit cost was recognized in Other (income) expense, net as a result of adopting Accounting Standards Update No. 2017-07, “Compensation-Retirement Benefits (ASC 715),” on July 1, 2018. Prior to the adoption, net periodic benefit cost was recorded in Cost of products sold, Selling and administrative expenses and Research and development costs.

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Appendix BA

Year Ended June 30, 2022
Percentage change versus the year-ago period
Reported
(GAAP) Net
Sales
Growth /
(Decrease)
Reported
Volume
Acquisitions
&
Divestitures
Foreign
Exchange
Impact
Price/Mix/
Other
(1)
Organic
Sales
Growth /
(Decrease)
(Non-
GAAP)
(2)
Organic
Volume
 
(3)
Health and Wellness             (10)%           (9)%                —%             —%             (1)%            (10)%             (9)%
Household(3)3(3)
Lifestyle32132
International2(1)(4)76(1)
Total(3)%(5)%%(1)%3%(2)%(5)%

(1) This represents the net impact on net sales growth / (decrease) from pricing actions, mix and other factors.

(2) Organic sales growth / (decrease) is defined as net sales growth / (decrease) excluding the effect of any acquisitions and divestitures and foreign exchange rate changes. See “Summary of Non-GAAP Financial Measures” below for reconciliation of organic sales growth / (decrease) to net sales growth / (decrease), the most directly comparable GAAP financial measure.

(3) Organic volume represents volume excluding the effect of any acquisitions and divestitures.

Net sales in fiscal year 2022 decreased by 3%, reflecting lower shipments primarily in the Health and Wellness reportable segment. Volume decreased by 5% versus the prior period. The variance between volume and net sales was primarily due to the impact of favorable price mix, partially offset by unfavorable foreign currency exchange rates.

20222021%
Change
2022
to
2021
Gross profit     $2,545     $3,199          (20)%
Gross margin35.8%43.6%

Gross margin decreased by 780 basis points in fiscal year 2022 from 43.6% to 35.8%. The decrease was primarily driven by higher manufacturing and logistics costs, increased commodity costs and unfavorable mix, partially offset by the benefit of price increases and cost savings.

Expenses

% Change% of Net sales
202220212022
to
2021
20222021
Selling and administrative expenses     $    954     $    1,004     (5)%     13.4%     13.7%
Advertising costs709790(10)10.010.8
Research and development costs132149        (11)1.92.0

Selling and administrative expenses, as a percentage of net sales, decreased by 30 basis points in fiscal year 2022. The dollar decrease in selling and administrative expenses was primarily due to lower nonqualified deferred compensation plan expense, lower incentive compensation expense and the benefit from cost savings, partially offset by the Company’s digital capabilities and productivity enhancements investments.

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Appendix A

Advertising costs, as a percentage of net sales, decreased by 80 basis points in fiscal year 2022. The dollar decrease was primarily due to higher spend in the prior period and the Company returning to historical levels of spend in the current period. The Company’s U.S. retail advertising spend as a percentage of net sales was 10% for fiscal year 2022 and 12% for fiscal year 2021, respectively.

Research and development costs, as a percentage of net sales, were essentially flat in the current period as compared to the prior period. The Company continues to invest behind product innovation and cost savings.

Goodwill, trademark and other asset impairments, Interest expense, Other expense (income), net, and the effective tax rate on earnings

     2022     2021
Goodwill, trademark and other asset impairments$$329
Interest expense10699
Other expense (income), net37(72)
Effective tax rate on earnings    22.4%    20.1%

Goodwill, trademark and other asset impairments of $329 in the prior fiscal year reflect non-cash impairment charges related to goodwill, trademarks, and other assets held by the VMS business (included within the Health and Wellness segment). See Notes to Consolidated Financial Statements for further information regarding the impairments recorded.

Interest expense was $106 and $99 in fiscal year 2022 and fiscal year 2021, respectively. The increase in the current period interest expense was primarily due to a loss on the early extinguishment of debt. See Notes to Consolidated Financial Statements for further information regarding the loss on the early extinguishment of debt recorded.

Other expense (income), net was $37 and ($72) in fiscal year 2022 and fiscal year 2021, respectively. The variance was due to the one-time, non-cash remeasurement gain recognized from the Company’s previously held equity interest in the Saudi joint venture in the first quarter of fiscal year 2021 (see Notes to Consolidated Financial Statements) and the loss in the current period from revaluation of the Company’s trust assets related to its nonqualified deferred compensations plans.

The effective tax rate on earnings (losses) was 20.8%, 19.8%22.4% and 21.8%20.1% in fiscal years 2020, 2019year 2022 and 2018,2021, respectively. The higher effectivelower tax rate in fiscal year 20202021 compared to fiscal year 20192022 was primarily due todriven by higher uncertain tax position releases in fiscal year 2019 as compared to fiscal year 2020. The lower effective tax rate for fiscal year 2019 compared to fiscal year 2018 was primarily due to the lower federal statutory tax rate for fiscal year 2019, partially offset by one-timeexcess tax benefits from stock-based compensation in the enactment of the Tax Act during the second quarter of fiscal year 2018.prior year.

Diluted net earnings per share

% Change
     2020     2019     2018     2020
to
2019
     2019
to
2018
Diluted net EPS$7.36$6.32$6.26  16%    1%
          % Change
2022
to
 2022     20212021
Diluted net EPS$    3.73$    5.58(33)%

Diluted net earnings per share (EPS) increaseddecreased by $1.04,1.85, or 16%33%, in fiscal year 2020,2022, primarily due to net sales growth andlower gross margin expansion,and the one-time, noncash remeasurement gain recognized on the previously held equity interest in the Saudi joint venture in the prior period, partially offset by higher selling and administrative expenses and advertising investments.the noncash impairment charges on assets held by the VMS business in the prior period.

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Diluted EPS increased by $0.06, or 1%, in fiscal year 2019, mainly driven by a lower effective tax rate, primarily from the benefit of the Tax Act, partially offset by lower earnings before income taxes. Earnings before income taxes reflected a higher gross margin, which was more than offset by increased advertising investments.Appendix A

SEGMENT RESULTS

The following presents the results of the Company’s reportable segments and certain unallocated costs reflected in Corporate (see Notes to Consolidated Financial Statements for a reconciliation of segment results to consolidated results):

Health and Wellness

               % Change
2022
% Changeto
     2020     2019     2018     2020
to
2019
     2019
to
2018
202220212021
Net sales$2,749$2,422$2,223  14%    9%$    2,690$    2,980         (10)%
Earnings before income taxes766570550344300305(2)

Fiscal year 20202022 versus fiscal year 2019: Volume, sales and earnings before income taxes increased by 15%, 14% and 34%, respectively, during fiscal year 2020. The volume increase was primarily fueled by a broad-based increase in demand for disinfecting and cleaning products across the Cleaning and Professional Products portfolios related to COVID-19, partially offset by lower shipments in VMS due to continued category and competitive headwinds and an ongoing supply disruption related to the pandemic. The increase in earnings before income taxes was primarily due to gross margin expansion, partially offset by higher advertising investments.

Fiscal year 2019 versus fiscal year 2018:2021: Volume, net sales and earnings before income taxes increaseddecreased by 7%9%, 9%10% and 4%2%, respectively, during fiscal year 2019. Both2022. The volume and net sales increased, mainlydecreases were primarily due to growthlower shipments in VMS, primarily driven by the benefit ofProfessional Products portfolio due to higher COVID-19 related demand in the April 2018 acquisition ofprior period. The decrease in earnings before income taxes in the Nutranext dietary supplements business. The variance between volume growth and net sales growthcurrent period was primarily due to lower net sales, higher manufacturing and logistics costs and unfavorable commodity costs, partially offset by the benefit of price increases.non-cash impairment charges on assets held by the VMS business in the prior period, and lower advertising spending, selling and administrative expenses and cost savings in the current period.

Household

               % Change
2022
to
202220212021
Net sales$    1,984$    1,981

%
Earnings before income taxes234375           (38)

Fiscal year 2022 versus fiscal year 2021: Volume and earnings before income taxes decreased by 3% and 38%, respectively, and net sales were flat during fiscal year 2022. The increasevolume decrease was primarily driven by lower shipments in Grilling due to higher demand in the prior period and impacts from pricing actions in the current period. The decrease in earnings before income taxes was primarilymainly due to net sales growthunfavorable commodity costs and cost savings, partially offset by higher manufacturing and logistics costs, unfavorable commodity costspartially offset by cost saving efforts and higher advertising investments.the benefits from pricing and lower trade spending.

Lifestyle

               % Change
2022
to
202220212021
Net sales$    1,253$    1,2183%
Earnings before income taxes280320          (13)

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Appendix B

Household

% Change
     2020     2019     2018     2020
to
2019
     2019
to
2018
Net sales$1,795$1,774$1,849    1%(4)%
Earnings before income taxes3473373843(12)

Fiscal year 2020 versus fiscal year 2019: Volume, net sales and earnings before income taxes increased by 3%, 1% and 3%, respectively, during fiscal year 2020. The volume growth reflected higher shipments across all SBUs, mainly in Cat Litter and Grilling, which both benefited from increased consumer demand, supported by innovation. Volume growth outpaced net sales growth primarily due to higher trade promotion spending, partially offset by the benefit of price increases in Grilling implemented in the back half of fiscal year 2019. The increase in earnings before income taxes was mainly due to cost savings, partially offset by higher manufacturing and logistics costs.A

Fiscal year 20192022 versus fiscal year 2018:2021: Volume and net sales increased by 2% and 3%, respectively, while earnings before income taxes decreased by 7%, 4% and 12%, respectively,13% during fiscal year 2019. Volume decreased, primarily driven by lower shipments of Glad bags and wraps, mainly due to wider price gaps compared to a year ago and distribution losses, and lower shipments in Grilling, mainly due to distribution losses and lower merchandising activity.2022. The variance between volume and net sales wasincreases were primarily driven by higher shipments of Brita water-filtration products due to expanded distribution and merchandising support and Natural Personal Care products primarily due to the benefit of price increases, partially offset by unfavorable mixinnovation and higher trade promotion spending.strong consumption. The decrease in earnings before income taxes was mainly due to higher manufacturing and logistics costs, lower net sales, higher advertising investments and unfavorable commodity costs, partially offset by cost savings.

Lifestyle

% Change
     2020     2019     2018     2020
to
2019
     2019
to
2018
Net sales$1,154$1,048$1,024  10%    2%
Earnings before income taxes320264253214

Fiscal year 2020 versus fiscal year 2019: Volume, net sales and earnings before income taxes increased by 9%, 10% and 21%, respectively, during fiscal year 2020. The volume increase reflected higher shipments across all SBUs, mainly due to higher shipments of Food and Brita® water filtration products driven by higher consumer demand. The increase in earnings before income taxes was primarily due to net sales growth, partially offset byunfavorable commodity costs and higher manufacturing and logistics costs.costs, partially offset by net sales growth.

International

% Change
2022
to
     2022     2021     2021
Net sales$    1,180$    1,1622%
Earnings before income taxes97201             (52)

Fiscal year 20192022 versus fiscal year 2018:2021: Volume net sales and earnings before income taxes increaseddecreased by 3%, 2%1% and 4%52%, respectively, during fiscal year 2019. Both volume and net sales increased primarily driven by growth in Burt’s Bees Natural Personal Care, mainly due to continued strength in lip care and face care largely driven by product innovation and distribution gains, and higher shipments of Brita® water-filtration systems due to product innovation. The increase in earnings before income taxes was primarily due to net sales growth and cost savings, partially offset by higher manufacturing and logistics costs.

International

% Change
     2020     2019     2018     2020
to
2019
     2019
to
2018
Net sales$1,023$970$1,028    5%  (6)%
Earnings before income taxes11696842114

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Appendix B

Fiscal year 2020 versus fiscal year 2019: Volume, net sales and earnings before income taxes increased by 9%, 5% and 21% respectively,2% during fiscal year 2020. The volume increase was primarily driven by higher shipments in all regions behind increased demand for cleaning as well as other household products. Volume growth outpaced net sales growth mainly due to the impact of unfavorable foreign currency exchange rates, partially offset by the benefit of price increases implemented to offset inflation. The increase in earnings before income taxes was largely due to net sales growth, partially offset by the impact of unfavorable foreign currency exchange rates, mainly in Argentina, and higher manufacturing and logistics costs.

Fiscal year 2019 versus fiscal year 2018: Volume increased by 2%, net sales decreased by 6%, and earnings before income taxes increased by 14% during fiscal year 2019. Volume grew, primarily driven by higher shipments in Asia and Canada, partially offset by lower shipments in certain Latin American countries, mainly Argentina.2022. The variance between volume and net sales was mainly due to unfavorable foreign currency exchange rates and higher trade promotion spending, partially offset by the benefit of price increases. The increase in earnings before income taxes was largely due to the benefit of price increases, and cost savings, partially offset by the impact of unfavorable foreign currency exchange rates, mainly from devaluation ofrates. The decrease in earnings before income taxes was primarily due to the Argentine peso,one-time, noncash remeasurement gain recognized on the previously held equity interest in the Saudi joint venture recognized in the prior period and inflationary pressure onunfavorable commodity costs and higher manufacturing and logistics costs.costs, partially offset by net sales growth all in the current period.

Argentina

The business environment in Argentina continues to be challenging due to significant volatility in Argentina’s currency, high inflation, and economic recession. There is additional uncertainty related to therecession, impacts of COVID-19 includingand temporary price freezes put in place as part of the government’s response to the pandemic. In addition, in May 2020, the Argentine government defaulted on debt payment agreements.controls. The Company operates in Argentina through certain wholly owned subsidiaries (collectively, “Clorox Argentina”). Clorox Argentina manufactures products at two plants that it owns and operates across Argentina and markets those products to consumers throughout the country. Products are advertised nationally and sold to consumers through wholesalers and retail outlets located throughout Argentina. Sales are made primarily through the use of Clorox Argentina’s sales force. Small amounts of products produced in Argentina are exported each year, including sales to the Company’s other subsidiaries located primarily in Latin America. Clorox Argentina obtains its raw materials almost entirely from local sources; however, the price of some of these raw materials may fluctuate with changes in the value of the U.S. dollar against the Argentine peso. The Company also conducts research and development activities at its owned facility in Buenos Aires, Argentina. Additionally, Clorox Argentina performs marketing, legal, and various other shared service activities to support the Company’s International operations. Clorox Argentina, in turn, benefits from shared service activities performed within other geographic locations, such as information technology support and manufacturing technical assistance.

Effective July 1, 2018, under the requirements of U.S. GAAP, Argentina was designated as a highly inflationary economy, since it has experienced cumulative inflation of approximately 100 percent or more overand as a three-year period. As a result, beginning July 1, 2018, the U.S. dollar replaced the Argentine peso as the functional currency of the Company’s subsidiaries in Argentina. Consequently, gains and losses from non-U.S. dollar denominated monetary assets and liabilities of Clorox Argentina are recognized in Other (income) expense, net in the consolidated statement of earnings.

As of September 2019, the government of Argentina reinstated foreign exchange controls in response to further declines in the value of the Argentine peso, limiting the Company’s ability to convert Argentine pesos to U.S. dollars and transfer U.S. dollars outside of Argentina. As of June 30, 20202022 and June 30, 2019,2021, the net asset position, excluding goodwill, of Clorox Argentina was $44$45 and $47,$48, respectively. Of these net assets, cash balances were approximately $19$15 and $16$11 as of June 30, 20202022 and 2019,2021, respectively. Net sales from Clorox Argentina represented approximately 2%, 2% and 3% of the Company’s consolidated net sales for the fiscal years ended June 30, 2020, 20192022 and 2018, respectively.2021.

Volatility in the exchange rate is expected to continue, in the future, which, along with competition, changes in the retail, labor and macro-economic environment, and implemented and future additional legal limitations instituted to restrict foreign exchange transactions, as well as government price controls, could have an adverse impact on Clorox Argentina’s liquidity, net sales, net earnings, cash flows and net monetary asset position. The Company is closely monitoring developments in Argentina and continues to take steps intended to mitigate the adverse conditions, but there can be no assurances that these actions will be able to mitigate these conditions as they may occur.

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Appendix BA

Corporate

% Change
     2020     2019     2018     2020
to
2019
     2019
to
2018
Losses before income taxes$(364)$(243)$(217)  50%  12%
               % Change
2022
to
 202220212021
Losses before income taxes$    (304)$    (301)              1%

Corporate includes certain non-allocated administrative costs, interest income, interest expense and various other non-operating income and expenses. Beginning in fiscal year 2022, losses before income taxes for Corporate include expenses related to the Company's digital capabilities and productivity enhancements investment.

Fiscal year 20202022 versus fiscal year 2019:2021: The increase in lossesLosses before income taxes was primarily drivenwere essentially flat due to increased investments in the Company’s digital capabilities and productivity enhancements, offset by higherlower employee and incentive compensation expenses and COVID-19 related expenditures.expenses.

Fiscal year 2019 versus fiscal year 2018: The increase in losses before income taxes was primarily driven by an increase in interest expense.

FINANCIAL POSITION AND LIQUIDITY

Management’s discussion and analysis of the Company’s financial position and liquidity describes its consolidated operating, investing and financing activities from operations, contractual obligations and off-balance sheet arrangements.operations.

The Company’s cash position includes amounts held by foreign subsidiaries and, as a result, the repatriation of certain cash balances from some of the Company’s foreign subsidiaries could result in additional tax costs. However, these cash balances are generally available without legal restriction to fund local business operations. In addition, a portion of the Company’s cash balance is held in U.S. dollars by foreign subsidiaries, whose functional currency is their local currency. Such U.S. dollar balances are reported on the foreign subsidiaries’ books, in their functional currency, with the impact from foreign currency exchange rate differences recorded in Other (income) expense, net.

The Company’s financial condition and liquidity remained strong as of June 30, 2020.2022. The following table summarizes cash activities for the years ended June 30:

     2020     2019     2018     2022     2021
Net cash provided by operations$1,546$992$976$786$1,276
Net cash used for investing activities(252)(196)(859)    (229)(452)
Net cash used for financing activities(523)(815)(399)(689)    (1,391)

Operating Activities

Net cash provided by operations was $1,546$786 in fiscal year 2020,2022, compared with $992$1,276 in fiscal year 2019.2021. The year-over-year increasedecrease was driven by decreaseslower cash earnings and an increase in working capital, (higherpartially offset by lower tax payments and cash received from the settlement of interest rate derivative contracts in the current period. The increase in working capital was due to lower Accounts payablespayable and accrued liabilities in the current yearperiod driven by lower spend and timing of payments, higher receivables due to the timing of paymentssales in the current period and lower inventories primarily due to high demand forincreased collections in the Company’s products), profitable sales growth, and prior fiscal year’s higher contributions to employee retirement income plans.

Net cash provided by operations was $992 in fiscal year 2019, compared with $976 in fiscal year 2018. The increase was primarily related to year-over-year improvements in working capital, then-current year benefits from the Tax Act,period, partially offset by higher inventory builds in the prior period to improve product availability.

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Appendix A

Payment Terms Extension and Supply Chain Financing

The Company initiated the extension of its payment terms with its suppliers in the second half of fiscal year 2020 in order to improve working capital as part of and to fund the IGNITE strategy and in keeping with evolving market practices. The Company’s current payment terms do not exceed 120 days in keeping with industry standards. The Company’s operating cash flows are directly impacted as a higher contributionresult of the extension of the payment terms with the suppliers.

As part of those ongoing efforts, the Company has arranged for a global financial institution to employee retirement income plans.offer a voluntary supply chain finance (SCF) program for the benefit of the Company’s suppliers. Leveraging the Company’s credit rating, the SCF program enables suppliers to directly contract with the financial institution to receive payment from the financial institution prior to the payment terms between the Company and the supplier, by selling the Company’s payables to the financial institution. The participation in the program is at the sole discretion of the supplier and the Company has no economic interest in a supplier's decision to enter into the agreement and has no direct financial relationship with the financial institution, as it relates to the SCF program. Once a supplier elects to participate in the SCF program and reaches an agreement with the financial institution, the supplier elects which individual Company invoices to sell to the financial institution. The terms of the Company’s payment obligations are not impacted by a supplier’s participation in the program and as such, the SCF program has no direct impact on the Company’s balance sheets, cash flows or liquidity. No guarantees are provided by the Company or any of our subsidiaries under the SCF program. There would not be an expected material impact to the Company’s liquidity or capital resources if the financial institution or a supplier terminated the SCF arrangement.

All outstanding amounts related to suppliers participating in SCF are recorded within Accounts payable and accrued liabilities in the Consolidated Balance Sheets and the associated payments are included in operating activities within the Consolidated Statements of Cash Flows. As of June 30, 2022 and 2021, the amount due to suppliers participating in SCF and included in Accounts payable and accrued liabilities was $211 and $152, respectively. While the Company does not have direct access to information on, or influence over, which invoices a participating supplier elects to sell to the financial institution, the Company expects that the majority of these amounts have been sold to the financial institution.

Investing Activities

Net cash used for investing activities was $252$229 in fiscal year 2020,2022, as compared to $196$452 in fiscal year 2019. The year-over-year increase was mainly due to higher capital spending, primarily to allow the Company to expand production capacity and improve efficiency of bringing our products to market.

Net cash used for investing activities was $196 in fiscal year 2019, as compared to $859 in fiscal year 2018.2021. The year-over-year decrease was mainly due to the $681 of cash paid for the April 2, 2018 acquisition of Nutranext (See Notesadditional interest in the Company’s Saudi joint venture in the prior period and lower capital spending in the current period.

Capital expenditures were $251 and $331 in fiscal years 2022 and 2021, respectively. Capital expenditures as a percentage of net sales was 3.5% and 4.5% for fiscal years 2022 and 2021, respectively. The current year-over-year decrease was due to Consolidated Financial Statements for more information).higher spending in the prior period on capital projects to expand production capacity.

Free cash flow

     2022     2021
Net cash provided by operations$786$    1,276
Less: capital expenditures    (251)(331)
Free cash flow$535$945
Free cash flow as a percentage of net sales7.5%12.9%

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Capital expenditures were $254, $206 and $194 in fiscal years 2020, 2019 and 2018, respectively. Capital expenditures as a percentage of net sales was 3.8%, 3.3% and 3.2% for fiscal years 2020, 2019 and 2018, respectively. The current year-over-year increase was due to expanding production capacity to address ongoing elevated demand for the Company’s products and to support new long-term growth opportunities. The prior year-over-year fluctuation was due to timing of certain infrastructure projects.

Free cash flow

   2020   2019  2018
Net cash provided by operations     $1,546     $992     $976
Less: capital expenditures(254)(206)(194)
Free cash flow$1,292$786$782
Free cash flow as a percentage of net sales19.2%12.6%12.8%

Financing Activities

Net cash used for financing activities was $523$689 in fiscal year 2020, as2022, compared to $815with $1,391 in fiscal year 2019.2021. The year-over-year decrease was mainly due to lower treasury stock purchases, and higher long-term borrowings as a result of the senior notes issuance, the proceeds of which were partially used to repay outstanding borrowings under the Company’s revolving credit agreement.

Net cash used for financing activities was $815 in fiscal year 2019, as compared to $399 in fiscal year 2018. Net cash used for financing activities was higher in fiscal year 2019, mainly due to higher treasury stock repurchases and higher dividend payments, partially offset by higherreduced proceeds from employee stock option exercises.exercises and net cash outflows from borrowings in the current period.

Current period financing activities include repayment of $300 of the Company’s senior notes with an annual fixed interest rate of 3.80% that became due in November 2021 and were repaid using commercial paper borrowings and repayment of $600 of the Company’s senior notes with an annual fixed interest rate of 3.05% due in September 2022 and $500 of senior notes with an annual fixed interest rate of 3.50% due in December 2024 that were redeemed prior to maturity using the proceeds from the May 2022 debt issuance of $1,100.

Capital Resources and Liquidity

The Company’s current liabilities may periodically exceed current assets as a result of the Company’s debt management policies, including the Company’s use of commercial paper borrowings which fluctuates depending on the amount and timing of operating and investing cash flows and payments for shareholder transactions such as dividends. In addition, the Company’s cash generated from operations has decreased recently primarily due to higher manufacturing and logistics costs and unfavorable commodity costs. The Company maintains a $1,200 revolving credit agreement (the Credit Agreement) that matures in November 2024. continues to take actions to address some of the effects of such cost increases, which include implementing price increases, driving cost savings and optimizing the Company’s supply chain.

Global financial markets have experienced a significant increase in volatility due to heightened uncertainty over the adverse economic impact caused by COVID-19. In March 2020,the COVID-19 outbreak and other geopolitical circumstances. Notwithstanding potential unforeseen adverse market conditions and as part of the Company’s regular assessment of its cash needs, the Company borrowed $450 underbelieves it will have the Credit Agreement primarilyfunds necessary to pay down maturing commercial paper balancessupport our short- and long-term liquidity and operating needs based on our anticipated ability to generate positive cash flows from operations in light of uncertainty inthe future, access to capital markets enabled by our strong short-term and long-term credit markets resulting from COVID-19. In May 2020, the Company issued $500 in senior notesratings, and used a portion of the proceeds to pay down all borrowings under the Credit Agreement. There were no borrowings due under the Credit Agreement as of June 30, 2020.current borrowing availability.

The Company may consider other transactions that require the issuance of additional long- and/or short-term debt or other securities to finance acquisitions, repurchase stock, refinance debt or fund other activities for general business purposes. Such transactions could require funds in excess of the Company’s current cash levels and available credit lines, and the Company’s access to or cost of such additional funds could be adversely affected by any decrease in credit ratings, which were the following as of June 30:

20202019
Short-termLong-termShort-termLong-term
Standard and Poor’sA-2A-A-2A-
Moody’sP-2Baa1P-2Baa1

Notwithstanding these potential adverse market conditions, the Company believes it will have the funds necessary to support our short-term liquidity and operating needs based on our anticipated ability to generate positive cash flows from operations in the future, access to capital markets enabled by our strong short-term and long-term credit ratings, and current borrowing availability under the Credit Agreement.

20222021
     Short-term   Long-term   Short-term   Long-term
Standard and Poor’sA-2BBB+A-2A-
Moody’sP-2Baa1P-2Baa1

Credit Arrangements

The Credit Agreement wasOn March 25, 2022, the Company entered in November 2019 and replacedinto a prior $1,100new $1,200 revolving credit agreement (the PriorCredit Agreement) that matures in March 2027. The Credit Agreement replaced a prior $1,200 revolving credit agreement (the prior Credit Agreement) in place since February 2017. NoNovember 2019. The Credit Agreement also changed the interest rate benchmark used as a reference rate for certain borrowings under the Credit Agreement from the London Interbank Offered Rate (LIBOR) to the secured overnight financing rate (SOFR). The Company did not incur any termination fees or penalties were incurred in connection with entering the new Credit Agreement, which was considered a debt modification. There were no borrowings under

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either the new Credit Agreement or the prior Credit Agreement as of June 30, 2022 and 2021, respectively, and the Company believes that borrowings under the new Credit Agreement are and will continue to be available for general corporate purposes. The Credit Agreement includes certain restrictive covenants and limitations. The primary restrictive covenant is a minimum ratio of 4.0, calculated as total earnings before interest, taxes, depreciation and amortization and other similar non-cash asset impairment charges and certain other items (Consolidated EBITDA) to total interest expense for the trailing four quarters (Interest Coverage ratio), as defined and described in the Credit Agreement.

The following table sets forth the calculation of the Interest Coverage ratio as of June 30, 2020, using Consolidated EBITDA for the trailing four quarters, as contractually defined in the Credit Agreement:

  2020
Earnings from operations             $939
Add back:
Interest expense99
Income tax expense246
Depreciation and amortization180
Non-cash asset impairment charges2
Less:
Interest income(2)
Consolidated EBITDA$1,464
Interest expense$99
Interest Coverage ratio14.8
      

The Company was in compliance with all restrictive covenants and limitations in the Credit Agreement as of June 30, 2020,2022, and anticipates being in compliance with all restrictive covenants for the foreseeable future. The Company continues to monitor the financial markets and assess its ability to fully draw on its Credit Agreement, and currently expects it will continue to have access to borrowing under the Credit Agreement. As of fiscal years ended June 30, 2020 and 2019, there were no borrowings due under the Credit Agreement or the Prior Credit Agreement.

As of June 30, 2020,2022, the Company maintained $38 of foreign and other credit lines, of which $3 was outstanding and the remainder of $35 was available for borrowing.

As of June 30, 2019, the Company maintained $39$34 of foreign and other credit lines, of which $4 was outstanding and the remainder of $35$30 was available for borrowing.

As of June 30, 2021, the Company maintained $35 of foreign and other credit lines, of which $5 was outstanding and the remainder of $30 was available for borrowing.

Short-term Borrowings

The Company’s notes and loans payable primarily consist of U.S. commercial paper issued by the parent company and any borrowings under the Credit Agreement. These short-term borrowings have stated maturities of less than one year and provide supplemental funding for supporting operations. The level of U.S. commercial paper borrowings generally fluctuates depending upon the amount and timing of operating cash flows and payments for items such as dividends, income taxes, stock repurchases and pension contributions. In March 2020, the Company borrowed $450 under the Credit Agreement primarily to pay down maturing commercial paper balances in light of uncertainty in short-term credit markets resulting from the pandemic. The borrowings under the Credit Agreement were paid down in full with a portion of the proceeds from the senior notes issued in May 2020. The average balance of short-term borrowings outstanding was $411$233 and $304$0 for the fiscal years ended June 30, 20202022 and 2019,2021, respectively.

Long-term Borrowings

In May 2020,2022, the Company issued $1,100 in senior notes, including $500 of senior notes with an annual fixed interest rate of 1.80% and a maturity date of May 15, 2030 and used the proceeds to repay borrowings under the Credit Agreement and for general corporate purposes. Interest on the notes is4.40% payable semi-annually in May and November. The notesNovember, final maturity in May 2029 that carry an effective rate of 3.89% (May 2029 senior notes), which includes the impact from the settlement of interest rate contracts in May 2022, and $600 of 1.96% (See Notes to Consolidated Financial Statements).senior notes with an annual fixed rate of 4.60%, payable semi-annually in May and November, final maturity in May 2032 that carry an effective rate of 3.25% (May 2032 senior notes), which includes the impact from the settlement of interest rate contracts in May 2022. The notes rank equally with all of the Company’s existing senior indebtedness.

In May 2018, Proceeds from the Company issuedsenior notes were used to redeem prior to maturity $600 of senior notes with an annual fixed interest rate of 3.05% due in September 2022 and $500 of senior notes with an annual fixed interest rate of 3.90%3.50% due in December 2024, which were redeemed in June 2022 and a maturity date of May 15, 2028 and used the proceeds to repay a portion of its outstanding commercial paper, including amounts raised infor general corporate purposes. In connection with the Nutranext acquisition. Theredemption prior to maturity of the $500 of senior notes carry an effectivedue in December 2024, the Company recorded a loss on the early extinguishment of debt of $13, which is included in Interest expense in the Consolidated Statement of Earnings, representing the difference paid in cash between the redemption price and the carrying amount of the debt extinguished of $5 and the accelerated amortization of losses on settlement of interest rate contracts and issuance costs associated with the debt extinguished of 4.02% (see Notes to Consolidated Financial Statements). The notes rank equally with all$8.

In November 2021, $300 of the Company’s existing senior indebtedness.

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In September 2017, the Company issued $400 of senior notes with an annual fixed interest rate of 3.10% and a maturity date of October 1, 2027 and used the proceeds to repay $400 of senior notes with an annual fixed interest rate of 5.95% that3.80% became due in October 2017. The September 2017 senior notes carry an effective interest rate of 3.13% (See Notes to Consolidated Financial Statements). The notes rank equally with all of the Company’s existing senior indebtedness.and were repaid using commercial paper borrowings.

Stock Repurchases and Dividend Payments

As of June 30, 2020,2022, the Company had two stock repurchase programs: an open-market purchase program with an authorized aggregate purchase amount of up to $2,000, which has no expiration date and was authorized by the Board of Directors in May 2018, and a program to offset the anticipated impact of dilution related to stock-based awards (the Evergreen Program), which has no authorization

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limit on the dollar amount and no expiration date. During the twelve months ended June 30, 2022 and 2021, the Company purchased 152 thousand and 4,758 thousand shares of common stock at a cost of $25 and $905, respectively.

Stock repurchases under the two stock repurchase programsDividends per share and total dividends paid to Clorox stockholders were as follows during the fiscal years ended June 30:

   2020    2019    2018 
Amount    Shares
(in thousands)
    Amount    Shares
(in thousands)
Amount    Shares
(in thousands)
 
Open-market purchase program       $85            577     $328               2,266      $95          749 
Evergreen Program1579543322,2081771,422 
Total stock repurchases$2421,531$6604,474$2722,171 
                       

Dividends per share and total dividends paid were as follows during the fiscal years ended June 30:

     2020     2019     2018     2022   2021
Dividends per share declared$4.29$3.94$3.60$     3.48$     4.49
Dividends per share paid4.243.843.484.644.44
Total dividends paid533490450571558

On May 19, 2020,July 12, 2022, the Company declared a 5%2% increase in the quarterly dividend, from $1.06$1.16 to $1.11$1.18 per share, payable on August 14, 202012, 2022 to common stockholders of record as of the close of business on July 29, 2020.27, 2022.

On May 20, 2019,June 2, 2021, the Company declared a 10%5% increase in the quarterly dividend, from 96 cents$1.11 to $1.06$1.16 per share, payable on August 16, 201913, 2021 to common stockholders of record as of the close of business on July 31, 2019.

On February 13, 2018, the Company declared a quarterly dividend of 96 cents per share payable on May 11, 2018 to common stockholders of record at the close of business on April 25, 2018. This represented an increase of 14% in the quarterly dividend, which was an accelerated declaration of the Company’s dividend increase that has typically taken place in the month of May and was a result of the passage of the Tax Act.28, 2021.

Contractual ObligationsMaterial Cash Requirements

The Company had contractual obligationsfollowing table summarizes the Company’s current and long-term material cash requirements as of June 30, 2020, payable or maturing in the following fiscal years:2022, which we intend to fund primarily with operating cash flows:

   2021   2022   2023   2024   2025   Thereafter   Total 
Notes, loans payable and long-term debt maturities including                        
interest payments$89$383$669$59$551$1,535$3,286 
Purchase obligations(1)149782719620299 
Operating and finance leases7358514438127391 
Payments related to nonqualified retirement income and 
retirement health care plans(2)131313141468135 
Venture Agreement terminal obligation(3)610610 
Total$324$532$760$136$609$2,360$4,721 
                              

     2023   2024   2025   2026   2027   Thereafter   Total
Long-term debt maturities including
interest payments
$     90$     90$     90$     90$     90$     2,737$     3,187
Notes and loans payable2651111269
Purchase obligations (1)18612773351223456
Operating and finance leases8783705746103446
Payments related to nonqualified
retirement income and retirement health
care plans (2)
151514151462135
Venture Agreement terminal obligation (3)635635
Total$643$316$248$833$163$2,925$5,128
(1)Purchase obligations are defined as purchase agreements that are enforceable and legally binding and that contain specified or determinable significant terms, including quantity, price and the approximate timing of the transaction. For purchase obligations subject to variable price and/or quantity provisions, an estimate of the price and/or quantity has been made. Examples of the Company’s purchase obligations include contracts to purchase raw materials, commitments to contract manufacturers, commitments for information technology and related services, advertising contracts, capital expenditure agreements, software acquisition and license commitments

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and service contracts. The raw material contracts included above are entered into during the regular course of business based on expectations of future purchases. Many of these raw material contracts are flexible to allow for changes in the Company’s business and related requirements. If such changes were to occur, the Company believes its exposure could differ from the amounts listed above. Any amounts reflected in the consolidated balance sheets as Accounts payable and accrued liabilities are excluded from the table above, as they are short-term in nature and expected to be paid within one year.

(2)

These amounts represent expected payments through 2030.2032. Based on the accounting rules for nonqualified retirement income and retirement health care plans, the liabilities reflected in the Company’s consolidated balance sheets differ from these expected future payments (see Notes to Consolidated Financial Statements).

(3)

The Company has a venture agreement with The Procter & Gamble Company (P&G) for the Company’s Glad bags and wraps business (the Venture Agreement). As of June 30, 2020,2022, P&G had a 20% interest in the venture. Upon termination of the agreement in January 2026, the Company is required to purchase P&G’s 20% interest for cash at fair value as established by predetermined valuation procedures. Refer to the Notes to Consolidated Financial Statements for further details.

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In conjunctionAppendix A

As announced in fiscal year 2021 and with divestituresinvestments beginning in fiscal year 2022, Clorox plans to invest approximately $500 million over a five year period in its digital capabilities and other transactions, the Company may provide typical indemnifications (e.g., indemnifications for representations and warranties and retention of previously existing environmental, tax and employee liabilities) that have terms that vary in duration and in the potential amount of the total obligation and, in many circumstances, are not explicitly defined.productivity enhancements. The Company has not made, nor does it believe that it is probable that it will make, any material payments relating to its indemnifications, and believes that any reasonably possible payments would not have a material adverse effect, individually or in the aggregate, on the Company’s consolidated financial statements.

The Company had not recorded any material liabilities on the aforementioned indemnifications as of June 30, 2020 and 2019.

The Company was a party to a letter of credit of $10 as of June 30, 2020 and $9 as of June 30, 2019, primarilyabove table includes contracted spend related to one of its insurance carriers, ofthese investments within Purchase obligations, which $0 had been drawn upon.are expected to be funded through cash generated from operations.

CONTINGENCIES

A summary of contingencies is contained in the Notes to Consolidated Financial Statements and is incorporated herein by reference.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a multinational company, the Company is exposed to the impact of foreign currency fluctuations, changes in commodity prices, foreign currency fluctuations, interest-rate risk and other types of market risk.

In the normal course of business, where available at a reasonable cost, the Company manages its exposure to market risk using contractual agreements and a variety of derivative instruments. The Company’s objective in managing its exposure to market risk is to limit the impact of fluctuations on earnings and cash flow through the use of derivative instruments, including over-the-counter swaps, forward purchasespurchase contracts and exchange-traded futures contracts. DerivativeOver-the-counter derivative contracts are entered into for non-trading purposes with major credit-worthy institutions, thereby decreasing the risk of credit loss.

The Company uses different methodologies, when necessary, to estimate the fair value of its derivative contracts. The estimated fair values of the majority of the Company’s contracts are based on quoted market prices, exchange-traded market prices or broker price quotations, and represent the estimated amounts that the Company would pay or receive to terminate the contracts.

See Notes to Consolidated Financial Statements for further discussion of derivatives and hedging policies and fair value measurements.

Sensitivity Analysis for Derivative Contracts

For fiscal years 20202022 and 2019,2021, the Company’s exposure to market risk was estimated using sensitivity analyses, which illustrateillustrates the change in the fair value of a derivative financial instrument assuming hypothetical changes in commodity prices, foreign exchange rates commodity prices or interest rates. The results of the sensitivity analyses for commodity, foreign currency derivative contracts, commodity derivative contracts and interest rate derivative contracts are summarized below. Actual changes in commodity prices, foreign exchange rates commodity prices or interest rates may differ from the hypothetical changes, and any changes in the fair value of the contracts, real or hypothetical, would be partly to fully offset by an inverse change in the value of the underlying hedged items.

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The changes in the fair value of derivatives are recorded as either assets or liabilities in the consolidated balance sheets with an offset to Net earnings or Other comprehensive (loss) income, depending on whether or not, for accounting purposes, the derivative is designated and qualified as an accounting hedge. For those derivative instruments designated and qualifying as hedging instruments, the Company must designate the hedging instrument either as a fair value hedge or as a cash flow hedge. The Company designates its commodity swaps and futures contracts for forecasted purchases of raw materials, foreign currency forward contracts for forecasted purchases of inventory, and interest rate forward contracts for forecasted interest payments as cash flow hedges. During the fiscal years ended June 30, 2020, 20192022 and 2018,2021, the Company had no hedging instruments designated as fair value hedges. In the event the Company has contracts not designated as hedges for accounting purposes, the Company recognizes the changes in the fair value of these contracts in the consolidated statement of earnings.

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Commodity Price Risk

The Company is exposed to changes in the price of commodities used as raw materials in the manufacturing of its products. The Company uses various strategies, where available at a reasonable cost to manage cost exposures on certain raw material purchases with the objective of obtaining more predictable costs for these commodities, including long-term commodity purchase contracts and commodity derivative contracts. During fiscal years 20202022 and 2019,2021, the Company had derivative contracts related to raw material exposures for soybean oil used for the Food business and jet fuel used for the Grilling business and soybean oil used for the Food products business.

Based on a hypothetical decrease or increase of 10% in these commodity prices as of June 30, 2020,2022, and June 30, 2019,2021, the estimated fair value of the Company’s then-existing commodity derivative contracts would decrease or increase by $2$3 and $2,$4, respectively, with the corresponding impact included in Other comprehensive (loss) income.

Foreign Currency Risk

The Company seeks to minimize the impact of certain foreign currency fluctuations by hedging transactional exposures related to inventory purchases with foreign currency forward contracts. Based on a hypothetical decrease of 10% in the value of the U.S. dollar as of June 30, 20202022 and June 30, 2019,2021, the estimated fair value of the Company’s then-existing foreign currency derivative contracts would decrease by $8$3 and $7,$8, respectively, with the corresponding impact included in Other comprehensive (loss) income. Based on a hypothetical increase of 10% in the value of the U.S. dollar as of June 30, 20202022 and June 30, 2019,2021, the estimated fair value of the Company’s then-existing foreign currency derivative contracts would increase by $6$3 and $6, respectively.

Interest Rate Risk

The Company iscan be exposed to interest rate volatility with regard to existing short-term borrowings, primarilyusing commercial paper and borrowingsor under the Credit Agreement, andin addition to potential changes in interest rates relating to anticipated future issuances of long-term debt. Weighted average interest rates for short-term borrowings using commercial paper and Credit Agreement borrowings were 2.12%0.48% during fiscal year 2020 and 2.61%2022. The Company had no material exposure to interest rate volatility through any short-term borrowing arrangements during fiscal year 2019.2021. Assuming average commercial paper and Credit Agreement borrowing levels during fiscal years 2020 and 2019, anyear 2022, a 100 basis point increase in interest rates or a decrease in interest rates to zero would increase or decrease interest expense from commercial paper and Credit Agreementshort-term borrowings by approximately $4$2 and $3,$1, respectively.

The Company iscan also be exposed to interest rate volatility with regard to anticipated future issuances of debt. Primary exposures includeThe Company utilizes interest rate contracts to manage our exposure to interest rate volatility related to movements in U.S. Treasury and swap rates. In May 2022, the Company’s interest rate contracts were settled upon issuance of $1,100 in senior notes. Therefore, as of June 30, 2022, the Company had no outstanding interest rate contracts. Based on a hypothetical increase or decrease of 100 basis points to 10-year swaprelevant interest rates as of June 30, 2020,2021, the estimated fair value of the Company’s existing forward starting interest rate swap contracts would increasehave increased or decreasedecreased by $21,$27 during fiscal year 2021, with the corresponding impact recorded in Other comprehensive (loss) income. The Company had no outstanding forward starting interest rate swap contract positions as of June 30, 2019.

RECENTLY ISSUED ACCOUNTING STANDARDS

A summary of all recently issued accounting standards is contained in Note 1 of the Notes to Consolidated Financial Statements.

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The methods, estimates and judgments the Company uses in applying its most critical accounting policies have a significant impact on the results the Company reports in its consolidated financial statements. Specific areas requiring the application of management’s estimates and judgments include, among others, assumptions pertaining to accruals for consumer and trade promotion programs, stock-based compensation, retirement income plans, future cash flows associated with impairment testing of goodwill and other long-lived assets and the valuation of the Venture Agreement terminal obligations, valuation of assets acquired and liabilities assumed in connection with a business combination, the credit worthiness of customers, uncertain tax positions, tax valuation allowances and legal, environmental and insurance matters. Accordingly, a different financial presentation could result depending on the judgments, estimates or assumptions that are used. The most critical accounting policies and estimates are those that are most important to the portrayal of the Company’s financial condition and results, and require the Company to make the most difficult and subjective judgments, often estimating the outcome of future events that are inherently uncertain. The Company’s most critical accounting policies and estimates are related to: revenue recognition; the valuation of goodwill and other intangible assets; income taxes; and the Venture Agreement terminal obligation.

Revenue recognition;
The valuation of goodwill and other intangible assets;
Income taxes; and
The Venture Agreement terminal obligation.

The Company’s critical accounting policies and estimates have been reviewed with the Audit Committee of the Board of Directors. A summary of the Company’s significant accounting policies and estimates is contained in Note 1 of Notes to Consolidated Financial Statements.

Revenue Recognition

The Company’s revenue is primarily generated from the sale of finished products to customers. This revenue is reported net of certain variable consideration provided to customers, generally in the form of one-time and ongoing trade-promotion programs. These trade-promotion programs include shelf price reductions, in-store merchandising, consumer coupons and other trade-related activities. Amounts accrued for trade-promotions are based on various factors such as contractual terms and sales volumes, and also incorporate estimates that include customer participation rates, the rate at which customers will achieve program performance criteria, product availability and historical consumer redemption rates. The actual amounts remitted to customers for these activities may differ from the Company’s estimates, depending on how actual results of the programs compare to the estimates. If the Company’s trade promotion accrual estimates as of June 30, 20202022 were to increase or decrease by 10%, the impact on net sales would be approximately $15.$19.

Goodwill and Other Intangible Assets

The Company tests its goodwill and other indefinite-lived intangible assets for impairment annually in the fiscal fourth quarter unless there are indications during a different interim period that these assets may have become impaired.

Goodwill

For fiscal year 2020,2022, the Company’s reporting units for goodwill impairment testing purposes were its individual SBUs. These reporting units, which are also the Company’s operating segments, are the level at which discrete financial information is available and reviewed by the manager of the respective operating segments. The respective operating segment managers, who have responsibility for operating decisions, allocating resources and assessing performance within their respective segments, do not review financial information for components that are below the operating segment level.

In its evaluation of goodwill impairment, the Company has the option to first assess qualitative factors such as the maturity and stability of the reporting unit, the magnitude of the excess fair value over the carrying value from thea prior period’s impairment testing, other reporting unit operating results, micro and macroeconomic factors, as well as new events and circumstances impacting the operations at the reporting unit level. If the result of a qualitative test indicates a potential for impairment, a quantitative test is performed. The In the

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quantitative test, is a two-step process. In the first step, the Company compares the estimated fair value of each reporting unit to its carrying value. In all instances, the estimated fair value exceeded the carrying value of the reporting unit. If the estimated fair value of any reporting unit had beenis less than its carrying value, the Company would have performed a second step to determine the implied fair value of the reporting unit’s goodwill. If the carrying value of a reporting unit’s goodwill had exceeded its implied fair value, an impairment charge would have beenis recorded for the difference between the carrying value and the implied fair value of the reporting unit’s goodwill.unit.

To determineDetermining the fair value of a reporting unit as part of its quantitative test, therequires significant judgments, assumptions and estimates by management which are subject to uncertainty. The Company uses a discounted cash flow (DCF) method under the income approach for its quantitative test, as it believes that this approach is the most reliable indicator of the fair value of its businesses and the fair value of their future earnings and cash flows. Under this approach, the Company estimates

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the future cash flows of each reporting unit and discounts these cash flows at a rate of return that reflects their relative risk. The cash flows used in the DCF method are consistent with those the Company uses in its internal planning, which gives consideration to actual business trends experienced and the long-term business strategy. The other key estimates and factors used in the DCF method include, but are not limited to, net sales and expense growth rates, commodity prices, foreign exchange rates, inflation and a terminal growth rate. Future changes in the judgments, assumptions and estimates that are used in the impairment testing for goodwill could result in significantly different estimates of the fair values.values and future impairment charges.

InDuring the fourththird quarter of fiscal year 2020, the Company realigned its reportable segments following operational and systems integration. As a result of these changes, the Company performed impairment testing immediately before and after the reorganization of its reporting unit structure. No impairments were identified2021, as a result of lower than expected actual and projected net sales growth and operating performance for the VMS reporting unit, a strategic review was initiated by management that resulted in updated financial and operational plans. These events were considered a triggering event requiring interim impairment assessments to be performed on the VMS reporting unit, indefinite-lived trademarks and other assets. Based on the outcome of these assessments, a $228 goodwill impairment reviews.

charge was recorded during the third quarter of fiscal year 2021. The results of the fiscal year 2022 annual impairment reviewsreview indicated that the new VMS SBU had 20% or less excess fair value over its carrying value. As such, this reporting unit is considered to havehas a heightened risk of impairmentfuture impairments if any assumptions, estimates or market factors unfavorably change in the future. The VMS SBU had goodwill of $534For perspective, if the discount rate as of June 30, 2020.2022 were to increase by 100 basis points, the change to the estimated fair value of the VMS reporting unit would have resulted in impairment charges of approximately $10. No triggering events or impairments for goodwill related to the VMS reporting unit were identified during fiscal year 2022. The VMS reporting unit had goodwill of $306 as of June 30, 2022. The Company is closely monitoring any events, circumstances or changes in this business that might imply a further reduction in the estimated fair value and may lead to aadditional goodwill impairment.

Except for the VMS reporting unit discussed above, no heightened risk of impairment of reporting units was identified. No impairments were identified in fiscal year 2022 as a result of the Company’s impairment review performed annually during the fourth quarter or during any other quarters of fiscal year 2022.

Trademarks and Other Indefinite-Lived Intangible Assets

For trademarks and other intangible assets with indefinite lives, the Company has the option to first assess qualitative factors, such as the maturity and stability of the trademark or other intangible asset, the magnitude of the excess fair value over carrying value from thea prior period’s impairment testing, other specific operating results, as well as new events and circumstances impacting the significant inputs used to determine the fair value of the intangible asset. If the result of a qualitative test indicates that it is more likely thatthan not that the asset is impaired, a quantitative test is performed. When a quantitative test is performed, the estimated fair value of an asset is compared to its carrying value. If the carrying value of such asset exceeds its estimated fair value, an impairment charge is recorded for the difference between the carrying value and the estimated fair value. The Company uses a DCF method under the relief from royalty income approach to estimate the fair value of its trademarks and other intangible assets with indefinite lives. This approach requires significant judgments in determining the royalty rates and the assets’ estimated cash flows, including consideration of related net sales growth rates, as well as the appropriate discount and foreign exchange rates applied to those cash flows to determine fair value. Future changes in such estimates or the use of alternative assumptions could result in significantly different estimates of the fair values.

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During the third quarter of fiscal year 2021, as a result of the interim impairment assessments performed on various VMS assets, an $86 impairment charge to indefinite-lived trademarks was recorded.

No significantheightened risk of impairment or impairments were identified in fiscal year 20202022 as a result of the Company’s impairment reviewsreview performed annually during the fourth quarter or during any other quarters of fiscal year 2020. The results of the annual impairment reviews indicated that the RenewLife® and Neocell® indefinite-lived trademarks each had 20% or less excess fair value over their respective carrying values. As such, these trademarks were considered to have a heightened risk of impairment if any assumptions, estimates, or market factors unfavorably change in the future. The carrying values of the RenewLife® and Neocell® trademarks were $133 and $35, respectively, as of June 30, 2020. The Company is closely monitoring any events, circumstances, or changes impacting these trademarks that might imply a reduction in the estimated fair value and lead to an impairment.2022.

Finite-Lived Intangible Assets

Finite-lived intangible assets are reviewed for possible impairment whenever events or changes in circumstances occur that indicate that the carrying value of an asset (or asset group) may not be recoverable. The Company’s impairment review requires significant judgment by management, including estimating the future success of product lines, future sales volumes, revenue and expense growth rates, alternative uses for the assets and proceeds from the disposal of the assets. The Company reviews business plans for possible impairment indicators. Impairment occursThe risk of impairment is initially assessed based on an estimate of the undiscounted cash flows at the lowest level for which identifiable cash flows exist. The asset (or asset group) is not recoverable when the carrying value of the asset (or asset group) exceeds itsthe estimated future undiscounted cash flows.flows generated by the asset. When impairment is indicated, an impairment charge is recorded for the difference between the asset’s (or asset group’s) carrying value and its estimated fair value. Depending on the asset, estimated fair value may be determined either by use of a DCF modelmethod or, if available, by reference to estimated selling values of assets in similar condition. These approaches require significant judgments in determining the assumptions utilized in the DCF or the selection of comparable assets, as applicable. Future changes in such estimates or the use of alternative assumptions could result in significantly different estimates of the fair values.

During the third quarter of fiscal year 2021, as a result of the interim impairment assessments performed on various VMS assets, a $14 impairment charge to finite-lived intangible assets was recorded. Additionally during the fourth quarter of fiscal year 2021, an impairment charge of $14 was recorded related to other intangible assets with finite lives that were no longer expected to be recoverable due to a pending exit from a Professional Products SBU supplier relationship.

No significant impairments for finite-lived intangible assets were identified in fiscal year 2020 as a result of the Company’s impairment reviews during any quarters of fiscal year 2020.

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Appendix B2022.

Income Taxes

The Company’s effective tax rate is based on income by tax jurisdiction, statutory tax rates and tax planning opportunities available to the Company in the various jurisdictions in which the Company operates. Significant judgment is required in determining the Company’s effective tax rate and in evaluating its tax positions.

The Company maintains valuation allowances when it is likely that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances from period to period are included in the Company’s income tax provision in the period of change. In determining whether a valuation allowance is warranted, the Company takes into account suchmany factors, as prior earnings history, expectedincluding the specific tax jurisdiction, both historical and projected future earnings, unsettled circumstances that, if unfavorably resolved, would adversely affect the utilization of a deferred tax asset, statutory carry-backcarryback and carry-forwardcarryforward periods and tax strategiesplanning strategies. Many of the judgments made in adjusting valuation allowances involve assumptions and estimates that could potentially enhance the likelihood of realization of a deferred tax asset.are highly subjective. Valuation allowances maintained by the Company relate mostly to deferred tax assets arising from the Company’s currently anticipated inability to use net operating losses and tax credits in certain foreign countries. As of June 30, 2020 and June 30, 2019, valuation allowances related to the realization of deferred tax assets were approximately $38 and $44, respectively.

In addition to valuation allowances, the Company provides forestablishes uncertain tax positions when such tax positions do not meet certain recognition thresholds or measurement standards.standards as defined by generally accepted accounting principles. These uncertain tax positions are adjusted as a result of changes in factors such as tax legislation, interpretations of laws by courts, rulings by tax authorities, new audit developments, changes in estimates and the expiration of the statute of limitations. Amounts

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for uncertain tax positions are adjusted in quarters when new information becomes available or when positions are effectively settled. AsMany of June 30, 2020 and June 30, 2019, the liabilities recorded forjudgments made in adjusting uncertain tax positions excluding associated interestinvolve assumptions and penalties, were approximately $22 and $31, respectively. Sinceestimates regarding audit outcomes and the timing of audit settlements, which are often uncertain and subject to significant uncertainty, liabilities for uncertain tax positions are excluded from the contractual obligations table (see Notes to Consolidated Financial Statements).change.

Foreign withholding taxes are not provided when foreign earnings are indefinitely reinvested. The Company determines whether its foreign subsidiaries will invest their undistributed earnings indefinitely and reassesses this determination on a quarterly basis. A change to the Company’s determination may be warranted based on the Company’s experience, as well as plans regarding future international operations and expected remittances. Changes in the Company’s determination would require an adjustment to the income tax provision in the quarter in which the determination is made. Through the second quarter of fiscal year 2018, the Company had determined that the undistributed earnings of a number of its foreign subsidiaries were indefinitely reinvested. In the third quarter of fiscal year 2018, the Company concluded an analysis wherein it determined that none of the undistributed earnings of its foreign subsidiaries were indefinitely reinvested because the Tax Act, which was enacted in December 2017, significantly reduced the cost of U.S. repatriation. As a result, the Company is providing foreign withholding taxes on the undistributed earnings of all foreign subsidiaries where applicable, which has no significant impact on the Company’s consolidated results.

Venture Agreement Terminal Obligation

The Company has a Venture Agreement with P&G for the Company’s Glad bags and wraps business. In connection with this agreement, P&G provides R&D support to the Glad business. As of June 30, 20202022 and June 30, 2019,2021, P&G had a 20% interest in the venture. In December 2017, the Company and P&G extended the termUpon termination of the agreement, and the related R&D support provided by P&G. The term will now expire incurrently set for January 2026, unless the parties agree on or prior to January 31, 2025, toa further extend the term of the agreement for another seven years or agree to take some other relevant action. Upon termination of the agreement,extension, the Company is required to purchase P&G’s 20% interest for cash at fair value as established by predetermined valuation procedures. The Company’s obligation to purchase P&G’s interest is reflected in Other liabilities (See Notes to Consolidated Financial Statements).liabilities. The difference between the estimated fair value and the amount recognized, and any future changes in the fair value of P&G’s interest, is charged to Cost of products sold in accordance with the effective interest method over the remaining life of the agreement. See Notes to Consolidated Financial Statements for additional information on the Venture Agreement.

The estimated fair value of P&G’s interest may increase or decrease up until any such purchase by the Company of P&G’s interest. The Company uses the DCF method under the income approach to estimate the fair value of P&G’s interest. Under this approach, the Company estimates the future cash flows and discounts these cash flows at a rate of return that reflects its risk. The cash flows used are consistent with those the Company uses in its internal planning, which gives consideration to actual business trends experienced and the long-term business strategy. The other key assumptions and estimates used include, but are not limited to, net sales and expense growth rates, commodity prices, foreign exchange rates, discount rates, inflation and terminal growth rates. Fair value determination requires significant judgment, assumptions and market factors which are uncertain and subject to change. Changes in the judgments, assumptions and estimatesmarket factors used could result in significantly different estimates of fair value. For perspective, if the discount rate as of June 30, 20202022 were to increase or decrease by 100 basis points, the estimated fair value of P&G’s interest would decrease by approximately $70$75 or increase by approximately $90,$98, respectively. Such changes would affect the amount of future charges to Cost of products sold.

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SUMMARY OF NON-GAAP FINANCIAL MEASURES

The non-GAAP financial measures that may be included in this MD&A and Exhibit 99.2 and the reasons management believes they are useful to investors are described below. These measures should be considered supplemental in nature and are not intended to be a substitute for the related financial information prepared in accordance with U.S. GAAP. In addition, these measures may not be the same as similarly named measures presented by other companies.

Free cash flow is is calculated as net cash provided by operations less capital expenditures. The Company’s management uses this measure and free cash flow as a percentage of net sales to help assess the cash generation ability of the business and funds available for investing activities, such as acquisitions, investing in the business to drive growth, and financing activities, including debt payments, dividend payments and stock repurchases. Free cash flow does not represent cash available only for discretionary expenditures, since the Company has mandatory debt service requirements and other contractual and non-discretionary expenditures. Refer to “Free cash flow” and “Free cash flow as a percentage of net sales” above for a reconciliation of these non-GAAP measures.

The Company uses the term Consolidated EBITDA because it is a term used in its revolving Credit Agreement. As defined in the Credit Agreement, Consolidated EBITDA represents earnings before interest, taxes, depreciation and amortization and non-cash asset impairment charges. Interest Coverage ratio is the ratio of Consolidated EBITDA to interest expense. The Company’s management believes disclosure of Consolidated EBITDA provides useful information to investors because it is used in the primary restrictive covenant in the Company’s Credit Agreement. For additional discussion of the Interest Coverage ratio and a reconciliation of Consolidated EBITDA, see “Financial Position and Liquidity - Financing Activities - Credit Arrangements” above.

EBIT represents earnings before income taxes, interest income and interest expense. EBIT margin is the ratio of EBIT to net sales. The Company’s management believes these measures provide useful additional information to investors to enhance their understanding about trends in the Company’s operations and are useful for period-over-period comparisons.

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Economic profit (EP) is defined by the Company as earnings before income taxes, excluding non-cashcertain U.S. GAAP restructuringitems (such as asset impairments, charges related to digital capabilities and intangible asset impairment charges,productivity enhancements investment, significant losses/(gains) related to acquisitions and other non-recurring or unusual items) and interest expense; less income taxes (calculated utilizingbased on the Company’s effective tax rate)rate excluding the identified U.S. GAAP items), and less after tax profit attributable to noncontrolling interests, and less a capital charge (calculated as average capital employed multiplied by a cost of capital percentage rate). EP is a key financial metric that the Company’s management uses to evaluate business performance and allocate resources, and is a component in determining employee incentive compensation. The Company’s management believes EP provides additional perspective to investors about financial returns generated by the business and represents profit generated over and above the cost of capital used by the business to generate that profit. Refer to Exhibit 99.2 for a reconciliation of EP to earnings before income taxes.

Organic sales growth / (decrease) is defined as net sales growth excluding the effect of foreign exchange rate changes and any acquisitions and divestitures. Management believes that the presentation of organic sales growth / (decrease) is useful to investors because it excludes sales from any acquisitions and divestitures, which results in a comparison of sales only from the businesses that the Company was operating and expects to continue to operate throughout the relevant periods, and the Company’s estimate of the impact of foreign exchange rate changes, which are difficult to predict, and out of the control of the Company and management.

The following table provides a reconciliation of organic sales growth / (decrease) (non-GAAP) to net sales growth / (decrease) (GAAP), the most comparable GAAP measure:

Twelve Months Ended June 30, 2020
Percentage change versus the year-ago period
Health and
Wellness
HouseholdLifestyleInternationalTotal
Net sales growth / (decrease) (GAAP)      14%      1%      10%      5%      8%
Add: Foreign Exchange    10 2
Add/(Subtract): Divestitures/Acquisitions     
Organic sales growth / (decrease) (non-GAAP)       14%         1%      10%           15%  10%
                     

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Twelve Months Ended June 30, 2022
Percentage change versus the year-ago period
Health
and
Wellness
Household LifestyleInternationalTotal
Net sales growth / (decrease) (GAAP)           (10)%             —%     3%     2%     (3)%
Add: Foreign Exchange      —41
Add/(Subtract): Divestitures/Acquisitions             —
Organic sales growth / (decrease) (non-GAAP)(10)%%3%6%(2)%

CAUTIONARY STATEMENT

This Annual Report on Form 10-K (this Report), including the exhibits hereto and the information incorporated by reference herein, contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, among others, statements related to the expected or potential impact of the novel coronavirus (COVID-19) pandemic, and the related responses of governments, consumers, customers, suppliers, employees and the Company, on our business, operations, employees, financial condition and results of operations, and any such forward-looking statements, whether concerning the COVID-19 pandemic or otherwise, involve risks, assumptions and uncertainties. Except for historical information, statements about future volumes, sales, organic sales growth, foreign currencies, costs, cost savings, margins, earnings, earnings per share, diluted earnings per share, foreign currency exchange rates, tax rates, cash flows, plans, objectives, expectations, growth or profitability are forward-looking statements based on management’s estimates, beliefs, assumptions and projections. Words such as “could,” “may,” “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will,” “predicts,” and variations on such words, and similar expressions that reflect our current views with respect to future events and operational, economic and financial performance are intended to identify such forward-looking statements. These forward-looking statements are only predictions, subject to risks and uncertainties, and actual results could differ materially from those discussed. Important factors that

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could affect performance and cause results to differ materially from management’s expectations are described in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Report, as updated from time to time in the Company’s Securities and Exchange Commission filings. These factors include, but are not limited to, the uncertainties relating to the impact of COVID-19 on the Company’s business, operations, employees, financial condition and results of operations, as well as:to:

intense competition in the Company’s markets;
the impact of the changing retail environment, including the growth of alternative retail channels and business models, and changing consumer preferences;
volatility and increases in the costs of raw materials, energy, transportation, labor and other necessary supplies or services;
the impactability of the Company to drive sales growth, increase prices and market share, grow its product categories and manage favorable product and geographic mix;
risks related to supply chain issues, product shortages and disruptions to the business, as a result of increased supply chain dependencies due to an expanded supplier network and a reliance on certain single-source suppliers;
the ongoing COVID-19 pandemic and related impacts, including on the availability of, and efficiency of the supply, manufacturing and distribution systems for, the Company’s products, including any significant disruption to such systems; on the demand for and sales of the Company’s products; and on worldwide, regional and local adverse economic conditions
long-term changesintense competition in consumer preference or demand for the Company’s products as a result of any shortages or lack of availability of any products in the near-term;markets;
risks related tounfavorable general economic and political conditions beyond our control, including recent supply chain issuesdisruptions, labor shortages, wage pressures, rising inflation, fuel and product shortagesenergy costs, foreign currency exchange rate fluctuations, weather events or natural disasters, disease outbreaks or pandemics, such as a result of reliance on a limited base of suppliersCOVID-19, terrorism, and unstable geopolitical conditions, including the significant increaseconflict in demand for disinfecting and other products due to the COVID-19 pandemic;Ukraine;
dependence on key customers and risks related to customer consolidation and ordering patterns;
risks related to the Company’s use of and reliance on information technology systems, including potential security breaches, cyber-attacks, privacy breaches or data breaches that result in the unauthorized disclosure of consumer, customer, employee or Company information, or service interruptions, especially at a time when a large number of the Company’s employees are working remotely and accessing its technology infrastructure remotely;
risks relating to acquisitions, new ventures and divestitures, and associated costs, including for asset impairment charges related to, among others, intangible assets and goodwill; and the ability to complete announced transactions and, if completed, integration costs and potential contingent liabilities related to those transactions;
unfavorable worldwide, regionalthe ability of the Company to implement and local economicgenerate cost savings and financialefficiencies, and successfully implement its business strategies, including achieving anticipated results and cost savings from the implementation of the streamlined operating model;
dependence on key customers and risks related to customer consolidation and ordering patterns;
the Company’s ability to attract and retain key personnel, which may continue to be impacted by challenges in the labor market, conditions, including as a result of fear of exposure to or actual impacts of a widespread disease outbreak, such as COVID-19;wage inflation and sustained labor shortages;
the Company’s ability to maintain its business reputation and the reputation of its brands and products;
lower revenue, increased costs or reputational harm resulting from government actions and regulations;compliance with regulations, or any material costs imposed by changes in regulation;
the ability of the Company to successfully manage global political, legal, tax and regulatory risks, including changes in regulatory or administrative activity;
the ability of the Company to drive sales growth, increase prices and market share, grow its product categories and manage favorable product and geographic mix;
volatility and increases in commodity costs such as resin, sodium hypochlorite and agricultural commodities, and increases in energy, transportation or other costs;

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risks related to international operations and international trade, including changing macroeconomic conditions as a result of inflation, volatile commodity prices and increases in raw and packaging materials prices, labor, energy and logistics; global economic or political instability; foreign currency fluctuations, such as devaluations, and foreign currency exchange rate controls, including periodic changes in such controls; changes in U.S. immigration or tradegovernmental policies, including the imposition oftrade, travel or immigration restrictions, new or additional tariffs;tariffs, and price or other controls; labor claims and laborcivil unrest; inflationary pressures, particularlycontinued high levels of inflation in Argentina; potential disruption from wars and military conflicts, including the conflict in Ukraine; impact of the United Kingdom’s exit from and the related on-going negotiations with, the European Union; government-imposed price controls or other regulations; potential negative impact and liabilities from the use, storage and transportation of chlorine in certain international markets where chlorine is used in the production of bleach; widespread health emergencies, such as COVID-19; and the possibility of nationalization, expropriation of assets or other government action;
the facilitiesimpact of the CompanyEnvironmental, Social, and its suppliers being subjectGovernance (ESG) issues, including those related to disruption by events beyond the Company’s control, including work stoppages, cyber-attacks, natural disasters, disease outbreaksclimate change and sustainability on our sales, operating costs or pandemics, such as COVID-19, and terrorism;reputation;
the ability of the Company to innovate and to develop and introduce commercially successful products, or expand into adjacent categories and countries;
the impact of product liability claims, labor claims and other legal, governmental or tax proceedings, including in foreign jurisdictions and in connection with any product recalls;
the ability of the Company to implement and generate cost savings and efficiencies;
the success of the Company’s business strategies;
risks relating to acquisitions, new ventures and divestitures, and associated costs; and the ability to complete announced transactions and, if completed, integration costs and potential contingent liabilities related to additional increases in the estimated fair value of P&G’s interest in the Glad business;those transactions;
the accuracy of the Company’s estimates and assumptions on which its financial projections, including any sales or earnings guidance or outlook it may provide from time to time, are based;
risks related to additional increases in the Company’s ability to attract and retain key personnel;estimated fair value of P&G’s interest in the Glad business;
environmental matters, including costs associated with the remediation and monitoring of past contamination, and possible increases in costs resulting from actions by relevant regulators, and the handling and/or transportation of hazardous substances;
increased focus by governmental and non-governmental organizations, customers, consumers and investors on sustainability issues, including those related to climate change;
the Company’s ability to effectively utilize, assert and defend its intellectual property rights;
rights, and any infringement or claimed infringement by the Company of third-party intellectual property rights;
the performance of strategic alliances and other business relationships;
the effect of the Company’s indebtedness and credit rating on its business operations and financial results;
results and the Company’s ability to access capital markets and other funding sources, as well as continued or increased market volatility;sources;
the Company’s ability to pay and declare dividends or repurchase its stock in the future;
uncertainties relating to tax positions, tax disputes and any changes in tax rates and regulations on the Company;
the Company’s ability to maintain an effective system of internal controls;
the impacts of potential stockholder activism; and
risks related to any litigation associated with the exclusive forum provision in the Company’s discontinuation of operations in Venezuela.bylaws.

The Company’s forward-looking statements in this Report are based on management’s current views, beliefs, assumptions and expectations regarding future events and speak only as of the date of this Report. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the federal securities laws.

In this Report, unless the context requires otherwise, the terms “the Company,” “Clorox,” “we,” “us,” and “our” refer to The Clorox Company and its subsidiaries.

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MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of its Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s financial statements for external reporting in accordance with accounting principles generally accepted in the United States of America.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Management evaluated the effectiveness of the Company’s internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework published in 2013. Management, under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of June 30, 2020,2022, and concluded that it is effective.

The Company’s independent registered public accounting firm, Ernst & Young LLP, has audited the effectiveness of the Company’s internal control over financial reporting as of June 30, 2020,2022, as stated in their report, which is included herein.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of The Clorox Company

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of The Clorox Company (the Company) as of June 30, 20202022 and 2019,2021, the related consolidated statements of earnings, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended June 30, 2020,2022, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at June 30, 20202022 and 2019,2021, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2020,2022, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of June 30, 2020,2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated August 13, 202010, 2022 expressed an unqualified opinion thereon.

Adoption of New Accounting Standards

As discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for leases, effective July 1, 2019, using the modified retrospective approach upon adoption of Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842).

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements

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are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Valuation of Goodwill and Trademarks with Indefinite Lives

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Valuation of Goodwill and Trademarks with Indefinite Lives
Description of the Matter

     

At June 30, 2020,2022, the Company’s goodwill was $1.6 billion and represented 25% of total assets; trademarks with indefinite lives was $766$668 million and represented 12%11% of total assets. As discussed in Note 1 of the consolidated financial statements, goodwill and trademarks with indefinite lives are tested by the Company’s management for impairment at least annually, in the fiscal fourth quarter, unless there are indications of impairment at other points throughout the year. Goodwill is tested for impairment at the reporting unit level.

Auditing the Company’s annual impairment test for goodwill and trademarks with indefinite lives is complex and highly judgmental and required the involvement of a valuation specialist due to the significant judgment in estimating the fair value of reporting units and trademarks with indefinite lives. In particular, the fair value estimates of reporting units with fair values that do not significantly exceed or that fall below their carrying values are sensitive to assumptions such as net sales growth rates, gross margins and discount rates. Trademarks with indefinite lives with fair values that do not significantly exceed or that fall below their carrying values are sensitive to assumptions such as net sales growth rates, discount rates and royalty rates. All of these assumptions are sensitive to and affected by expected future market or economic conditions, particularly those in emerging markets, and industry and company-specific qualitative factors.

                         

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How We Addressed the Matter in Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill and trademarks impairment review process. This included evaluating controls over the Company’s budgetary and forecasting process used to develop the estimated future earnings and cash flows used in estimating the fair value of reporting units and trademarks with indefinite lives. We also tested controls over management’s review of the data used in their valuation models and review of the significant assumptions such as estimation of net sales, expense growth rates and terminal growth rates.

To test the estimated fair value of the Company’s reporting units and trademarks with indefinite lives (with fair values that do not significantly exceed or that fall below carrying values), we performed audit procedures that included, among others, assessing the methodologies, testing the significant assumptions discussed above used to develop the estimates of future earnings and cash flows and testing the completeness and accuracy of the underlying data. We compared the significant assumptions used by management to current industry and economic trends, the Company’s historical results and other guideline companies within the same industry, and we evaluated whether changes in the Company’s business would affect the significant assumptions. We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the change in the fair value of the reporting units and trademarks with indefinite lives resulting from changes in these assumptions. We involved our valuation specialists to assist in reviewing the valuation methodology and testing the terminal growth rates, discount rates and royalty rates.

In addition, for goodwill we also tested the Company’s calculation of implied multiples of the reporting units, compared them to guideline companies and evaluated the resulting premium. For trademarks with indefinite lives, where applicable, we also assessed whether the assumptions used were consistent with those used in the goodwill impairment review process.


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Appendix B

Valuation of Venture Agreement Terminal Obligation

Description of the Matter

As discussed in Note 8 of the consolidated financial statements, the Company has an agreement with The Proctor & Gamble Company (P&G) for the Company’s Glad bags and wraps business, for which the Company is required to purchase P&G’s 20% interest in the venture for cash at fair value of the global Glad business upon termination of the agreement. At June 30, 2020,2021, the fair value of $400$468 million has been recognized as a venture agreement terminal obligation and represented 8%9% of total liabilities.

Auditing the Company’s Glad venture agreement terminal obligation is complex and highly judgmental and required the involvement of a valuation specialist due to the significant judgment in estimating the fair value of the global Glad business. In particular, the fair value estimate is sensitive to assumptions such as net sales growth rates, gross margins, discount rate and commodity prices. These assumptions are sensitive to and affected by expected future market or economic conditions, particularly those in emerging markets, and industry and company-specific qualitative factors.


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Appendix A

How We
Addressed the
Matter in Our
Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the venture agreement terminal obligation valuation review process. This included controls over the Company’s budgetary and forecasting process used to develop the estimated fair value of the global Glad business. We also tested management’s controls over the data used in their valuation models and review of the significant assumptions such as estimation of net sales, expense growth rates, terminal growth rates and commodity prices.

To test the estimated fair value of the venture agreement terminal obligation, we performed audit procedures that included, among others, assessing the methodologies, testing the significant assumptions discussed above used to develop estimates of future earnings and cash flows, and testing the completeness and accuracy of the underlying data. We compared the significant assumptions used by management to current industry and economic trends, the Company’s historical results and other guideline companies within the same industry, and we evaluated whether changes in the Company’s business, including shifts in consumer demands and commodity prices, would affect the significant assumptions. We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the change in the fair value of the venture agreement terminal obligation resulting from changes in these assumptions. We involved our valuation specialists to assist in reviewing the valuation methodology and testing the terminal growth rates and discount rates.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2003.

San Francisco, CA
August 13, 202010, 2022

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Appendix BA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of The Clorox Company

Opinion on Internal Control Over Financial Reporting

We have audited The Clorox Company’s internal control over financial reporting as of June 30, 2020,2022, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, The Clorox Company (the Company) maintained, in all material respects, effective internal control over financial reporting as of June 30, 2020,2022, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of The Clorox Company as of June 30, 20202022 and 2019,2021, the related consolidated statements of earnings, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended June 30, 2020,2022, and the related notes (collectively referred to as the “consolidated financial statements”) and our report dated August 13, 202010, 2022 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

San Francisco, CA
August 13, 202010, 2022

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Appendix A

CONSOLIDATED STATEMENTS OF EARNINGS
The Clorox Company

Years ended June 30      
       
Dollars in millions, except per share data     2022     2021     2020
Net sales$     7,107$     7,341$     6,721
Cost of products sold4,5624,1423,658
Gross profit2,5453,1993,063
Selling and administrative expenses9541,004969
Advertising costs709790675
Research and development costs132149145
Goodwill, trademark and other asset impairments329
Interest expense1069999
Other (income) expense, net37(72)(10)
Earnings before income taxes6079001,185
Income taxes136181246
Net earnings471719939
Less: Net earnings attributable to noncontrolling interests99
Net earnings attributable to Clorox$462$710$939
Net earnings per share attributable to Clorox
Basic net earnings per share$3.75$5.66$7.46
Diluted net earnings per share$3.73$5.58$7.36
Weighted average shares outstanding (in thousands)
Basic123,113125,570125,828
Diluted123,906127,299127,671

See Notes to Consolidated Financial Statements

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Appendix BA

CONSOLIDATED STATEMENTS OF EARNINGSCOMPREHENSIVE INCOME
The Clorox Company

Years ended June 30
Dollars in millions, except share and per share data
202020192018
Net sales     $6,721      $6,214      $6,124 
Cost of products sold3,658 3,486 3,449 
Gross profit3,063 2,728 2,675 
 
Selling and administrative expenses969 856 837 
Advertising costs675 612 570 
Research and development costs145 136 132 
Interest expense99 97 85 
Other (income) expense, net(10)3 (3)
Earnings before income taxes1,185 1,024 1,054 
Income taxes246 204 231 
Net earnings$939 $820 $823 
 
Net earnings per share
Basic net earnings per share$7.46 $6.42 $6.37 
Diluted net earnings per share$7.36 $6.32 $6.26 
 
Weighted average shares outstanding (in thousands)
Basic125,828 127,734 129,293 
Diluted127,671 129,792 131,581 
Years ended June 30      
       
Dollars in millions     2022     2021     2020
Net earnings$     471$     719$     939
Other comprehensive (loss) income:
Foreign currency adjustments, net of tax(45)47(36)
Net unrealized gains (losses) on derivatives, net of tax100395
Pension and postretirement benefit adjustments, net of tax128(7)
Total other comprehensive (loss) income, net of tax6794(38)
Comprehensive income538813901
Less: Total comprehensive income attributable to noncontrolling
interests
99
Total comprehensive income attributable to Clorox$529$804$901

See Notes to Consolidated Financial Statements

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Appendix BA

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMEBALANCE SHEETS

The Clorox Company

Years ended June 30
Dollars in millions
202020192018
Net earnings     939      820      823 
Other comprehensive (loss) income:
Foreign currency adjustments, net of tax(36)(22)(28)
Net unrealized gains (losses) on derivatives, net of tax5 2 12 
Pension and postretirement benefit adjustments, net of tax(7)4 12 
Total other comprehensive (loss) income, net of tax(38)(16)(4)
Comprehensive income$901 $804 $819 
             
As of June 30
Dollars in millions, except per share data
     2022     2021
ASSETS
Current assets
Cash and cash equivalents$     183$     319
Receivables, net681604
Inventories, net755752
Prepaid expenses and other current assets106154
Total current assets1,7251,829
Property, plant and equipment, net1,3341,302
Operating lease right-of-use assets342332
Goodwill1,5581,575
Trademarks, net687693
Other intangible assets, net197225
Other assets315378
Total assets$6,158$6,334
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Notes and loans payable$237$
Current maturities of long-term debt300
Current operating lease liabilities7881
Accounts payable and accrued liabilities1,4691,675
Total current liabilities1,7842,056
Long-term debt2,4742,484
Long-term operating lease liabilities314301
Other liabilities791834
Deferred income taxes6667
Total liabilities5,4295,742
Commitments and contingencies
Stockholders’ equity
Preferred stock: $1.00 par value; 5,000,000 shares authorized; none issued or
outstanding
Common stock: $1.00 par value; 750,000,000 shares authorized; 130,741,461 shares
issued as of June 30, 2022 and 2021; and 123,152,132 and 122,780,220 shares
outstanding as of June 30, 2022 and 2021, respectively
131131
Additional paid-in capital1,2021,186
Retained earnings1,0481,036
Treasury stock, at cost: 7,589,329 and 7,961,241 shares as of June 30, 2022 and 2021,
respectively
(1,346)(1,396)
Accumulated other comprehensive net (loss) income(479)(546)
Total Clorox stockholders’ equity556411
Noncontrolling interests173181
Total stockholders’ equity729592
Total liabilities and stockholders’ equity$6,158$6,334

See Notes to Consolidated Financial Statements

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Appendix BA

CONSOLIDATED BALANCE SHEETSSTATEMENTS OF STOCKHOLDERS’ EQUITY
The Clorox Company

As of June 30
Dollars in millions, except share and per share data
20202019
ASSETS
Current assets
Cash and cash equivalents     $871      $111 
Receivables, net648   631 
Inventories, net454   512 
Prepaid expenses and other current assets47   51 
Total current assets2,020   1,305 
Property, plant and equipment, net1,103   1,034 
Operating lease right-of-use assets291   
Goodwill1,577   1,591 
Trademarks, net785   791 
Other intangible assets, net109   121 
Other assets328   274 
Total assets$6,213 $5,116 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Notes and loans payable$$396 
Current operating lease liabilities64   
Accounts payable and accrued liabilities1,329   1,035 
Income taxes payable25   9 
Total current liabilities1,418   1,440 
Long-term debt2,780   2,287 
Long-term operating lease liabilities278   
Other liabilities767   780 
Deferred income taxes62   50 
Total liabilities5,305   4,557 
 
Commitments and contingencies
 
Stockholders’ equity
Preferred stock: $1.00 par value; 5,000,000 shares authorized; none issued or outstanding—   
Common stock: $1.00 par value; 750,000,000 shares authorized; 158,741,461 shares issued as of June 30, 2020 and 2019; and 126,198,606 and 125,686,325 shares outstanding as of June 30, 2020 and 2019, respectively159   159 
Additional paid-in capital1,137   1,046 
Retained earnings3,567   3,150 
Treasury shares, at cost: 32,542,855 and 33,055,136 shares as of June 30, 2020 and 2019, respectively(3,315)  (3,194)
Accumulated other comprehensive net (loss) income(640)  (602)
Stockholders’ equity908   559 
Total liabilities and stockholders’ equity$6,213 $5,116
         
(Dollars in millions except per
share data; shares in thousands)
  Common Stock  Additional
Paid-in
Capital
  Retained
Earnings
  Treasury Stock  Accumulated
Other
Comprehensive
Net (Loss)
Income
  

Non-
controlling
interests

  Total
Stockholders’
Equity
Amount  SharesAmount  Shares
Balance as of June 30, 2019$159158,741$   1,046$3,150$(3,194)(33,055)$              (602)$$559
Cumulative effect of accounting
changes (1)
2222
Net earnings939939
Other comprehensive
(loss) income
(38)(38)
Dividends to Clorox stockholders
($4.29 per share declared)
(544)           (544)
Stock-based compensation5050
Other employee stock
plan activities
411212,043162
Treasury stock purchased(242)(1,531)(242)
Balance as of June 30, 2020159158,7411,1373,567(3,315)(32,543)(640)908
Net earnings7109719
Other comprehensive
(loss) income
9494
Dividends to Clorox stockholders
($4.49 per share declared)
(564)(564)
Dividends to
noncontrolling interests
(26)(26)
Business combinations
including purchase
accounting adjustments
       198198
Stock-based compensation5050
Other employee stock
plan activities
(1)(37)1561,340118
Treasury stock purchased(905)(4,758)(905)
Treasury stock retirement(28)(28,000)(2,640)2,66828,000
Balance as of June 30, 2021131130,7411,1861,036(1,396)(7,961)(546)181592
Net earnings4629471
Other comprehensive
(loss) income
6767
Dividends to Clorox stockholders
($3.48 per share declared)
(430)(430)
Dividends to
noncontrolling interests
(17)(17)
Stock-based compensation5252
Other employee stock
plan activities
(36)(20)7552419
Treasury stock purchased(25)(152)(25)
Balance as of June 30, 2022$131130,741$1,202$1,048$(1,346)(7,589)$(479)$173$729

(1) As a result of adopting ASU No. 2016-02, “Leases (ASC 842),” on July 1, 2019, the Company recorded a cumulative effect of initially applying the new guidance as an adjustment to the fiscal year 2020 opening balance of Retained earnings.

See Notes to Consolidated Financial Statements

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Appendix BA

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITYCASH FLOWS
The Clorox Company

Common StockTreasury Stock
Dollars in millions,
except per share data
AmountShares (in
thousands)
Additional
Paid-in
Capital
Retained
Earnings
AmountShares (in
thousands)
Accumulated
Other
Comprehensive
Net (Loss)
Income
Total
Balance as of June 30, 2017     $159     158,741     $928     $2,440     $(2,442)     (29,727)     $(543)     $542
Net earnings823823
Other comprehensive
(loss) income
(4)(4)
Dividends ($3.60 per
share declared)
(467)(467)
Stock-based compensation5353
Other employee stock
plan activities
(6)1561,13951
Treasury stock purchased(272)(2,171)(272)
Balance as of June 30, 2018159158,7419752,797(2,658)(30,759)(547)726
Cumulative effect of
accounting changes(1)
36(39)(3)
Net earnings820820
Other comprehensive
(loss) income
(16)(16)
Dividends ($3.94 per
share declared)
(503)(503)
Stock-based compensation4343
Other employee
stock plan activities
281242,178152
Treasury stock purchased(660)(4,474)(660)
Balance as of June 30, 2019159158,7411,0463,150(3,194)(33,055)(602)559
Cumulative effect of
accounting changes(2)
2222
Net earnings939939
Other comprehensive
(loss) income
(38)(38)
Dividends ($4.29 per
share declared)
(544)(544)
Stock-based compensation5050
Other employee
stock plan activities
411212,043162
Treasury stock purchased(242)(1,531)(242)
Balance as of June 30, 2020    $159    158,741     $1,137   $3,567  $(3,315)    (32,543)              $(640)$908
 

(1)

As a result of adopting ASU No. 2014-09, “Revenue from Contracts with Customers (ASC 606),” on July 1, 2018, the Company recorded a cumulative effect of initially applying the new guidance as an adjustment to the fiscal year 2019 opening balance of Retained earnings.

(2)

As a result of adopting ASU No. 2016-02, “Leases (ASC 842),” on July 1, 2019, the Company recorded a cumulative effect of initially applying the new guidance as an adjustment to the fiscal year 2020 opening balance of Retained earnings. See Note 1 for more information.

Years ended June 30
Dollars in millions
     2022     2021     2020
Operating activities:
Net earnings$471$719$939
Adjustments to reconcile net earnings to net cash provided by operations:
Depreciation and amortization224211180
Stock-based compensation525050
Deferred income taxes5(32)(2)
Goodwill, trademark and other asset impairments329
Settlement of interest rate derivative contracts114
Other191030
Changes in:
Receivables, net(84)82(27)
Inventories, net(18)(282)50
Prepaid expenses and other current assets16(30)2
Accounts payable and accrued liabilities(47)311291
Operating lease right-of-use assets and liabilities, net(1)(2)19
Income taxes payable/prepaid35(90)14
Net cash provided by operations7861,2761,546
Investing activities:
Capital expenditures(251)(331)(254)
Businesses acquired, net of cash acquired(85)— 
Other22(36)2 
Net cash used for investing activities(229)(452)(252)
Financing activities:
Notes and loans payable, net237(396)
Long-term debt repayments(1,405)
Long-term debt borrowings, net of issuance costs paid1,085492
Treasury stock purchased(25)(905)(248)
Cash dividends paid to Clorox stockholders(571)(558)(533)
Cash dividends paid to noncontrolling interests(15)(31)
Issuance of common stock for employee stock plans and other5103162
Net cash used for financing activities(689)(1,391)(523)
Effect of exchange rate changes on cash, cash equivalents and restricted cash(6)12(5)
Net increase (decrease) in cash, cash equivalents and restricted cash(138)(555)766
Cash, cash equivalents and restricted cash:
Beginning of year324879113
End of year$186$324$879
Supplemental cash flow information:
Interest paid$89$89$89
Income taxes paid, net of refunds100303241
Non-cash financing activities:
Cash dividends declared and accrued, but not paid14156 140

See Notes to Consolidated Financial Statements

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Appendix B

CONSOLIDATED STATEMENTS OF CASH FLOWS
The Clorox Company

Years ended June 30
Dollars in millions
202020192018
Operating activities:
Net earnings     $939     $820     $823
Adjustments to reconcile net earnings to net cash provided by operations:
Depreciation and amortization180180166
Stock-based compensation504353
Deferred income taxes(2)(20)(23)
Other30(29)44
Changes in:
Receivables, net(27)(32)(24)
Inventories, net50(7)(21)
Prepaid expenses and other current assets2(6)4
Accounts payable and accrued liabilities29117(47)
Operating lease right-of-use assets and liabilities, net19
Income taxes payable/ prepaid14261
Net cash provided by operations1,546992976
 
Investing activities:
Capital expenditures(254)(206)(194)
Businesses acquired, net of cash acquired(681)
Other21016
Net cash used for investing activities(252)(196)(859)
 
Financing activities:
Notes and loans payable, net(396)189(214)
Long-term debt borrowings, net of issuance costs paid492891
Long-term debt repayments(400)
Treasury stock purchased(248)(661)(271)
Cash dividends paid(533)(490)(450)
Issuance of common stock for employee stock plans and other16214745
Net cash used for financing activities(523)(815)(399)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash(5)(2)(3)
Net increase (decrease) in cash, cash equivalents and restricted cash766(21)(285)
Cash, cash equivalents and restricted cash:
Beginning of year113134419
End of year$879$113$134
 
Supplemental cash flow information:
Interest paid$89$87$75
Income taxes paid, net of refunds241207245
Non-cash financing activities:
Cash dividends declared and accrued, but not paid140133123

See Notes to Consolidated Financial Statements

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Appendix BA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Clorox Company
(Dollars in millions, except share and per share data)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations and Basis of Presentation

The Company is principally engaged in the production, marketing and sale of consumer products through mass retailers, grocery outlets, warehouse clubs, dollar stores, home hardware centers, drug, pet and military stores, third-party and owned e-commerce channels, and distributors. The consolidated financial statements include the statements of the Company and its wholly owned and controlled subsidiaries. All significant intercompany transactions and accounts were eliminated in consolidation.

Use of Estimates

The preparation of these consolidated financial statements in conformity with generally accepted accounting principles in the United States of America (U.S. GAAP) requires management to reach opinions as to estimates and assumptions that affect reported amounts and related disclosures. Specific areas requiring the application of management’s estimates and judgments include, among others, assumptions pertaining to accruals for consumer and trade-promotion programs, stock-based compensation, retirement income plans, future cash flows associated with impairment testing of goodwill and other long-lived assets and the valuation of the venture agreement terminal obligation, the valuation of assets acquired and liabilities assumed in connection with a business combination, the credit worthiness of customers, uncertain tax positions, tax valuation allowances and legal, environmental and insurance matters. Actual results could materially differ from estimates and assumptions made.

Cash, Cash Equivalents and Restricted Cash

Cash equivalents consist of highly liquid interest-bearing accounts, time deposits held by financial institutions and money market funds with an initial maturity at purchase of 90 days or less. The fair value of cash and cash equivalents approximates the carrying amount.

The Company’s cash position includes amounts held by foreign subsidiaries and, as a result, the repatriation of certain cash balances from some of the Company’s foreign subsidiaries could result in additional withholding tax costs in certain foreign jurisdictions. However, these cash balances are generally available without legal restriction to fund local business operations. In addition, a portion of the Company’s cash balance is held in U.S. dollars by foreign subsidiaries whose functional currency is their local currency. Such U.S. dollar balances are reported on the foreign subsidiaries’ books in their functional currency, and the impact on such balances from foreign currency exchange rate differences is recorded in Other (income) expense, net.

As of June 30, 2022, 2021, 2020 2019, 2018, and 2017,2019, the Company had $3, $5, $8 $2, $3 and $2 of restricted cash, respectively, which was included in Prepaid expenses and other current assets and Other assets. The restricted cash as of June 30, 20202022 was primarily related to cash margin deposits held for exchange-traded futures contracts and funds held in an escrow account with limitations on usage and cash margin deposits held for exchange-traded futures contracts.usage.

Inventories

The Company values its inventories using both the First-In, First-Out (“FIFO”)(FIFO) and the Last-In, First-Out (“LIFO”)(LIFO) methods. The FIFO inventory is stated at the lower of cost or net realizable value, which includes any costs to sell or dispose. In addition, appropriate consideration is given to obsolescence, excessive inventory levels, product deterioration and other factors in evaluating net realizable value. The LIFO inventory is stated at the lower of cost or market.

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Appendix BA

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Property, Plant and Equipment and Finite-Lived Intangible Assets

Property, plant and equipment and finite-lived intangible assets are stated at cost. Depreciation and amortization expense are primarily calculated by the straight-line method using the estimated useful lives or lives determined by reference to the related lease contract in the case of leasehold improvements. The table below provides estimated useful lives of property, plant and equipment by asset classification.

Estimated
Useful Lives
Buildings and leasehold improvements7 - 40 years
Land improvements10 - 30 years
Machinery and equipment3 - 15 years
Computer equipment3 - 5 years
Capitalized software costs3 - 7 years

Finite-lived intangible assets are amortized over their estimated useful lives, which range from 27 to 30 years.

Property, plant and equipment and finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances occur that indicate that the carrying amount of an asset (or asset group) may not be fully recoverable. The risk of impairment is initially assessed based on an estimate of the undiscounted cash flows at the lowest level for which identifiable cash flows exist. Impairment occurs when the carrying value of the asset (or asset group) exceeds the estimated future undiscounted cash flows generated by the asset.asset (or asset group). When impairment is indicated, an impairment charge is recorded for the difference between the carrying value of the asset (or asset group) and its estimated fair market value. Depending on the asset, estimated fair market value may be determined either by use of a discounted cash flow model or by reference to estimated selling values of assets in similar condition.

Capitalization of Software Costs

The Company capitalizes certain qualifying costs incurred in the acquisition and development of software for internal use, including the costs of the software, materials, consultants, interest and payroll and payroll-related costs for employees during the application development stage. Internal and external costs incurred during the preliminary project stage and post implementation-operation stage, mainly training and maintenance costs, are expensed as incurred. Once the application is substantially complete and ready for its intended use, qualifying costs are amortized on a straight-line basis over the software’s estimated useful life. Capitalized internal use software is included in Property, plant and equipment. Capitalized software as a service is included in Prepaid expenses and other current assets or Other assets and is amortized using the straight-line method over the term of the hosting arrangement which is typically no greater than 6 years.

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Appendix A

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Business Combinations

The Company records acquired businesses within the consolidated financial statements using the acquisition method prospectively from the acquisition date. Under the acquisition method, once control is obtained, assets acquired and liabilities assumed, including amounts attributable to noncontrolling interests, are recorded at their respective fair values on the acquisition date. The Company’s estimates of fair value are inherently uncertain and subject to refinement. The excess of the total of the purchase consideration, fair value of the noncontrolling interest and fair value of the previously held equity interest over the identifiable assets acquired and liabilities assumed is recorded as goodwill. Measurement period adjustments to the fair values of the identifiable assets acquired and liabilities assumed with the corresponding offset to goodwill, if applicable, are applied in the reporting period in which the adjustment amounts are determined based on new information obtained during the measurement period. In the event of a step acquisition, the Company records a gain or loss in Other income (expense), net on the consolidated statement of earnings as a result of remeasuring a previously held equity interest to fair value on the acquisition date. Transaction expenses are recognized separately from the business combination and are expensed as incurred.

Impairment Review of Goodwill and Indefinite-Lived Intangible Assets

The Company tests its goodwill, trademarks with indefinite lives and other indefinite-lived intangible assets annually for impairment in the fiscal fourth quarter unless there are indications during a different interim period that these assets may have become impaired.

With respect to goodwill, the Company has the option to first assess qualitative factors, such as the maturity and stability of the reporting unit, the magnitude of the excess fair value over carrying value from the priora previous period’s impairment testing, other reporting unit specific operating results, micro and macroeconomic factors, as well as new events and circumstances impacting the operations at the reporting unit level. Reporting units for goodwill impairment testing purposes were its individual strategic business units (SBUs). If the result of a qualitative test indicates a potential for impairment of a reporting unit, a quantitative test is performed. TheIn the quantitative test, is a two-step process. In the first step, the Company compares the estimated fair value of the reporting unit to its carrying value. If the estimated fair value of any reporting unit is less than its carrying value, the Company performs a second step to determine the implied fair value of the reporting unit’s goodwill. If the carrying value of a reporting unit’s goodwill exceeds its implied fair value, an impairment charge is recorded for the difference between the carrying value and the implied fair value of the reporting unit’s goodwill. No impairments were identified as a result of the Company’s impairment review during fiscal year 2020.unit.

To determine the fair value of a reporting unit as part of its quantitative test, the Company uses athe discounted cash flow (DCF) method under the income approach, as it believes that this approach is the most reliable indicator of the fair value of its businesses and the fair value of their future earnings and cash flows. Under this approach, which requires

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Appendix B

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

significant judgments, the Company estimates the future cash flows of each reporting unit and discounts these cash flows at a rate of return that reflects their relative risk. The cash flows used in the DCF method are consistent with those the Company uses in its internal planning, which gives consideration to actual business trends experienced, and the broader business strategy for the long term. The other key estimates and factors used in the DCF method include, but are not limited to, net sales and expense growth rates, commodity prices, foreign exchange rates, inflation and a terminal growth rate. Changes in such estimates or the application of alternative assumptions could produce different results.

For trademarks and other intangible assets with indefinite lives, the Company has the option to first assess qualitative factors, such as the maturity and stability of the trademark or other intangible asset, the magnitude of the excess fair value over carrying value from the prior year’sa previous period’s impairment testing, other specific operating results, as well as new events and circumstances impacting the significant inputs used to determine the fair value of the intangible asset. If the result of a qualitative test indicates that it is more likely thatthan not that the asset is impaired, a quantitative test is performed. When a quantitative test is performed, the estimated fair value of an asset is compared to its carrying value. If the carrying value of such asset exceeds its estimated fair value, an impairment charge is recorded

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Appendix A

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

for the difference between the carrying value and the estimated fair value. The Company uses the DCF method under the relief from royalty income approach to estimate the fair value of its trademarks and other intangible assets with indefinite lives. This approach requires significant judgments in determining the royalty rates and the assets’ estimated cash flows, as well as the appropriate discount and foreign exchange rates applied to those cash flows to determine fair value. Changes in such estimates or the use of alternative assumptions could produce different results. No significant impairments were identified in fiscal year 2020 as a result of the Company’s impairment review during any quarters of fiscal year 2020.

Leases

Effective July 1, 2019, the Company adopted Accounting Standards Codification 842, Leases (ASC 842). Under this guidance, theThe Company determines whether an arrangement contains a lease at inception by determining if the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration and other facts and circumstances. Right-of-use (ROU) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets are calculated based on the lease liability adjusted for any lease payments paid to the lessor at or before the commencement date and initial direct costs incurred by the Company and excludes any lease incentives received from the lessor. Lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term. The lease term may include an option to extend or terminate the lease when it is reasonably certain that the Company will exercise that option as of the commencement date of the lease, and is reviewed in subsequent periods if a triggering event occurs. As the Company’s leases typically do not contain a readily determinable implicit rate, the Company determines the present value of the lease liability using its incremental borrowing rate at the lease commencement date based on the lease term and the currency of the lease on a collateralized basis. Variable lease payments are the portion of lease payments that are not fixed over the lease term. Variable lease payments are expensed as incurred, and include certain non-lease components, such as maintenance and other services provided by the lessor, and other charges included in the lease, as applicable. The Company elected to combine lease and non-lease components as a single lease component and to exclude short-term leases, defined as leases with an initial termsterm of 12 months or less, from its consolidated balance sheet.

Stock-based Compensation

The Company grants various nonqualified stock-based compensation awards to eligible employees, including stock options, restricted stock awards and performance shares.

For stock options, the Company estimates the fair value of each award on the date of grant using the Black-Scholes valuation model, which requires management to make estimates regarding expected option life, stock price volatility and other assumptions. Groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The Company estimates stock option forfeitures based on historical data for each employee grouping. The total number of stock options expected to vest is adjusted by actual and estimated forfeitures. Changes to the actual and estimated forfeitures will result in a cumulative adjustment in the period of change. Compensation expense is recorded by amortizing the grant date fair values on a straight-line basis over the vesting period, adjusted for estimated forfeitures.

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Appendix B

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

For restricted stock awards, the fair value of each grant issued is estimated on the date of grant based on the current market price of the stock. Forfeitures are estimated based on historical data. The total number of restricted stock awards expected to vest is adjusted by actual and estimated forfeitures. Changes to the actual and estimated forfeitures will result in a cumulative adjustment in the period of change. Compensation expense is recorded by amortizing the grant date fair values on a straight-line basis over the vesting period, adjusted for estimated forfeitures.

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Appendix A

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The Company’s performance shares provide for the issuance of common stock to certain managerial staff and executive management if the Company achieves specified performance targets. The number of shares issued is dependent upon the achievement of specified performance targets. The performance period is three years and the payout determination is made at the end of the three-year performance period. Performance shares receive dividends earned during the vesting period upon vesting. The fair value of each grant issued is estimated on the date of grant based on the current market price of the stock. The total amount of compensation expense recognized reflects estimated forfeiture rates and management’s assessment of the probability that performance goals will be achieved. A cumulative adjustment is recognized to compensation expense in the current period to reflect any changes in the probability of achievement of performance goals.

Cash flows resulting from tax deductions in excess of the cumulative compensation cost recognized for stock-based payment arrangements (excess tax benefits) are classified as operating cash inflows.

Employee Benefits

The Company accounts for its retirement income and retirement health care plans using actuarial methods. These methods use an attribution approach that generally spreads “plan events” over the service lives or expected lifetime (for frozen plans) of plan participants. Examples of plan events are plan amendments and changes in actuarial assumptions such as the expected return on plan assets, discount rate, rate of compensation increase and certain employee-related factors, such as retirement age and mortality. The principle underlying the attribution approach is that employees render service over their employment period on a relatively “smooth” basis and, therefore, the statement of earnings effects of retirement income and retirement health care plans are recognized in the same pattern. One of the principal assumptions used in the net periodic benefit cost calculation is the expected return on plan assets. The expected return on plan assets may result in recognized expense or income that differs from the actual returns of those plan assets in any given year. Over time, however, the goal is for the expected long-term returns to approximate the actual returns and, therefore, the expectation is that the pattern of income and expense recognition should closely match the pattern of the services provided by the participants. The Company uses a market-related value method for calculating plan assets for purposes of determining the amortization of actuarial gains and losses. The differences between actual and expected returns are recognized in the net periodic benefit cost calculation over the average remaining service period or expected lifetime (for frozen plans) of the plan participants using the corridor approach. Under this approach, only actuarial gains (losses) that exceed 5% of the greater of the projected benefit obligation or the market-related value of assets are amortized to the Company’s net periodic benefit cost. In developing its expected return on plan assets, the Company considers the long-term actual returns relative to the mix of investments that comprise its plan assets and also develops estimates of future investment returns by considering external sources.

The Company recognizes an actuarial-based obligation at the onset of disability for certain benefits provided to individuals after employment, but before retirement, that includeincludes medical, dental, vision, life and other benefits.

Environmental Costs

The Company is involved in certain environmental remediation and ongoing compliance activities. Accruals for environmental matters are recorded on a site-by-site basis when it is probable that a liability has been incurred and based upon a reasonable estimate of the liability. The Company’s accruals reflect the anticipated participation of other potentially responsible parties in those instances where it is probable that such parties are legally responsible and financially capable of paying their respective shares of the relevant costs. These accruals are adjusted periodically as assessment and remediation efforts progress or as additional technical or legal information becomes available. Actual costs to be incurred at identified sites in future periods may vary from the estimates, given the inherent

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Appendix A

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

uncertainties in evaluating environmental exposures. The accrual for environmental matters is included in Accounts payable and accrued liabilities and Other liabilities in the Company’s consolidated balance sheets on an undiscounted basis due to uncertainty regarding the timing of future payments.

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Appendix B

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenue Recognition

The Company’s revenue is primarily generated from the sale of finished product to customers. Revenue is recognized at the point in time when performance obligations under the terms of customer contracts are satisfied, which is when ownership, risks and rewards transfer, and can be on the date of shipment or the date of receipt by the customer, depending upon the particular customer arrangement. Shipping and handling activities are accounted for as contract fulfillment costs and included within Cost of products sold. After the completion of the performance obligation, there is an unconditional right to consideration as outlined in the contract. A right is considered unconditional if nothing other than the passage of time is required before payment of that consideration is due. The Company typically collects its customer receivables within two months. All performance obligations under the terms of contracts with customers have an original duration of one year or less.

The Company has trade promotion programs, which primarily include shelf price reductions, in-store merchandising and consumer coupons. The costs of such activities, defined as variable consideration under ASC 606, “Revenue from Contracts with Customers,” are netted against sales and recorded when the related sales take place. Accruals for trade promotion programs are established based on the Company’s best estimate of the amounts necessary to settle existing and future obligations for products sold as of the balance sheet date. Amounts accrued for trade-promotions are based on various factors such as contractual terms and sales volumes, and also incorporate estimates that include customer participation rates, the rate at which customers will achieve program performance criteria, product availability and historical consumer redemption rates.

The Company provides an allowance for doubtful accounts based on its historical experience and ongoing assessment of its customers’ credit risk and aging. ReceivablesCustomer receivables are presented net of an allowance for doubtful accounts of $10$9 and $4$8 as of June 30, 20202022 and 2019,2021, respectively. Receivables, net, includedinclude non-customer receivables of $20$22 and $17$22 as of June 30, 20202022 and 2019,2021, respectively, and related allowance of $0 and $14 as of June 30, 2022 and 2021, respectively.

Cost of Products Sold

Cost of products sold represents the costs directly related to the manufacture and distribution of the Company’s products and primarily includes raw materials, packaging, contract manufacturing fees, shipping and handling, warehousing, package design, depreciation, amortization, direct and indirect labor and operating costs for the Company’s manufacturing and distribution facilities, including salary, benefit costs and incentive compensation, and royalties and other charges related to the Company’s Glad Venture Agreement (See Note 8).

Costs associated with developing and designing new packaging, including design, artwork, films and labeling, are expensed as incurred and included within Cost of products sold.

Selling and Administrative Expenses

Selling and administrative expenses represent costs incurred by the Company in generating revenues and managing the business and include market research, commissions and certain administrative expenses. Administrative expenses include salary, benefits, incentive compensation, professional fees and services and other operating costs (such as software and licensing costs) associated with the Company’s non-manufacturing, non-research and development staff, facilities and equipment, as well as software and licensing fees.operations.

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Appendix A

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Advertising and Research and Development Costs

The Company expenses advertising and research and development costs in the period incurred.

Income Taxes

The Company uses the asset and liability method to account for income taxes. Deferred tax assets and liabilities are recognized for the anticipated future tax consequences attributable to differences between financial statement amounts and their respective tax basis. Management reviews the Company’s deferred tax assets to determine whether their value

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Appendix B

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

can be realized based upon available evidence. A valuation allowance is established when management believes that it is more likely than not that some portion of its deferred tax assets will not be realized. Changes in valuation allowances from period to period are included in the Company’s income tax provision in the period of change. In addition to valuation allowances, the Company provides for uncertain tax positions when such tax positions do not meet certain recognition thresholds or measurement standards. Amounts for uncertain tax positions are adjusted in quarters when new information becomes available or when positions are effectively settled.

Per U.S. GAAP, foreign withholding taxes are provided on unremitted foreign earnings that are not indefinitely reinvested at the time the earnings are generated. The Company regularly reviews and assesses whether there are any changes to its indefinite reinvestment assertion and determined that none of the undistributed earnings of its foreign subsidiaries are indefinitely reinvested. As a result, the Company is providing foreign withholding taxes on the undistributed earnings of all foreign subsidiaries where applicable.

Foreign Currency Transactions and Translation

Local currencies are the functional currencies for substantially all of the Company’s foreign operations. When the transactional currency is different than the functional currency, transaction gains and losses are included as a component of Other (income) expense, net. In addition, certain assets and liabilities denominated in currencies other than a foreign subsidiary’s functional currency are reported on the subsidiary’s books in its functional currency, with the impact from exchange rate differences recorded in Other (income) expense, net. Assets and liabilities of foreign operations are translated into U.S. dollars using the exchange rates in effect at the balance sheet date, while income and expenses are translated at the respective average monthly exchange rates during the year.

Gains and losses on foreign currency translations are reported as a component of Other comprehensive (loss) income. The income tax effect of currency translation adjustments is recorded as a component of deferred taxes with an offset to Other comprehensive (loss) income where appropriate.

Effective July 1, 2018, under the requirements of U.S. GAAP, Argentina was designated as a highly inflationary economy, since it has experienced cumulative inflation of approximately 100 percent or more over a three-year period. As a result, beginning July 1, 2018, the U.S. dollar replaced the Argentine peso as the functional currency of the Company’s subsidiaries in Argentina (collectively, “Clorox Argentina”). Consequently, gains and losses from non-U.S. dollar denominated monetary assets and liabilities for Clorox Argentina are recognized in Other (income) expense, net in the consolidated statement of earnings.

Derivative Instruments

The Company’s use of derivative instruments, principally swaps, futures and forward contracts, is limited to non-trading purposes and is designed to partially manage exposure to changes in commodity prices, interest rates and foreign currencies. The Company’s contracts are hedges for transactions with notional amounts and periods consistent with the related exposures and do not constitute investments independent of these exposures.

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Appendix A

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

The changes in the fair value (i.e., gains or losses) of a derivative instrument are recorded as either assets or liabilities in the consolidated balance sheets with an offset to Net earnings or Other comprehensive (loss) income depending on whether, for accounting purposes, it has been designated and qualifies as an accounting hedge and, if so, on the type of hedging relationship. The criteria used to determine if hedge accounting treatment is appropriate are: (a) formal designation and documentation of the hedging relationship, the risk management objective and hedging strategy at hedge inception; (b) eligibility of hedged items, transactions and corresponding hedging instrument; and (c) effectiveness of the hedging relationship both at inception of the hedge and on an ongoing basis in achieving the hedging objectives. For those derivative instruments designated and qualifying as hedging instruments, the Company must designate the hedging instrument either as a fair value hedge or as a cash flow hedge. The Company designates its commodity forward and future contracts for forecasted purchases of raw materials, interest rate forward contracts for forecasted interest payments, and foreign currency forward contracts for forecasted purchases of inventory as cash flow hedges. During the fiscal years ended June 30, 2020, 20192022, 2021 and 2018,2020, the Company had no hedging instruments designated as fair value hedges.

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Appendix B

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

For derivative instruments designated and qualifying as cash flow hedges, the effective portion of gains or losses isare reported as a component of Other comprehensive (loss) income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. From time to time, the Company may have contracts not designated as hedges for accounting purposes, for which it recognizes changes in the fair value in the consolidated statement of earnings in the current period. Cash flows from hedging activities are classified as operating activities in the consolidated statements of cash flows.

Recently Issued Accounting Standards

Recently Issued Accounting Standards Not Yet Adopted

In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2019-12, “Income Taxes (ASC 740): Simplifying the Accounting for Income Taxes,” which simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and clarifies and amends existing guidance to improve consistent application. The standard will be effective for the Company beginning in the first quarter of fiscal year 2022, with early adoption permitted. The amendments that are related to changes in ownership of foreign equity method investments or foreign subsidiaries are to be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The amendments that are related to franchise taxes that are partially based on income are to be applied on either a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. All other amendments under this ASU are to be applied on a prospective basis. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04, “Intangibles-Goodwill and Other (ASC 350): Simplifying the Test for Goodwill Impairment,” which eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge. The new guidance is effective for the Company beginning in the first quarter of fiscal year 2021. The impact of the new standard will be dependent on the specific facts and circumstances of future individual impairments, if any.

Recently Adopted Accounting Standards

In August 2017,December 2019, the FASBFinancial Accounting Standards Board (FASB) issued ASUAccounting Standards Update (ASU) No. 2017-12, “Derivatives and Hedging2019-12, “Income Taxes (ASC 815)740): Targeted Improvements toSimplifying the Accounting for Hedging Activities,Income Taxes,” which removes certain exceptions to the general principles in ASC 740 and amends the hedge accounting recognitionexisting guidance to improve consistent application. Certain amendments must be applied prospectively, certain amendments must be applied on a retrospective basis and presentation requirementscertain amendments must be applied on a modified retrospective basis through a cumulative effect adjustment to better align an entity’s risk management activities with its financial reporting. This standard also simplifies the application of hedge accounting in certain situations.retained earnings. The Company adopted this new guidance in the first quarterstandard as of fiscal year 2020 and theJuly 1, 2021. The adoption did not have a material impact on the Company’s condensed consolidated financial statements.

In February 2016,NOTE 2. BUSINESS ACQUIRED

Saudi Joint Venture Acquisition

On July 9, 2020, the FASB issued ASU No. 2016-02, “Leases (ASC 842),” which requires lessees to recognize a ROU asset and a lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation will depend on the classification of a lease as either a finance or an operating lease. ASU 2016-02 also requires expanded disclosures about leasing arrangements. In July 2018, the FASB issued ASU No. 2018-11, “Leases (ASC 842), Targeted Improvements,” which provides an optional transition methodCompany increased its investment in applying the new lease standard. ASC 842 can be applied using either a modified retrospective approach at the beginningeach of the earliest period presented, or,two entities comprising its joint venture in the Kingdom of Saudi Arabia (Saudi joint venture). The joint venture offers customers in the Gulf region a range of cleaning and disinfecting products. The Company had previously accounted for its 30 percent investment of $27 as permitted by ASU 2018-11, atof June 30, 2020, under the beginningequity method of accounting. Subsequent to the closing of this transaction, the Company's total ownership interest in each of the period in which it is adopted.entities increased to 51 percent. The Company adoptedhas consolidated this joint venture into its consolidated financial statements from the new standard indate of acquisition and reflects operations within the first quarter of fiscal year 2020, on a modified retrospective basis using the optional transition method,International reportable segment. The equity and accordingly, has not restated comparative periods; fiscal year 2019 balances and related disclosures supporting those comparative period balances continue to be presented under ASC 840, “Leases.” As allowed under the new standard, the Company elected to apply the package of practical expedients to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs. Upon adoption, the Company recorded a cumulative effect adjustmentincome attributable to the opening balance of Retained earnings of $22 related primarily to the remaining deferred gain from the sale-leaseback of the Company’s general office building in Oakland, California. This new standard did not have a material impact on the Company’s consolidated statement of earnings or the consolidated statement of cash flows. Refer to Note 11 for more information.other joint venture owners is recorded and presented as noncontrolling interests.

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Appendix BA

NOTE 2. BUSINESS ACQUIRED (Continued)

Nutranext Acquisition

On April 2, 2018, the Company acquired 100 percent of Nutranext, a dietary supplements company based in Sunrise, Florida. Nutranext manufactures and markets leading dietary supplement brands in the retail and e-commerce channels as well as in its direct-to-consumer business. The purchase of the business reflects the Company’s strategy to acquire leading brands in fast-growing categories with attractive gross margins.

The total purchase consideration of $111 consisted of $100 cash paid, which was sourced from operations, and $11 from the net effective settlement of $681, which included post-closing working capitalpreexisting arrangements between the Company and other adjustments, was initially funded through commercial paper borrowings and subsequently repaid using a combination of long-term debt financing and cash repatriated from foreign subsidiaries.the joint venture. The assets and liabilities of Nutranextthe joint venture were recorded at their respective estimated fair value as of the acquisition date using generally accepted accounting principles for business combinations. The excess of the purchase price over the fair value of the net identifiable assets acquired has beenwas allocated to goodwill in the Health and WellnessInternational reportable segment in the amount of $412.$208. The goodwill of $412 is primarily attributable to the synergies expected to arise after the acquisition and reflectsreflected the value of further expandinggrowth anticipated in the Company’s portfolio intoGulf region. None of the health and wellness arena. Of the total goodwill $363 is deductible for tax purposes.

As a result of this transaction, the carrying value of the Company’s previously held equity investment was remeasured to fair value, and resulted in an $85 non-recurring, non-cash gain recorded in Other (income) expense, net in the consolidated statement of earnings and adjusted in Other operating activities in the consolidated statement of cash flows for the first quarter of fiscal year 2021. The fair values of the noncontrolling interests and previously held equity interest were determined using the DCF method under the income approach. Under this approach, the Company estimated future cash flows and discounts these cash flows at a rate of return that reflected the entities’ relative risk.

The purchase price allocation was finalized during the thirdsecond quarter of fiscal year 2019.2021. The following table summarizes the final purchase price allocation for the fair value of Nutranext’sthe joint venture’s assets acquired and liabilities assumed and the related deferred income taxes.taxes as of the acquisition date. The fair value of the assets acquired and liabilities assumed reflects the final insignificant measurement period adjustments related to goodwill, deferred income taxes and income taxes payable. The finite-lived intangibles acquired primarily represent the Company reacquiring previously licensed trademarks and customer relationships. The weighted-average estimated useful life of intangible assets subject to amortization was 9 years.

     Joint Venture
Goodwill$            208
Reacquired rights (included in Other intangible assets, net)138
Property, plant and equipment46
Customer relationships (included in Other intangible assets, net)10
Working capital, net (includes cash acquired of $26)34
Noncurrent liabilities net(5)
Deferred income taxes(19)
Total fair value of net assets412
Less: Fair value of noncontrolling interests(198)
Less: Fair value of previously held equity interest(103)
Total purchase consideration$111

Included in the Company’s results for both fiscal years 2022 and 2021 was $84 of net sales from the joint venture. Pro forma results reflecting this transaction were not presented because it is 15 years.not significant to the Company’s consolidated financial results.

     Nutranext
Goodwill (in the Health and Wellness reportable segment)(1)      $412
Trademarks143
Customer relationships75
Property, plant and equipment49
Working capital, net22
Deferred income taxes(20)
Consideration paid$681
 

(1)Continues on next page
Reflects segment changes effective in the fourth quarter of fiscal year 2020. See Note 18 for more information.

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NOTE 3. INVENTORIES, NET

Inventories, net consisted of the following as of June 30:

     2020     2019     2022     

2021

Finished goods$340$411$     593$     543
Raw materials and packaging140125191229
Work in process761611
LIFO allowances(33)(30)(40)(31)
Total$454$512
Total inventories, net760752
Non-current inventories, net (1)5
Total current inventories, net$755$752
(1)Non-current inventories, net is recorded in Other assets.

The LIFO method was used to value approximately 31%36% and 34% of inventories as of June 30, 20202022 and 2019,2021, respectively. The carrying values for all other inventories are determined on the FIFO method. The effect on earnings of the liquidation of LIFO layers was insignificant for each of the fiscal years ended June 30, 2020, 20192022, 2021 and 2018.

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Appendix B2020.

NOTE 4. PROPERTY, PLANT AND EQUIPMENT, NET

The components of property, plant and equipment, net, consisted of the following as of June 30:

     2020     2019     2022     2021
Machinery and equipment$1,921$1,867$     2,215$     2,105
Buildings642596729707
Capitalized software costs368358389368
Land and improvements145138166148
Construction in progress153131249249
Computer equipment9894116107
Total3,3273,1843,8643,684
Less: Accumulated depreciation and amortization(2,224)(2,150)(2,530)(2,382)
Property, plant and equipment, net$1,103$1,034$1,334$1,302

Depreciation and amortization expense related to property, plant and equipment, net, was $166, $165$193, $179 and $156$166 in fiscal years 2020, 20192022, 2021 and 2018,2020, respectively, of which $5, $8, $6 and $11$5 were related to amortization of capitalized software, respectively. Machinery and equipment above also includes capital leases of $21 and corresponding accumulated depreciation of $12 as of June 30, 2019 under Accounting Standards Codification 840, Leases (ASC 840).

Non-cash capital expenditures were $7, $2$6, $13 and $2$7 for fiscal years, 2020, 20192022, 2021 and 2018,2020, respectively. There were no significant asset retirement obligations recorded and included in Buildings above for both fiscal years 20202022 and 2019.2021.

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NOTE 5. GOODWILL, TRADEMARKS AND OTHER INTANGIBLE ASSETS

The changes in the carrying amount of goodwill by reportable segment for the fiscal years ended June 30, 20202022 and 20192021 were as follows:

Goodwill
     Health and
Wellness(1)
     Household(1)     Lifestyle(1)     International     Total
Balance as of June 30, 2018        $856            $85       $244         $417$1,602
Acquisition11
Effect of foreign currency translation(12)(12)
Balance as of June 30, 2019$857$85$244$405$1,591
Acquisition
Effect of foreign currency translation(14)(14)
Balance as of June 30, 2020$857$85$244$391$1,577
 

(1)Reflects segment changes effective in the fourth quarter of fiscal year 2020. See Note 18 for more information.
Goodwill
Health and
Wellness
HouseholdLifestyleInternationalTotal
Balance as of June 30, 2020     $       857     $     85     $     244     $            391     $  1,577
Acquisition208208
Goodwill impairment(228)(228)
Effect of foreign currency translation1818
Balance as of June 30, 2021$629$85$244$617$1,575
Effect of foreign currency translation(17)(17)
Balance as of June 30, 2022$629$85$244$600$1,558

The changes in the carrying amount of trademarks and other intangible assets for the fiscal years ended June 30, 2022 and 2021 were as follows:

As of June 30, 2020As of June 30, 2019
     Gross
carrying
amount
     Accumulated
amortization
     Net
carrying
amount
     Gross
carrying
amount
     Accumulated
amortization
     Net
carrying
amount
  
Trademarks with indefinite lives  $766          $    $766  $777          $    $777
Trademarks with finite lives472819402614
Other intangible assets with finite lives424315109430309121
Total$1,237$343$894$1,247$335$912
 

As of June 30, 2022As of June 30, 2021
Gross
carrying
amount
Accumulated
amortization/
Impairments
Net carrying
amount
Gross
carrying
amount
Accumulated
amortization/
Impairments
Net carrying
amount
Trademarks with                              
indefinite lives$    668$              $            668$    670$               $            670
Trademarks with
finite lives573819603723
Other intangible
assets with finite lives577380197593368225
Total$1,302$418$884$1,323$405$918

Amortization expense relating to the Company’s intangible assets was $31, $32 and $14 for the years ended June 30, 2022, 2021 and 2020, respectively. Estimated amortization expense for these intangible assets is $29, $28, $27, $27 and $27 for fiscal years 2023, 2024, 2025, 2026 and 2027, respectively.

During fiscal year 2021, as a result of lower than expected actual and projected net sales growth and operating performance for the Vitamins, Minerals and Supplements (VMS) SBU, a strategic review was initiated by management that resulted in updated financial and operational plans. These events were considered a triggering event requiring interim impairment assessments to be performed on the VMS reporting unit, indefinite-lived trademarks and other assets. Based on the outcome of these assessments, the following pre-tax impairment charges were recorded during fiscal year 2021 within Goodwill, trademark and other asset impairments:

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Table of Contents

Appendix BA

NOTE 5. GOODWILL, TRADEMARKS AND OTHER INTANGIBLE ASSETS (Continued)

VMS Impairment
     Charge
Goodwill$                    228
Trademarks, net93
Other intangible assets, net7
Property, plant and equipment, net1
Total$329

Amortization expense relatingThe impairment charges were a result of a higher level of competitive activity than originally assumed, accelerated declines in certain channels where the business was over-developed and higher than anticipated investments to grow the business, which adversely affected the assumptions used to determine the fair value of the respective assets held by the VMS reporting unit for growth and the estimates of expenses necessary to achieve that growth. These impairment charges were based on the Company’s estimates regarding the future financial performance of the VMS SBU and macroeconomic factors. In connection with recognizing these impairment charges, the Company recognized tax benefits related to the Company’simpairments of $62 due to the partial tax deductibility of these charges.

To determine the fair value of the VMS reporting unit, the Company used the DCF method under the income approach. Under this approach, the Company estimated the future cash flows of the VMS reporting unit and discounted these cash flows at a rate of return that reflected its relative risk. The other key estimates and factors used in the DCF method included, but were not limited to, net sales and expense growth rates, and a terminal growth rate.

To determine the estimated fair values of the VMS related indefinite-lived trademarks, which were included within the Health and Wellness reportable segment, the Company used the relief from royalty income approach. This approach required significant judgments in determining the royalty rates and the assets’ estimated cash flows as well as the appropriate discount rates applied to those cash flows to determine fair value.

Additionally during fiscal year 2021, an impairment charge of $14 was recorded within Cost of products sold related to other intangible assets with finite lives that were no longer expected to be recoverable due to a pending exit from a Professional Products SBU supplier relationship. The remaining carrying value of these assets was $14, $15$0 following the impairment charge.

No other significant impairments were identified as a result of the Company’s impairment reviews during fiscal year 2021 and $10 for the years ended June 30, 2020, 2019 and 2018, respectively. Estimated amortization expense for these intangible assets is $13, $12, $12, $11 and $10 forno significant impairments were identified during fiscal years 2021,year 2022 2023, 2024 and 2025, respectively.or fiscal year 2020.

NOTE 6. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

Accounts payable and accrued liabilities consisted of the following as of June 30:

     2020     2019       2022     2021
Accounts payable$575$507$     960$     930
Compensation and employee benefit costs288158176219
Trade and sales promotion costs164115199227
Dividends14613919162
Other156116115137
Total$1,329$1,035$1,469$1,675

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Table of Contents

Appendix A

NOTE 7. DEBT

Short-term borrowings

Notes and loans payable are borrowings that mature in less than one year, primarily consisting of U.S. commercial paper issued by the Company and borrowings under the Company’s revolving credit agreements. Notes and loans payable were $0$237 and $396$0 as of June 30, 20202022 and 2019,2021, respectively.

The weighted average interest rates incurred on average outstanding notes and loans payable during the fiscal years ended June 30, 2020, 20192022, 2021, and 2018,2020, including fees associated with the Company’s revolving credit agreements, were 2.49%0.54%, 2.98%0% and 2.10%,2.49% respectively. The weighted average effective interest rates onCompany had no material outstanding notes and loans payable as ofduring the fiscal year ended June 30, 2019 was 2.65%.2021.

Long-term borrowings

Long-term debt, carried at face value net of unamortized discounts, premiums and debt issuance costs, included the following as of June 30:

     2020     2019       2022     2021
Senior unsecured notes and debentures:
3.80%, $300 due November 2021$299$299$     $     300
3.05%, $600 due September 2022599598599
3.50%, $500 due December 2024498498498
3.10%, $400 due October 2027397397398398
3.90%, $500 due May 2028496495497497
4.40%, $500 due May 2029493
1.80%, $500 due May 2030491494492
4.60%, $600 due May 2032592
Total2,7802,2872,4742,784
Less: Current maturities of long-term debt300
Long-term debt$2,780$2,287$2,474$2,484

In May 2020,2022, the Company issued $1,100 in senior notes, including $500 of senior notes with an annual fixed interest rate of 1.80% and a maturity date of May 15, 2030 and used the proceeds to repay borrowings under the revolving Credit Agreement and for general corporate purposes. Interest on the notes is4.40%, payable semi-annually in May and November. The notesNovember, final maturity in May 2029 that carry an effective interest rate of 1.96%3.89% (May 2029 senior notes), which includes the impact of amortizing debt issuance costs andfrom the gain on the relatedsettlement of interest rate forward contracts overin May 2022, and $600 of senior notes with an annual fixed rate of 4.60%, payable semi-annually in May and November, final maturity in May 2032 that carry an effective rate of 3.25% (May 2032 senior notes), which includes the lifeimpact from the settlement of the notes (See Note 9).interest rate contracts in May 2022. The notes rank equally with all of the Company’s existing senior indebtedness. Proceeds from the senior notes were used to redeem prior to maturity $600 of senior notes with an annual fixed interest rate of 3.05% due in September 2022 and $500 of senior notes with an annual fixed interest rate of 3.50% due in December 2024, which were redeemed in June 2022 prior to their maturities, and for general corporate purposes. In connection with the redemption prior to maturity of the $500 of senior notes due in December 2024, the Company recorded a loss on the early extinguishment of debt of $13, which is included in Interest expense in the Consolidated Statement of Earnings, representing the difference paid in cash between the redemption price and the carrying amount of the debt extinguished of $5 and the accelerated amortization of losses on settlement of interest rate contracts and issuance costs associated with the debt extinguished of $8.

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Table of Contents

Appendix BA

NOTE 7. DEBT (Continued)

In May 2018,November 2021, $300 of the Company issued $500 ofCompany’s senior notes with an annual fixed interest rate of 3.90%3.80% became due and a maturity date of May 15, 2028 and used the proceeds to repay a portion of the outstandingwere repaid using commercial paper including amounts raised in connection with the Nutranext acquisition. Interest on the notes is payable semi-annually in May and November. The notes carry an effective interest rate of 4.02%, which includes the impact of amortizing debt issuance costs and the loss on the related interest rate forward contracts over the life of the notes (See Note 9). The notes rank equally with all of the Company’s existing senior indebtedness.

In September 2017, the Company issued $400 of senior notes with an annual fixed interest rate of 3.10% and a maturity date of October 1, 2027 and used the proceeds to repay $400 of senior notes with an annual fixed interest rate of 5.95% that became due in October 2017. The notes carry an effective interest rate of 3.13%, which includes the impact of amortizing debt issuance costs and the gain on the related interest rate forward contracts over the life of the notes (See Note 9). The notes rank equally with all of the Company’s existing senior indebtedness.borrowings.

The weighted average interest rates incurred on average outstanding long-term debt during the fiscal years ended June 30, 2022, 2021 and 2020, 2019were 3.25%, 3.49% and 2018, were 3.75%, 3.81% and 3.94%, respectively. The weighted average effective interest rates on long-term debt balances as of both June 30, 20202022 and 20192021 were 3.48%3.37% and 3.81%3.49%, respectively.

Long-term debt maturities as of June 30, 2020,2022, were $0 $300, $600, $0, $500, and $1,400 in fiscal years 2021, 2022, 2023 2024, 2025,through 2027, and thereafter, respectively.$2,500 thereafter.

Credit arrangements

On November 15, 2019,March 25, 2022, the Company entered into a new $1,200 revolving credit agreement (the Credit Agreement) that matures in November 2024.March 2027. The Credit Agreement replaced a prior $1,100$1,200 revolving credit agreement (the Prior Credit Agreement) in place since February 2017.November 2019. The Credit Agreement changed the interest rate benchmark used as a reference rate for borrowings under the Credit Agreement from the London Interbank Offered Rate (LIBOR) to the secured overnight financing rate (SOFR). The Company did not incur any termination fees or penalties in connection with entering the new agreement, which was considered a debt modification. The Company was in compliance with all restrictive covenants and limitations in the Credit Agreement as of June 30, 2020, and anticipates being in compliance with all restrictive covenants for the foreseeable future. The Company continues to monitor the financial markets and assess its ability to fully draw on its Credit Agreement, and currently expects that it will continue to have access to borrowing under the Credit Agreement. As of the fiscal years ended June 30, 2020 and 2019, thereThere were no borrowings due under either the Credit Agreement or the Prior Credit Agreement.Agreement as of June 30, 2022 and June 30, 2021, respectively, and the Company believes that borrowings under the new Credit Agreement will continue to be available for general corporate purposes. The Credit Agreement includes certain restrictive covenants and limitations consistent with the previous agreement, with which the Company was in compliance as of June 30, 2022 and June 30, 2021.

The Company’s borrowing capacity under the revolving credit agreements and other financing arrangements as of June 30 was as follows:

     2020     2019  20222021
Revolving credit facility$1,200$1,100     $    1,200     $    1,200
Foreign and other credit lines38393435
Total$1,238$1,139$1,234$1,235

Of the $38$34 of foreign and other credit lines as of June 30, 2020, $32022, $4 was outstanding and the remainder of $35$30 was available for borrowing. Of the $39$35 of foreign and other credit lines as of June 30, 2019, $42021, $5 was outstanding and the remainder of $35$30 was available for borrowing.

NOTE 8. OTHER LIABILITIES

Other liabilities consisted of the following as of June 30:

     2020     2019  20222021
Venture Agreement terminal obligation, net  $400  $370     $    468     $    432
Employee benefit obligations294280263330
Taxes23341923
Environmental liabilities2324
Other50961825
Total$767$780$791$834

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Table of Contents

Appendix BA

NOTE 8. OTHER LIABILITIES (Continued)

Venture Agreement

The Company has an agreement with The Procter & Gamble Company (P&G) for the Company’s Glad bags and wraps business. In connection with this agreement, P&G provides research and development (R&D) support to the Glad business. As of June 30, 20202022 and 2019,2021, P&G had a 20% interest in the venture. The Company pays a royalty to P&G for its interest in the profits, losses and cash flows, as contractually defined, of the Glad business, which is included in Cost of products sold. In December 2017, the Company and P&G extended the term of the agreement and the related R&D support provided by P&G. The term will now expire in January 2026, unless the parties agree, on or prior to January 31, 2025, to further extend the term of the agreement for another seven years or agree to take some other relevant action. The agreement can be terminated under certain circumstances, including at P&G’s option upon a change in control of the Company or, at either party’s option, upon the sale of the Glad business by the Company.

Upon termination of the agreement, the Company is required to purchase P&G’s 20% interest for cash at fair value as established by predetermined valuation procedures. As of June 30, 2020,2022, the estimated fair value of P&G’s interest was $610,$635, of which $400$468 has been recognized and is reflected in Other liabilities as noted in the table above. The difference between the estimated fair value and the amount recognized, and any future changes in the fair value of P&G’s interest, is charged to Cost of products sold in accordance with the effective interest method over the remaining life of the agreement. Following termination, the Glad business will retain the exclusive core intellectual property licenses contributed by P&G on a royalty-free basis for the licensed products marketed.

Deferred Gain on Sale-leaseback Transaction

In December 2012, the Company completed a sale-leaseback transaction under which it sold its general office building in Oakland, California to an unrelated third party for net proceeds of $108 and entered into a 15-year operating lease agreement with renewal options with the buyer for a portion of the building. The Company deferred recognition of the portion of the total gain on the sale that was equivalent to the present value of the lease payments and began to amortize such amount to earnings ratably over the lease term. As of June 30, 2019, the long-term portion of the deferred gain of $22 was included in Other, as noted in the table above. The Company reclassified the remaining deferred gain from the sale-leaseback of the general office building to Retained earnings upon adoption of the new lease guidance under ASC 842 effective July 1, 2019. Refer to Note 1 for more information.

NOTE 9. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Financial Risk Management and Derivative Instruments

The Company is exposed to certain commodity, foreign currency and interest rate risks related to its ongoing business operations and uses derivative instruments to mitigate its exposure to these risks.

Commodity Price Risk Management

The Company may use commodity exchange-traded futures and over-the-counter swap contracts, which are generally no longer than 2 years, to fix the price of a portion of its forecasted raw material requirements. Commodity purchase contracts are measured at fair value using market quotations obtained from the Chicago Board of Trade commodity futures exchange and commodity derivative dealers.

As of June 30, 2020,2022, the notional amount of commodity derivatives was $27, of which $14$18 related to soybean oil futures used for the Food products business and $13$9 related to jet fuel swaps used for the Grilling business. As of June 30, 2019,2021, the notional amount of commodity derivatives was $24,$32, of which $13$23 related to soybean oil futures and $11$9 related to jet fuel swaps.

Foreign Currency Risk Management

The Company may also enter into certain over-the-counter derivative contracts to manage a portion of the Company’s forecasted foreign currency exposure associated with the purchase of inventory. These foreign currency contracts generally have durations of no longer than 2 years. The foreign exchange contracts are measured at fair value using information quoted by foreign exchange dealers.

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Appendix B

NOTE 9. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued)

The notional amounts of outstanding foreign currency forward contracts used by the Company’s subsidiaries to hedge forecasted purchases of inventory were $70$31 and $61,$70, respectively, as of June 30, 20202022 and 2019.2021.

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Table of Contents

Appendix A

NOTE 9. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued)

Interest Rate Risk Management

The Company may enter into over-the-counter interest rate forward contracts to fix a portion of the benchmark interest rate prior to the anticipated issuance of fixed rate debt or to manage the Company’s level of fixed and floating rate debt. These interest rate forward contracts generally have durations of less than 3 years. The interest rate contracts are measured at fair value using information quoted by U.S. government bond dealers.

DuringThe notional amounts of the fourth quarterCompany’s outstanding interest rate contracts were $0 and $300, respectively, as of June 30, 2022 and 2021. During fiscal year 2020,2022, the Company entered into forward startingan additional $650 of interest rate contracts. All contracts represented interest rate swap contracts with a maturity date of September 2022 and notional amounts totaling $225. The contracts were designated as cash flow hedgeslock agreements to manage the exposure to interest rate volatility associated with future interest payments on a forecasted debt issuance. The unrealized mark-to-market gains or losses on these hedging contracts will be recordedissuance, and were terminated in Other comprehensive (loss) income until termination at which point the realized gains or losses will be reclassified from Accumulated other comprehensive net (loss) income and amortized into Interest expense on the consolidated statement of earnings over the term of the forecasted debt. There were no outstanding forward starting interest rate swaps as of June 30, 2019.

During fiscal year 2020, the Company entered into, and subsequently terminated, interest rate forward contracts related to the May 20202022 upon issuance of $500$1,100 in senior notes (See Note 7). These contracts resulted in an insignificanta $114 gain recorded in Other comprehensive (loss) income, comprised of $25 attributable to the May 2029 senior notes and $89 attributable to the May 2032 senior notes, which is being amortized into Interest expense onin the consolidated statement of earnings over the 7-year and 10-year term of the notes.

During fiscal year 2018, the Company entered into, and subsequently terminated, interest rate forward contracts related to the September 2017 issuance of $400 in senior notes and the May 2018 issuance of $500 in senior notes (See Note 7). These contracts resulted in insignificant gains and losses included within Other comprehensive (loss) income, which are being amortized into Interest expense on the consolidated statement of earnings over the 10-year term of each of the notes.

Commodity, Foreign Exchange and Interest Rate Derivatives

The Company designates its commodity forward and futures contracts for forecasted purchases of raw materials, foreign currency forward contracts for forecasted purchases of inventory, and interest rate forward contracts for forecasted interest payments as cash flow hedges.

The effects of derivative instruments designated as hedging instruments on Other comprehensive (loss) income and Net earnings were as follows during the fiscal years ended June 30:

Gains (losses) recognized
in Other comprehensive
(loss) income
Gains (losses) recognized in
Other comprehensive (loss) income
     2020     2019     2018  202220212020
Commodity purchase derivative contracts   $(7)   $(5)   $4     $     17        $     21         $     (7)
Foreign exchange derivative contracts21
Interest rate derivative contracts2289232
Total$(5)$(5)$8$107$44$(5)

Location of gains
(losses) reclassified
from Accumulated other
comprehensive net (loss)
income into Net earnings
Gains (losses) reclassified from
Accumulated other comprehensive
net (loss) income and recognized
in Net earnings
202220212020
Commodity purchase derivative contracts     Cost of products sold     $    23         $    1         $    (4)
Foreign exchange derivative contractsCost of products sold
Interest rate derivative contractsInterest expense(9)(6)(6)
Total$14$(5)$(10)

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Table of Contents

Appendix BA

NOTE 9. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued)

Location of Gains
(losses) reclassified
from Accumulated
other comprehensive
net (loss) income into
Net earnings
     Gains (losses)
reclassified from
Accumulated other
comprehensive net
(loss) income and
recognized in
Net earnings
     2020     2019     2018
Commodity purchase derivative contractsCost of products sold $(4) $(2) $1
Foreign exchange derivative contractsCost of products sold2(1)
Interest rate derivative contractsInterest expense(6)(6)(6)
Total$(10)$(6)$(6)
                  

The estimated amount of the existing net gain (loss) in Accumulated other comprehensive net (loss) income as of June 30, 20202022 that is expected to be reclassified into Net earnings within the next twelve months is $(11).$22.

Counterparty Risk Management and Derivative Contract Requirements

The Company utilizes a variety of financial institutions as counterparties for over-the-counter derivative instruments. The Company enters into agreements governing the use of over-the-counter derivative instruments and sets internal limits on the aggregate over-the-counter derivative instrument positions held with each counterparty. Certain terms of these agreements require the Company or the counterparty to post collateral when the fair value of the derivative instruments exceeds contractually defined counterparty liability position limits. Of the over-the-counter derivative instruments in liability positions held as of both June 30, 20202022 and 2019, $3 and $1, respectively,2021, $0 contained such terms. As of both June 30, 20202022 and 2019,2021, neither the Company nor any counterparty was required to post any collateral as no counterparty liability position limits were exceeded.

Certain terms of the agreements governing the Company’s over-the-counter derivative instruments require the credit ratings, as assigned by Standard & Poor’s and Moody’s to the Company and its counterparties, to remain at a level equal to or better than the minimum of an investment grade credit rating. If the Company’s credit ratings were to fall below investment grade, the counterparties to the derivative instruments could request full collateralization on derivative instruments in net liability positions. As of both June 30, 20202022 and 2019,2021, the Company and each of its counterparties had been assigned investment grade ratings by both Standard & Poor’s and Moody’s.

Certain of the Company’s exchange-traded futures contracts used for commodity price risk management include requirements for the Company to post collateral in the form of a cash margin account held by the Company’s broker for trades conducted on that exchange. As of June 30, 20202022 and 2019,2021, the Company maintained cash margin balances related to exchange-traded futures contracts of $2$1 and $1,$0, respectively, which are classified as Prepaid expenses and other current assets on the consolidated balance sheets.

Trust Assets

The Company holds interests in mutual funds and cash equivalents as part of trust assets related to its nonqualified deferred compensation plans. The participants in the nonqualified deferred compensation plans, who are the Company’s current and former employees, may select among certain mutual funds in which their compensation deferrals are invested in accordance with the terms of the plan and within the confines of the trusts, which hold the marketable securities. The trusts represent variable interest entities for which the Company is considered the primary beneficiary, and, therefore, trust assets are consolidated and included in Other assets in the consolidated balance sheets. The gains and losses on the trust assets are recorded in Other (income) expense, net in the consolidated statement of earnings. The interests in mutual funds are measured at fair value using quoted market prices. The Company has designated these marketable securities as trading investments.

As of June 30, 2022, the balance of the trust assets related to the Company’s nonqualified deferred compensation plans decreased by $17 as compared to June 30, 2021.

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Appendix BA

NOTE 9. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued)

As of June 30, 2020, the value of the trust assets related to the Company’s nonqualified deferred compensation plans increased by $4 as compared to June 30, 2019.

Fair Value of Financial Instruments

Financial assets and liabilities measured at fair value on a recurring basis in the consolidated balance sheets are required to be classified and disclosed in one of the following three categories of the fair value hierarchy:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs reflecting the reporting entity’s own assumptions.

As of June 30, 20202022 and 2019,2021, the Company’s financial assets and liabilities that were measured at fair value on a recurring basis during the period included derivative financial instruments, which were classified as either Level 1 or Level 2, and trust assets to fund the Company’s nonqualified deferred compensation plans, which were classified as Level 1.

All of the Company’s derivative instruments qualify for hedge accounting. The following table provides information about the balance sheet classification and the fair values of the Company’s derivative instruments:

20202019 20222021
     Balance sheet classification     Fair value
hierarchy
level
     Carrying
Amount
     Estimated
Fair Value
     Carrying
Amount
     Estimated
Fair
Value
 Balance sheet
classification
Fair value
hierarchy
level
Carrying
Amount
Estimated
Fair
Value
Carrying
Amount
Estimated
Fair
Value
Assets                                   
Interest rate forward contractsOther assets2 1 1   
Commodity purchase futures contractsPrepaid expenses and other current assets1$$$5$5
Commodity purchase swaps contractsPrepaid expenses and other current assets26644
Foreign exchange forward contractsAccounts payable and accrued liabilities211
Interest rate contractsOther assets22424
 $1 $1 $ $ $7$7$33$33
Liabilities     
Commodity purchase futures contractsAccounts payable and
accrued liabilities
1 1 1 1 1  Accounts payable and accrued liabilities1$1$1$$
Commodity purchase swaps contractsAccounts payable and
accrued liabilities
2 3 3 1 1 
Foreign exchange forward contractsAccounts payable and
accrued liabilities
2 $1 1   
      $5      $5      $2        $2 $1$1$$
          

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Appendix BA

NOTE 9. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued)

The following table provides information about the balance sheet classification and the fair values of the Company’s other assets and liabilities for which disclosure of fair value is required:

20202019 2022 2021
     Balance sheet classification     Fair value
hierarchy
level
     Carrying
Amount
     Estimated
Fair Value
     Carrying
Amount
     Estimated
Fair
Value
   Balance sheet
classification
  Fair value
hierarchy
level
 Carrying
Amount
  Estimated
Fair
Value
  Carrying
Amount
  Estimated
Fair
Value
Assets     
Investments, including money
market funds
Cash and cash equivalents(a)1   $584    $584   $26    $26 
Interest-bearing investments,
including money market funds
Cash and cash
equivalents (1)
1$     86$     86 $     196$     196
Time depositsCash and cash equivalents(a)2 165 165 7 7 Cash and cash
equivalents (1)
2441111
Trust assets for nonqualified deferred
compensation plans
Other assets1 100 100 96 96 Other assets1119119136136
 $849 $849 $129 $129   $209 $209 $343 $343
Liabilities     
Notes and loans payableNotes and loans payable(b)2 $ $ $396 $396 

Notes and loans
payable (2)

2$237$237 $$
Current maturities of long-term debt and
long-term debt
Current maturities of long-term
debt and Long-term debt(c)
     
Current maturities of
long-term debt and
Long-term debt
Current maturities of
long- term debt and
Long-term
debt (3)
22,4742,3862,7842,963
2 2,780 3,051 2,287 2,402 $2,711$2,623 $2,784$2,963
 $2,780 $3,051 $2,683 $2,798 
     
(a)(1)Cash and cash equivalents are composed of time deposits and other interest-bearing investments, including money market funds with original maturity dates of 90 days or less. Cash and cash equivalents are recorded at cost, which approximates fair value.
(b)(2)Notes and loans payable isare composed of outstanding U.S.U. S. commercial paper balances and/or amounts drawn on the Company’s credit agreements, all of which are recorded at cost, which approximates fair value.
(c)(3)Current maturities of long-term debt and Long-term debt are recorded at cost. The fair value of Long-term debt, including current maturities, was determined using secondary market prices quoted by corporate bond dealers, and is classified as Level 2.

Furthermore, impairment charges of $343 were recorded during the fiscal year 2021, of which $228, $93, and $22 related to goodwill, certain indefinite-lived trademarks and other assets, respectively. These adjustments were included as non-cash charges in the consolidated statement of earnings. The non-recurring fair values utilized included unobservable Level 3 inputs based on management’s best estimates and assumptions. See Note 5 for additional information.

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Appendix A

NOTE 10. OTHER CONTINGENCIES, GUARANTEES AND COMMITMENTS

Contingencies

The Company is involved in certain environmental matters, including response actions at various locations. The Company had recorded liabilities totaling $28 and $27 as of both June 30, 20202022 and 2019, respectively,2021 for its share of aggregate future remediation costs related to these matters.

One matter, which accounted for $14 of the recorded liability as of both June 30, 20202022 and 2019,2021, relates to environmental costs associated with one of the Company’s former operations at a site located in Alameda County, California. In November 2016, at the request of regulators and with the assistance of environmental consultants, the Company submitted a Feasibility Study that evaluated various options for managing the site and included estimates of the related costs. As a result,Following further discussions with the regulators in 2017, the Company recorded in Other (income) expense, net an undiscounted liability for costs estimated to be incurred over a 30-year period, based on one of the option recommendedoptions in the Feasibility Study. However,In September 2021, as a result of ongoingan additional study and further discussions with regulators, in June 2017, the Company increased itssubmitted a Soil Vapor Intrusion Report to the regulators, which has not resulted in a change to the recorded liability to $14, which reflects anticipated costs to implement additional remediation measures at the site.liability. While the Company believes its latest estimate isestimates of remediation costs are reasonable, the ultimate remediation requirements are not yet finalized and the regulators could require the Company to implement one of the other options evaluated in the Feasibility Study, withremediation actions for a longer period or take additional actions, which could include estimated undiscounted costs of up to approximately $28 over an estimated 30-year period, or require the Company to take otherdifferent actions and incur costs not included in the study.additional costs.

Another matter in Dickinson County, Michigan, at the site of one of the Company’s former operations for which the Company is jointly and severally liable, accounted for $10$9 and $11$10 of the recorded liability as of June 30, 20202022 and 2019,2021, respectively. This amount reflects the Company’s agreement to be liable for 24.3% of the aggregate remediation and associated costs for this matter pursuant to a cost-sharing arrangement with a third party. If the third party is unable to pay its share of the response and remediation obligations, the Company may be responsible for such obligations. With the assistance of environmental consultants, the Company maintains an undiscounted liability representing its current best estimate of its share of the capital expenditures, maintenance and other costs that may be incurred over an

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Appendix B

NOTE 10. OTHER CONTINGENCIES, GUARANTEES AND COMMITMENTS (Continued)

estimated 30-year remediation period. Although it is reasonably possible that the Company’s exposure may exceed the amount recorded for the Dickinson County matter, any amount of such additional exposures, or range of exposures, is not estimable at this time.

The Company’s estimated losses related to these matters are sensitive to a variety of uncertain factors, including the efficacy of any remediation efforts, changes in any remediation requirements and the future availability of alternative clean-up technologies.

The Company is subject to various legal proceedings, claims and other loss contingencies, including, without limitation, loss contingencies relating to contractual arrangements (including costs connected to the transition and unwinding of certain supply and manufacturing relationships), product liability, patents and trademarks, advertising, labor and employment, environmental, health and safety and other matters. With respect to these proceedings, claims and other loss contingencies, while considerable uncertainty exists, in the opinion of management at this time, the ultimate disposition of these matters, to the extent not previously provided for, will not have a material adverse effect, either individually or in the aggregate, on the Company’s consolidated financial statements taken as a whole.

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Appendix A

NOTE 10. OTHER CONTINGENCIES, GUARANTEES AND COMMITMENTS (Continued)

Guarantees

In conjunction with divestitures and other transactions, the Company may provide typical indemnifications (e.g., indemnifications for representations and warranties and retention of previously existing environmental, tax and employee liabilities) that have terms that vary in duration and in the potential amount of the total obligation and, in many circumstances, are not explicitly defined. The Company has not made, nor does it believe that it is probable that it will make, any material payments relating to its indemnifications, and believes that any reasonably possible payments would not have a material adverse effect, either individually or in the aggregate, on the Company’s consolidated financial statements taken as a whole.

The Company had not recorded any material liabilities on the aforementioned guarantees as of June 30, 20202022 and 2019.2021.

The Company was a party to a letter of credit of $10$14 as of June 30, 20202022 and $9$11 as of June 30, 2019,2021, primarily related to one of its insurance carriers, of which $0 had been drawn upon.

Commitments

The Company is a party to certain purchase obligations, which are defined as purchase agreements that are enforceable and legally binding and that contain specified or determinable significant terms, including quantity, price and the approximate timing of the transaction. For purchase obligations subject to variable price and/or quantity provisions, an estimate of the price and/or quantity must be made. Examples of the Company’s purchase obligations include contracts to purchase raw materials, commitments to contract manufacturers, commitments for information technology and related services, advertising contracts, capital expenditure agreements, software acquisition and license commitments and service contracts. The Company enters into purchase obligations based on expectations of future business needs. Many of these purchase obligations are flexible to allow for changes in the Company’s business and related requirements. As of June 30, 2020,2022, the Company’s purchase obligations by purchase date were approximately as follows:

YearPurchase
Obligations
 
2021              $149 
2022 78 
2023 27 
2024 19 
2025 6 
Thereafter 20 
Total $299 
      

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Appendix B

Year     Purchase
Obligations
2023$186
2024127
202573
202635
202712
Thereafter23
Total$456

NOTE 11. LEASES

The Company leases various property, plant and equipment, including office, warehousing, manufacturing and research and development facilities and equipment. These leases have remaining lease terms of up to 1135 years, inclusive of renewal or termination options that the Company is reasonably certain to exercise. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

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Appendix A

NOTE 11. LEASES (Continued)

Supplemental balance sheet information related to the Company’s leases as of June 30 was as follows:

     Balance sheet classification     As of
6/30/2020
      Balance sheet classification     2022     2021
Operating leases  
Right-of-use assetsOperating lease right-of-use assets       $291 Operating lease right-of-use assets$     342$     332
Current lease liabilitiesCurrent operating lease liabilities 64 Current operating lease liabilities$78$81
Non-current lease liabilitiesLong-term operating lease liabilities 278 Long-term operating lease liabilities314301
Total operating lease liabilities $342 $392$382
Finance leases  
Right-of-use assetsOther assets $14 Other assets$18$19
Current lease liabilitiesAccounts payable and accrued liabilities 2 

Accounts payable and accrued
liabilities

$6$5
Non-current lease liabilitiesOther liabilities 12 Other liabilities1315
Total finance lease liabilities $14 $19$20
    

Components of lease cost were as follows:follows for the fiscal years ended June 30:

Twelve Months
Ended 6/30/2020
Operating lease cost73
Finance lease cost:
Amortization of right-of-use assets4
Interest on lease liabilities
Total finance lease cost4
Variable lease cost39
Short term lease cost1
     2022     2021
Operating lease cost$     83$     73
Finance lease cost:
Amortization of right-of-use assets$94
Interest on lease liabilities1
Total finance lease cost$10$4
Variable lease cost$80$39
Short term lease cost$6$2

Supplemental cash flow information and non-cash activity related to the Company’s leases were as follows:follows during fiscal years ended June 30:

     Twelve Months
Ended 6/30/2020
      2022     2021
Cash paid for amounts included in the measurement of lease liabilities: 
Operating cash flows from operating leases, net                     $54 $     84$     75
Operating cash flows from finance leases 1
Financing cash flows from finance leases2 93
Right-of-use assets obtained in exchange for lease obligations: 
Operating leases$38 $94$106
Finance leases8 187

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Appendix BA

NOTE 11. LEASES (Continued)

Weighted-average remaining lease term and discount rate for the Company’s leases were as follows:follows as of fiscal year ended June 30:

     As of 6/30/20202022
Weighted-average remaining lease term:
Operating leases          76 years
Finance leases74 years
Weighted-average discount rate:
Operating leases2.49%2.4%
Finance leases3.20%4.1%

Maturities of lease liabilities by fiscal year for the Company’s leases as of June 30, 20202022 were as follows:

Year     Operating
leases
     Finance
leases
     Operating
leases
     Finance
leases
2021      $70      3
2022 56 2
2023 49 2$       80$     7
2024 42 2785
2025 36 2673
2026552
2027451
Thereafter 122 51012
Total lease payments $375 $16$426$20
Less: Imputed interest (33) (2)(34)(1)
Total lease liabilities $342 $14$392$19
         

The future minimum annualOperating and finance lease payments required underpresented in the Company’s existing non-cancelable operatingtable above exclude $39 and capital$0, respectively, of minimum lease agreementspayments signed but not yet commenced as of June 30, 2019 prior2022.

On May 25, 2022, the Company completed an asset sale-leaseback transaction on a plant in Ontario, Canada. The Company received proceeds of $16, net of selling costs, which had a carrying value of $2, and resulted in a $14 gain on the transaction which was recognized in Other (income) expense, net. The leaseback is accounted for as an operating lease. The term of the lease is 10 years, with the option to terminate the adoptionlease at 7 years.

NOTE 12. STOCKHOLDERS' EQUITY

On November 18, 2020 the Company retired 28 million shares of ASC 842, wereits treasury stock. These shares are now authorized but unissued. There was no effect on the Company’s overall equity position as follows:a result of the retirement.

Year     Operating
leases
     Capital
leases
 
2020      $71      $2 
2021 65 2 
2022 50 1 
2023 42 1 
2024 37 1 
Thereafter 124 2 
Total lease payments $389 $9 
          

Rent expense under operating leases under ASC 840 amountedDividends per share paid to $72 and $86 forClorox stockholders during the fiscal years ended June 30 2019 and 2018, respectively.were as follows:

     2022     2021     2020
Dividends per share paid$     4.64$     4.44$     4.24

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Appendix BA

NOTE 12. STOCKHOLDERS’ EQUITY (Continued)

As of June 30, 2020,On July 12, 2022, a cash dividend was declared in the Company had two stock repurchase programs: an open-market purchase program with an authorized aggregate purchase amount of up to $2,000, which has no expiration date, was authorized by the Board of Directors in May 2018, and a program to offset the anticipated impact of dilution related to stock-based awards (the Evergreen Program), which has no authorization limit on the dollar amount and no expiration date.

Stock repurchases under the two stock repurchase programs were as follows during the fiscal years ended June 30:

   2020   2019   2018
Amount   

Shares
(in thousands)

Amount   Shares
(in thousands)
Amount   Shares
(in thousands)
Open-market purchase program       $85               577        $328               2,266        $95               749 
Evergreen Program157954 3322,208 1771,422 
Total stock repurchases$242 1,531 $660 4,474 $272 2,171 
                       

Dividends$1.18 per share paid duringpayable on August 12, 2022 to common stockholders of record as of the fiscal years ended June 30 were as follows:close of business on July 27, 2022.

20202019     2018
Dividends per share paid     $4.24     $3.84     $3.48

Accumulated Other Comprehensive Net (Loss) Income

Changes in Accumulated other comprehensive net (loss) income attributable to Clorox by component were as follows for the fiscal years ended June 30:

   Foreign
currency
translation
adjustments
   Net unrealized
gains (losses)
on derivatives
   Pension and
postretirement
benefit
adjustments
   Accumulated
other
comprehensive
net (loss) income
Balance June 30, 2017           $(356)                $(37)              $(150)                  $(543)
Other comprehensive (loss) income before
reclassifications(20)8 11 (1)
Amounts reclassified from Accumulated other
comprehensive net (loss) income6 8 14 
Income tax benefit (expense)(8)(2)(7)(17)
Net current period other comprehensive (loss) income(28)12 12 (4)
Balance June 30, 2018(384)(25)(138)(547)
Other comprehensive (loss) income before
reclassifications(20)(5)(25)
Amounts reclassified from Accumulated other
comprehensive net (loss) income6 6 12 
Income tax benefit (expense)(2)1 (2)(3)
Net current period other comprehensive (loss) income(22)2 4 (16)
Cumulative effect of accounting changes (1)(8)(31)(39)
Balance June 30, 2019(414)(23)(165)(602)
Other comprehensive (loss) income before
reclassifications(35)(5)(16)(56)
Amounts reclassified from Accumulated other
comprehensive net (loss) income10 7 17 
Income tax benefit (expense)(1)2 1 
Net current period other comprehensive (loss) income(36)5 (7)(38)
Balance June 30, 2020$(450)$(18)$(172)$(640)
                     

(1)The opening balance of Accumulated other comprehensive net (loss) income was adjusted as a result of adopting ASU No. 2018-02, “Income Statement-Reporting Comprehensive Income (ASC 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” on April 1, 2019.

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Appendix B

NOTE 12. STOCKHOLDERS’ EQUITY (CONTINUED)

     Foreign
currency
translation
adjustments
     Net
unrealized
gains
(losses) on
derivatives
     Pension and
postretirement
benefit
adjustments
     Accumulated
other
comprehensive
net
(loss) income
Balance June 30, 2019$         (414)$        (23)$             (165)$              (602)
Other comprehensive (loss) income
before reclassifications
(35)(5)(16)(56)
Amounts reclassified from Accumulated
other comprehensive net (loss) income
10717
Income tax benefit (expense)(1)21
Net current period other comprehensive
(loss) income
(36)5(7)(38)
Balance June 30, 2020(450)(18)(172)(640)
Other comprehensive (loss) income
before reclassifications
5344(2)95
Amounts reclassified from Accumulated
other comprehensive net (loss) income
(5)51414
Income tax benefit (expense)(1)(10)(4)(15)
Net current period other comprehensive
(loss) income
4739894
Balance June 30, 2021(403)21(164)(546)
Other comprehensive (loss) income
before reclassifications
(45)107163
Amounts reclassified from Accumulated
other comprehensive net (loss) income
(14)151
Income tax benefit (expense)7(4)3
Net current period other comprehensive
(loss) income
(45)1001267
Balance June 30, 2022$(448)$121$(152)$(479)

Included in foreign currency translation adjustments are re-measurement losses on long-term intercompany loans where settlement is not planned or anticipated in the foreseeable future. For the fiscal years ended June 30, 2020, 2019There were $0, $11, and 2018, Other comprehensive losses on$0 associated with these loans totaled $5, $3 and $9, respectively, and there were no amounts reclassified from Accumulated other comprehensive net (loss) income for the periods presented.fiscal years ended June 30, 2022, 2021, and 2020, respectively.

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Appendix A

NOTE 13. NET EARNINGS PER SHARE (EPS)

The following is the reconciliation of the weighted average number of shares outstanding (in thousands) used to calculate basic net EPS to those used to calculate diluted net EPS for the fiscal years ended June 30:

      2020      2019      20182022     2021     2020
Basic125,828 127,734 129,293      123,113125,570125,828
Dilutive effect of stock options and other1,843 2,058 2,288 7931,7291,843
Diluted127,671 129,792 131,581 123,906127,299127,671
Antidilutive stock options and other800 1,192 2,448476

Basic net earnings per share and Diluted net earnings per share are calculated on Net earnings attributable to Clorox.

NOTE 14. STOCK-BASED COMPENSATION PLANS

In November 2012,2021, the Company’s stockholders voted to approve the amended and restated 2005 Stock Incentive Plan (the Plan). The Plan permits the Company to grant various nonqualified stock-based compensation awards, including stock options, restricted stock, performance shares, deferred stock units, stock appreciation rights and other stock-based awards. The primary amendment reflected inPlan as amended and restated provides that the maximum number of shares which may be issued under the Plan was an increase of approximately 3will be 5 million common shares that may be issued for stock-based compensation purposes. As of June 30, 2020,2022, the Company was authorized to grant up to approximately 75 million common shares, plus additional shares equal to shares that are potentially deliverable under an award that expireexpires or are canceled, forfeited or settled without the delivery of shares, under the Plan. As of June 30, 2020,2022, approximately 74 million common shares remained available for grant.

Compensation cost and the related income tax benefit recognized for stock-based compensation plans were classified as indicated below for the fiscal years ended June 30:

  2020  2019  2018202220212020
Cost of products sold      $5       $5       $7      $     6     $     6     $     5
Selling and administrative expenses41 35 42 424041
Research and development costs4 3 4 444
Total compensation costs$50 $43 $53 $52$50$50
Related income tax benefit$12 $10 $16 $12$12$12

Cash received during fiscal years 2020, 20192022, 2021 and 20182020 from stock options exercised under all stock-based payment arrangements was $176, $166$35, $133 and $70,$176, respectively. The Company issues shares for stock-based compensation plans from treasury stock. The Company may repurchase stock under its Evergreen Program to offset the estimated impact of dilution related to stock-based awards (See Note 12).awards.

Details regarding the valuation and accounting for stock options, restricted stock awards, performance shares and deferred stock units for non-employee directors follow.

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Appendix BA

NOTE 14. STOCK-BASED COMPENSATION PLANS (CONTINUED)(Continued)

Stock Options

The fair value of each stock option award granted during fiscal years 2020, 20192022, 2021 and 20182020 was estimated on the date of grant using the Black-Scholes valuation model and assumptions noted in the following table:

     2020     2019     20182022     2021     2020
Expected life5.4 years5.4 years5.5 years5.4 years5.3 to 5.4
years
5.4 years
Weighted-average expected life5.4 years5.4 years5.5 years5.4 years5.4 years5.4 years
Expected volatility18.7%17.3% to 20.2%15.7% to 18.7%21.7% to 25.0%21.4% to 23.2%18.7%
Weighted-average volatility18.7%17.4%15.7%21.8%21.9%18.7%
Risk-free interest rate1.7%2.5% to 3.0%1.3% to 2.6%0.9% to 2.1%0.3% to 0.5%1.7%
Weighted-average risk-free interest rate1.7%2.9%1.8%0.9%0.3%1.7%
Dividend yield2.8%2.5% to 2.6%2.4% to 3.0%2.9% to 3.7%2.1% to 2.3%2.8%
Weighted-average dividend yield2.8%2.6%2.5%2.9%2.1%2.8%

The expected life of the stock options is based on historical exercise patterns. The expected volatility is based on implied volatility from publicly traded options on the Company’s stock at the date of grant, historical implied volatility of the Company’s publicly traded options and other factors. The risk-free interest rate is based on the implied yield on a U.S. Treasury zero-coupon issue with a remaining term equal to the expected term of the option. The dividend yield is based on the projected annual dividend payment per share, divided by the stock price at the date of grant.

Details of the Company’s stock option activities are summarized below:

    Number of
Shares
(In thousands)
    Weighted-
Average
Exercise
Price
per Share
    Average
Remaining
Contractual
Life
    Aggregate
Intrinsic
Value
Number of
Shares
(In thousands)
     Weighted-
Average
Exercise Price
per Share
     Average
Remaining
Contractual
Life
     Aggregate
Intrinsic
Value
Options outstanding as of June 30, 2019           5,744        $112 6 years         $235 
Options outstanding as of June 30, 20214,020$1396 years$179
Granted1,031 156 669163
Exercised(1,828)97 317110
Canceled(86)145 174165
Options outstanding as of June 30, 20204,861 $127 6 years$451 
Options vested as of June 30, 20202,680 $110 5 years$294 
Options outstanding as of June 30, 20224,198$1445 years$49
Options vested as of June 30, 20222,861$1314 years$49

The weighted-average fair value per share of each option granted during fiscal years 2020, 20192022, 2021 and 2018,2020, estimated at the grant date using the Black-Scholes option pricing model, was $20.03, $22.38$22.26, $30.90 and $15.33,$20.03, respectively. The total intrinsic value of options exercised in fiscal years 2022, 2021 and 2020 2019was $18, $109 and 2018 was $145, $125 and $51, respectively.

Stock option awards outstanding as of June 30, 2020,2022, have been granted at prices that are equal to the market value of the stock on the date of grant. Stock option grants generally vest over 4 years and expire no later than 10 years after the grant date. The Company recognizes compensation expense on a straight-line basis over the vesting period. As of June 30, 2020,2022, there was $12 of total unrecognized compensation cost related to non-vested options, which is expected to be recognized over a remaining weighted-average vesting period of 1 year, subject to forfeiture changes.

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Appendix A

NOTE 14. STOCK-BASED COMPENSATION PLANS (Continued)

Restricted Stock Awards

The fair value of restricted stock awards is estimated on the date of grant based on the market price of the stock and is amortized to compensation expense on a straight-line basis over the related vesting periods, which are generally 3 to 4 years. The total number of restricted stock awards expected to vest is adjusted by actual and estimated forfeitures. Restricted stock awards receive dividend distributions earned during the vesting period upon vesting.

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Appendix B

NOTE 14. STOCK-BASED COMPENSATION PLANS (CONTINUED)

As of June 30, 2020,2022, there was $28$34 of total unrecognized compensation cost related to non-vested restricted stock awards, which is expected to be recognized over a remaining weighted-average vesting period of 1 year. The total fair value of the shares that vested in each of the fiscal years 2022, 2021 and 2020 2019was $20, $15 and 2018 was $9, $5 and $1, respectively. The weighted-average grant-date fair value of awards granted was $156.25, $152.12$157.50, $210.78 and $135.29$156.25 per share for fiscal years 2020, 20192022, 2021 and 2018,2020, respectively.

A summary of the status of the Company’s restricted stock awards is presented below:

Number of Shares
(In thousands)
     Weighted-Average
Grant Date Fair
Value per Share
     Number of
Shares
(In thousands)
     Weighted-
Average
Grant Date Fair
Value per Share
Restricted stock awards as of June 30, 2019                        241                      $144 
Restricted stock awards as of June 30, 2021315$178
Granted142 156 261157
Vested(65)143 118167
Forfeited(24)147 46177
Restricted stock awards as of June 30, 2020294 $150 
    
Restricted stock awards as of June 30, 2022412$168

Performance Shares

As of June 30, 2020,2022, there was $15$13 in unrecognized compensation cost related to non-vested performance shares that is expected to be recognized over a remaining weighted-average performance period of 1 year. The weighted-average grant-date fair value of awards granted was $155.54, $151.95$162.46, $212.00 and $135.47$155.54 per share for fiscal years 2020, 20192022, 2021 and 2018,2020, respectively.

A summary of the status of the Company’s performance share awards is presented below:

     Number of Shares
(In thousands)
    Weighted-Average
Grant Date Fair
Value per Share
     Number of
Shares
(In
thousands)
     Weighted-
Average Grant
Date Fair Value
per Share
Performance share awards as of June 30, 2019                      537                       $120 
Performance share awards as of June 30, 2021353$146
Granted119 $156 117$162
Distributed(223)$121 129$118
Forfeited(19)$144 28$169
Performance share awards as of June 30, 2020414 $128 
Performance shares vested and deferred as of June 30, 2020136 $85 
Performance share awards as of June 30, 2022313$162
Performance shares vested and deferred as of June 30, 202258$110
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NOTE 14. STOCK-BASED COMPENSATION PLANS (Continued)

The non-vested performance shares outstanding as of June 30, 20202022 and 20192021 were 278,000255,000 and 387,000,241,000, respectively, and the weighted average grant date fair value was $148.59$173.38 and $133.10$172.04 per share, respectively. During fiscal year 2020, 209,0002022, 74,000 shares vested. Deferred shares continue to earn dividends, which are also deferred. The total fair value of shares vested was $11, $26 $37 and $35$26 during fiscal years 2020, 20192022, 2021 and 2018,2020, respectively. Upon vesting, the recipients of the grants receive the distribution as shares or, if previously elected by eligible recipients, as deferred stock. Deferred shares continue to earn dividends, which are also deferred.

Deferred Stock Units for Nonemployee Directors

Nonemployee directors receive annual grants of deferred stock units under the Company’s director compensation program and can elect to receive all or a portion of their annual retainers and fees in the form of deferred stock units. The deferred stock units receive dividend distributions, which are reinvested as deferred stock units, and are recognized at their fair value on the date of grant. Each deferred stock unit represents the right to receive one share of the Company’s common stock following the completion of a director’s service.

During fiscal year 2020,2022, the Company granted 14,00015,000 deferred stock units, reinvested dividends of 5,000 units and distributed 29,00049,000 shares, which had a weighted-average fair value on the grant date of $157.22, $165.71$167.19, $159.37 and $81.41$93.60 per share, respectively. As of June 30, 2020, 190,0002022, 145,000 units were outstanding, which had a weighted-average fair value on the grant date of $95.42$118.99 per share.

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Appendix B

NOTE 15. OTHER (INCOME) EXPENSE, NET

The major components of Other (income) expense, net, for the fiscal years ended June 30 were:

   2020   2019   2018     2022     2021     2020
Income from equity investees     $(20)     $(15)     $(12)
Amortization of trademarks and other intangible assets131711$     31$     31$     13
Trust investment (gains) losses, net21(25)(3)
Net periodic benefit cost(1)1014161510
Foreign exchange transaction (gains) losses, net7733107
Asset impairment charges21
Income from equity investees(6)(5)(20)
Interest income(2)(3)(6)(5)(5)(2)
Gain on previously held equity investment (1)(85)
Gain on sale-leaseback transaction(14)
Indemnity settlement from past acquisition(15)(15)
Other(5)(17)(9)(8)
Total$(10)$3$(3)$37$(72)$(10)
      

(1) Non-recurring, non-cash gain from the remeasurement of the Company’s previously held investment in its Saudi joint venture (see Note 2).

(1)

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As a result of adopting ASU No. 2017-07, “Compensation-Retirement Benefits (ASC 715),” beginning in fiscal year 2019, net periodic benefit cost is recorded in Other (income) expense, net and in Cost of products sold, Selling and administrative expenses and Research and development costs prior to fiscal year 2019.

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Appendix A

NOTE 16. INCOME TAXES

The provision for income taxes, by tax jurisdiction, consisted of the following for the fiscal years ended June 30:

    2020    2019    2018     2022     2021     2020
Current            
Federal          $171          $166          $177$     71$     146$     171
State322434172632
Foreign453443434145
Total current248224254$131$213$248
Deferred
Federal13(22)(24)$6$(26)$13
State(5)(1)3(2)(9)(5)
Foreign(10)3(2)13(10)
Total deferred(2)(20)(23)5(32)(2)
Total$246$204$231$136$181$246
      

The components of Earnings before income taxes, by tax jurisdiction, consisted of the following for the fiscal years ended June 30:

    2020    2019    2018 
United States$1,041$912$963 
Foreign14411291 
Total$1,185$1,024$1,054 
           

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Appendix B

NOTE 16. INCOME TAXES (Continued)

     2022     2021     2020
United States$     483$     696$     1,041
Foreign124204144
Total$607$900$1,185

A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate on operations follows for the fiscal years ended June 30:

     2020      2019      2018
Statutory federal tax rate21.0%21.0%28.1%
State taxes (net of federal tax benefits)1.71.72.4
Tax differential on foreign earnings0.91.01.2
Federal domestic manufacturing deduction(1.8)
Federal excess tax benefits(2.4)(2.3)(1.7)
Reversals of deferred taxes related to foreign unremitted earnings(2.6)
Remeasurement of deferred taxes0.1(3.1)
Other differences(0.4)(1.7)(0.7)
Effective tax rate20.8%19.8%21.8%
          

The Tax Act was signed into law by the President of the United States on December 22, 2017. The Tax Act made significant changes to U.S. tax law, and included a reduction of U.S. corporation statutory income tax rates from 35% to 21%, effective January 1, 2018. Under the Tax Act, the Company was subject to an average federal statutory tax rate of 28.1% for its fiscal year ended June 30, 2018. The Company’s federal statutory tax rate was 21.0% beginning in July 2018 for the fiscal year ended June 30, 2019. The Tax Act also included, among other things, a one-time transition tax on accumulated foreign earnings and the adoption of a modified territorial approach to the taxation of future foreign earnings.

During the second quarter of fiscal year 2018, the Company made reasonable estimates of the impacts of the Tax Act and initially recorded total benefits of $81 as provisional, as defined in Staff Accounting Bulletin No. 118, as follows:

    Adjustments
One-time net deferred tax liability reduction                $60
One-time transition tax(7)
Net total one-time tax benefit53
Beneficial year-to-date current taxable income impact28
Total tax benefits$81
      

As of December 31, 2018, the Company completed its accounting for all of the enactment-date income tax effects of the Tax Act. Cumulative measurement adjustments through the second quarter of fiscal year 2019 were insignificant.

     2022     2021     2020
Statutory federal tax rate     21.0%     21.0%     21.0%
State taxes (net of federal tax benefits)1.91.51.7
Foreign tax rate differential3.10.20.9
Federal excess tax benefits(0.9)(2.7)(2.4)
Net U.S. tax on foreign income(1.7)(0.5)(0.2)
Other differences(1.0)0.6(0.2)
Effective tax rate22.4%20.1%20.8%

Per U.S. GAAP, foreign withholding taxes are provided on unremitted foreign earnings that are not indefinitely reinvested at the time the earnings are generated. The Company regularly reviews and assesses whether there are any changes to its indefinite reinvestment assertion. Through the second quarter of fiscal year 2018, the Company had determined that the undistributed earnings of a number of its foreign subsidiaries were indefinitely reinvested. When the Tax Act was passed into law in December 2017, it significantly reduced the cost of U.S. repatriation. In the third quarter of fiscal year 2018, the Company concluded an analysis wherein it determined that noneNone of the undistributed earnings of its foreign subsidiaries were indefinitely reinvested. As a result, the Company is providing foreign withholding taxes on the undistributed earnings of all foreign subsidiaries where applicable. These withholding taxes had no significant impact on the Company’s consolidated results.

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Appendix BA

NOTE 16. INCOME TAXES (Continued)

The components of net deferred tax assets (liabilities) as of June 30 are shown below:

20202019     2022     2021
Deferred tax assets  
Compensation and benefit programs      $119      $100$     100$     104
Net operating loss and tax credit carryforwards 84 879385
Operating and finance lease liabilities 75 98100
Accruals and reserves 38 413539
Basis difference related to the Venture Agreement 19 191919
Inventory costs 16 222518
Other 18 211315
Subtotal 369 290383380
Valuation allowance (38) (44)(52)(42)
Total deferred tax assets 331 246$331$338
Deferred tax liabilities  
Fixed and intangible assets (256) (236)$(242)$(232)
Lease right-of-use assets (68) (91)(94)
Low-income housing partnerships (9) (13)
Other (24) (18)(29)(41)
Total deferred tax liabilities (357) (267)(362)(367)
Net deferred tax assets (liabilities)    $(26)    $(21)$(31)$(29)
       

The Company reviews its deferred tax assets for recoverability on a quarterly basis. A valuation allowance is established when the Company believes that it is more likely than not that some portion of its deferred tax assets will not be realized. Valuation allowances have been provided to reduce deferred tax assets to amounts considered recoverable. Details of the valuation allowance were as follows as of June 30:

202020192018     2022     2021     2020
Valuation allowance at beginning of year       $(44)       $(43)       $(40)$     (42)$     (38)$     (44)
Net decrease/(increase) for other foreign deferred tax assets1(1)(1)1
Net decrease/(increase) for foreign net operating loss carryforwards and tax credits5(1)(3)
Net decrease/(increase) for foreign and U. S. net operating loss carryforwards and tax credits(9)(3)5
Valuation allowance at end of year$(38)$(44)$(43)$(52)$(42)$(38)
          

As of June 30, 2020,2022, the Company had foreign tax credit carryforwards of $32$27 for U.S. income tax purposes with expiration dates between fiscal years 20242025 and 2030.2032. Tax credit carryforwards in U.S. jurisdictions of $1$2 have expiration dates between fiscal year 20202023 and 2029.2032. Tax credit carryforwards in U.S. jurisdictions of $2 can be carried forward indefinitely. Tax credit carryforwards in foreign jurisdictions of $26$28 can be carried forward indefinitely. Tax benefits from net operating loss carryforwards in U.S. jurisdictions of $3 have expiration dates between fiscal years 2030 and 2041. Tax benefits from net operating loss carryforwards in U.S. jurisdictions of $4 can be carried forward indefinitely. Tax benefits from foreign net operating loss carryforwards of $16$19 have expiration dates between fiscal years 20212023 and 2036. Tax benefits from foreign net operating loss carryforwards of $7$8 can be carried forward indefinitely.

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Appendix A

NOTE 16. INCOME TAXES (Continued)

The Company files income tax returns in the U.S. federal and various state, local and foreign jurisdictions. The federal statute of limitations has expired for all tax years through June 30, 2015. Various income tax returns in state and foreign jurisdictions are currently in the process of examination.

The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense. As of June 30, 20202022 and 2019,2021, the total balance of accrued interest and penalties related to uncertain tax positions was $2 and $4,$2, respectively. Interest and penalties related to uncertain tax positions included in income tax expense resulted in a net benefit of $0 in fiscal year 2022, a net benefit of $0 in fiscal year 2021 and a net benefit of $2 in fiscal year 2020, a net benefit of $1 in fiscal year 2019, and a net expense of $1 in fiscal year 2018.

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Appendix B

NOTE 16. INCOME TAXES (Continued)2020.

The following is a reconciliation of the beginning and ending amounts of the Company’s gross unrecognized tax benefits:

202020192018     2022     2021     2020
Unrecognized tax benefits at beginning of year     $31     $47     $40$     21$     22$     31
Gross increases - tax positions in prior periods12211
Gross decreases - tax positions in prior periods(11)(20)(1)(7)(5)(11)
Gross increases - current period tax positions468434
Gross decreases - current period tax positions
Lapse of applicable statute of limitations(1)(3)(2)(1)(1)
Settlements(2)(1)(2)
Unrecognized tax benefits at end of year$22$31$47$17$21$22
       

Included in the balance of unrecognized tax benefits as of June 30, 2020, 20192022, 2021 and 2018,2020, were potential benefits of $14, $17 $23 and $33,$17, respectively, which if recognized, would affect the effective tax rate. Unrecognized tax benefits are not expected to significantly increase or decrease within the next 12 months.

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During the year ended June 30, 2019, new facts and circumstances warranted the recognitionTable of previously unrecognized federal, state, and foreign income tax benefits from prior years. The benefits that were recognized in the prior year were not material for any one jurisdiction or any one tax position.Contents

Appendix A

NOTE 17. EMPLOYEE BENEFIT PLANS

Retirement Income Plans

The Company has various retirement income plans for eligible domestic and international employees. As of June 30, 20202022 and 2019,2021, the domestic retirement income plans were frozen for most participants, and the benefits of the domestic retirement income plans were generally based on either employee years of service and compensation or a stated dollar amount per year of service.

The Company contributed $13, $63$15, $14 and $21$13 to its domestic retirement income plans during fiscal years 2020, 20192022, 2021 and 2018,2020, respectively. The Company’s funding policy is to contribute amounts sufficient to meet benefit payments and minimum funding requirements as set forth in employee benefit tax laws plus additional amounts as the Company may determine to be appropriate.

The Company has a domestic qualified pension plan (the Plan). The Plan is frozen for all participants. The Plan generally was frozen effective June 30, 2011 for all employees, except for certain collectively bargained employees, whose Plan freeze was effective January 1, 2019. As a result of the Plan freeze, no employees are eligible to commence participation in the Plan or accrue any additional benefits under the Plan.

On May 17, 2022, the Company’s Board of Directors approved a resolution to terminate the Plan. The amendment will allow the settlement of the pension obligation with either a lump sum payout or a purchased annuity. It is expected to take 18 to 24 months to complete the termination from the date of the approved resolution to terminate the Plan.

As of June 30, 2022, the Company reported net unrealized losses of $139, net of tax, in Accumulated other comprehensive net (loss) income on its consolidated balance sheet related to the Plan. These net unrealized losses will be recognized in the Company’s consolidated statement of income as payments are made to settle lump sum elections and to purchase group annuity contracts. Final settlement is dependent on market conditions, which could affect discount rates and returns on plan assets as well as final elections received from plan participants. The completion of the process of offering and accepting lump sum elections are dependent on when certain regulatory approvals are obtained. Currently, there is not enough information available to determine the ultimate charge of the termination.

Retirement Health Care Plans

The Company provides certain health care benefits for employees who meet age, participation and length of service requirements at retirement. The plans pay stated percentages of covered expenses after annual deductibles have been met or stated reimbursements up to a specified dollar subsidy amount. Benefits paid take into consideration payments by Medicare for the domestic plan. The plans are funded as claims are paid, and the Company has the right to modify or terminate certain plans.

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Appendix BA

NOTE 17. EMPLOYEE BENEFIT PLANS (Continued)

Benefit Obligation and Funded Status

Summarized information for the Company’s retirement income and retirement health care plans as of and for the fiscal years ended June 30 is as follows:

Retirement
Income
Retirement
Health Care
     Retirement
Income
     Retirement
Health Care
2020     2019     2020     20192022     20212022     2021
Change in benefit obligations:     
Benefit obligation as of beginning of year$604$593$34$38$621$628$36$36
Service cost1112
Interest cost202312151511
Actuarial loss (gain)43264(3)(66)12(7)
Plan amendments(7)
Translation and other adjustments(1)(6)81
Plan settlement(13)(12)
Benefits paid(39)(39)(3)(3)(32)(32)(2)(2)
Benefit obligation as of end of year6286043634$513$621$28$36
Change in plan assets:
Fair value of assets as of beginning of year485420$506$507$$
Actual return on plan assets4841(63)26
Employer contributions136333151522
Plan Settlement(13)(12)
Benefits paid(39)(39)(3)(3)(32)(32)(2)(2)
Translation and other adjustments(1)2
Fair value of plan assets as of end of year507485412506
Accrued benefit cost, net funded status$(121)$(119)$(36)$(34)$      (101)$      (115)$      (28)$      (36)
       
Amount recognized in the balance sheets consists of:
Pension benefit assets$52$48$$$30$61$$
Current accrued benefit liability(11)(12)(2)(2)(12)(12)(2)(2)
Non-current accrued benefit liability(162)(155)(34)(32)(119)(164)(26)(34)
Accrued benefit cost, net$(121)$(119)$(36)$(34)$(101)$(115)$(28)$(36)
         

For the retirement income plans, the benefit obligation is the projected benefit obligation.obligation (PBO). For the retirement health care plan, the benefit obligation is the accumulated benefit obligation (ABO).

The ABO for all retirement income plans was $626, $603$512, $618 and $592$626 as of June 30, 2022, 2021 and 2020, 2019 and 2018, respectively.

Retirement income plans with ABO in excess of plan assets as of June 30 were as follows:

ABO Exceeds the Fair Value
of Plan Assets
     2020     2019
Projected benefit obligation     $172$167
Accumulated benefit obligation170166
Fair value of plan assets

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Table of Contents

Appendix BA

NOTE 17. EMPLOYEE BENEFIT PLANS (Continued)

Retirement income plans with ABO or PBO in excess of plan assets as of June 30 were as follows:

     ABO Exceeds the Fair Value
of Plan Assets
     PBO Exceeds the Fair Value
of Plan Assets
2022     20212022     2021
Projected benefit obligation$133$176$133$178
Accumulated benefit obligation132174132175
Fair value of plan assets222

Net Periodic Benefit Cost

The net cost of the retirement income and health care plans for the fiscal years ended June 30 included the following components:

Retirement IncomeRetirement Health Care     Retirement Income     Retirement Health Care
2020201920182020201920182022     2021     20202022     2021     2020
Service cost     $1     $1     $1     $     $     $$1$2$1$$$
Interest cost202323122151520111
Expected return on plan assets(19)(18)(19)     (15)     (16)      (19)
Settlement loss recognized75
Amortization of unrecognized items10910(3)(3)(3)91110      (1)      (2)      (3)
Total$12$15$15$(2)$(1)$(1)$17$17$12$$(1)$(2)
             

As a resultService cost component of adopting ASU No. 2017-07, “Compensation-Retirement Benefits (ASC 715),” effective July 1, 2018,the net periodic benefit cost is reflected in employee benefit costs, all other components are reflected in Other (income) expense, net, for fiscal year 2019 and thereafter, and in Cost of products sold, Selling and administrative expenses, and Research and development costs prior to fiscal year 2019.net.

Items not yet recognized as a component of postretirement expense as of June 30, 2020,2022, consisted of:

Retirement
Income
Retirement
Health Care
     Retirement
Income
     Retirement
Health Care
Net actuarial loss (gain)                $240              $(13)$        222$          (15)
Prior service benefit(1)(7)
Net deferred income tax (assets) liabilities(58)4(51)3
Accumulated other comprehensive loss (income)         $182        $(10)$164$(12)
     

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Appendix A

NOTE 17. EMPLOYEE BENEFIT PLANS (Continued)

Net actuarial loss (gain) recorded in Accumulated other comprehensive net (loss) income for the fiscal year ended June 30, 2020,2022, included the following:

Retirement
Income
Retirement
Health Care
     Retirement
Income
     Retirement
Health Care
Net actuarial loss (gain) as of beginning of year     $236     $(18)$        226$          (10)
Amortization during the year(10)3(16)1
Loss (gain) during the year14212(6)
Net actuarial loss (gain) as of end of year           $240        $(13)$222$(15)
     

The Company uses the straight-line amortization method for unrecognized prior service costs and benefits. In fiscal year 2021, the Company expects to recognize, on a pre-tax basis, $10 of the net actuarial loss as a component of net periodic benefit cost for the retirement income plans. In addition, in fiscal year 2021, the Company expects to recognize, on a pre-tax basis, $2 of the net actuarial gain as a component of net periodic benefit cost for the retirement health care plans.

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Appendix B

NOTE 17. EMPLOYEE BENEFIT PLANS (Continued)

Assumptions

Weighted-average assumptions used to estimate the actuarial present value of benefit obligations were as follows as of June 30:

Retirement
Income
Retirement
Health Care
     Retirement Income     Retirement Health Care
20202019202020192022     20212022     2021
Discount rate     2.45%     3.41%     2.51%     3.35%      3.72 %      2.56 %      4.65 %      2.61 %
Rate of compensation increase2.92%2.86%n/an/a3.09 %3.02 %n/an/a
Interest crediting rate2.69 %2.57 %n/an/a

Weighted-average assumptions used to estimate the retirement income and retirement health care costs were as follows as of June 30:

Retirement Income     Retirement Income
2020201920182022     2021     2020
Discount rate     3.41%     4.10%     3.70%      2.56 %      2.45 %      3.41 %
Rate of compensation increase2.86%2.87%2.83%3.02 %2.92 %2.86 %
Expected return on plan assets3.95%4.33%4.43%3.00 %3.08 %3.95 %
Interest crediting rate2.57 %1.92 %3.01 %
Retirement Health CareRetirement Health Care
202020192018202220212020
Discount rate3.35%4.01%3.66%      2.61 %      2.51 %      3.35 %

The expected long-term rate of return assumption is based on an analysis of historical experience of the portfolio and the summation of prospective returns for each asset class in proportionaccording to the fund’s current target asset allocation.

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Appendix A

NOTE 17. EMPLOYEE BENEFIT PLANS (Continued)

The actuarial benefit obligation gain incurred during fiscal year 2022 was primarily driven by increases in the discount rates for the retirement plans, partially offset by the domestic qualified plan reflecting plan termination lump sum window and annuity buyout assumptions. The actuarial benefit obligation loss during fiscal year 2021 was primarily driven by the increase in assumed interest crediting rate, partially offset by asset gains and increase in the discount rate.

Expected Benefit Payments

Expected benefit payments for the Company’s retirement income and retirement health care plans as of June 30, 2020,2022, were as follows:

Retirement
Income
Retirement
Health Care
     Retirement
Income
     Retirement
Health Care
2021               $38                  $2
2022 53 2
2023 36 2$46$2
2024 37 23562
2025 36 2142
Fiscal years 2026 through 2030 179 10
2026142
2027132
Fiscal years 2028 through 20325911

Expected benefit payments are based on the same assumptions used to measure the benefit obligations and include estimated future employee service.

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Appendix B

NOTE 17. EMPLOYEE BENEFIT PLANS (Continued)

Plan Assets

The target allocations and weighted average asset allocations by asset category of the investment portfolio for the Company’s domestic retirement income plans as of June 30 were:

% Target Allocation% of Plan Assets     % Target Allocation     % of Plan Assets
20202019202020192022     20212022     2021
U.S. equity     5%         9%     5%       9%— %3 %— %3 %
International equity5%8%5%8%— %2 %— %2 %
Fixed income90%83%90%83%100 %95 %99 %94 %
Other%%%%— %— %1 %1 %
Total100%100%100%100%      100%       100 %      100 %      100 %
         

The target asset allocation is determined based on the optimal balance between risk and return and, at times, may be adjusted to achieve the plan’s overall investment objective to generate sufficient resources to pay current and projected plan obligations over the life of the domestic retirement income plan.

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Appendix A

NOTE 17. EMPLOYEE BENEFIT PLANS (Continued)

The following table sets forth by level within the fair value hierarchy, the retirement income plans’ assets carried at fair value as of June 30:

2020  
Level 1Level 2Total 
Cash equivalents       $3     $—$3 
Total assets in the fair value hierarchy     $3     $—     $3 
Common collective trusts measured at net asset value 
Bond funds$444 
International equity funds36 
Domestic equity funds23 
Real estate fund1 
Total common collective trusts measured at net asset value504 
Total assets at fair value$507 
           
 
2019  
Level 1Level 2Total 
Cash equivalents$2$—$2 
Total assets in the fair value hierarchy$2$—$2 
Common collective trusts measured at net asset value 
Bond funds$393 
International equity funds50 
Domestic equity funds39 
Real estate fund1 
Total common collective trusts measured at net asset value483 
Total assets at fair value$485 
           

The carrying value of cash equivalents approximated their aggregate fair value as of June 30, 2020 and 2019.

20222021
Common collective trusts measured at net asset value          
     Bond funds$     391$     459
     International equity funds1428
     Domestic equity funds14
     Short-term investment fund43
     Real estate fund32
Total assets at fair value$412$506

Common collective trust funds are not publicly traded and were valued at a net asset value unit price determined by the portfolio’s sponsor based on the fair value of underlying assets held by the common collective trust fund on June 30, 20202022 and 2019.

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Appendix B

NOTE 17. EMPLOYEE BENEFIT PLANS (Continued)2021.

The common collective trusts are invested in various trusts that attempt to achieve their investment objectives by investing primarily in other collective investment funds that have characteristics consistent with each trust’s overall investment objective and strategy.

Defined Contribution Plans

The Company has various defined contribution plans for eligible domestic and international employees. The aggregate cost of the domestic defined contribution plans was $54, $49$58, $65 and $47$54 in fiscal years 2020, 20192022, 2021 and 2018,2020, respectively. The aggregate cost of the international defined contribution plans was $4,$6, $4 and $3$4 for the fiscal years ended June 30, 2020, 20192022, 2021 and 2018,2020, respectively.

NOTE 18. SEGMENT REPORTING

The Company operates through SBUs whichthat are also the Company’s operating segments. These SBUs are then aggregated into four reportable segments. In the fourth quarter of fiscal year 2020, the Company realigned its reportable segments following operational and systems integration. The Digestive Health and Dietary Supplements SBUs, previously included in the Household and Lifestyle reportable segments, respectively, were combined into a new Vitamins, Minerals and Supplements SBU, and the Home Care and Laundry SBUs, previously included in the Cleaning reportable segment, were combined to create the Cleaning SBU. These newly established SBUs, along with the Professional Products SBU, now make up the newsegments: Health and Wellness, reportable segment due to their shared economicHousehold, Lifestyle and qualitative characteristics. All periods presented have been recast to reflect this change. TheInternational. These four reportable segments consist of the following:

Health and Wellness consists of cleaning products, professional products and vitamins, minerals and supplement productssupplements mainly marketed and sold in the U.S. Products within this segment include cleaning products such as laundry additives, including bleach products under the Clorox® brand and Clorox 2® stain fighter and color booster; home care products, primarily under the Clorox®, Clorox® Scentiva®, Formula 409®, Liquid-Plumr®, Pine-Sol® and Tilex® brands; professional cleaning and disinfecting products under the CloroxPro, Clorox Healthcare®, and Clorox® Total 360® brands and professional food service products under the Hidden Valley® brand; and vitamins, minerals and supplement products under the RenewLife®, Rainbow Light®, Natural Vitality®, NeoCell® and Stop Aging Now® brands.
Household consists of grilling products; bags and wraps;wraps, grilling products and cat litter products marketed and sold in the U.S. Products within this segment include grilling products under the Kingsford® and Kingsford® Match Light® brands; bags and wraps under the Glad® brand; and cat litter products under the Fresh Step®, Scoop Away® and Ever Clean® brands.
Lifestyle consists of food, products, water-filtration systems and filters, and natural personal care products and water-filtration products marketed and sold in the U.S. Products within this segment include dressings and sauces, primarily under the Hidden Valley® brand; water-filtration systems and filters under the Brita® brand; and natural personal care products under the Burt’s Bees® brand.
International consists of products sold outside the U.S. Products within this segment include laundry additives; home care products; water-filtration systems and filters;products; digestive health products; grilling products; cat litter products; food products;litter; food; bags and wraps; natural personal care products; and professional cleaning and disinfecting products primarily under the Clorox®, Ayudin®, Clorinda®, Poett®, Pine-Sol®, Glad®, Brita®, RenewLife®, Ever Clean® and Burt’s Bees® brands.products.

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Appendix BA

NOTE 18. SEGMENT REPORTING (Continued)

Certain non-allocated administrative costs, interest income, interest expense and various other non-operating income and expenses are reflected in Corporate. Corporate assets include cash and cash equivalents, prepaid expenses and other current assets, property and equipment, operating lease right-of-use assets, other long-term assets and deferred taxes.

     Fiscal
Year
     Health
and
Wellness
     Household     Lifestyle     International     Corporate     Total
Company
  
Net sales2020     $2,749         $1,795   $1,154          $1,023      $     $6,721
20192,4221,7741,0489706,214
20182,2231,8491,0241,0286,124
Earnings (losses) before income taxes2020766347320116(364)1,185
201957033726496(243)1,024
201855038425384(217)1,054
Income from equity investees
included in Other (income)
expense, net
20202020
20191515
20181212
Total assets20202,1458109561,0101,2926,213
20191,9588069431,0273825,116
Capital expenditures20207294462022254
20196380262611206
2018617222336194
Depreciation and amortization2020646522227180
2019666420255180
2018546221245166
Significant non-cash charges included in
earnings (losses) before income taxes:
Stock-based compensation2020139612150
2019151171943
20181411712053
   Fiscal
Year
   Health and
Wellness
(1)
   Household   Lifestyle   International (2)   Corporate (3)   Total
Company
Net sales2022$        2,690$        1,984$    1,253$              1,180$          $      7,107
20212,9801,9811,2181,1627,341
20202,7491,7951,1541,0236,721
Earnings (losses)
before income taxes
202230023428097(304)607
2021305375320201(301)900
2020766347320116(364)1,185
Income from equity
investees included
in Other (income)
expense, net
202266
202155
20202020
Total assets20221,9991,0451,0351,4536266,158
20212,0439121,0111,4898796,334
Capital expenditures202272112242716251
2021135108294217331
20207294462022254
Depreciation and
amortization
20227567244711224
2021676723459211
2020646522227180
Significant non-cash charges included in earnings (losses) before income taxes:
     Stock-based
     compensation
2022178631852
20211910721250
2020139612150
(1)Fiscal year 2021 earnings (losses) before income taxes for the Health and Wellness segment included impairment charges of $343, of which $228, $93, and $22 related to goodwill, certain indefinite-lived trademarks and other assets, respectively.
(2)

Fiscal year 2021 earnings (losses) before income taxes for the International segment included an $85 non-cash gain from the remeasurement of the Company’s previously held investment in its Saudi joint venture.

(3)

Fiscal year 2022 earnings (losses) before income taxes for the Corporate segment included expenses related to the Company’s digital capabilities and productivity enhancements investment.

All intersegment sales are eliminated and are not included in the Company’s reportable segments’ net sales.

Net sales to the Company’s largest customer, Walmart Stores, Inc. and its affiliates, were 25%, 25% and 26% of consolidated net sales for each of the fiscal years ended June 30, 2020, 20192022, 2021 and 2018, respectively,2020, and occurred across all of the Company’s reportable segments. No other customers accounted for 10% or more of the Company’s consolidated net sales in any of these fiscal years.

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Appendix BA

NOTE 18. SEGMENT REPORTING (Continued)

The following table provides Net sales as a percentage of the Company’s consolidated net sales, disaggregated by SBU, under the new reporting structure, for the fiscal years ended June 30:

     2020     2019     2018
Cleaning30%28%28%
Professional Products7%6%6%
Vitamins, Minerals and Supplements4%5%3%
Health and Wellness41%39%37%
Bags and Wraps12%13%14%
Cat Litter7%7%7%
Grilling8%8%9%
Household27%28%30%
Food Products9%9%9%
Natural Personal Care4%5%4%
Water Filtration4%3%3%
Lifestyle17%17%16%
International15%16%17%
Total100%100%100%
 

During fiscal year 2020, the Company’s Charcoal SBU within the Household reportable segment was renamed the Grilling SBU to reflect a broader strategic view of the category. There has been no change to the composition of the Grilling SBU or the Household reportable segment; therefore, no prior periods were restated.

     2022     2021     2020
Cleaning     29%     30%     30%
Professional Products4%7%7%
Vitamins, Minerals and Supplements4%4%4%
Health and Wellness37%41%41%
Bags and Wraps12%11%12%
Grilling8%9%8%
Cat Litter8%7%7%
Household28%27%27%
Food10%9%9%
Natural Personal Care4%4%4%
Water Filtration4%3%4%
Lifestyle18%16%17%
International17%16%15%
Total100%100%100%

The Company’s products are marketed and sold globally. The following table provides the Company’s global product lines, which were sold in the U.S. (including the Professional Products SBU) and International, that accounted for 10% or more of consolidated net sales for the fiscal years ended June 30:

     2020     2019     2018     2022     2021     2020
Cleaning products43%40%41%     42%     43%     43%
Bags and wraps15%16%18%16%14%15%
Food products10%10%10%11%10%10%
Grilling products8%9%10%

Net sales and property, plant and equipment, net, by geographic area for and as of the fiscal years ended June 30 were as follows:

FiscalUnitedTotal
     Fiscal
Year
     United
States
     Foreign     Total
Company
       Year     States     Foreign     Company
Net sales2020$5,725      $996      $6,721 2022$     5,951$     1,156$      7,107
20195,281 933 6,214 20216,2071,1347,341
20185,135 989 6,124 20205,7259966,721
Property, plant and equipment, net20201,005 98 1,103 20221,1801541,334
2019929 105 1,034 20211,1431591,302

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Appendix A

NOTE 19. RELATED PARTY TRANSACTIONS

The Company holds various equity investments with ownership percentages of up to 50% in a number of consumer products businesses, most of which operate both within and outside the United States. The equity investments, presented in Other assets and accounted for under the equity method, were $62$52 and $57$55 as of the fiscal years ended June 30, 20202022 and 2019,2021, respectively. The Company has no ongoing capital commitments, loan requirements, guarantees or any other types of arrangements under the terms of its agreements that would require any future cash contributions or disbursements arising out of an equity investment.

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Appendix B

NOTE 19. RELATED PARTY TRANSACTIONS (Continued)

Transactions with the Company’s equity investees typically represent payments for contract manufacturing and purchases of raw materials. Payments to related parties, including equity investees, for such transactions during the fiscal years ended June 30, 2022, 2021 and 2020 2019 and 2018 were $55, $56$117, $44 and $55, respectively. Receipts from and ending accounts receivable and payable balances related to the Company’s related parties were not significant during or as of the end of each of the fiscal years presented.

NOTE 20. SUBSEQUENT EVENT

On July 9, 2020,August 3, 2022, the Company increased its investment in each of the two entities comprising its joint venture in the Kingdom of Saudi Arabia forannounced it will begin to implement a total purchase price of approximately $100. The joint venture offers customers in the Gulf region a range of cleaning and disinfecting products. The Company has previously accounted for its 30 percent investment of $27 and $25 as of June 30, 2020 and 2019, respectively, under the equity method of accounting. Subsequent to the closing of this transaction, the Company’s total ownership interest in each of the entities increased to 51 percent. The Company will consolidate this joint venture into the Company's consolidated financial statements from the date of acquisition and reflect the operations and expected goodwill and intangible assets within the International reportable segment. The equity and income attributable to the other joint venture owners will be recorded and presented as noncontrolling interests. As a result of this transaction, the carrying value of the Company’s previously held equity investment will be remeasured to fair value, which is expected to result in a significant non-recurring, non-cash gain to be recorded in Other (income) expense, net.

The Company is currently in the process of finalizing the accounting for the increased investment and expects to record the transactionstreamlined operating model in the first quarter of fiscal year 2021,2023. The Company’s Board of Directors has approved up to approximately $100 of expenses to be incurred over fiscal years 2023 and 2024 related to this initiative, including the remeasurement of the previously held equity investmentrestructuring costs, primarily employee-related costs, as well as the allocations of the purchase considerationassociated implementation and other costs. The costs are expected to the assets acquired and liabilities assumed, the preexisting license arrangements between the Company and the joint venture, and valuations of the noncontrolling interests in the joint venture. Pro forma results reflecting this transaction will not be presented because it is not significant to the Company's consolidated financial results.recorded primarily within Other (income) expense, net.

NOTE 21. UNAUDITED QUARTERLY DATA

Quarters Ended
Dollars in millions, except per share data     September 30     December 31     March 31     June 30     Full Year  
Fiscal year ended June 30, 2020                         
Net sales$1,506$1,449$1,783$1,983$6,721
Cost of products sold$843$810$951$1,054$3,658
Net earnings$203$185$241$310$939
Net earnings per share:
Basic net earnings per share$1.61$1.48$1.92$2.45$7.46
Diluted net earnings per share$1.59$1.46$1.89$2.41$7.36
Dividends declared per share$1.06$1.06$1.06$1.11$4.29
 
Fiscal year ended June 30, 2019
Net sales$1,563$1,473$1,551$1,627$6,214
Cost of products sold$885$830$878$893$3,486
Net earnings$210$182$187$241$820
Net earnings per share:
Basic net earnings per share$1.65$1.42$1.46$1.91$6.42
Diluted net earnings per share$1.62$1.40$1.44$1.88$6.32
Dividends declared per share$0.96$0.96$0.96$1.06$3.94

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Appendix BA

FIVE-YEAR FINANCIAL SUMMARY
The Clorox Company

Years ended June 30
Dollars in millions, except per share data     2020     2019     2018     2017     2016  
OPERATIONS
Net sales$6,721$6,214$6,124$5,973$5,761
Gross profit3,063$2,728$2,675$2,671$2,598
Earnings from continuing operations$939$820$823$703$648
(Losses) earnings from discontinued operations, net of tax(2)
Net earnings$939$820$823$701$648
COMMON STOCK
Earnings per share
Continuing operations
Basic$7.46$6.42$6.37$5.45$5.01
Diluted7.366.326.265.354.92
Dividends declared per share4.293.943.603.243.11
 
As of June 30
Dollars in millions20202019201820172016
OTHER DATA
Total assets(1) (2)$6,213$5,116$5,060$4,573$4,510
Long-term debt(1)2,7802,2872,2841,3911,789

(1)Amounts for the fiscal years ended June 30, 2016 have been retrospectively adjusted to conform to the presentation of debt issuance costs required by ASU No. 2015-03, “Interest - Imputation of Interest (ASC 835-30): Simplifying the Presentation of Debt Issuance Costs.”
(2)As a result of adopting ASU No. 2016-02, “Leases (ASC 842),” the Company has included operating right-of-use assets within Total assets as of June 30, 2020. See Note 1 for more information.

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Appendix B

THE CLOROX COMPANY
RECONCILIATION OF ECONOMIC PROFIT (UNAUDITED)(1)

Dollars in millions     FY20     FY19     FY18  FY22FY21FY20
Earnings before income taxes$1,185$1,024$1,054     $    607     $     900     $     1,185
Add back:
Non-cash U.S. GAAP restructuring and intangible asset impairment charges222
Certain U.S. GAAP charges (2)(3)613572
Interest expense9997851069999
Earnings before income taxes, non-cash U.S. GAAP restructuring and intangible asset impairment
charges, and interest expense
1,2861,123$1,141
Less:
Income taxes on earnings before income taxes, non-cash U.S. GAAP restructuring and intangible
asset impairment charges and interest expense(2)
267222249
Saudi JV acquisition gain (4)(82)
Earnings before income taxes, certain U.S. GAAP items and
interest expense
7741,2741,286
Less:
Income taxes on earnings before income taxes,
certain U.S. GAAP items and interest expense (5)
174264267
Adjusted after tax profit1,0199018926001,0101,019
Average capital employed(3)3,4783,2312,977
Less: Capital charge(4)313291268
Economic profit(1) (Adjusted after tax profit less capital charge)$706$610$624
Less: After tax profit attributable to noncontrolling interests99
Adjusted after tax profit attributable to Clorox5911,0011,019
Average capital employed (6)3,4283,6553,478
Less: Capital charge (7)309329313
Economic profit (1) (Adjusted after tax profit attributable to Clorox
less capital charge)
$282$672$706
(1)

Economic profit (EP) is defined by the Company as earnings before income taxes, excluding non-cashcertain U.S. GAAP restructuringitems (such as asset impairments, charges related to digital capabilities and intangible asset impairment charges,productivity enhancements investment, significant losses/ (gains) related to acquisitions and other non-recurring or unusual items) and interest expense; less income taxes (calculated utilizingbased on the Company’s effective tax rate)rate excluding the identified U.S. GAAP items), and less after tax profit attributable to noncontrolling interests, and less a capital charge (calculated as average capital employed multiplied by a cost of capital rate). EP is a key financial metric that the Company’s management uses to evaluate business performance and allocate resources, and is a component in determining employee incentive compensation. The Company’s management believes EP provides additional perspective to investors about financial returns generated by the business and represents profit generated over and above the cost of capital used by the business to generate that profit.profit

(2)

Fiscal year 2022 includes $61 ($47 after tax) of incremental operating expenses primarily recorded within selling and administrative expenses related to the implementation related to the Company’s digital capabilities and productivity enhancements investment, which are recorded within the Corporate segment. The expenses relate to the following:


Twelve Months
Ended
June 30, 2022
                    External consulting fees (a)     $                    43
IT project personnel costs (b)11
Other (c)7
Total$61

(a) Comprised of third-party consulting fees incurred to assist in the project management and the preliminary project stage of this transformative investment. The company relies on consultants for certain capabilities required for these programs that the company does not maintain internally. These costs support the implementation of these programs incremental to the company’s normal IT costs and will not be incurred following implementation.

(b) Comprised of labor costs associated with internal IT project management teams that are utilized to oversee the new system implementations. Given the magnitude and transformative nature of the implementations planned, the necessary project management costs are incremental to the historical levels of spend and will no longer be incurred subsequent to implementation. As a result of this long-term strategic investment, the company considers these costs not reflective of the ongoing costs to operate its business.

(c) Comprised of various other expenses associated with the company’s new system implementations, including company personnel dedicated to the project that have been backfilled with either permanent or temporary resources in positions that are considered part of normal operating expenses.


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Appendix A

(3)

Fiscal year 2021 includes impairment charges of $329 (after tax $267) of which $228, $93, and $8 related to the goodwill of the VMS reporting unit, certain indefinite-lived trademarks and other assets, respectively, and non-cash charges of $28 ($21 after tax) on investments and related arrangements made with a Professional Products business supplier.

(4)

On July 9, 2020, the Company increased its investment in each of the two entities comprising its joint venture in the Kingdom of Saudi Arabia (Saudi joint venture). As a result of this transaction, a non-cash nonrecurring net gain was recognized of $82 ($76 after tax) in Other (income) expense, net in the quarter ended September 30, 2020, primarily due to the remeasurement of the carrying value of the company’s previously held equity investment to fair value.

(5)

The tax rate applied is the effective tax rate on earnings, whichbefore the identified U.S. GAAP items was 20.8%22.5%, 19.8%20.7% and 21.8%20.8% in fiscal years 2022, 2021, and 2020, 2019respectively. The difference between the fiscal year 2022 effective tax rate on earnings of 22.4% is due to the tax rate impact of the incremental operating expenses recorded related to the implementation of the Company’s digital capabilities and 2018,productivity enhancements investment of 0.1%. The difference between the fiscal year 2021 effective tax rate on earnings of 20.1% is due to the tax rate impact of the Professional Products supplier charge, VMS impairment, and Saudi JV acquisition gain of 0.1%, (0.4)%, and 0.9%, respectively.

(3)(6)

Total capital employed represents total assets less non-interest bearing liabilities. Adjusted capital employed represents total capital employed adjusted to add back current year after tax noncash U.S. GAAP restructuringitems, as applicable, and intangible asset impairment charges.deduct the current year after tax non-cash, non-recurring gain. Average capital employed is the average of adjusted capital employed for the current year and total capital employed for the prior year, based on year-end balances. See below for details of the average capital employed calculation.

(4)(7)

Capital charge represents average capital employed multiplied by a cost of capital, which was 9% for all fiscal years presented. The calculation of capital charge includes the impact of rounding numbers.


      Dollars in millions     FY20     FY19     FY18  
Total assets$6,213$5,116$5,060
Less:
Accounts payable and accrued liabilities(5)1,3271,0331,000
Current operating lease liabilities64
Income taxes payable259
Long-term operating lease liabilities278
Other liabilities(5)755774778
Deferred income taxes625072
Non-interest bearing liabilities2,5111,8661,850
Total capital employed3,7023,2503,210
Add back:
After tax non-cash U.S. GAAP restructuring and intangible asset impairment charges211
Adjusted capital employed$3,704$3,251$3,211
Average capital employed$3,478$3,231$2,977
 

Dollars in millionsFY22FY21FY20
Total assets     $    6,158     $     6,334     $     6,213
Less:
       Accounts payable and accrued liabilities (8)1,4631,6701,327
       Current operating lease liabilities788164
       Income taxes payable25
       Long-term operating lease liabilities314301278
       Other liabilities (8)778819755
       Deferred income taxes666762
              Non-interest bearing liabilities2,6992,9382,511
Total capital employed (6)3,4593,3963,702
After tax certain U.S. GAAP items (3)(4)02122
Adjusted capital employed (6)$3,459$3,608$3,704
Average capital employed$3,428$3,655$3,478
(5)(8)Accounts payable and accrued liabilities and Other liabilities are adjusted to exclude interest-bearing liabilities.

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THE CLOROX COMPANY - 20202022 Proxy Statement



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 A The Board of Directors recommends a vote FOR the election of each of the following director nominees:
1. Election of Directors: For   Against  Abstain  For   Against  Abstain  For   Against  Abstain 
    01 - Amy L. Banse 0605 - A.D. David Mackay 1109 - Pamela Thomas-GrahamMatthew J. Shattock 
02 - Richard H. CarmonaJulia Denman 0706 - Paul Parker12 - Russell Weiner
03 - Benno Dorer08 - Linda Rendle13 - Christopher J. Williams
04 - Spencer C. Fleischer09 - Matthew J. Shattock
05 - Esther Lee10 - Kathryn Tesija
03 - Spencer C. Fleischer07 - Stephanie Plaines11 - Russell J. Weiner
04 - Esther Lee08 - Linda Rendle12 - Christopher J. Williams

 B The Board of Directors recommends a vote FOR Proposal 2.
   For  Against  Abstain
2. Advisory Vote to Approve Executive Compensation.

 D The Board of Directors recommends a vote FOR Proposal 4.
ForAgainstAbstain
4. Approval of the Amended and Restated Certificate of Incorporation to Eliminate Supermajority Voting Provision.

 C The Board of Directors recommends a vote FOR Proposal 3.
   For  Against  Abstain
3. Ratification of the Selection of Ernst & Young LLP as the Clorox Company’s Independent Registered Public Accounting Firm.


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Proxy — The Clorox Company

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE CLOROX COMPANY

ANNUAL MEETING OF SHAREHOLDERS — NOVEMBER 18, 202016, 2022

The stockholder(s)shareholder(s) whose signature(s) appear(s) on the reverse side hereby appoint(s) Linda Rendle, Kevin JacobsenAngela Hilt and Laura Stein,Iké Adeyemi, and each of them individually, as proxies, each with full power of substitution, to vote as designated on the reverse side of this ballot, all of the shares of common stock of The Clorox Company that the stockholder(s)shareholder(s) whose signature(s) appear(s) on the reverse side would be entitled to vote, if personally present, at the Annual Meeting of Shareholders to be held at 9:00 a.m., Pacific time on Wednesday, November 18, 202016, 2022 and any adjournment or postponement thereof. A majority of said proxies, including any substitutes, or if only one of them be present, then that one, may exercise all of the powers of said proxies hereunder.

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