Independent Director
Joined the Board: 2023
Age 59 Nordstrom Board
Committee Memberships
None | | (a) | Blake Nordstrom, Erik NordstromEric D. Sprunk Skills and Peter Nordstrom are brothers, great grandsonsQualifications Mr.Sprunk brings to the Board more than 25 years of leadership experience in the Company’s founderconsumer retail industry and the second cousinsa track record of James F. Nordstrom, Jr.driving financial performance and large-scale transformations within a complex global business. He has significant experience in marketing, finance and accounting as well as operational expertise in key functions that include manufacturing, sourcing, sales and procurement, and product development. His service on public company boards provides additional experience with corporate governance matters, assessing risk and overseeing management.        
Career Highlights •2013 to 2020: Chief Operating Officer of NIKE, Inc., ana global apparel company •2008 to 2015: Executive Vice President of Global Product and Merchandising of NIKE •2001 to 2008: Executive Vice President of Global Footwear of NIKE •1993 to 2001: Various executive roles at NIKE, including Vice/General Manager of America’s Region, General Manager of Footwear Europe, Middle East and Africa, and Chief Financial Officer of Europe, Middle East and Africa •1987 to 1993: Certified public accountant at Price-Waterhouse | | Other Current Public Boards | Previous Public Boards in Past 5 Years | | Bombardier Inc. (2021 to present) | None | | | General Mills, Inc. (2015 to present) | |
Independent Director
Joined the Company. Erik Board: 2022
Age 48 Nordstrom Board
Committee Memberships
AFC (Chair)
TC | | | | Amie Thuener O’Toole Skills and Peter Nordstrom’s biographical information is onQualifications Ms. Thuener O’Toole brings to the following page.Board more than 25 years of finance and accounting experience. Her experience in a variety of senior leadership roles at some of the world’s most innovative companies brings valuable perspectives in finance and accounting matters, including financial planning and reporting, risk assessment, incentive compensation plans and finance advice and support for all mergers and acquisitions activities. She brings to the Board a wealth of knowledge and expertise regarding strategic finance in the context of a rapidly growing and quickly-changing business.  Career Highlights •2018 to present: Vice President and Chief Accounting Officer of Alphabet Inc., one of the world’s leading technology conglomerate holding companies •2013 to 2018: Vice President and Chief Accountant of Alphabet Inc. •1996 to 2012: Managing Director, Transaction Services of PricewaterhouseCoopers | | Other Current Public Boards | Previous Public Boards in Past 5 Years | | None | None |
| | 2023 Proxy Statement | | 30 |
NORDSTROM, INC. -2016 Proxy Statement | 20 |
Table of Contents PROPOSAL 1: ELECTION OF DIRECTORS Back
Independent Director
Joined the Board: 2016
Age 62 Nordstrom Board
Committee Memberships
CGNC | | | | Bradley D. Tilden Skills and Qualifications Mr. Tilden brings to Contentsthe Board executive, operational, strategic planning and financial experience, as well as insights with respect to customer rewards programs in the consumer services industry. Mr. Tilden’s public company board service provides him with experience with corporate governance matters and key skills in working with directors, understanding board processes and functions, assessing risk and overseeing management.   Career Highlights •2021 to 2022: Chairman of Alaska Air Group, Inc., an airline holding company comprised of Alaska Airlines, Inc., and Horizon Air, Inc. •2014 to 2021: Chairman and Chief Executive Officer of Alaska Air Group, Inc. •2012 to 2014: President and Chief Executive Officer of Alaska Air Group, Inc. •2008 to 2012: President of Alaska Air Group, Inc. •2002 to 2008: Executive Vice President of Finance and Planning of Alaska Air Group, Inc. •2000 to 2008: Chief Financial Officer of Alaska Air Group, Inc. •Prior to 2000: Vice President of Finance at Alaska Air Group, Inc.; PricewaterhouseCoopers | | Other Current Public Boards | Previous Public Boards in Past 5 Years | | None | Alaska Air Group, Inc. (2010 to 2022) |
Independent Director
Joined the Board: 2020
Age 59 Nordstrom Board
Committee Memberships
CPCC
CGNC | | | | Mark J. Tritton Skills and Qualifications Mr. Tritton brings to the Board over 30 years of experience in retail and apparel businesses, providing him deep insights into consumer behavior, brand building and operational matters which are key to the Company’s business. In addition, as a former CEO of a public company retailer, Mr. Tritton has unique insights into the challenges facing our Company and our industry.    
Career Highlights •2019 to 2022: President and Chief Executive Officer of Bed Bath & Beyond Inc., an omnichannel retailer selling a wide assortment of domestic merchandise and home furnishings online and through several brand retail storefronts. On April23, 2023, Bed Bath & Beyond Inc. filed a voluntary Chapter 11 petition with the United States Bankruptcy Court for the District of New Jersey •2016 to 2019: Executive Vice President and Chief Merchandising Officer of Target Corporation, an omnichannel retailer selling everyday essentials and fashionable, differentiated merchandise at discounted prices online and through several brand retail storefronts •2009 to 2016: Executive Vice President and Division President of the Nordstrom Product Group of Nordstrom, Inc. | | Other Current Public Boards | Previous Public Boards in Past 5 Years | | None | Bed Bath & Beyond Inc. (2019 to 2022) |
31 | | 2023 Proxy Statement | | 
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Erik B. Nordstrom
Director since 2006
Age 52
Co-PresidentTable of Nordstrom, Inc. since May 2015. Mr. Nordstrom served as Executive Vice President and President – Nordstrom.com from May 2014 to May 2015. From February 2006 to May 2014, Mr. Nordstrom was Executive Vice President and President – Stores of Nordstrom, Inc. From August 2000 to February 2006, Mr. Nordstrom served as Executive Vice President – Full-Line Stores. Mr. Nordstrom previously served as Executive Vice President and Northwest General Manager from February 2000 to August 2000, and as Co-President of the Company from 1995 to February 2000. He has held various other management and sales positions of increasing responsibility since joining the Company in 1979.Contents
PROPOSAL 1: ELECTION OF DIRECTORS Mr. Nordstrom’s positions of increasing responsibility with the Company over more than 35 years, including executive and operational roles, give him a customer-centric perspective in retailing and supporting the business of the Company.
Peter E. Nordstrom
Director since 2006
Age 54
Co-President of Nordstrom, Inc. since May 2015. Mr. Nordstrom served as Executive Vice President and President – Merchandising of Nordstrom, Inc. from February 2006 to May 2015. From September 2000 to February 2006, Mr. Nordstrom served as Executive Vice President and President – Full-Line Stores. Mr. Nordstrom previously served as Executive Vice President and Director of Full-Line Store Merchandise Strategy from February 2000 to September 2000, and as Co-President of the Company from 1995 to 2000. He has held various other management and sales positions of increasing responsibility since joining the Company in 1978.
Mr. Nordstrom’s positions of increasing responsibility with the Company over more than 35 years, including executive and operational roles, give him a customer-centric perspective in retailing and supporting the business of the Company.
Philip G. Satre
Director since 2006
Age 66
Retired Chief Executive Officer of Harrah’s Entertainment, Inc., a provider of branded casino entertainment, from 1994 to 2003 and a director of Harrah’s from 1988 to 2005, serving as Chairman of the Board from 1997 to 2005. Mr. Satre held various other positions of increasing responsibility with Harrah’s beginning in 1980, when he joined the company as Vice President, General Counsel and Secretary, until his retirement in 2005. Prior to joining Harrah’s, Mr. Satre practiced law in Reno, Nevada. He has been a director of International Game Technology, PLC since January 2009 and its Chairman since December 2009. Mr. Satre served as a director of NV Energy from 2005 through 2013, Rite Aid Corporation from 2005 to 2011 and Tabcorp Holdings, Ltd. (Australia) from 2000 to 2007.
Mr. Satre’s roles at Harrah’s Entertainment provide him legal experience, senior leadership skills as chief executive officer and experience overseeing customer loyalty and service programs. Further, Mr. Satre’s substantial board experience at International Game Technology, Rite Aid, NV Energy, Tabcorp and his role as Chairman of Harrah’s Entertainment, which under his leadership became one of the world’s largest casino gaming companies, provide him with extensive experience responding to complex financial, operational and strategic challenges, experience with corporate governance matters and key skills in working with directors, understanding board processes and functions, assessing risk and overseeing management.
Brad D. Smith
Director since 2013
Age 52
President and Chief Executive Officer of Intuit, Inc., a global provider of business and financial management solutions since 2008. Mr. Smith has served on Intuit’s board of directors since 2008. Mr. Smith joined Intuit in 2003 and served as Senior Vice President and General Manager, Small Business division from 2006 to 2007, Senior Vice President and General Manager, QuickBooks from 2005 to 2006, Senior Vice President and General Manager, Consumer Tax Group from 2004 to 2005 and as Vice President and General Manager of Intuit’s Accountant Central and Developer Network from 2003 to 2004. Before joining Intuit, Mr. Smith was Senior Vice President of Marketing and Business Development of ADP, where he held several executive positions from 1996 to 2003. Mr. Smith served on the board of directors of Yahoo! Inc. from 2010 until 2013.
Mr. Smith brings to the Board digital expertise, brand marketing, innovation and entrepreneurial experience, as well as financial and accounting skills, from his position at Intuit. He provides unique insights related to technology innovation and marketing of products and services to broad audiences throughout the world. Mr. Smith’s service on the boards of Yahoo! and Intuit provide him with experience in corporate governance matters and key skills in working with directors, understanding board processes and functions, assessing risk and overseeing management.
NORDSTROM, INC. -2016 Proxy Statement | 21 |
Back
Independent Director
Joined the Board: 2023
Age 57 Nordstrom Board
Committee Memberships
None | | | | Atticus N. Tysen Skills and Qualifications Mr. Tysen brings to Contentsthe board more than three decades of engineering and information security experience. Mr. Tysen also has a wealth of knowledge and expertise regarding technology, cybersecurity and fraud prevention in the context of a rapidly growing and quickly-changing business. His background will add to the diversity of experience already represented across our Board and help us hone an increasingly important area of focus for the retail industry.  Career Highlights •2021 to present: SVP Product Development, Chief Information Security and Fraud Prevention Officer of Intuit Inc., a global provider of business and financial management solutions •2020 to 2021: SVP, Chief Information Security Officer, Chief Fraud Prevention Officer and Chief Information Officer of Intuit Inc. •2013 to 2020: SVP and CIO of Intuit Inc. | | Other Current Public Boards | Previous Public Boards in Past 5 Years | | None | None |
| | 2023 Proxy Statement | | 32 |
Gordon A. Smith
Director since 2015
Age 57
Chief Executive Officer, Chase Consumer and Community Banking, JP Morgan Chase & Co., a global financial services firm, since 2007. Mr. Smith was President, Global Commercial Card Group for American Express Travel Related Services, Inc., from 2005 to 2007, PresidentTable of Consumer Card Services Group for American Express Travel Related Services, Inc., from September 2001 to 2005 and Executive Vice President of U.S. Service Delivery from March 2000 to September 2001. Mr. Smith joined American Express in 1978 and held positions of increasing responsibility within the company. Mr. Smith has served on the board of directors of Choice Hotels International since 2004.Contents
Mr. Smith brings to the Board his extensive experience in customer-focused businesses in a highly competitive industry. He provides unique insights with respect to customer rewards programs in the consumer services industry. Further, Mr. Smith’s service on a public company board provides him with experience with corporate governance matters and key skills in working with directors, understanding board processes and functions, assessing risk and overseeing management.
Bradley D. Tilden
Director since 2016
Age 55
Chairman and Chief Executive Officer of Alaska Air Group and its two subsidiaries, Alaska Airlines and Horizon Air since January 2014 and President of Alaska Airlines since December 2008. In May 2012, Mr. Tilden was named President and Chief Executive Officer of Alaska Air Group and Chief Executive Officer of Alaska Airlines and Horizon Air. He served as Executive Vice President of Finance and Planning from 2002 to 2008 and as Chief Financial Officer from 2000 to 2008 for Alaska Airlines and Alaska Air Group, and prior to 2000, was Vice President of Finance at Alaska Airlines and Alaska Air Group. Before joining Alaska Airlines, Mr. Tilden worked for the accounting firm PricewaterhouseCoopers. He serves on the board of Alaska Air Group.
Mr. Tilden brings to the Board executive, operational, strategic planning and financial experience, as well as insights with respect to customer rewards programs in the consumer services industry. Mr. Tilden’s service on a public company board provides him with experience with corporate governance matters and key skills in working with directors, understanding board processes and functions, assessing risk and overseeing management.
B. Kevin Turner
Director since 2010
Age 51
Chief Operating Officer of Microsoft Corporation, a worldwide software, services and solutions provider, since 2005. In his capacity as Chief Operating Officer, Mr. Turner’s areas of responsibility include global/worldwide sales, marketing, services, operations, customer service and support, worldwide licensing and pricing, corporate public relations, corporate information technology, worldwide partner channel management and the retail stores division. Mr. Turner served as Chief Executive Officer and President of Sam’s Club, a Wal-Mart subsidiary corporation from 2002 to 2005. Between 1985 and 2002, Mr. Turner held a number of positions of increasing responsibility with Wal-Mart Stores, Inc., including Executive Vice President and Global Chief Information Officer from 2001 to 2002.
Mr. Turner’s experience at Microsoft and Wal-Mart has provided him with strategic and operational leadership skills and expertise in online worldwide sales, global operations, supply chain, merchandising, branding, marketing, information technology and public relations.
Robert D. Walter
Director since 2008
Age 70
Private investor since 2008. Mr. Walter was founder and former Chairman and CEO of Cardinal Health, Inc. Mr. Walter retired from Cardinal Health in June 2008. Prior to his retirement, he served as Executive Director from November 2007 to June 2008; Executive Chairman of the Board from April 2006 to November 2007; and Chairman and Chief Executive Officer from 1971 to April 2006. Mr. Walter has been a director of American Express Company since 2002 and YUM! Brands, Inc. since 2008. He served as a director of Cardinal Health (and its predecessors) from 1971 to November 2008.
Mr. Walter’s roles at Cardinal Health, which under his leadership grew from a small regional business to become one of the largest distributors of pharmaceuticals, health and beauty products and hospital supplies in the United States, provide him executive, operational, accounting and executive compensation experience, leadership and strategic skills and significant experience acquiring and developing businesses and building management teams. Further, Mr. Walter’s proven financial and business acumen and significant board experience at American Express and YUM! Brands give him background and experience working with directors, overseeing management and assessing risk.
NORDSTROM, INC. -2016 Proxy Statement | 22 |
AUDIT AND FINANCE COMMITTEE REPORT The following Report of the Company’s Audit Committee of the Board (the “Audit Committee”) does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent the Company specifically incorporates this Report by reference. The Audit CommitteeAFC operates under a written Chartercharter adopted by the Board. The Chartercharter contains a detailed description of the scope of the Audit Committee’sAFC’s responsibilities and how they will be carried out. The Audit Committee’s CharterAFC’s charter is available on our website atinvestor.nordstrom.com,under Corporate Governance.
Investor Relations Website. The AFC currently consists of four Directors, each of whom has been determined by the Board to meet the heightened independence requirements under SEC and NYSE Listed Company Rules. In addition, the Board has determined that each member of the Audit CommitteeAFC is independent from the Company as such term is defined in Sections 303.01(B)(2)(a) and (3) of the NYSE’s listing standards at all times during the fiscal year and that each member was an “audit committee financial expert” within the meaning of Item 407 of Regulation S-K under the Securities Exchange Act of 1934. SEC rules. The Audit CommitteeAFC serves in an oversight capacity and is not part of the Company’s managerial or operational decision-makingdecision-making process. As part of its responsibilities for oversight of the Company’s Enterprise Risk Management process, the Audit CommitteeAFC reviews and discusses Company policies and processes with respect to risk assessment and risk management, including discussions of individual risk areas. Management is responsible for the Company’s internal controls and the financial reporting process. Deloitte, the Company’s independent registered public accounting firm, reports to the Company’s Audit Committee,AFC, and is responsible for performing an integrated audit of the Company’s consolidated financial statements and internal control over financial reporting in accordance with auditing standards generally accepted in the United States of America. Deloitte and the Company’s internal auditors have full access to the Audit Committee.AFC. The auditors meet with the Audit CommitteeAFC at each of the Audit Committee’sAFC’s regularly scheduled meetings, with and without management being present, to discuss appropriate matters. The Audit CommitteeAFC has also discussed with the independent auditors the matters required to be discussed under the applicable rules of the Public Company Accounting Oversight Board and the SEC. The AFC has the sole authority to engage, evaluate and terminate the Company’s independent auditors. The Audit CommitteeAFC also pre-approvespre-approves all auditing services, internal control-relatedcontrol-related services and permitted nonauditnon-audit services to be performed by the Company’s independent auditors, and periodically reviews whether to request proposals for the engagement of the independent audit firm. The Audit CommitteeAFC recommended to the Board that the audited consolidated financial statements for the fiscal year ended January 30, 201628, 2023 be included in the Company’s 2022 Annual Report on Form 10-K for such fiscal year, based on the following actions by the Committee: • | •review and discussion of the Company’s audited consolidated financial statements with management;•review of the unaudited interim financial statements and Forms 10-Q prepared each quarter by the Company; •review of the Company’s Disclosure Committee practices and the certifications prepared each quarter in accordance with Sections 302 and 906 of the Sarbanes-Oxley Act of 2002; •review with management of the critical accounting estimates on which the financial statements are based, as well as its evaluation of alternative accounting treatments; •receipt of management representations that the Company’s financial statements were prepared in accordance with GAAP; •review, with management, the internal auditors and Deloitte, of management’s assessment of the effectiveness of the Company’s internal control over financial reporting and Deloitte’s evaluation of the Company’s internal control over financial reporting; •review, with legal counsel and management, of contingent liabilities; •receipt of the written disclosures and letter from Deloitte required by the Public Company Accounting Oversight Board Ethics and Independence Rule 3526, Communication with AFCs Concerning Independence; and •review, with Deloitte, of Deloitte’s independence, the audited consolidated financial statements, the matters required to be discussed by Auditing Standard No. 16 Communications with AFCs, as amended, and other matters, including Rule 2-07 of SEC Regulation S-X. | Audit and Finance Committee | | | | •
| review of the unaudited interim financial statements and Forms 10-Q prepared each quarter by the Company;
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| | | Amie Thuener O’Toole, Chair | Stacy Brown-Philpot | James L. Donald | Kirsten A. Green |
•33 | review of the Company’s Disclosure Committee practices and the certifications prepared each quarter in accordance with Sections 302 and 906 of the Sarbanes-Oxley Act of 2002; | | | 2023 Proxy Statement | • | discussions with management regarding the critical accounting estimates on which the financial statements are based, as well as its evaluation of alternative accounting treatments; | | | | • | receipt of management representations that the Company’s financial statements were prepared in accordance with accounting principles generally accepted in the United States of America; | | | • | discussions with management, the internal auditors, and Deloitte regarding management’s assessment of the effectiveness of the Company’s internal control over financial reporting and Deloitte’s evaluation of the Company’s internal control over financial reporting; | | | • | discussions with legal counsel and management regarding contingent liabilities; | | | • | receipt of the written disclosures and letter from Deloitte required by the Public Company Accounting Oversight Board Ethics and Independence Rule 3526, Communication with Audit Committees Concerning Independence; and | | | • | discussions with Deloitte regarding their independence, the audited consolidated financial statements, the matters required to be discussed byAuditing Standard No.16 Communications with Audit Committees, as amended, and other matters, including Rule 2-07 of SEC Regulation S-X.
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AUDIT COMMITTEETable of Contents
PROPOSAL 2: RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Shellye L. Archambeau
Phyllis J. Campbell
Tanya L. Domier
Brad D. Smith,Chair
Bradley D. Tilden
Alison A. Winter
NORDSTROM, INC. -2016 Proxy Statement | 23 |
PROPOSAL 2 | RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
The Board recommends a vote FOR this proposal. The Audit Committee,AFC, consistent with NYSE and SEC rules, has appointed Deloitte to be the Company’s independent registered public accounting firm for the fiscal year ending January 28, 2017.February 3, 2024. Deloitte and its predecessors have served as the Company’s independent registered public accounting firm for over forty50 years, including the fiscal year ended January 30, 2016. 28, 2023. As a matter of good corporate practice to provide shareholders an avenue to express their views on this matter, the Board has determined to seek shareholder ratification of Deloitte’s appointment at this time. If the shareholders do not ratify the appointment of Deloitte, the Board will reconsider the appointment. A representative of Deloitte will be present atattend the Annual Meeting will have the opportunityto respond to questions and to make a statement if he or she so desires, and will be available to respond to questions.desired. Audit Fees The following table summarizes fees billed or expected to be billed to the Company by Deloitte in connection with services for the fiscal years ended January 30, 2016 and January 31, 2015:by Deloitte: | | Fiscal Year Ended January 28, 2023 | | Fiscal Year Ended January 29, 2022 | Type of Fee | | ($) | (%) | | ($) | (%) | Audit Fees(a) | | 3,658,000 | 89 | | 3,411,000 | 86 | Audit-Related Fees(b) | | 389,000 | 9 | | 465,000 | 12 | Tax Fees(c) | | 67,000 | 2 | | — | — | All Other Fees(d) | | — | — | | 68,000 | 2 | TOTAL | | 4,114,000 | 100 | | 3,944,000 | 100 |
| | Fiscal Year Ended | | Fiscal Year Ended | | | January 30, 2016 | | January 31, 2015 | | Type of Fee | ($) | (%) | | ($) | (%) | | Audit Fees(a) | 2,490,000 | 78 | | 2,510,000 | 81 | | Audit-Related Fees(b) | 669,000 | 21 | | 519,000 | 17 | | Tax Fees(c) | 9,000 | 1 | | 50,000 | 2 | | TOTAL | 3,168,000 | 100 | | 3,079,000 | 100 |
(a) Audit Fees primarily includerelate to fees for services forfor: (i) auditing the consolidated financial statements of the Company and the separate financial statements of one of the Company’s wholly-owned subsidiaries, Nordstrom fsb;Company; (ii) reviewing the interim financial information of the Company included in its Form 10-Qs;10-Qs; and (iii) auditing the Company’s internal control over financial reporting. Substantially all of Deloitte’s work on these audits was performed by full-time,full-time, regular employees and partners of Deloitte and its affiliates. Audit-Related(b) Audit-Related Fees are fees for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements and internal control over financial reporting. Also included arereporting, services related to the issuance of the Company’s securities and accounting research tool subscription feesfees. This amount does not reflect additional amounts of $2,850$383,246 for fiscal year ended January 30, 201628, 2023 and $2,847$364,500 for fiscal year ended January 31, 2015.29, 2022 which were reimbursed to the Company by its banking partner in connection with the System and Organization Controls report related to the Company’s credit card servicing activities.
(c) Tax Fees include various tax planning projectsrelated to advice and miscellaneous compliance matters.recommendations on Canadian customs and import duty filings for the fiscal year ended January 28, 2023. Pre-Approval Policy Consistent with SEC policies regarding auditor independence, the services performed by Deloitte for the fiscal years ended January 30, 201628, 2023 and January 31, 201529, 2022 were pre-approvedpre-approved in accordance with the policies and procedures adopted by the Audit Committee.AFC. The pre-approvalpre-approval policy is periodically reviewed and updated. It describes the permitted audit, audit-related,audit-related, tax and other services that Deloitte may perform. Normally, pre-approvalpre-approval is provided at regularly scheduled Audit CommitteeAFC meetings. However, the authority to grant specific pre-approvalpre-approval between meetings, as necessary, has been assigned to the Chair of the Audit Committee.AFC. The Chair is responsible for updating the Audit CommitteeAFC at the next regularly scheduled meeting of any services that were pre-approvedpre-approved between meetings. The Audit CommitteeAFC approves fees up to a specified amount associated with each proposed service. Providing for fees up to a specified amount for a serviceservices, which incorporates appropriate oversight and control of the Deloitte relationship, while permitting the Company to receive immediate assistance from Deloitte when time is of the essence. The Committee also reviews on a regular basis: The Committee also reviews on a regular basis: | | • | a listing of approved services since its last review; | | | • | a report summarizing the year-to-date services provided by Deloitte, including fees paid for those services; and | | | • | •a listing of approved services since its last review; •a report summarizing the year-to-date services provided by Deloitte, including fees paid for those services; and •a projection for the current fiscal year of estimated fees. |
The policy prohibits the Company from engaging the independent registered public accountants for services billed on a contingent fee basis and from hiring current or former employees of the independent auditor who have not satisfied the statutory cooling-offcooling-off period for certain positions.
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NORDSTROM, INC. -2016 Proxy Statement | 24 |
Table of Contents
EXECUTIVE OFFICERS The Executive Officers of the Company are appointed annually by the Board following each year’s Annual Meeting of Shareholdersannual meeting and serve at the discretion of the Board. In addition to Blake Nordstrom, Erik Nordstrom and Peter Nordstrom, whose biographical information is provided under Election of Directors on pages 20 and 21,page 25, the following are the other Executive Officers of the Company.Company on the filing date of this Proxy Statement. 
| Teri J. Bariquit | Employee since 1986 | Age 57 | Chief Merchandising Officer since August 2019. From 2004 to 2019, Ms. Bariquit served as Vice President and then Executive Vice President, Nordstrom Merchandising Group, where she was responsible for Inventory, Planning, Solutions and Business Integration. In her prior role, she led inventory planning, merchandising strategy, brand programs and business transformation initiatives for both Nordstrom and Nordstrom Rack. Prior to 2004, she held various management roles in Merchandising, including Business Integration Director, Business Information & Technology Director and Inventory Audit Manager. | | | 
| Alexis DePree | Employee since 2020 | Age 44 | Chief Supply Chain Officer since January 2020, when she joined the Company. Ms. DePree previously served as Vice President of Americas sort centers and planning at Amazon.com, Inc. from 2018 to 2020, and as Amazon’s Vice President of global supply chain operations from 2016 to 2018. From 2007 to 2016, she held executive positions with increasing responsibility at Target Corporation, prior to which she was employed at Dell Technologies Inc. in various leadership positions from 2001 to 2005. | | | 
| Michael W. Maher | Employee since 2009 | Age 49 | Interim Chief Financial Officer and Chief Accounting Officer since December 2022. Mr. Maher previously served as Chief Accounting Officer from January 2020 to December 2022 and SVP, Finance from May 2017 to January 2020. From October 2011 to April 2017, he held various leadership finance roles for the Company’s Full-Line stores and Full-Price business. He previously served as the Company’s Controller from November 2009, when he joined the Company, until September 2011. Prior to joining Nordstrom, he served as the Vice President, Retail Division Controller for Longs Drug Stores Corporation, the Assistant Corporate Controller at 24 Hour Fitness, and as a Manager of Assurance and Advisory Services and a Certified Public Accountant with Deloitte & Touche LLP. | | | 
| James F. Nordstrom, Jr. | Employee since 1986 | Age 50 | Chief Stores Officer since April 2022. Previously, he served as President, Stores from May 2014 to April 2022. From 2005 to 2014, Mr. Nordstrom served as Executive Vice President and President, Nordstrom.com. He previously served as Corporate Merchandise Manager, Children’s Shoes, from May 2002 to February 2005, and as a project manager for the design and implementation of the Company’s inventory management system from 1999 to May 2002. Mr. Nordstrom is a great-grandson of the Company’s founder. | | | 
| Farrell B. Redwine | Employee since 2016 | Age 51 | Chief Human Resources Officer since July 2021. In addition, Ms. Redwine has responsibility for the Company’s Diversity, Inclusion and Belonging strategy and co-chairs the Nordstrom Diversity Action Council. Ms. Redwine joined Nordstrom in 2016 as Vice President, Human Resources supporting eCommerce, call centers and stores, and subsequently served as Senior Vice President, Human Resources, overseeing the talent, culture, diversity and total rewards functions for the Company. From 2014 to 2016, Ms. Redwine was a change management consultant and leadership coach. From 2008 to 2013, she was Global Head of Diversity & Talent Management for Barclays Capital. Prior to 2008, Ms. Redwine held various global HR leadership positions with increasing responsibility at several large corporations, including Lehman Brothers, ExxonMobil and Time Inc. |
35 | | 2023 Proxy Statement | |
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| Ann Munson Steines | Employee since 2019 | Age 58 | Chief Legal Officer, General Counsel and Corporate Secretary since April 2022. Ms. Steines joined the Company as General Counsel and Corporate Secretary in July 2019. Previously, she was Senior Vice President, Deputy General Counsel and Assistant Secretary for Macy’s, Inc. for approximately ten years. Ms. Steines joined Macy’s, Inc. in 1998 as Assistant Counsel, Employment Law, and rose through positions of increasing responsibility until her appointment as Deputy General Counsel and Assistant Secretary. Prior to Macy’s, Ms. Steines was a Senior Attorney with the Overnite Transportation Company, a subsidiary of Union Pacific Corporation. Ms. Steines began her legal career with Dinsmore & Shohl in Cincinnati, Ohio in 1990 and then practiced law with the law firm of Michael Best & Friedrich in Milwaukee, Wisconsin. | | | 
| Kenneth J. Worzel | Employee since 2010 | Age 58 | Chief Customer Officer since April 2022. Previously, he served as Chief Operating Officer from August 2019 to April 2022. From 2018 to August 2019, Mr. Worzel served as Chief Digital Officer, from 2016 to 2019 as President of Nordstrom.com, and from 2010 to 2016, he served as Executive Vice President, Strategy and Development. Prior to joining the Company, he was a partner with McKinsey & Company, a global management consulting firm, from 2009 to 2010. While at McKinsey, he provided the Company and other clients with management strategy and organizational services. Prior to joining McKinsey, he was a managing partner at Marakon Associates, an international strategy consulting firm, from 1992 to 2008. As a partner at Marakon Associates, he provided consulting services to the Company from 1997 to 2008. |
Brian K. Dennehy
Employee since 2013
Age 50
Brian K. Dennehy was named Chief Marketing Officer upon joiningAs previously disclosed by the Company, in January 2013,Nordstrom Canada Retail, Inc., Nordstrom Canada Holdings, LLC and was named Executive Vice President in February 2013. Prior to joining the Company, Mr. Dennehy served as Chief Marketing Officer of Silicon Valley Bank Financial Group from March 2011 until December 2012. From 2001 to 2011, Mr. Dennehy was employed at Intuit, Inc., serving as Vice President of Business Intelligence, Data and Analytics from 2009 to 2011, Vice President of Marketing, Small Business Division from 2005 to 2009, as well as other executive positions from 2001 to 2005.
Christine F. Deputy
Employee since 2015
Age 50
Christine F. Deputy was named Executive Vice President – Human Resources upon joining the Company in June 2015. Prior to joining the Company, Ms. Deputy served as Group Human Resources Director at Aviva plc from March 2013 to June 2015. From February 2012 to March 2013, Ms. Deputy was Human Resources Director – Global Retail Banking for Barclays Bank. From July 2009 to February 2012, Ms. Deputy was Chief Human Resource Office at Dunkin’ Brands. Ms. Deputy was employed at Starbucks, Inc. from March 1998 to June 2009, serving as Vice President, Human Resources Asia Pacific from November 2007 to June 2009, Vice President, Global Staffing from September 2005 to January 2008, as well as other executive positions from 1998 to 2005.
James A. Howell
Employee since 2007
Age 50
James A. Howell was named Executive Vice President – Finance and Treasurer in November 2014. From 2007 to 2014, he served as Vice President – Finance. Mr. Howell also functions as the Company’s Principal Accounting Officer. From July 2003 to August 2007, Mr. Howell was employed at Blockbuster Inc., most recently as Senior Vice President and Corporate Controller. From 2002 to 2003, Mr. Howell worked for CAE SimuFlite, Inc., a provider of training for the civil aviation industry, after spending 12 years with PricewaterhouseCoopers serving clients in both the retail and financial services industries.
Michael G. Koppel
Employee since 1999
Age 59
Michael G. Koppel was named Executive Vice President and Chief Financial Officer in May 2001. From 1999 to 2001, he served as Vice President, Corporate Controller and Principal Accounting Officer. Mr. Koppel previously served as Chief Operating Officer of CML Group, a specialty retail holding company, and as Chief Financial Officer of Lids Corporation, a specialty retailer from 1997 through 1998. Prior to that, Mr. Koppel spent 13 years with the May Department Stores Company in a variety of financial and operating roles.
Daniel F. Little
Employee since 2002
Age 54
Daniel F. Little was named Executive Vice President and Chief Information Officer in February 2014. From 2003 to 2014, he served as Executive Vice President and Chief Administrative Officer and from July 2002 until March 2003, he served as Vice President – Supply Chain Strategy. Prior to joining the Company in July 2002, Mr. Little held various positions with Colgate-Palmolive from April 1993 through June 2002, most recently as Manufacturing General Manager for Personal Care Products in Europe.
James F. Nordstrom Jr.
Employee since 1986
Age 43
James F. Nordstrom, Jr. was named Executive Vice President and President – Stores in May 2014. From 2005 to 2014, he served as Executive Vice President and President – Nordstrom Direct. He previously served as Corporate Merchandise Manager – Children’s Shoes, from May 2002 to February 2005, and as a project manager for the design and implementation of the Company’s inventory management system from 1999 to May 2002. Mr. Nordstrom is a great-grandsonCanada Holdings II, LLC, which are subsidiaries of the Company, founder.have commenced a wind-down of their business operations, obtaining an Initial Order from the Ontario Superior Court of Justice under the Companies’ Creditor Arrangement Act on March2, 2023 to facilitate the wind-down in an orderly fashion. Erik Nordstrom and Michael Maher served as directors and/or officers of such entities.
| | 2023 Proxy Statement | | 36 |
Robert B. Sari
Employee since 2009
Age 60
Robert B. Sari was named Executive Vice President, General Counsel and Secretary upon joining the Company in April 2009. Prior to joining the Company, he served as Executive Vice President, General Counsel and SecretaryTable of Rite Aid Corporation since October 2005. Mr. Sari also served as Rite Aid’s Senior Vice President, General Counsel and Secretary from 2002 to 2005 and as Senior Vice President, Deputy General Counsel and Secretary from 2000 to 2002. Mr. Sari served in other roles for Rite Aid beginning in 1997.Contents
NORDSTROM, INC. -2016 Proxy Statement | 25 |
Geevy S.K. Thomas
Employee since 1983
Age 51
Geevy S. K. Thomas was named Executive Vice President and President – Nordstrom Rack, in February 2010. He previously served as Executive Vice President and South Regional Manager from November 2001 to February 2010, as Executive Vice President and General Merchandise Manager – Full-Line Stores from February 2001 to November 2001, and as Executive Vice President – Full-Line Stores and Director of Merchandising Strategy from February 2000 to February 2001. Prior to February 2000, Mr. Thomas held various merchandise strategy, store and regional management positions with the Company.
Kenneth J. Worzel
Employee since 2010
Age 51
Kenneth J. Worzel was named Executive Vice President – Strategy and Development upon joining the Company in March 2010. Prior to joining the Company, he was a partner with McKinsey & Company, a global management consulting firm, from 2009 to 2010. While at McKinsey, Mr. Worzel provided the Company and other clients with management strategy and organizational services. Prior to joining McKinsey, Mr. Worzel was a managing partner at Marakon Associates, an international strategy consulting firm, from 1992 to 2008. As a partner at Marakon Associates, Mr. Worzel provided consulting services to the Company from 1997 to 2008.
NORDSTROM, INC. -2016 Proxy Statement | 26 |
COMPENSATION OF EXECUTIVE OFFICERS | Compensation, People and Culture Committee Report The CPCC has reviewed and discussed with management the CD&A included in this Proxy Statement. The CPCC believes the CD&A represents the intent and actions of the CPCC with regard to executive compensation and has recommended to the Board that it be included in this Proxy Statement for filing with the SEC. | | | | Compensation, People and Culture Committee | | | | 
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| | | | James L. Donald, Chair | Glenda G. McNeal | Mark J. Tritton | | | | | | | |
Compensation Discussion and Analysis This section describes our executive compensation program and the compensation decisions made for our fiscal year 2015 Named Executive Officers: 2022 NEOs. Anne Bramman separated on December 2, 2022 and Edmond Mesrobian separated on October 14, 2022. Blake W.Erik B. Nordstrom | | Co-PresidentChief Executive Officer | Michael W. Maher | | Interim Chief Financial Officer and Chief Accounting Officer | Peter E. Nordstrom | | Co-PresidentPresident & Chief Brand Officer | Erik B. NordstromKenneth J. Worzel | | Co-PresidentChief Customer Officer | Michael G. KoppelAlexis DePree | | Executive Vice President andChief Supply Chain Officer | Anne L. Bramman | | Former Chief Financial Officer | Christine F. DeputyEdmond Mesrobian | | Former Chief Technology & Information Officer |
Executive Vice President – Human ResourcesSummary |
Given the challenging environment, we have been executing with agility since we saw softening trends in late June. We took action to navigate the macroeconomic uncertainty and position our business for success. This included managing expenses to align with sales expectations, optimizing product mix and clearing through excess inventory. While this strategy required more markdowns than we had initially planned in 2022, we exited the year with inventory levels down 15% and are positioned for greater agility amidst continuing macroeconomic uncertainty. While we navigate this ever-shifting landscape, we remain committed to our long-term strategic and financial goals. We also continue building capabilities to better serve customers and deliver increased profitability, with a focus on improving Nordstrom Rack performance, winning in our most important markets and leveraging our digital capabilities. We have a loyal customer base and acquired approximately 10 million new customers and 2.5 million new Nordy Club members in 2022. In 2023, we will build on these successes through three priorities: improving Nordstrom Rack performance, increasing our inventory productivity and optimizing our supply chain. Improve Nordstrom Rack Performance: We are committed to delivering profitable growth while improving the customer experience through three key initiatives. The first is increasing our supply of premium brands at Nordstrom Rack by prioritizing 100 nationally recognized strategic brands that help us drive sales and grow market share. We are dedicated to having great brands at great prices ateach of our locations, and these brands are a differentiator for the Rack as many are not widely available in the off-price space. 37 | | 2023 Proxy Statement | |
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In May 2015,Table of Contents
COMPENSATION OF EXECUTIVE OFFICERS These brands accounted for half of Rack sales in 2022, and they make up 60% of our on-order for the first half of 2023. The second is focusing on expanding our reach and convenience for customers through opening new Rack stores. Rack stores are our largest source of new customer acquisition and we have an opportunity to attract more customers and drive profitable growth through a proven model. We opened two new Rack stores in 2022 and have announced plans to open many more in 2023 and beyond. Finally, we aim to drive greater engagement and higher profitability at NordstromRack.com. Our digital capabilities are unique in the appointment of Blake Nordstrom, Peter Nordstromoff-price space, and Erik Nordstrom as Co-Presidents of Nordstrom, Inc. The three executives retained their current roles and responsibilities and willwe see opportunities to leverage our digital assets to increase engagement with Rack customers. We also continue to serveoptimize our operational model to drive improved profitability. In the third quarter of 2022, we reduced Rack store-based order fulfillment and raised the minimum order amount to receive free ship-to-store delivery on NordstromRack.com. Increase Inventory Productivity: Better inventory discipline across our operations provides customers with relevant and new assortments from the Nordstrom Board of Directors where they are engagedworld’s best brands. Supply chain disruptions and volatility over the past three years had a significant impact on our inventory management and outcomes. As supply chains have stabilized, we have a significant opportunity to improve our earnings and returns on invested capital through increased productivity from our merchandise inventory, which is our largest annual investment. Optimize Our Supply Chain: We made significant progress on our supply chain initiatives in developing the Company’s long-range strategic plans. There were no changes to their annual compensation as a result of their appointments as Co-Presidents. For purposes of our filings with the SEC, including this annual Proxy Statement, Blake Nordstrom is considered our Principal Executive Officer. In June 2015, Christine Deputy joined Nordstrom as the Executive Vice President – Human Resources. 2015 Snapshot
Continued Growth Despite Challenging Retail Environment
In 2015, we continued to grow our business despite a more challenging retail environment2022, which drove improvement in the second half of the year. We added nearly $1B to our top-line, delivering total net sales growth of 7.5% and a comparable sales increase of 2.7%.
During the year, we achieved the following milestones in executing our customer strategy:
• | Opened our first international flagship store in Vancouver, British Columbia, the most successful opening in our Company history. | | | • | Grew Nordstromrack.com/HauteLook by 47%, reaching over $500M in sales. | | | • | Expanded our fulfillment network with our third fulfillment center in Elizabethtown, Pennsylvania, located within two-day delivery of approximately half the U.S. population. | | | • | Initiated a strategic partnership with TD Bank on October 1, 2015, which included the sale of a substantial majority of our U.S. Visa and private label credit card receivables to TD. | | | • | Returned $2.4B to shareholders through share repurchase and dividends, of which $1.8B resulted from the sale of our credit card receivables. | | | • | Added over $400M to our top-line growth from our investments in HauteLook, Canada and Trunk Club. | | | • | Opened five Nordstrom full-line stores, including two in Canada, and 27 Nordstrom Rack stores. | | | • | Increased the number of new and total customers. |
These milestones are the outcome of our strategy to serve customers on their terms and to deliver the Nordstrom experience they expect. Several years ago, we began to accelerate growth in multiple channels to evolve the customer experience that merges the richness of storesand profitability despite ongoing cost pressures. We made progress on optimizing unit flow, improved productivity in our distribution and fulfillment centers and increased delivery speed. In 2023, we expect to see further benefits from these and additional supply chain optimization actions.
Although there is continued macroeconomic uncertainty heading into 2023, our priorities, along with the convenience of online.capabilities we have built with our Closer to You strategy and digital assets, prepare us to manage short-term pressures. With our strong balance sheet and cash position, we also have the flexibility to respond to shifting demand. We look forwardare navigating short-term headwinds, while also continuing to the opportunities ahead as we continuebuild capabilities to better serve our goal of providing a best-in-class customer experience through service, productcustomers, drive profitable growth and capabilities across all channels at Nordstrom.increase shareholder value. Shareholders Support our Compensation Program Our shareholders approved our Board’s recommendation to hold Say-on-Payexecutive compensation advisory votes on an annual basis so that wethey may communicate frequently and openly express their views about the compensation of our Named Executive Officers.NEOs. Each year since 2011, 94% or more than 90% of the votes cast have been in favorsupportive of our Say-on-Pay proposal. Shareholders have demonstrated strongcompensation programs. The CPCC took investors’ sustained support for our fundamental objective of pay for performanceinto account as we continueit continued to apply these guiding principles:implement similar compensation policies and programs in fiscal year 2022. • | Motivate and reward our people to achieve meaningful results that support our strategic goals and shareholder interests, while avoiding encouragement of excessive risk taking; | | | • | Attract and keep the best talent through programs that reflect our values and consider, but are not dictated by, market practice; | | | • | Ensure the cost of our programs best serve a balance of employee and shareholder business interests; | | | • | Keep things simple to promote understanding for our employees and transparency for our shareholders; and | | | • | Be attuned to trends and new ideas to support our programs and diverse workforce. |
NORDSTROM, INC. -2016 Proxy Statement | 27 |
2015 Highlights Reflect Dynamics of Our Business Model
 Achieved a new record for total net sales at over $14B, a 7.5% increase over our previous high last year.
| |  Generated earnings of $600M reflecting a challenging retail environment and ongoing investments to drive growth.
| |  Delivered a 2.7% increase in comparable sales, with Nordstrom.com achieving 15% growth.
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| | | | | 2014 | | 2015 | | Measures and results |  | • Incentive Return on Invested Capital (“Incentive ROIC”) | | | 13.6 | % | | | 11.0 | % | | used for bonus calculation: | | | | | | | | | | | No Bonus Paid for 2015 | • Incentive Earnings Before Interest and Income Taxes (“Incentive EBIT”) | | $ | 1,391 | M | | $ | 1,246 | M |
See page 33 and Appendix B to learn more about the performance-based bonus pay element including Incentive ROIC and Incentive EBIT results for 2015.
We Emphasize Variable Pay and Balance Short- and Long-Term Incentives Incentive Values In accordance with our pay-for-performancepay-for-performance philosophy, the compensation program for our Named Executive OfficersNEOs is straightforward in design and includes four primary elements: base salary, performance-basedperformance-based bonus, long-term incentivesLTIs and benefits. Within these pay elements, we emphasize variable pay over fixed pay, with approximately 80%at least 70% of our Named Executive Officers’ combinedeach NEO’s target compensation linked to our financial or market results, (excluding one-time payments such as new-hire grants or relocation).with the exception of the Interim Chief Financial Officer and Chief Accounting Officer for whom 55% of target compensation is variable, consistent with other similarly leveled executives. The program also balances the importance of these executives achieving both critical short-termshort-term objectives and strategic long-termlong-term priorities. The following graphics represent fiscal year 2022 target direct compensation (excluding benefits) for the CEO and the President & Chief Brand Officer, and for the other NEOs. | | CEO and
President & Chief Brand Officer | | Average of All Other NEOs | | | | | | 
| | 
| | | | | | 85% | | 73% | | | | | | Performance Based | | Performance Based | | |
Our Variable Pay Reflects Company Performance UnderOur pay-for-performance design includes rigorous performance goals and high performance standards. Further, with a substantial portion of pay in the form of Common Stock, pay outcomes align with our pay-for-performance design,shareholders’ interests. This is evidenced by our NEOs’ recent incentive compensation payouts to the Named Executive Officers inand grant realizable values as of fiscal year 2015 were closely aligned with results for their variable pay components:end 2022, as shown in the following tables.
•
| Performance-based bonuses did not pay out. While our Incentive ROIC achievement of 11.0% exceeded the established threshold of 10.5%, our Incentive EBIT achievement of $1,246M fell below the established threshold of $1,269M. See page 33 and Appendix B to learn more about the performance-based bonus pay element including Incentive ROIC and Incentive EBIT results for 2015. | | | | •2023 Proxy Statement | Performance share units granted under the long-term incentive plan paid out at 75% as our Total Shareholder Return (“TSR”) was positive and outpaced more than half of our retail peers over the 2013-2015 fiscal year performance cycle, surpassing the minimum threshold of greater than 50thpercentile rank. See page 34 to learn more about the long-term incentive pay element and results for 2015. | 38 |
PayoutsTable of Contents
COMPENSATION OF EXECUTIVE OFFICERS INCENTIVE COMPENSATION PAYOUTS | 2018 | 2019 | 2020 | 2021 | 2022 | Annual bonus payout as a % of target on Incentive Adjusted EBIT measure(a) | 89% | 44% | 0% | 128% | 0% | PSU vesting (payout as a % of target)(b) | 0% | 0% | N/A | 0% | N/A |
GRANT REALIZABLE VALUES | 2018 | 2019 | 2020 | 2021 | 2022 | PSUs (realizable value as a % of grant value) | N/A | 0% | N/A | 0% | 44% | RSUs (realizable value as a % of grant value) | 64% | 65% | 101% | 38% | 62% | Stock options (realizable value as a % of grant value) | N/A | 0% | 70% | 0% | 0% |
The table above reflects realizable values shown as a percent of grant values, based on the actual values at time of vest and current unvested values using our 2022 fiscal year-end stock price of $18.42 and a 75% payout percentage for the 2022 PSU awards (the minimum percentage that would have been closely aligned with Company resultsearned as well. The graphs on the following page show the average performance-based payouts to our Co-Presidents relative to Incentive EBIT and TSR ranking forof fiscal year 2015end 2022). PSUs, RSUs and stock options are shown in the four prior years. This patterncolumn matching the year of pay for performance is consistent for the other Named Executive Officers during these periods.grant. NORDSTROM, INC. -2016 Proxy Statement | 28 |
Annual EBIT Results are used to determine performance-based bonus payouts and, as in 2015, may reflect related adjustments under the Executive Management Bonus Plan. See page 33 and Appendix B to learn more about the performance-based bonus pay element including Incentive ROIC and Incentive EBIT results for 2015. | | 3-Year TSR Ranking is based on our TSR results for the performance period, relative to our peers. See page 34 to learn more about long-term incentive pay. |
The PSUs granted on March 9, 2020 were cancelled on August 18, 2020, as discussed in footnote (c) of the Summary Compensation CommitteeTable, and are not reflected in the above table. The CPCC reviews these results and other analyses to ensurewith the Named Executive Officers’goal of ensuring that the NEOs’ aggregate compensation aligns with shareholder interests. Based on these and other outcomes, the Compensation CommitteeCPCC believes that total direct compensation for our Named Executive OfficersNEOs reflects our pay-for-performance objectivepay-for-performance philosophy and is well-alignedwell aligned with shareholder interests. 39 | | 2023 Proxy Statement | |
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NORDSTROM, INC. -2016 Proxy Statement | 29 |
Table of Contents COMPENSATION OF EXECUTIVE OFFICERS Effective Corporate Governance Reinforces Our Compensation Program Our executive compensation philosophy for our executive team, including our NEOs, is reflected in governance practices that support the needs of our business, drive performance and align with our shareholders’ long-termlong-term interests. Below is a summary of what we do and don’t do in that regard. WHAT WE DO | | WHAT WE DON’T DO |  ✓ | Pay for performance:-for-performance: Our compensation program for Named Executive OfficersNEOs emphasizes variable pay over fixed pay, with approximately 80%at least 70% of their collectiveeach NEO’s target compensation linked to our financial or market results.results, with the exception of the Interim Chief Financial Officer and Chief Accounting Officer, for whom 55% of target compensation is variable, consistent with other similarly leveled executives. | | 
| Provide employment agreements. | | 
| Offer separation benefits to our NEOs who are Nordstrom family members. | ✓ | Retain meaningful stock ownership guidelines:Our expectations for ownership align executives’ interests with those of our shareholders, and all Named Executive OfficersNEOs have exceeded their targets. | |
| Offer special perquisites to our NEOs. | ✓ | Mitigate undue risk: We have caps on potential performance-based bonus payments, a clawback policy on performance-basedperformance-based compensation and active and engaged oversight and risk management systems, including those related to compensation-relatedcompensation-related risk. | |
| Maintain separate change in control agreements. | |
| Gross up taxes, except in the case of selected relocation expenses. | ✓ | Engage an independent compensation consulting firm:The Compensation Committee’sCPCC’s consultant does not provide any other services to the Company. | |
| Reprice underwater stock options. | ✓ | Apply conservative post-employmentpost-employment and change in control provisions:Executive Officers are subject to provisions in the same manner as those for our broader employee population.provisions. | |
| Issue grants below 100% fair market value. | ✓ | Limit accelerated vesting:Our equity plan provides for accelerated vesting of equity awards after a change in control only if an executive is involuntarily terminated by the Company without cause or resigns for good reason, a provision referred to as a “double trigger.” | |
| Pay dividends on any unearned or unvested equity awards. | |
| Permit hedging or short-sale transactions. | ✓ | Restrict pledging activity: All Executive Officers are subject to pre-clearancepre-clearance requirements and restrictions. | |
| Count pledged shares toward stock ownership targets. | ✓ | Receive strong shareholder support: Each year since 2011, 94% or more than 90% of the votes cast have been in favorsupportive of our Say-on-Pay proposal.compensation programs. |
Our Pay and Benefits Philosophy
•We believe that if our customers win, our employees and shareholders win – our interests are aligned. NORDSTROM, INC. -2016 Proxy Statement | 30 |
Context•We pay for Understanding Our Compensation Programperformance by investing in talent that delivers results and Decisionsdemonstrates the behaviors that drive our success, while not encouraging excessive risk taking.
This section provides background on the roles involved in determining compensation•We deliver competitive pay and benefits for all jobs and differentiate pay for critical jobs that directly impact our Named Executive Officers, our use of market data and the companies selected for our peer group.
Our Roles in Determining Compensation are Well Defined
Compensation Committee
Our Compensation Committee (“Committee”) oversees the development and delivery of our guiding principles and compensation plans for the Named Executive Officers and other executives as described in the Committee Charterability to deliver on our website atinvestor.nordstrom.com.strategy.
•We use objective market data to design flexible pay and benefits programs to help attract, retain, motivate and reward our employees and meet the needs of specific talent groups. As part of that oversight,•We provide equal pay and promotion opportunities for all employees and give them the Committee ensures the Named Executive Officers’ aggregate compensation aligns with shareholder interests by reviewing analyses that includes:information they need to clearly understand their pay and effectively manage their careers.
•
| Cash alignment to evaluate the short-term incentive payouts relative to our EBIT performance results. | | | | •2023 Proxy Statement | Relative pay and performance to compare the percentile rankings of our total direct compensation (base salary + performance-based bonus + long-term incentives) with financial performance metrics of our peer group. | 40 |
Compensation Committee Consultant
The Committee’s independent executive compensation consulting firm, Semler Brossy Consulting Group, LLC (“Semler Brossy”), is retained by, and reports directly to, the Committee. A consultant from that firm attends the Committee meetings and supports the Committee’s role by providing independent expertise on market practices, compensation program design and related subjects as described on page 15. Semler Brossy provides services only as directed by the Committee and has no other relationship with the Company. There were no fees paid to Semler Brossy for services that were not related exclusively to executive or Director compensation during fiscal year 2015.
Management
Our Co-Presidents provide input to the Committee on the level and designTable of compensation elements for the Named Executive Officers and other Executive Officers, excluding themselves. Our Executive Vice President – Human Resources joins the Co-President(s) in Compensation Committee meetings to provide perspective and expertise relevant to the agenda. Management supports the Committee’s activity by providing analyses and recommendations developed internally or occasionally with the assistance of external consulting firms other than the Committee’s consulting firm. Management did not utilize any external consultants for such assistance in 2015.Contents
COMPENSATION OF EXECUTIVE OFFICERS Market Data Provides a Reference Point for Compensation
The Committee believes that knowledge of market practices, particularly those of our peers listed on the following page, is helpful in assessing the design and targeted level of our executive compensation package. In reviewing peer group information, the Committee uses a customized survey prepared by external consultants (Hay Group), monitors general market movement for executive pay and references proxy statements for specific roles.
During the year, the Committee also reviews general information from other published and private surveys to keep current on trends and practices while recognizing the differences across companies’ philosophies and plan designs.
When the Committee reviews market data, they consider the 50thpercentile (median) of our peer group as a reference point, rather than a policy, for positioning target total direct compensation. Target opportunities for individual pay elements vary by executive role based on scope of responsibilities and expected contributions.
Blake Nordstrom, Peter Nordstrom and Erik Nordstrom’s target total direct compensation for 2015 was below our peer group median. Michael Koppel and Christine Deputy’s target total direct compensation was within a competitive range of our peer group median. Actual pay for the Named Executive Officers can exceed our established targets or peer group actual pay through the variable compensation elements when pre-determined performance milestones are achieved.
Peer Group Companies Represent Our Business
Each year, the Committee reviews the appropriateness of our peer group for comparison on pay and related practices. While the companies represent prominent brands and specialty retailers that are relevant to Nordstrom, they may not always have a direct match to our product offerings or annual revenue. However, the peer group companies meet the following selection criteria:
• | collective representation of our primary business areasincluding our full-price, off-price, in stores, and online business and private label products; | | | • | some overlap with our industry group as defined by institutional shareholders and shareholder service organizations; | | | • | general compatibility with our compensation strategy through a competitive offering of the primary pay elements of base salary, performance-based bonus and long-term incentives; and | | | • | public company subject to similar market pressures with a track record of sustainability. |
NORDSTROM, INC. -2016 Proxy Statement | 31 |
Our peer group used for determining compensation in fiscal year 2015 was comprised of the following retail companies:
Abercrombie & Fitch Co. | | Kohl’s Corporation | | Starbucks Corporation | Bed Bath & Beyond, Inc. | | L. Brands, Inc. | | Tiffany & Co. | Coach, Inc. | | Macy’s, Inc. | | The TJX Companies, Inc. | Dillard’s, Inc. | | Neiman Marcus, Inc. | | Urban Outfitters, Inc. | Foot Locker, Inc. | | Nike, Inc. | | VF Corporation | Gap, Inc. | | Ralph Lauren Corporation | | Williams-Sonoma, Inc. | J.C. Penney Company, Inc. | | Ross Stores, Inc. | | |
During 2015, as part of its annual review of peer companies to be used for compensation comparison purposes, the Committee updated the peer group for 2016 by (1)removingAbercrombie & Fitch Co. due to its decreasing size, and (2)adding Michael Kors Holdings Limited and The Estee Lauder Companies, Inc. because both fit within our selection criteria.
Each Element of Compensation Has itsIts Own Purpose Our compensation program for Named Executive OfficersNEOs is made up of four primary elements outlined below.on the following table. Each element has its own purpose based on our fundamental premise of pay for performance-for-performance and our guiding principles.pay and benefits philosophy, as previously described. Additional information is provided on the following page in the “About Our Compensation Elements, What We Paid in 2015 and Why” section. pages. Compensation Element | | Purpose | Base Salary
(Page 33)41) | | Reflect scope of the role and individual performance through base-linebase-line cash compensation. | Performance-Based Annual
Cash Bonus
(Page 33)42) | | Motivate and reward contributions to annual operating performance and long-termlong-term business strategy with cash that varies based on results. | Long-Term Incentives
LTIs
(Page 34)42) | | Promote alignment of executive decisions with Company goals and shareholder interests through stock options, performance share units and restricted stock units where value varies with Company stock performance. | Benefits
(Page 35)44) | | Provide meaningful and competitive broad-based,broad-based, leadership and retirement benefits that support healthy lifestyles and contribute to financial security. |
Only Base Pay Values ChangedChanges for 2015
2022 On an annual basis, the CommitteeCPCC reviews base salary, performance-basedperformance-based bonus target opportunity and long-term incentiveLTI target grant value for each of the Named Executive OfficersNEOs in consideration of the upcoming fiscal year. CommitteeCPCC decisions for fiscal year 20152022 targets are summarized belowin this section and shown as a comparisonyear over year comparison. See LTIs on page 42 for information on special equity grants and CPCC discretion to increase the 2022 LTI grant value for Michael Maher. | Base Salary
($) | | Performance-Based
Annual Cash Bonus
(Target Opportunity
as a % of Base Salary) | | LTI
Annual Grant
(Target Grant Value
as a % of Base Salary) | Name | FYE 2021 | FYE 2022 | | FYE 2021 | FYE 2022 | | FYE 2021 | FYE 2022 | Erik B. Nordstrom | 758,500 | 758,500 | | 200 | 200 | | 350 | 350 | Michael W. Maher | 441,000 | 525,000 | | 50 | 50 | | 70 | 70 | Peter E. Nordstrom | 758,500 | 758,500 | | 200 | 200 | | 350 | 350 | Kenneth J. Worzel | 895,000 | 895,000 | | 125 | 125 | | 250 | 250 | Alexis DePree | 570,000 | 650,000 | | 80 | 80 | | 150 | 150 | Anne L. Bramman | 815,000 | 845,000 | | 100 | 100 | | 200 | 250 | Edmond Mesrobian | 800,000 | 825,000 | | 80 | 80 | | 150 | 150 |
In 2022, the CPCC approved increases to base salaries for Michael Maher, Alexis DePree, Anne Bramman and Edmond Mesrobian. •To maintain his relative market competitiveness, Michael Maher’s base salary increased from $441,000 to $456,435 on March27, 2022, and then from $456,435 to $525,000 on November27, 2022 to reflect his expanded responsibilities as Interim Chief Financial Officer and Chief Accounting Officer. •To maintain relative market competitiveness, the CPCC also approved the following base salary increases: Alexis DePree’s base salary increased from $570,000 to $595,000 on March27, 2022 and from $595,000 to $650,000 on June5, 2022, Anne Bramman’s base salary increased from $815,000 to $845,000 on March27, 2022 and Edmond Mesrobian’s base salary increased from $800,000 to $825,000 on June5, 2022. •The base salaries of 2014 and 2015 fiscal year end (“FYE”) amounts. The Committee believes these elements and the overall compensation program are meeting the expectations for our pay-for-performance philosophy and guiding principles. | | | | | | | | | Performance-Based | | Long-Term Incentives | | | | | | | | | | Annual Cash Bonus | | Annual Grant | | | | Base Salary | | (Target Opportunity as % of | | (Grant Value as % of | | | | ($) | | Base Salary) | | Base Salary) | | Name | | FYE 2014 | | | FYE 2015 | | | FYE 2014 | | | FYE 2015 | | | FYE 2014 | | | FYE 2015 | | | Blake W. Nordstrom | | | 725,000 | | | | 740,000 | | | | 200 | | | | same | | | | 250 | | | | same | | | Peter E. Nordstrom | | | 725,000 | | | | 740,000 | | | | 200 | | | | same | | | | 250 | | | | same | | | Erik B. Nordstrom | | | 725,000 | | | | 740,000 | | | | 200 | | | | same | | | | 250 | | | | same | | | Michael G. Koppel | | | 748,800 | | | | 770,000 | | | | 90 | | | | same | | | | 175 | | | | same | | | Christine F. Deputy(a) | | | N/A | | | | 525,000 | | | | N/A | | | | 80 | | | | N/A | | | | 150 | |
(a) | Christine Deputy joined the Company in June 2015. |
NORDSTROM, INC. -2016 Proxy Statement | 32 |
About Our Compensation Elements, What We Paid in 2015 and Why
Base Salary
all other NEOs remained unchanged. The CommitteeCPCC made no changes to target bonus opportunities for any of the NEOs. In 2022, the CPCC approved an increase of Anne Bramman’s target LTI grant value as a percent of base salary from 200% to 250% to maintain her relative market competitiveness. The target LTI grant as a percent of base salary of all other NEOs remained unchanged. Base Salary The CPCC begins its annual review of base salary for the Named Executive OfficersNEOs through discussion with the Co-PresidentsCEO and the President & Chief Brand Officer on the expectations and achievements of each executive during the previous year, as well as their pay history and pay equity with other internal roles. The CommitteeCPCC then references our pay levels to similar roles in peer companies to ensure they are within a competitive range of the peer group median. Named Executive Officers NEOs do not necessarily receive increases in base salary every year. When they do, the changes are generally effective on or about April 1st1st following their annual performance review, which includes a discussion about individual results against defined expectations.
41 | | 2023 Proxy Statement | |
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For 2015, Blake Nordstrom, Peter Nordstrom, Erik Nordstrom and Michael Koppel received increases in base pay to acknowledge their performance and maintain relative market competitiveness.Table of Contents
COMPENSATION OF EXECUTIVE OFFICERS Performance-Based Annual Cash Bonus The opportunity for annual performance-basedperformance-based cash awards under our shareholder-approvedshareholder-approved Nordstrom, Inc. Executive Management Bonus PlanEMBP is designed to focus the Named Executive OfficersNEOs on the alignment between annual operating performance and long-termlong-term business strategy. In determining the target bonus opportunities, the CPCC takes into account the mix of pay elements, market pay information for similar roles within our peer group and the internal relationship between roles within the Company. In support of our guiding principles,pay-for-performance philosophy, the performance-basedmaximum bonus awards paypayout, which is associated with superior performance, is 2.5 times an executive’s target bonus opportunity. This maximum is higher than is common among our retail peers because we believe it is important to continue encouraging and paying rewards when we achieve truly superior results. Under our approach, truly superior results are rarely achieved. In the past ten years, we have not paid out only when pre-determinedbonuses in excess of 150% of target. For fiscal year 2022, the CPCC maintained the same financial performance milestones are achieved.measures and weighting of Incentive Adjusted EBIT, which emphasizes the importance of earnings and its role in driving shareholder value, and Incentive Adjusted ROIC, which ensures our overall performance aligns directly with shareholder returns over the long term. The Committee establishesCPCC retained the ability to differentiate payouts for eligible roles, indicated in the following criteria in developingtable, based on individual contributions and execution against goals. For the annualportion of the year prior to assuming the Interim Chief Financial Officer role, Michael Maher was eligible for the broad-based bonus arrangements: plan, for which the measures were Net Sales and Incentive Adjusted EBIT. • | Target bonus opportunity: In determining the target percentage of base salary shown on page 32, the Committee takes into account the mix of pay elements, market pay informationMeasure and Weighting | Opportunity for similar roles within our peer group and the internal relationship between roles within the Company.Individual Bonus Differentiation | CEO and President & Chief Brand Officer | 100% Incentive Adjusted EBIT subject to achievement of the Incentive Adjusted ROIC threshold | No | Other NEOs | In support100% Incentive Adjusted EBIT subject to achievement of our pay-for-performance philosophy, the maximum bonus payout, which is associated with superior performance, is 2.5 times an executive’s target bonus opportunity. This maximum is higher than is common among our retail peers because we believe it is important to continue encouraging and paying rewards when we achieve truly superior results. | | Incentive Adjusted ROIC threshold | | • | Performance measures: The Committee establishesYes, applied after the calculation of outcomes on the financial performance measures to focus executives on the most important annual and long-term strategic goals. For fiscal year 2015, the Named Executive Officers all had the following measures: | | |
| – | ROIC to ensure our overall performance aligns directly with shareholder returns over the long term. The measure is expressed as a threshold that must be met before any payout can be made on EBIT results to ensure our executives are rewarded only after earnings generate a meaningful return for our shareholders. | | | | | – | EBIT to emphasize the importance of earnings and its role in driving shareholder value. Each executive’s performance-based bonus was weighted 100% on this measure, subject to the ROIC threshold. | | | |
• | Performance measure milestones: The Committee defines financial milestones for ROIC (as a threshold) and EBIT (as a range) that relate to varying percentages of bonus payout. The difficulty level in achieving the milestones reflects the Committee’s belief that there should be a balance between executive pay opportunity, reinvestment in the Company and return to shareholders. | | | | In accordance with our bonus plan, ROIC and EBIT achievement used to determine bonus payout may differ from ROIC and EBIT, as reported in our Form 10-K filed on March 14, 2016, due to the exclusion of certain one-time gains or losses. In this situation, we refer to the measure achievements as Incentive ROIC and Incentive EBIT. This is the case for 2015 where achievements reflect non-operating related adjustments not included in the financial plan. | | |
| – | The ROIC threshold was set at a level consistent with the minimum EBIT performance to ensure that an appropriate return on our invested capital was achieved before any bonus was paid out. The 2015 Incentive ROIC achievement of 11.0% exceeded the established threshold of 10.5%. | | | | | – | The minimum EBIT performance milestone was established at a likely, but not certain, level of attainment and was based on growth assumptions for sales and earnings. The minimum performance milestone ensures no payout is earned until a defined level of EBIT is achieved. The target performance represents stretch results relative to growth in the annual operating plan, our historical performance trends, market conditions and current external projections for the Company. The superior performance milestone indicates breakthrough results and considers earlier periods of strong earnings growth. The 2015 Incentive EBIT achievement of $1,246M fell below the minimum performance milestone of $1,269M required for payout. |
The CPCC defines financial milestones for Incentive Adjusted ROIC (as a threshold) and Incentive Adjusted EBIT (as a range) that relate to varying percentages of bonus payout. The difficulty level in achieving the milestones reflects the CPCC’s belief that there should be a balance between executive pay opportunity, reinvestment in the Company and return to shareholders. Because theIn accordance with our EMBP, Incentive Adjusted EBIT performance threshold was not achieved, no performance-based bonuses were awardedand Incentive Adjusted ROIC achievement used to determine bonus payout may differ from EBIT and Adjusted ROIC, as reported in our Named Executive Officers2022 Annual Report. Beginning in 2015. The fiscal year 20152021, our Incentive Adjusted EBIT measure excluded certain performance milestones-based compensation elements in order to be more reflective of business performance. Incentive Adjusted EBIT and Incentive EBIT achievement are shown below. IncentiveAdjusted ROIC and Incentive EBIT are not measures of financial performance under Generally Accepted Accounting Principles (“GAAP”)GAAP and should be considered in addition to, and not a substitute for, return on assets, net earnings, total assets andor other GAAP financial measures prepared in accordance with GAAP.measures. See Appendix BA for a reconciliation of GAAP and non-GAAPnon-GAAP financial measures.
2022 Bonus Measure Outcomes and Payouts 2015Our Incentive Adjusted EBIT Milestonesachievement missed our threshold of $906 million and Bonus PayoutIncentive Adjusted ROIC missed the threshold of 11.0%, resulting in a 0% bonus payout. The performance-based annual cash bonus results for the EMBP are summarized in the following table. For the portion of the year prior to assuming the Interim Chief Financial Officer role, Michael Maher was eligible for the broad-based bonus plan, for which the measures were Net Sales and Incentive Adjusted EBIT, and for which his payout was also 0%.
| | Milestones | | Name | Bonus Measures | Threshold | Target | Superior | Actual | All NEOs | Incentive Adjusted EBIT | $906M | $1,158M | $1,662M | $524M | % of Payout | 25% | 100% | 250% | 0% | Subject to Incentive Adjusted ROIC threshold | 11.0% | 7.7% |
| | | Minimum | | Threshold | | Target | | Superior / Maximum | | Actual Achievement | | EBIT Performance | | Less than $1,269M | | $1,269M | | $1,349M | | $1,415M or Greater | | $1,246M | | Bonus Payout Level | | | | | | | | | | | | % of Executive’s Target Bonus Opportunity | | 0% | | 25% | | 100% | | 250% | | 0% |
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Long-Term Incentives
LTIs Annual grants of equityLTIs under the shareholder-approved 2010 Equity Incentive Planour shareholder-approved EIP are intended to provide the Named Executive OfficersNEOs with additional incentive to create shareholder value and receive financial rewards. The long-term incentive value that determines the size of the annual grant to Named Executive Officers is expressed as a percentage of base salary as shown on page 32. In establishing the long-term incentiveLTI annual grant value at grant for each Named Executive Officer,NEO, the CommitteeCPCC considers the mix of pay elements, market pay information for similar roles within our peer group, our annual share usage and dilution, performance and internal equity of grant size by role. The grant value of the equity awarded to the Named Executive Officers, other than Christine Deputy, in the fiscal year 2015 annual grant consisted of 50% stock options, 25% performance share units and 25% restricted stock units. Because Christine Deputy was hired midyear, she did not receive performance share units as part of her annual grant. Instead, she received the grant value as 50% stock options and 50% restricted stock units. In addition to the 2015 annual grant, Christine Deputy received a new-hire grant consisting of restricted stock units, as reported on page 43. The CommitteeCPCC typically approves LTI annual grants of equity awards during the February CommitteeCPCC meeting, which is scheduled at least a year in advance. Scheduling decisions are made without regard to anticipated earnings or other major announcements by the Company. The February meeting occurs after performance results for the prior year are known, which allows the CommitteeCPCC to align compensation elements with our performance and business goals.
Stock Options, Performance Share UnitsIn 2022, performance-based equity was reintroduced into the LTI annual grant mix. The target annual grant mix for all NEOs, except Michael Maher, is 60% PSUs and Restricted Stock Units Create the Right Balance40% stock options.
The Committee believes the relationship between our equity vehicles represents the right balance of absolute and relative performance.
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| Stock options provide motivation for creating increased value while aligning management and shareholder interests in our growth. The options vest and become exercisable in four equal annual installments and have a 10-year term. None of our equity incentive plans permit repricing, grant prices below 100% of the fair market value of Common Stock on the date of grant or cash dividend payments on options. | | | 2023 Proxy Statement | • | Performance share units focus the executives on relative performance compared to companies in Standard & Poor’s 500. The units are earned after a 3-year performance cycle only when the Company’s TSR outperforms more than 50% of the companies identified for that grant. The Committee believes relative TSR is a meaningful measure for performance share units as it aligns with shareholder interests and complements the measures established for executives under the performance-based bonus plan. | | | | | For purposes of determining the TSR percentile rank, the share price of our Common Stock and the share prices of the companies in the peer group are based on a 30 trading-day closing price average that is established both prior to the beginning of the performance cycle and prior to the end of the performance cycle. These parameters recognize the importance of relative performance while balancing against volatility within the peer group. | | | | In keeping with our pay-for-performance philosophy, our approach to performance share units requires a high standard of performance before any payout may be earned. Given the potential leverage that we offer through the performance-based bonus plan and the value that could be realized from stock options and restricted stock units, the Committee believes this is the appropriate way to balance rewards. | | | | The performance share units are earned on the last day of the 3-year cycle if performance criteria have been met, and become vested when the results have been certified by the Committee. The Named Executive Officers may elect to defer their vested units into the Executive Deferred Compensation Plan described on page 49. | | | • | Restricted stock units complement our objectives for balancing award value through both absolute and relative stock performance. Units granted as part of the annual grant vest in four equal annual installments.42 |
2013 Performance Share Units Paid Out at 75%Table of Contents
COMPENSATION OF EXECUTIVE OFFICERS Performance share units for the 2013-2015 fiscal year performance cycle were granted•The PSUs will pay out based on the vesting schedule shown below. Atcumulative sales and EBIT margin % over a three-year performance period ending on February1, 2025. Goals for the PSUs are aligned with the Company’s forward-looking strategy communicated at the February 2021 Investor Event. The CPCC believes that these measures reflect the Company’s key areas of strategic focus over the next three years. The minimum percentage of PSUs that can be earned at the end of the three-yearperformance cycle our TSRis 75% and the maximum is 150%.
•The stock options will vest 50% in year three and 50% in year four, to emphasize the long-term nature of 0.88% outpaced more than halfthe award. Michael Maher’s 2022 LTI annual grant mix was composed of our retail peers, meeting75% RSUs with four-year equal vesting and 25% stock options vesting 50% in year three and 50% in year four. The CPCC retains discretion to approve LTI annual grants above and below the minimum thresholdtarget grant value as a percent of greater than 50thpercentile, which is requiredbase salary in any given year to reflect an individual’s contributions to delivering shareholder value. The CPCC used its discretion to modify the 2022 LTI annual grant value as a percentage of base salary from 70% to 90% for payout. The value realized on vesting is included in the Option ExercisesMichael Maher to recognize his performance and Stock Vested in Fiscal Year 2015 table on page 47.expected future contributions. Required Percentile
Rank for Vesting | | % of Granted Performance Share Units
Paid Out at Vesting | | >90th | | | 175 | | >80th | | | 150 | | >75th | | | 125 | | >65th | | | 100 | | >50th | | | 75 | | ≤50th | | | 0 | |
One-Time Equity Awards At the timeMay 2022 meeting, the CPCC approved special RSU grants which were awarded on May 26, 2022 and vest 50% on June 10, 2024 and 50% on June 10, 2025 to Michael Maher, Alexis Depree and Edmond Mesrobian. To mitigate retention risk, Michael Maher was awarded a grant of grant$1,200,000. Due to the highly critical role that Supply Chain and Technology play in 2013,meeting our peer group for performance share units included the companies listed below. Saks was removed from the peer group in 2013 after it was acquired. ANN, INC. was removed from the peer group in 2015 after it was acquired.ambitions relative to our Closer to You strategy, Alexis DePree and Edmond Mesrobian were awarded grants of $1,000,000 and $850,000, respectively. Edmond Mesrobian forfeited all unvested equity, including this award, upon his separation on October 14, 2022. Abercrombie & Fitch Co. | | Macy’s, Inc. | ANN, INC. | | Saks Incorporated | Chico’s FAS, Inc. | | Sears Holdings Corporation | Coach, Inc. | | Target Corporation | Dillard’s, Inc. | | Tiffany & Co. | Gap, Inc. | | The TJX Companies, Inc. | J.C. Penney Company, Inc. | | Urban Outfitters, Inc. | Kohl’s Corporation | | VF Corporation | L. Brands, Inc. | | |
2014 and 2015 Performance Share Units are Still in Process
The 3-year performance cycle for the 2014 performance share units runs February 2, 2014 through January 28, 2017. The 3-year performance cycle for the 2015 performance share units runs February 1, 2015 through February 3, 2018. The vesting schedule for these grants is the same as shown above, and the peer group is comprised of companies in the Standard & Poor’s 500 as of the first day of the performance cycle.
Adjustment of Outstanding Equity Awards Upon Special Dividend
The shareholder-approved 2010 Equity Incentive Plan requires that outstanding equity awards be adjusted in the event of a special dividend payment in order to maintain the economic value of outstanding awards. As a result, upon the sale of a substantial majority of the Company’s credit card receivables and the Board’s declaration of a special dividend on
NORDSTROM, INC. -2016 Proxy Statement | 34 |
October 1, 2015, outstanding equity awards and option exercise prices were adjusted. The adjusted values are reflected in the Grants of Plan-Based Awards in 2015 table on pages 42 and 43, Outstanding Equity Awards at Fiscal Year-End 2015 table on page 45, Option Exercises and Stock Vested in Fiscal Year 2015 table on page 47, and Equity Compensation Plans table on page 55.
Stock Ownership Guidelines Align Executives and Shareholders Ownership of Common Stock byTo align our Named Executive Officers and other Executive Officers is encouraged by management and the Board to align executives’ interests with those of our shareholders. As a result,shareholders and to ensure that our executives own meaningful levels of Company stock throughout their tenures with the Company, our stock ownership guidelines were formally established in 2004. Ownership shares are made up of all forms of Common Stock, as well as vested performance share unitsPSUs that are deferred, PSUs with a minimum payout of more than zero and unvested restricted stock units.RSUs. Ownership shares do not include unvested or vested stock options, unvested performance share unitsPSUs with a minimum payout of zero or pledged shares.
The Named Executive OfficersNEOs and other Executive Officers have an annuala share target defined as base salary on each April 1st1st multiplied by their ownership multiple of base salary divided by the 52-weeka 52-week average closing stock price set each April 1st.price. The ownership multiples of base salary depend on the executive’s role in the Company and are as shown in the following table for the Named Executive Officers.NEOs. The CommitteeCPCC has assigned these particular multiples to match or exceed market practice, and to represent a significant portion of the overall compensation package to reinforce the alignment of management’s decision making-making with shareholder interests. | | Multiple of Base Salary Used to | Position | | Establish Ownership Target | Co-President | | | 10x | Executive Vice President and Chief Financial Officer | | | 4x | Executive Vice President – Human Resources | | | 3x |
Executives will be deemed to be in compliance with the stock ownership guidelines once their holdings of Common Stock meet or exceed the threshold, and will remain in compliance, unless and until the executive sells shares. Under our guidelines, Named Executive OfficersNEOs and other Executive Officers are required to arrange for stockconduct any open market transactions in Common Stock only in accordance with an approved SEC Rule 10b5-110b5-1 trading plan. Theseplan or with pre-clearance from the Chief Legal Officer during an open trading window. Transactions pursuant to SEC Rule 10b5-1 trading plans predetermine the timing, number of shares and price at which an Executive Officer may buy or sell Company shares. The Executive Officers must also achieve and retain a minimum holding of 100% of their ownership targets before they may sell or otherwise dispose of Company shares. Executive Officers have five years to achieve their target. The CommitteeCPCC regularly reviews stock ownership status for the Named Executive Officers. All of the Named Executive Officers have exceeded theirNEOs. Each continuing NEO has met his or her respective stock ownership targets.guideline. Position | Multiple of Base Salary Used to Establish Ownership
Target | Chief Executive Officer | 10x | Interim Chief Financial Officer and Chief Accounting Officer | 1x | President & Chief Brand Officer | 10x | Chief Customer Officer | 4x | Chief Supply Chain Officer | 3x | Former Chief Financial Officer | 4x | Former Chief Technology & Information Officer | 3x |
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Table of Contents COMPENSATION OF EXECUTIVE OFFICERS Benefits NordstromThe Company offers the Named Executive OfficersNEOs a comprehensive program of broad-based,broad-based, leadership and retirement benefits. Their purpose varies by benefit, but in general enhancesthey enhance total compensation with meaningful and competitive offerings that support healthy lifestyles and contribute to financial security. These benefits are regularly reviewed for consistency with our guiding principles,pay and benefits philosophy, organizational culture and market practices.
Additional information on 20152022 benefits is provided as noted below. in the following table. | Benefit | | Benefit | | Where to Learn More | Broad-BasedBroad-
Based | | • | Company contribution to medical, dental and vision coverage; short- and long-termlong-term disability; life insurance; adoption assistance; and employee referral assistance. Employee access to accident insurance; health savings account and flexible spending accounts. Employee Stock Purchase Plan. Merchandiseaccounts; ESPP; and merchandise discount. Paid time off.off (or Self-Managed Time Away for executives) | | •For merchandise discount, see All Other Compensation in Fiscal Year 2015,2022, footnote (b)(d) on page 40.50. | Leadership | | • | Salary continuance; long-termLong-term disability coverage; life insurance | | •For long-termlong-term disability and life insurance, see All Other Compensation in Fiscal Year 2015,2022, footnote (a)(b) on page 40.50. | | | •NDCP, including Company match for eligible participants | • | Executive Deferred Compensation Plan | | See Nonqualified Deferred Compensation beginning on page 49.58. | | | •Executive Severance Plan | • | Leadership Separation Plan | | See Potential Payments Upon Termination or Change in Control at Fiscal Year-End 2015,Year-End 2022, footnote (f)(e) on page 54.64. | Retirement | •401(k) match: Company matching contributions are made each pay period an employee contributes to the 401(k) Plan, equal to a dollar for dollar match up to 1% of eligible pay then $0.50 per dollar on the next 6% of eligible pay, up to a maximum of 4% of eligible pay and IRC limits | • | 401(k) match and discretionary profit-based match | | See All Other Compensation in Fiscal Year 2015,2022, footnote (c)(a) on page 41.50. | | | | • | Retiree health care (closed to new entrants in 2013)2013; Erik Nordstrom, Peter Nordstrom and Kenneth Worzel are participants as they were eligible prior to the closure to new entrants) | | •See Potential Payments Upon Termination or Change in Control at Fiscal Year-End 2015,Year End 2022, footnote (e)(d) on page 54.63. | | | | • | Supplemental Executive Retirement Plan (closedSERP (annual benefit capped for current participants; closed to new entrants in 2012)2012; Erik Nordstrom, Peter Nordstrom and Kenneth Worzel are participants as they were eligible prior to the closure to new entrants) | | •See Pension Benefits beginning on page 48.56. |
Changes for 2016 2023 Each year, the CommitteeCPCC reviews the design of our total compensation elements and makes changes as needed to improve alignment with our guiding principles. In 2016,pay and benefits philosophy. At the Committee madeFebruary 2023 meeting, the CPCC approved the following changes:changes for fiscal year 2023: Base Salary For 2016, the Named Executive Officers received increases of approximately 2.5%The CPCC determined to increase Alexis DePree’s base salary from $650,000 to $725,000 effective March 26, 2023, to reflect an increase in base payscope and to maintain relative market competitiveness.
The base salaries of all other NEOs remained unchanged. Performance-Based Annual Cash Bonus The CPCC determined that the target bonus opportunity as a percent of base salary for the NEOs will remain unchanged for 2023. The 2023 bonus opportunity for Michael Maher, Kenneth Worzel and Alexis DePree was modified to include individual operational metrics, weighted at 25% of the bonus opportunity and subject to achieving the Incentive Adjusted EBIT threshold. The plan maintains a focus on Incentive Adjusted EBIT, weighted at 75% of the bonus opportunity and subject to achievement of the Incentive Adjusted ROIC threshold. The 2023 bonus opportunity for Erik Nordstrom and Peter Nordstrom will remain based on 100% Incentive Adjusted EBIT subject to achievement of the Incentive Adjusted ROIC threshold.
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Table of Contents COMPENSATION OF EXECUTIVE OFFICERS LTIs The target LTI grant as a percent of base salary of all NEOs remained unchanged, as did the equity mix and vesting schedules. The CPCC did not use its discretion to modify any NEO target LTI grants for 2023. Our Roles in Determining Compensation Are Well-Defined Compensation, People and Culture Committee Our CPCC oversees the development and delivery of our pay and benefits philosophy and compensation plans for the NEOs and other executives as described in the CPCC charter on our Investor Relations Website. As part of that oversight, the CPCC ensures the NEOs’ aggregate compensation aligns with shareholder interests by reviewing analyses that include: •Cash alignment to evaluate the short-term incentive payouts relative to our financial performance. •Relative pay and performance to compare the percentile rankings of our CEO’s total direct compensation (base salary + performance-based bonus + LTIs) and our Company’s financial performance metrics within our peer group. The total direct compensation of our NEOs within our peer group is also considered. CPCC Consultant The CPCC has retained Semler Brossy. A consultant from the firm attends CPCC meetings and in support of the CPCC’s role, provides independent expertise on market practices, compensation program design and related subjects as described on page 16. Semler Brossy provides services only as directed by the CPCC. During fiscal year 2022, Semler Brossy’s services included a review of executive pay programs, a review of the compensation peer group and other pay-related matters specific to the CPCC’s charter. Management Our CEO and the President & Chief Brand Officer provide input to the CPCC on the level and design of compensation elements for the NEOs and other Executive Officers, excluding themselves. Our Chief Human Resources Officer attends CPCC meetings to provide perspective and expertise relevant to the agenda. Management supports the CPCC’s activity by providing analyses and recommendations developed internally, or occasionally with the assistance of external consulting firms other than the CPCC’s independent consultant. Market Data Provides a Reference Point for Compensation The CPCC believes that knowledge of market practices, particularly those of our peers listed on page 46, is helpful in assessing the design and targeted level of our executive compensation package. In reviewing peer group information, the CPCC uses survey data provided by external consultants, monitors general market movement for executive pay and references proxy statements for specific roles. While the CPCC considers the 50th percentile (median) of our peer group as a reference, there is no specific percentage of target total direct compensation targeted by the CPCC other than to remain generally competitive with similarly situated peer companies. Target opportunities for individual pay elements vary by executive role based on scope of responsibilities and expected contributions. Target total direct compensation for 2022 for Erik Nordstrom was below our peer group median, as it has been in previous years. Based on the CPCC’s review of relevant market data and internal pay equity, the CPCC believes the target total direct compensation for the other NEOs was within a competitive range of the peer group median. Actual pay for the NEOs can exceed our established targets or peer group actual pay through the variable compensation elements when pre-determined performance milestones established by the CPCC are achieved. Peer Group Companies Represent Our Business Each year, the CPCC reviews the appropriateness of our peer group for comparison on pay and related practices. Collectively, the peer group companies represent our primary business areas, including our Nordstrom, Nordstrom Rack, in-store and online businesses and private label products. The peer group companies generally meet the following selection criteria: •fall within the Consumer Discretionary sectors; •fall within a reasonable range of our size, defined as one-third to three times our revenue and one-fourth to four times our market capitalization; •share similar talent, operational and/or business characteristics, including a retail-focused business model; •have a similar or related product focus and place a high value on customer experience; •are part of our industry group as defined by institutional shareholders and shareholder service organizations; and •are a public company subject to similar market pressures. 45 | | 2023 Proxy Statement | |
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Table of Contents COMPENSATION OF EXECUTIVE OFFICERS Our peer group used for evaluating compensation for fiscal year 2022 was comprised of the following retail companies: •American Eagle Outfitters, Inc. (AEO) | | The Board is proposing an Amended and Restated Nordstrom,Gap, Inc. Executive Management Bonus Plan (see Proposal 4) to provide flexibility in the Company’s incentive plan structure while preserving deductibility under Internal Revenue Code (“IRC”) section 162(m). The Plan allows the Committee to develop executive-specific compensation plans within a 162(m)-compliant structure. The underlying plan is the performance-based annual cash bonus plan outlined on page 33.(GPS) | | Tapestry, Inc. (TPR) | Burlington Stores, Inc. (BURL) | | Kohl’s Corporation (KSS) | | The TJX Companies, Inc. (TJX) | Capri Holdings Limited (CPRI) | | Macy’s, Inc. (M) | | Ulta Beauty, Inc. (ULTA) | Dillard’s, Inc. (DDS) | | Ralph Lauren Corporation (RL) | | V.F. Corporation (VFC) | DICK’S Sporting Goods, Inc. (DKS) | | Ross Stores, Inc. (ROST) | | Victoria’s Secret & Co. (VSCO) | Foot Locker, Inc. (FL) | | | | | • | In connection with the performance-based annual cash bonus plan, the Committee has added a Strategic Bonus Measure contingent upon shareholder approval of the Amended and Restated Nordstrom, Inc. Executive Management Bonus Plan. In addition to the ROIC and EBIT bonus measures, with this change the Committee will also take into account our success on executing against our strategic objectives. |
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Long-Term IncentivesDuring 2022, as part of its annual review of peer companies to be used for compensation comparison purposes, the CPCC determined that Bed Bath & Beyond Inc., The Estée Lauder Companies Inc., Urban Outfitters, Inc. and Williams-Sonoma, Inc. should be removed based on the selection criteria. Additionally, the CPCC determined that American Eagle Outfitters, Inc., Burlington Stores, Inc., DICK’S Sporting Goods, Inc., Ulta Beauty, Inc. and Victoria’s Secret & Co. should be added based on meeting the selection criteria.
• | Blake Nordstrom, Peter Nordstrom and Erik Nordstrom received an increase in their Long-Term Incentive Annual Grant, which increased the grant value as a percent of base salary from 250% to 350%, in order to improve market competitiveness. | | | • | We provided an increase to the 2016 Long-Term Incentive Annual Grant value as a percent of base salary for Michael Koppel from 175% to 233% and for Christine Deputy from 150% to 200% to reinforce our alignment of executive compensation with shareholder interests. | | | Benefits | | | • | The Committee approved an amendment to the Company’s Leadership Separation Plan whereby only leadership employees whose positions are eliminated will be eligible for separation pay under the Plan. Blake Nordstrom, Peter Nordstrom and Erik Nordstrom are not eligible for the Leadership Separation Plan. |
Additional Information
Compensation Risk Assessment Supports Integrity of theOur Pay Program Practices The CommitteeCPCC oversees an extensive review of the Company’s pay-for-performancepay-for-performance philosophy, the composition and balance of elements in the compensation package and the alignment of plans with shareholder interests to ensure these practices do not pose a material adverse risk to the organization. The review is conducted every other year as underlying programs and practices are generally consistent over time. The last review, for fiscal year 2014,2022, concluded with the following perspectives: • | The goals of the Company’s compensation programs are to attract and retain the best talent and to motivate and reward our people in ways that are aligned with the long-term interests of our shareholders. This has been a long-standing objective of our pay-for-performance philosophy. We believe that the strong alignment of our employee compensation plans with performance has served our stakeholders, and in particular, our shareholders, well. The strength of this alignment is regularly reviewed and monitored by the Committee. | | | • | As a fashion specialty retailer, the Company’s compensation-related risks are generally more straightforward than some other business sectors. We have systems in place to identify, monitor and control risks, making it difficult for a single individual or a group of individuals to expose the Company to material risk. | | | • | Our compensation program rewards both short- and long-term performance. Company results are team-oriented rather than individually focused and tied to measurable factors that are both transparent to shareholders and drivers of their returns. | | | • | The compensation program balances the importance of achieving critical short-term objectives with a focus on realizing strategic long-term priorities. Strong stock ownership guidelines are in place for Company leaders, and mechanisms, such as an executive clawback policy, exist to address inappropriate rewards. | | | • | The Committee is actively engaged in establishing compensation plans, monitoring these plans during the year and using discretion in making rewards, as necessary. | | | • | The Company has active and engaged oversight systems in place. The entire Board is aware of the compensation program, as established and approved by the Committee. The Audit Committee and the full Board closely monitor and certify the performance that drives employee rewards through detailed and transparent financial reporting, which is in place to provide strong, timely insight into the performance of the Company. |
•The goals of the Company’s compensation programs are to attract and retain the best talent and to motivate and reward our people in ways that are aligned with the long-term interests of our shareholders. This has been a long-standing objective of our pay-for-performance philosophy. We believe that the strong alignment of our employee compensation plans with performance has well-served our stakeholders, and our shareholders in particular. The strength of this alignment is regularly reviewed and monitored by the CPCC. As•We have systems in place to identify, monitor and control risks, making it difficult for a resultsingle individual or a group of individuals to expose the Company to material compensation risk.
•Our compensation program rewards both short- and long-term performance. Performance measures are predominantly team-oriented rather than individually focused and tied to measurable factors that are both transparent to shareholders and drivers of shareholder return. •The compensation program balances the importance of achieving critical short-term objectives with a focus on realizing long-term strategic priorities. Strong stock ownership guidelines are in place for Company leaders, and mechanisms, such as an executive clawback policy, exist to address inappropriate rewards. •The CPCC is actively engaged in establishing compensation plans, monitoring these plans during the year and using discretion in making rewards, as necessary. •The Company has active and engaged oversight systems in place. The AFC and the full Board closely monitor and certify the performance that drives employee rewards through detailed and transparent financial reporting, which is in place to provide strong, timely insight into the performance of the Company. Based on this review, the CommitteeCPCC believes that the Company’s compensation plans do not encourage risk taking that is reasonably likely to have a material adverse effect on the Company. Executive Compensation Clawback Policy Applies to Performance-Based Pay In February 2008, the Board adopted a formal executive compensation clawback policy that applies to any performance-basedperformance-based bonus, equity, equity equivalent or other incentive compensation awarded to an Executive Officer, beginning in that fiscal year. Under that policy, in the event of a material restatement of the Company’s financial results, the Board will review the circumstances that caused the restatement and consider accountability to determine whether an Executive Officer was negligent or engaged in misconduct. If so, and if the amount or vesting of an award would have been less had the financial statements been correct, the Board will seek to recover compensation from the Executive Officer as it deems appropriate. This policy is in addition to any requirements which might be imposed pursuant to applicable law. LTI Grants Are Effective On the First Day of the Open Trading Window The CPCC approves annual equity-based awards at its annual February meeting, which is typically held approximately three weeks after fiscal year end. Annual grants are customarily effective on the first day of the Company’s next open trading window following CPCC approval. The CPCC may approve one-time equity-based grants to executives on other dates for reasons such as newly hired executives or for retention purposes. Such grants are generally effective on the first day of the Company’s next open trading window following approval by the CPCC.
| | 2023 Proxy Statement | | 46 |
Table of Contents COMPENSATION OF EXECUTIVE OFFICERS Termination and Change in Control Provisions are Committee-Directed CPCC-Directed Under our Leadership SeparationNordstrom, Inc. Executive Severance Plan, the eligible Named Executive Officers, including certain NEOs, are entitled to receive severance benefits upon involuntary termination of employment by the Company other than for cause, to assist in the transition from active employment. To be eligible to participate in the Plan upon involuntary termination, the NEO must have signed a non-competition and non-solicitation agreement. Prior to his appointment to Interim Chief Financial Officer and Chief Accounting Officer on December 5, 2022, Michael Maher was eligible, and remains eligible, for the Nordstrom, Inc. Executive Severance Plan, subject only to a non-solicitation agreement. Erik Nordstrom and Peter Nordstrom are not eligible for separation benefits under the Plan. Separation benefits are described in the Potential Payments Upon Termination or Change in Control section beginning on page 50. 59. As described in the same section, the Named Executive OfficersNEOs are generally not entitled to any payment or accelerated benefit in connection with a change in control of the Company. However, the Named Executive OfficersNEOs are entitled to accelerated vesting of equity if they experience a qualifying termination (termination by the Company without cause or termination by the executive for good reason) within 12 months following a change in control. Notwithstanding, if the successor corporation refuses to assume or substitute the award, then the CPCC shall provide for the cancellation of the vested portion of any such award in exchange for either an amount of cash (or stock, other securities or other property) and provide for the cancellation of the unvested portion of the award, if any, without payment of consideration. NORDSTROM, INC. -2016 Proxy Statement | 36 |
Tax and Accounting Considerations Underlie the Compensation Elements The CommitteeCPCC recognizes the tax and regulatory factors that can influence the structure of executive compensation programs, including: •Section 162(m) of the IRC, which disallows a tax deduction to public companies for annual compensation over $1 million paid to “covered employees” which generally include NEOs. Certain performance-based compensation under arrangements in place as of November2, 2017 are not subject to the limitation. Therefore, compensation in excess of $1 million paid to our NEOs is generally expected to be nondeductible by the Company. •FASB ASC 718, where stock options, PSUs and RSUs are accounted for based on their grant date fair value (see the notes to the financial statements contained within the Company’s 2022 Annual Report). The CPCC regularly considers the accounting implications of our equity-based awards. •Section 409A of the IRC, the limitations of which primarily relate to the deferral and payment of benefits under the NDCP and SERP. The CPCC continues to consider the impact of Section 409A and in general, the evolving tax and regulatory landscape in which its compensation decisions are made. •47 | Section 162(m) of the IRC, which generally disallows a tax deduction to public companies for annual compensation over $1M paid to their Named Executive Officers (other than the Principal Financial Officer). The IRC generally excludes from the calculation of the $1M cap compensation that is based on the attainment of pre-established, objective performance goals established under a shareholder-approved plan. The Committee considers, among other things, the impact of this exclusion for performance-based compensation when developing and implementing our executive compensation programs. Annual awards under our short-term and long-term incentive plans are generally designed in a manner that is intended to meet the requirements under the exclusion. However, due to the complex nature of the requirements that must be met, we cannot guarantee that such awards will qualify as performance-based compensation under Section 162(m). | | | 2023 Proxy Statement | | | While the Committee seeks to preserve tax deductibility in developing and implementing our compensation program, the Committee also believes that it is important to maintain flexibility in administering compensation programs in a manner designed to promote varying Company goals. Therefore, amounts paid under any of our executive compensation programs may be subject to the Section 162(m) limitation on deductibility. | | | • | Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 718,Stock Compensation (“ASC 718”), where stock options, performance share units and restricted stock units are accounted for based on their grant date fair value (see the notes to the financial statements contained within the Company’s Annual Report on Form 10-K for the fiscal year ended January 30, 2016, filed with the SEC). The Committee regularly considers the accounting implications of our equity-based awards. | | | • | Section 409A of the IRC, the limitations of which primarily relate to the deferral and payment of benefits under the Executive Deferred Compensation Plan and Supplemental Executive Retirement Plan. The Committee continues to consider the impact of Section 409A and in general, the evolving tax and regulatory landscape in which its compensation decisions are made.
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| | NORDSTROM, INC. -2016 Proxy Statement | 37 |
Compensation Committee Report
The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis included in this Proxy Statement. The Committee believes the Compensation Discussion and Analysis represents the intent and actionsTable of the Committee with regard to executive compensation and has recommended to the Board that it be included in this Proxy Statement for filing with the SEC.Contents
COMPENSATION COMMITTEE
Tanya L. Domier
Enrique Hernandez, Jr.
Gordon A. Smith
Robert D. Walter,ChairOF EXECUTIVE OFFICERS NORDSTROM, INC. -2016 Proxy Statement | 38 |
Summary Compensation Table The following table summarizes the total compensation paid or accrued by the Company for services provided by the Named Executive OfficersNEOs for fiscal years ended January 28, 2023, January 29, 2022 and January 30, 2016, January 31, 20152021. Neither Michael Maher nor Alexis DePree were NEOs in fiscal years 2021 and February 1, 2014.2020, so no amounts are shown in these years. Name and Principal
Position | Fiscal
Year | Salary
($)(a) | Bonus
($)(b) | Stock
Awards
($)(c) | Option
Awards
($)(d) | Non-Equity Incentive Plan
Compensation
($)(e) | Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)(f) | All Other
Compensation
($)(g) | Total
($) | Erik B. Nordstrom | 2022 | 758,500 | — | 1,592,844 | 1,061,890 | — | — | 57,748 | 3,470,982 | Chief Executive Officer | 2021 | 758,700 | — | — | 3,699,999 | 1,941,761 | — | 44,686 | 6,445,146 | | | 2020 | 367,419 | — | 1,592,846 | 2,654,740 | — | 1,010,681 | 21,984 | 5,647,670 | Michael W. Maher | 2022 | 465,927 | — | 1,497,662 | 99,221 | — | — | 19,301 | 2,082,111 | Interim Chief Financial
Officer and Chief
Accounting Officer | | | | | | | | | | Peter E. Nordstrom | 2022 | 758,500 | — | 1,592,844 | 1,061,890 | — | — | 64,534 | 3,477,768 | President & Chief Brand
Officer | 2021 | 758,700 | — | — | 3,699,999 | 1,941,761 | — | 56,475 | 6,456,935 | 2020 | 367,419 | — | 1,592,846 | 2,654,740 | — | 1,055,774 | 24,849 | 5,695,628 | Kenneth J. Worzel | 2022 | 895,000 | — | 1,342,500 | 894,992 | — | — | 32,053 | 3,164,545 | Chief Customer Officer | 2021 | 892,123 | — | 1,443,737 | 962,494 | 1,427,077 | 1,389,900 | 32,195 | 6,147,526 | | | 2020 | 764,597 | — | 2,624,977 | 2,374,996 | — | 864,312 | 18,367 | 6,647,249 | Alexis DePree | 2022 | 627,115 | — | 1,512,974 | 341,992 | — | — | 17,127 | 2,499,208 | Chief Supply Chain Officer | | | | | | | | | | Anne L. Bramman | 2022 | 710,385 | — | 1,222,499 | 814,997 | — | — | 128,304 | 2,876,185 | Former Chief Financial
Officer | 2021 | 812,892 | — | 1,319,977 | 879,995 | 1,040,246 | — | 24,679 | 4,077,789 | 2020 | 699,231 | — | 1,999,988 | 1,824,997 | — | — | 14,411 | 4,538,627 | Edmond Mesrobian | 2022 | 578,365 | — | 1,569,965 | 479,998 | — | — | 1,741,026 | 4,369,354 | Former Chief Technology & Information Officer | 2021 | 827,123 | — | 1,394,971 | 929,995 | 815,262 | — | 12,158 | 3,979,509 | 2020 | 677,214 | — | 1,549,973 | 1,374,995 | — | — | 7,917 | 3,610,099 |
| | | | | | | | | | | | | | | Change in | | | | | | | | | | | | | | | | | | | | Pension Value | | | | | | | | | | | | | | | | | | | | and | | | | | | | | | | | | | | | | | | | | Nonqualified | | | | | | | | | | | | | | | | | | Non-Equity | | Deferred | | | | | | | | | | | | | | Stock | | Option | | Incentive Plan | | Compensation | | All Other | | | | | | Fiscal | | Salary | | Bonus | | Awards | | Awards | | Compensation | | Earnings | | Compensation | | Total | | Name and Principal Position | | Year | | ($)(a) | | ($)(b) | | ($)(c) | | ($)(d) | | ($)(e) | | ($)(f) | | ($)(g) | | ($) | | Blake W. Nordstrom | | | 2015 | | | 735,445 | | | — | | | 906,175 | | | 906,232 | | | — | | | — | | | 61,858 | | | 2,609,710 | | Co-President | | | 2014 | | | 722,986 | | | — | | | 906,152 | | | 906,481 | | | 1,197,990 | | | — | | | 55,630 | | | 3,789,239 | | | | | 2013 | | | 718,958 | | | — | | | 438,099 | | | 1,312,779 | | | 921,330 | | | — | | | 43,526 | | | 3,434,692 | | Michael G. Koppel | | | 2015 | | | 764,328 | | | — | | | 655,120 | | | 655,199 | | | — | | | — | | | 23,659 | | | 2,098,306 | | Executive Vice President and | | | 2014 | | | 742,000 | | | — | | | 629,974 | | | 630,155 | | | 556,793 | | | 1,916,126 | | | 30,609 | | | 4,505,657 | | Chief Financial Officer | | | 2013 | | | 710,750 | | | — | | | 295,749 | | | 886,115 | | | 411,739 | | | 737,203 | | | 28,151 | | | 3,069,707 | | Peter E. Nordstrom | | | 2015 | | | 735,445 | | | — | | | 906,175 | | | 906,232 | | | — | | | — | | | 42,203 | | | 2,590,055 | | Co-President | | | 2014 | | | 722,986 | | | — | | | 906,152 | | | 906,481 | | | 1,197,990 | | | 318,071 | | | 40,137 | | | 4,091,817 | | | | | 2013 | | | 718,958 | | | — | | | 438,099 | | | 1,312,779 | | | 921,330 | | | — | | | 34,115 | | | 3,425,281 | | Erik B. Nordstrom | | | 2015 | | | 735,445 | | | — | | | 906,175 | | | 906,232 | | | — | | | — | | | 55,224 | | | 2,603,076 | | Co-President | | | 2014 | | | 722,986 | | | — | | | 906,152 | | | 906,481 | | | 1,197,990 | | | 864,701 | | | 51,386 | | | 4,649,696 | | | | | 2013 | | | 718,958 | | | — | | | 438,099 | | | 1,312,779 | | | 921,330 | | | — | | | 49,425 | | | 3,440,591 | | Christine F. Deputy | | | 2015 | | | 319,206 | | | 200,000 | | | 2,293,615 | | | 393,744 | | | — | | | — | | | 306,537 | | | 3,513,102 | | Executive Vice President – | | | 2014 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | Human Resources | | | 2013 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
(a) Salary The amounts shown represent base salary earned during the fiscal year. TheseThe numbers shown for all fiscal years vary somewhat from the annual base salaries disclosed on page 32 due to the fact that our fiscal year ends on the Saturday nearest to January 31st31st and salary increases are generally effective on or about April 1st1st of each year. The 20152022 base salaries for the Named Executive Officers were $740,000$758,500 each for BlakeErik Nordstrom and Peter Nordstrom, and Erik Nordstrom, $770,000$895,000 for Kenneth Worzel. Michael KoppelMaher’s base salary increased from $441,000 to $456,435 on March 27, 2022 and from $456,435 to $525,000 for Christine Deputy.on November 27, 2022. Alexis DePree’s base salary increased from $570,000 to $595,000 on March 27, 2022 and from $595,000 to $650,000 on June 5, 2022. Anne Bramman’s base salary increased from $815,000 to $845,000 on March 27, 2022. Edmond Mesrobian’s base salary increased from $800,000 to $825,000 on June 5, 2022. The amount2022 base salaries shown for Christine DeputyAnne Bramman and Edmond Mesrobian reflects a partial year of paybase salary as she joinedthey left the Company in June 2015. Because she was not a Named Executive Officeron December 2, 2022 and October 14, 2022, respectively. Neither Michael Maher nor Alexis DePree were NEOs prior to fiscal year 2015, no amounts2022. The 2022 base salaries are reported for fiscal years 2014 or 2013 in this column or others in the Summary Compensation Table.described on page 41. Christine DeputyKenneth Worzel elected to defer $17,68010% of his base salary earned during calendar year 20162022 and calendar year 2023 into the Executive Deferred Compensation Plan.NDCP. Anne Bramman elected to defer 10% of her base salary earned during calendar year 2022 into the NDCP. Due to the timing of our fiscal year end, $769 of this wasends, $86,058 and $74,173 were attributed to fiscal year 2015,2022 deferrals for Kenneth Worzel and Anne Bramman, respectively, as reported in the Fiscal Year 20152022 Nonqualified Deferred Compensation Table on page 50.58.
Blake Nordstrom, Michael Koppel, Peter Nordstrom and Erik Nordstrom allEach of the NEOs contributed a portion of their base salary earned during fiscal year 20152022 to the 401(k) Plan.
Christine Deputy received a cash payment of $200,000 as part of her new-hire compensation package when she joined the Company in June 2015.
The amounts reported for Blakefiscal year 2020 reflect the reduced base salaries of the NEOs, as part of the Company’s response to business impacts from the COVID-19 pandemic. Base salaries were reduced from March 29, 2020 to October 3, 2020, as follows: Erik Nordstrom Michael Koppel,and Peter Nordstrom received no base salary, while Kenneth Worzel, Anne Bramman and Erik NordstromEdmond Mesrobian received a 25% base salary reduction.
| | 2023 Proxy Statement | | 48 |
Table of Contents COMPENSATION OF EXECUTIVE OFFICERS (b) Bonus This column refers to one-time payments not made under the EMBP. No amounts were paid to NEOs. (c) Stock Awards The amounts reported reflect the grant date fair value of performance share unitsPSUs and restricted stock unitsRSUs granted during the fiscal year under the 2010 Equity Incentive Plan. The amount reported for Christine Deputy reflects the grant date fair value of the restricted stock units granted under the 2010 Equity Incentive Plan as part of her new-hire compensation package.2019 EIP. The amounts reported are not the value actually received. The value the Named Executive OfficersNEOs will ultimately receive from their performance share units2022 PSUs will depend on whether the performance requirement is metrequirements and the market price of Common Stock at the end of the three year performance cycle. In fiscal year 2022, PSUs were granted to all NEOs, except for Michael Maher who was appointed Interim Chief Financial Officer and Chief Accounting Officer on December 5, 2022. The amounts reported were calculated in accordance with FASB Accounting Standards CodificationASC 718Stock Compensation (“ASC 718” and reflect the grant date fair value at target (100%) by multiplying the. The minimum number of PSUs that can be earned at the end of the three-yearperformance share unitscycle is 75% and the maximum is 150%. The grant date fair value for the PSUs awarded byto Erik Nordstrom, Peter Nordstrom, Kenneth Worzel, Alexis DePree, Anne Bramman and Edmond Mesrobian at the closing pricemaximum payout of Common Stock on the date of grant.150% is $2,389,266, $2,389,266, $2,013,750, $769,493, $1,833,749 and $1,079,973, respectively. See column (c) of the Grants of Plan-BasedPlan-Based Awards in Fiscal Year 20152022 table on pages 42 and 43page 51 for the number of performance share unitsPSUs granted in fiscal year 2015. 2022. No PSU amounts are reported for fiscal year 2021 as the Company did not award PSUs during the fiscal year. The PSU amounts reported in fiscal year 2020 reflects grants of PSUs that were subsequently cancelled 6 months later as part of the Company’s response to COVID-19. The cancelled PSU grants to Erik Nordstrom and Peter Nordstrom each had a grant date fair value of $1,592,846. The cancelled PSU grants to Kenneth Worzel, Anne Bramman, and Edmond Mesrobian had a grant date fair value of $1,574,982, $1,199,989 and $929,983, respectively. The value the Named Executive OfficersNEOs may receive from their restricted stock unitsRSUs will depend on whether the time-basedtime-based vesting requirement is met and the market price of Common Stock on the vesting date. In fiscal year 2022, RSUs were granted to Michael Maher, Alexis DePree and Edmond Mesrobian. The amounts reported were calculated in accordance with ASC 718 and were based on the number of restricted stock units granted and the closing price of Common Stock on the date of grant.718. See column (d) of the Grants of Plan-BasedPlan-Based Awards in Fiscal Year 20152022 table on pages 42 and 43page 51 for the number of restricted stock unitsRSUs granted in fiscal year 2015.2022. (d) Option Awards The amounts reported reflect the grant date fair value of stock options granted during the fiscal year under the 2010 Equity Incentive Plan.2019 EIP. This is not the value received. The Named Executive OfficersNEOs will only realize value from stock options if the market price of Common Stock is higher than the exercise price of the stock options at the time of exercise. The amounts reported were calculated in accordance with ASC 718. See column (e) of NORDSTROM, INC. -2016 Proxy Statement | 39 |
the Grants of Plan-BasedPlan-Based Awards in Fiscal Year 20152022 table on pages 42 and 43page 51 for the number of stock options granted in fiscal year 2015. 2022. Assumptions used in the calculation of these amounts for fiscal years 2015, 2014 and 2013 are included in the notes to the financial statements contained within the Company’s 2022 Annual Report on Form 10-K for the fiscal year ended January 30, 2016, filed with the SEC.Report. (e) | (e) Non-Equity Incentive Plan Compensation |
No amounts are reported for fiscal year 2015 because Company results that year did not meet the pre-established performance targets set by the Compensation Committee under the shareholder-approved Executive Management Bonus Plan and no performance-based bonuses were awarded to the Named Executive Officers for the year.
(f) | Change in Pension Value and Nonqualified Deferred Compensation Earnings |
The amounts to bereported reflect the annual performance-based cash awards under the EMBP, as described on page 42. (f) Change in Pension Value and Nonqualified Deferred Compensation Earnings The amounts reported are the changesincreases in actuarial present value from each fiscal year-end 2014 to fiscal year-end 2015year end for each of the eligible Named Executive Officer’sNEO’s benefit under the Supplemental Executive Retirement Plan (“SERP”).SERP. The present value of the benefit is affected by current earnings, credited years of service, the executive’s age and time until normal retirement eligibility, the age of the executive’s spouse or life partner as the potential beneficiary, and economicactuarial assumptions (discount rate and mortality table used to determine the present value of the benefit). , and the annual SERP benefit cap of $700,000. The present value of Blake Nordstrom, Michael Koppel, Peter Nordstrom and Erik Nordstrom’s, benefitsPeter Nordstrom’s and Kenneth Worzel’s benefit decreased from last2021 fiscal year end by $1,143,415, $785,760, $1,268,866$2,790,760, $2,848,930 and $1,246,492,$729,204 respectively. The decreases were primarily the resultsresult of an increase in the discount rate from 3.70% to 4.55% and an update to the mortality table used to determine the present value of the benefit. Decreasesbenefits. The interest rate used is the same as the discount rate used for financial reporting purposes for the SERP which changed from 3.19% to 4.95%. Negative values are not reported in the table, so no amounts are shown. No amount isshown for Erik Nordstrom, Peter Nordstrom and Kenneth Worzel. Amounts are not reported for Christine Deputy becausethe other NEOs, as they are not eligible for the SERP was closedbenefit. Since decreases in the actuarial present value of pension benefits are required to new entrants priorbe identified in a footnote rather than included in the Summary Compensation Table, the amounts reported in the Change in Pension Value and Nonqualified Deferred Compensation Earnings and Total columns for fiscal year 2021 have been updated to when she joinedexclude the Company. Seenegative values of $692,013 and $1,364,580 attributed to the Pension Benefits section beginning on page 48 for more information aboutdecline in the SERP. actuarial present value of the SERP benefits of Erik Nordstrom and Peter Nordstrom, respectively. The amounts were calculated using the same discount rate and mortality table assumptions as those used in the Company’s financial statements to calculate the Company’s obligations under the Plan.SERP. Assumptions used in the calculation of these amounts are included in the notes to the financial statements contained within the Company’s 2022 Annual Report on Form 10-K for the fiscal year ended January 30, 2016, filed with the SEC. Report. Michael KoppelMaher, Kenneth Worzel, Anne Bramman and Christine DeputyEdmond Mesrobian had account balances in the Executive Deferred Compensation PlanNDCP in fiscal year 2015,2022, as shown on page 50.58. They did not receive any above-market-rateabove-market-rate or preferential earnings on their deferred compensation, so no amounts for these types of earnings are included in the table. (g)49 | All Other Compensation | 2023 Proxy Statement | |
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A detailed descriptionTable of Contents
COMPENSATION OF EXECUTIVE OFFICERS (g) All Other Compensation Each component of all other compensation paid to the Named Executive OfficersNEOs is shown in the table below.following table. All Other Compensation in Fiscal Year 2015
All Other Compensation in Fiscal Year 2022 |
The following table shows each component of “All Other Compensation” for fiscal year 2015,2022, reported in column (g) of the Summary Compensation Table on page 39,48, calculated at the aggregate incremental cost to the Company. Name | 401(k) Plan
Company Match
($)(a) | Premium on
Insurance
($)(b) | Severance
($)(c) | Other Benefits
($)(d) | Total
($) | Erik B. Nordstrom | 5,859 | 2,321 | — | 49,568 | 57,748 | Michael W. Maher | 12,278 | 1,423 | — | 5,600 | 19,301 | Peter E. Nordstrom | 9,998 | 2,321 | — | 52,215 | 64,534 | Kenneth J. Worzel | 14,937 | 2,739 | — | 14,377 | 32,053 | Alexis DePree | 11,961 | 1,927 | — | 3,239 | 17,127 | Anne L. Bramman | 10,155 | 2,355 | — | 115,794 | 128,304 | Edmond Mesrobian | 6,096 | 1,868 | 1,650,000 | 83,062 | 1,741,026 |
| | | | | | | Broad-Based | | | | | | | | | | | | Leadership | | Broad-Based | | Retirement | | | | | | | | | | | | Benefits | | Benefits | | Benefit | | Other | | | | | | | Premium | | | | 401(k) Plan | | Personal Use | | Expenses in | | | | | | | | on | | Merchandise | | Company | | of Company | | Connection with | | Tax Reim- | | | | | | Insurance | | Discount | | Match | | Aircraft | | Relocation | | bursement | | Total | | Name | | ($)(a) | | ($)(b) | | ($)(c) | | ($)(d) | | ($)(e) | | ($)(f) | | ($) | | Blake W. Nordstrom | | | 569 | | | 50,579 | | | 10,600 | | | 110 | | | — | | | — | | | 61,858 | | Michael G. Koppel | | | 584 | | | 12,475 | | | 10,600 | | | — | | | — | | | — | | | 23,659 | | Peter E. Nordstrom | | | 569 | | | 31,000 | | | 10,600 | | | 34 | | | — | | | — | | | 42,203 | | Erik B. Nordstrom | | | 569 | | | 41,845 | | | 10,600 | | | 2,210 | | | — | | | — | | | 55,224 | | Christine F. Deputy | | | 286 | | | 39,018 | | | — | | | — | | | 194,863 | | | 72,370 | | | 306,537 |
The(a) 401(k) Plan Company provides life insurance to the Named Executive Officers in an amount equal to approximately 1.25 times their base salary and additional long-term disability insurance. The amounts reported are the annual Company-paid premiums.
The Company provides a merchandise discount for its employees. The Named Executive Officers were provided a discount of 33% for purchases at Nordstrom full-line stores and Nordstrom.com and 20% for purchases at Nordstrom Rack stores, Nordstromrack.com/HauteLook and our restaurants. A 40% discount is available at certain times of the year on
NORDSTROM, INC. -2016 Proxy Statement | 40 |
specified merchandise. The merchandise discount provided to the Named Executive Officers is the same as for all other eligible management and high-performing nonmanagement employees of the Company. The amounts reported are the total discounts the Named Executive Officers received on their Nordstrom purchases during the fiscal year.
(c) | 401(k) Plan Company Match |
Match The Company offers a matching contribution on employee 401(k) contributions under the 401(k) Plan to all eligible employees, including the Named Executive Officers.NEOs. The Named Executive OfficersNEOs and all other Company employees, may defer up to 16%50% of their eligible pay (i.e., base salary, performance-basedperformance-based bonus and other taxable wages) into the 401(k) Plan, subject to IRC limits. AlthoughCompany matching contributions are made each pay period an employee contributes to the matching contribution is discretionary and subject401(k) Plan, equal to change, the Company currently matches employee contributions for the Plan year,a dollar for dollar match up to 1% of eligible pay then $0.50 per dollar on the next 6% of eligible pay, up to a maximum of 4% of eligible pay.pay and IRC limits. The 2015 calendartotal Company matching contribution each of the NEOs received, as shown in the table, reflects this matching formula for fiscal year compensation limit for eligible pay was $265,000, as set by the IRS. The maximum Company contribution for the eligible Named Executive Officers was $10,600 (4% x $265,000), as reported on page 40.
The Company also offers a discretionary match up to an additional 2% of eligible pay, based on Company performance. However, based on the Company’s performance in 2015, no additional profit-based match was made.
2022. Contributions under the 401(k) Plan may be directed to any of 13 custom target retirement date funds or to any of 9nine individual investment alternatives, including Common Stock. The Plan also offers a self-directedself-directed brokerage option. (d) | Personal Use of Company Aircraft |
The Company owns two aircraft which it uses for business purposes. On rare occasions, a Named Executive Officer’s guest accompanies the executive(b) Premium on a business trip on the Company’s aircraft as an additional passenger. Only the direct variable costs (i.e., costs the Company incurs solely as a result of the passenger being on the aircraft) are included in determining the aggregate incremental cost to the Company. When travel does not meet the IRS standard for business travel, the cost of the travel is imputed as income to the executive, which is the Company’s practice to fully disclose. The Company does not reimburse the Named Executive Officers for taxes incurred as a result of the imputed income.
In fiscal year 2015, Blake Nordstrom and Erik Nordstrom were each accompanied by a family member on two business trips and Peter Nordstrom was accompanied by a family member on one business trip. The costs reported are the total direct variable costs associated with the family member’s travel which include the tax deduction the Company was not able to take as a result of the nondeductible portion of the aircraft operating costs.
(e) | Expenses in Connection with Relocation |
Insurance The Company provides relocation assistance to eligible employees who have changed their place of residence to accept a position with Nordstrom. The type and amount of assistance varies by leadership level. Christine Deputy received the standard relocation benefits under our guidelines for an executive vice president when she moved from Englandlife insurance to the Company’s headquartersNEOs in Seattle.an amount equal to approximately 2 times their base salary and additional disability insurance. The amountamounts reported are the annual Company-paid premiums. (c) Severance In connection with his separation on October 14, 2022, Edmond Mesrobian received a lump sum cash severance payment equal to 24 months of base salary, in accordance with the terms for involuntary separation without cause under the Nordstrom, Inc. Executive Severance Plan described on page 64. (d) Other Benefits The amounts reported include a remote work stipend and the total discount the NEOs received on their Nordstrom purchases during fiscal year 2022. Amounts reported for Anne Bramman and Edmond Mesrobian also include lump sum payments of accrued and unused Paid Time Off, which was paid out upon their separation on December 2, 2022 and October 14, 2022, respectively. The remote work stipend provided to the NEOs was the same as for all other employees working remotely, and the merchandise discount provided to the NEOs is the cost incurred bysame as for all other eligible management and high-performing non-management employees of the Company, and includes home finding, final travel expenses, transportation of household goods and new home closing costs. The Company provides reimbursement of all taxes incurredits Board, as described on taxable moving expenses to employees who have changed their place of residence to accept a position with Nordstrom. The amount reported is the tax reimbursement received by Christine Deputy in fiscal year 2015.page 19.
NORDSTROM, INC. -2016 Proxy Statement | 41 |
Grants of Plan-Based Awards in Fiscal Year 2015 2022 The following table disclosesdiscloses: •non-equity incentive plan awards granted in fiscal year 2022 and the potential range of payouts. These awards are performance-based cash bonuses granted under the EMBP, as described on page 42; •the number and grant date fair value of PSUs granted under the 2019 EIP in fiscal year 2022 and the potential range of payouts, for:as described on page 42; •the number, price and grant date fair value of stock options granted under the 2019 EIP in fiscal year 2022, as described on page 42; and •the number and grant date fair value of RSUs granted under the 2019 EIP in fiscal year 2022, as described on page 42. •
| non-equity incentive plan awards granted in fiscal year 2015. These awards are performance-based cash bonuses granted under the Executive Management Bonus Plan, as described on page 33; and | | | 2023 Proxy Statement | • | equity incentive plan awards granted in fiscal year 2015. These awards are performance share units granted under the 2010 Equity Incentive Plan, as described on page 34. | | | | The table also discloses: | | | • | the grant date fair value of performance share units granted under the 2010 Equity Incentive Plan in fiscal year 2015; | | | • | the number, price and grant date fair value of stock options granted under the 2010 Equity Incentive Plan in fiscal year 2015, as described on page 34; and | | | • | the number and grant date fair value of restricted stock units granted under the 2010 Equity Incentive Plan in fiscal year 2015, as described on page 34.50 |
| | | | | | | Estimated Future Payouts | | Estimated Future Payouts | | All Other | | All Other | | | | Grant | | | | | | | | Under Non-Equity Incentive | | Under Equity Incentive | | Stock | | Option | | | | Date Fair | | | | | | | | Plan Awards | | Plan Awards | | Awards: | | Awards: | | Exercise | | Value of | | | | | | | | (b) | | (c) | | Number | | Number of | | or Base | | Stock | | | | | | | | | | | | of Shares | | Securities | | Price of | | and | | | | Grant | | | | | | | | of Stock | | Underlying | | Option | | Option | | Name | | Date | | Approval | | Threshold | | Target | | Maximum | | Threshold | | Target | | Maximum | | or Units | | Options | | Awards | | Awards | | and Award | | (a) | | Date | | ($) | | ($) | | ($) | | (#) | | (#) | | (#) | | (#)(d) | | (#)(e) | | ($/Sh)(f) | | ($)(g) | | Blake W. Nordstrom | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Executive Management Bonus | | | | | | | 370,000 | | | 1,480,000 | | | 3,700,000 | | | | | | | | | | | | | | | | | | | | | | | Performance Share Unit Award | | 2/24/2015 | | 2/13/2015 | | | | | | | | | | | | 4,516.5 | | | 6,022.0 | | | 10,538.5 | | | | | | | | | | | | 453,069 | | Stock Option Award | | 2/24/2015 | | 2/13/2015 | | | | | | | | | | | | | | | | | | | | | | | | 45,996 | | | 75.23 | | | 906,232 | | Restricted Stock Unit Award | | 2/24/2015 | | 2/13/2015 | | | | | | | | | | | | | | | | | | | | | 6,230 | | | | | | | | | 453,106 | | Michael G. Koppel | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Executive Management Bonus | | | | | | | 173,250 | | | 693,000 | | | 1,732,500 | | | | | | | | | | | | | | | | | | | | | | | Performance Share Unit Award | | 2/24/2015 | | 2/13/2015 | | | | | | | | | | | | 3,265.5 | | | 4,354.0 | | | 7,619.5 | | | | | | | | | | | | 327,557 | | Stock Option Award | | 2/24/2015 | | 2/13/2015 | | | | | | | | | | | | | | | | | | | | | | | | 33,255 | | | 75.23 | | | 655,199 | | Restricted Stock Unit Award | | 2/24/2015 | | 2/13/2015 | | | | | | | | | | | | | | | | | | | | | 4,504 | | | | | | | | | 327,563 | | Peter E. Nordstrom | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Executive Management Bonus | | | | | | | 370,000 | | | 1,480,000 | | | 3,700,000 | | | | | | | | | | | | | | | | | | | | | | | Performance Share Unit Award | | 2/24/2015 | | 2/13/2015 | | | | | | | | | | | | 4,516.5 | | | 6,022.0 | | | 10,538.5 | | | | | | | | | | | | 453,069 | | Stock Option Award | | 2/24/2015 | | 2/13/2015 | | | | | | | | | | | | | | | | | | | | | | | | 45,996 | | | 75.23 | | | 906,232 | | Restricted Stock Unit Award | | 2/24/2015 | | 2/13/2015 | | | | | | | | | | | | | | | | | | | | | 6,230 | | | | | | | | | 453,106 |
Table of Contents NORDSTROM, INC. -2016 Proxy Statement | 42 |
COMPENSATION OF EXECUTIVE OFFICERS | | | | | | | Estimated Future Payouts | | Estimated Future Payouts | | All Other | | All Other | | | | Grant | | | | | | | | Under Non-Equity Incentive | | Under Equity Incentive | | Stock | | Option | | | | Date Fair | | | | | | | | Plan Awards | | Plan Awards | | Awards: | | Awards: | | Exercise | | Value of | | | | | | | | (b) | | (c) | | Number | | Number of | | or Base | | Stock | | | | | | | | | | | | of Shares | | Securities | | Price of | | and | | | | Grant | | | | | | | | of Stock | | Underlying | | Option | | Option | | Name | | Date | | Approval | | Threshold | | Target | | Maximum | | Threshold | | Target | | Maximum | | or Units | | Options | | Awards | | Awards | | and Award | | (a) | | Date | | ($) | | ($) | | ($) | | (#) | | (#) | | (#) | | (#)(d) | | (#)(e) | | ($/Sh)(f) | | ($)(g) | | Erik B. Nordstrom | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Executive Management Bonus | | | | | | | 370,000 | | | 1,480,000 | | | 3,700,000 | | | | | | | | | | | | | | | | | | | | | | | Performance Share Unit Award | | 2/24/2015 | | 2/13/2015 | | | | | | | | | | | | 4,516.5 | | | 6,022.0 | | | 10,538.5 | | | | | | | | | | | | 453,069 | | Stock Option Award | | 2/24/2015 | | 2/13/2015 | | | | | | | | | | | | | | | | | | | | | | | | 45,996 | | | 75.23 | | | 906,232 | | Restricted Stock Unit Award | | 2/24/2015 | | 2/13/2015 | | | | | | | | | | | | | | | | | | | | | 6,230 | | | | | | | | | 453,106 | | Christine F. Deputy | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Executive Management Bonus | | | | | | | 64,327 | | | 257,308 | | | 643,269 | | | | | | | | | | | | | | | | | | | | | | | Stock Option Award | | 8/24/2015 | | 5/5/2015 | | | | | | | | | | | | | | | | | | | | | | | | 20,094 | | | 67.34 | | | 393,744 | | Restricted Stock Unit Award | | 8/24/2015 | | 5/5/2015 | | | | | | | | | | | | | | | | | | | | | 35,231 | | | | | | | | | 2,293,615 |
| | |
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards
(b)
| |
Estimated Future Payouts
Under Equity Incentive
Plan Awards
(c)
| All Other
Stock
Awards:
Number of
Shares
of Stock
or Units
(#)(d) | All Other
Option
Awards:
Number of
Securities
Underlying Options
(#)(e) |
Exercise
or Base
Price of
Option
Awards
($/Sh)(f)
| Grant
Date Fair
Value of
Stock
and
Option
Awards
($)(g) | Name and Award | Grant Date
(a) | Approval Date | Threshold
($) | Target
($) | Maximum
($) | Threshold
(#) | Target
(#) | Maximum
(#) | Erik B. Nordstrom | | | | | | | | | | | | | EMBP | | | 379,250 | 1,517,001 | 3,792,502 | | | | | | | | PSU | 3/3/2022 | 2/22/2022 | | | | 52,902 | 70,536 | 105,804 | | | | 1,592,844 | Stock Option | 3/3/2022 | 2/22/2022 | | | | | | | | 102,506 | 25.68 | 1,061,890 | Michael W. Maher | | | | | | | | | | | | | EMBP | | | 57,054 | 228,218 | 570,544 | | | | | | | | Stock Option | 3/3/2022 | 2/22/2022 | | | | | | | | 9,578 | 25.68 | 99,221 | RSU | 3/3/2022 | 2/22/2022 | | | | | | | 12,842 | | | 297,674 | RSU | 5/26/2022 | 5/17/2022 | | | | | | | 54,177 | | | 1,199,988 | Peter E. Nordstrom | | | | | | | | | | | | | EMBP | | | 379,250 | 1,517,001 | 3,792,502 | | | | | | | | PSU | 3/3/2022 | 2/22/2022 | | | | 52,902 | 70,536 | 105,804 | | | | 1,592,844 | Stock Option | 3/3/2022 | 2/22/2022 | | | | | | | | 102,506 | 25.68 | 1,061,890 | Kenneth J. Worzel | | | | | | | | | | | | | EMBP | | | 279,688 | 1,118,750 | 2,796,875 | | | | | | | | PSU | 3/3/2022 | 2/22/2022 | | | | 44,587 | 59,450 | 89,175 | | | | 1,342,500 | Stock Option | 3/3/2022 | 2/22/2022 | | | | | | | | 86,395 | 25.68 | 894,992 | Alexis
DePree | | | | | | | | | | | | | EMBP | | | 119,000 | 476,000 | 1,190,000 | | | | | | | | PSU | 3/3/2022 | 2/22/2022 | | | | 17,037 | 22,717 | 34,075 | | | | 512,995 | Stock Option | 3/3/2022 | 2/22/2022 | | | | | | | | 33,013 | 25.68 | 341,992 | RSU | 5/26/2022 | 5/17/2022 | | | | | | | 45,147 | | | 999,979 | Anne L. Bramman | | | | | | | | | | | | | EMBP | | | 211,250 | 845,000 | 2,112,500 | | | | | | | | PSU | 3/3/2022 | 2/22/2022 | | | | 40,602 | 54,136 | 81,204 | | | | 1,222,499 | Stock Option | 3/3/2022 | 2/22/2022 | | | | | | | | 78,673 | 25.68 | 814,997 | Edmond Mesrobian | | | | | | | | | | | | | EMBP | | | 160,000 | 640,000 | 1,600,000 | | | | | | | | PSU | 3/3/2022 | 2/22/2022 | | | | 23,912 | 31,883 | 47,824 | | | | 719,982 | Stock Option | 3/3/2022 | 2/22/2022 | | | | | | | | 46,335 | 25.68 | 479,998 | RSU | 5/26/2022 | 5/17/2022 | | | | | | | 38,375 | | | 849,983 |
(a) Grant Date The grant date is the first open-windowbusiness day of the open trading daywindow that falls on or after the Compensation Committee’sCPCC approval of the grant, orgrant. (b) Estimated Future Payouts Under Non-Equity Incentive Plan Awards Although the column heading refers to future payouts, fiscal year 2022 performance-based bonuses resulted in no payout for all the NEOs in March 2023, as reported in the case of Christine Deputy, who joinedSummary Compensation Table on page 48 in column (e) “Non-Equity Incentive Plan Compensation.” For there to be any payout, minimum performance milestones or achievement must be met and NEOs must be an active employee on the Company in June 2015, the first open-window tradinglast day that falls on or after the later of the Compensation Committee’s approval of the grant or the executive’s hire date. (b) | Estimated Future Payouts Under Non-Equity Incentive Plan Awards |
The amounts shown report the range of possible cash payouts for fiscal year, 2015 associated with established levelsthe exception of performance under the Executive Management Bonus Plan.retirement, death and disability in which case a prorated amount may be earned. The amounts shown in the “Threshold,”“Threshold”, “Target” and “Maximum” columns reflect the payout opportunity associated with established levels of performance or achievement, based on pay and bonus targets as of March 27, 2022, as discussed on page 33. For there to be any payout, the minimum performance milestone must be achieved. For fiscal year 2015, the minimum performance milestone was not achieved so no bonus was earned or paid to the Named Executive Officers, as reported in the Summary Compensation 42.
51 | | 2023 Proxy Statement | |
|
Table on page 39, in column (e), “Non-Equityof Contents COMPENSATION OF EXECUTIVE OFFICERS (c) Estimated Future Payouts Under Equity Incentive Plan Compensation.” (c) | Estimated Future Payouts Under Equity Incentive Plan Awards |
Awards The numbers shown report the range of potential payouts at the end of the three-yearperformance share unit payoutscycle for the three-year performance cycle ofPSU grants made in fiscal year 2022 to Erik Nordstrom, Peter Nordstrom, Kenneth Worzel, Alexis DePree, Anne Bramman and Edmond Mesrobian under the 2015 grant, beginning February 1, 2015 and ending February 3, 2018.2019 EIP. Payouts are shown in units atof 75%, 100% and 175%150% of the number of performance share unitsPSUs granted. If the threshold levelThe PSU grants to Anne Bramman and Edmond Mesrobian were forfeited upon their separation on December 2, 2022 and October 14, 2022, respectively. (d) All Other Stock Awards: Number of performance is not met, no payout will be earned. The numbers shown reflect the adjustments approved by the Compensation Committee to mitigate the effectShares of the special dividend declared by the Company on October 1, 2015, as described in the Compensation Discussion and Analysis on page 34. (d) | All Other Stock Awards: Number of Shares of Stock or Units |
Stock or Units The numbers shown report the number of restricted stock unitsRSUs granted to the Named Executive OfficersMichael Maher, Alexis DePree and Edmond Mesrobian in fiscal year 20152022 under the 2010 Equity Incentive Plan. These restricted stock units2019 EIP. The RSUs granted on March 3, 2022 to Michael Maher vest equally over four years, beginning on March 10, 2023. The RSUs granted to Blake Nordstrom, Michael Koppel, Peter NordstromMaher, Alexis DePree and Erik NordstromEdmond Mesrobian on May 26, 2022 vest in four equal annual installments beginning one year from the date of grant. Christine Deputy received restricted stock unit grants as part of her new-hire compensation package in 2015. These grants of 21,034 units, 6,062 units50% on June 10, 2024 and 8,135 units vest in three, four and five equal annual installments, respectively, beginning one year from the date of grant.50% on June 10, 2025. The numbers shown reflect the adjustments approved by the Compensation CommitteeRSUs granted to mitigate the effect of the special dividend declared by the CompanyEdmond Mesrobian were forfeited upon his separation on October 1, 2015, as described in the Compensation Discussion and Analysis on page 34. For more information about long-term incentive grant practices, see page 34.14, 2022. (e) | All Other Option Awards: Number of Securities Underlying Options |
(e) All Other Option Awards: Number of Securities Underlying Options The numbers shown report the number of stock options granted to the Named Executive OfficersNEOs in fiscal year 20152022 under the 2010 Equity Incentive Plan, as adjusted by the Compensation Committee to mitigate the effect of the special dividend declared by the Company2019 EIP. Stock options were granted on October 1, 2015, described in the Compensation Discussion and Analysis on page 34. These stock options vestMarch 3, 2022 and become exercisable in four equal annual installments beginning one year fromon March 10, 2025 and March 10, 2026. The stock option grants to Anne Bramman and Edmond Mesrobian were forfeited upon their separations on December 2, 2022 and October 14, 2022, respectively. NORDSTROM, INC. -2016 Proxy Statement | 43 |
the date(f) Exercise or Base Price of grant. For more information about long-term incentive grant practices, see page 34.
Under the 2010 Equity Incentive Plan, the Compensation Committee may grant different types of equity, including stock options, stock appreciation rights, unrestricted shares, restricted shares, restricted stock units and performance share units. In fiscal year 2015, the Named Executive Officers were granted stock options, restricted stock units and performance share units.
(f) | Exercise or Base Price of Option Awards |
Option Awards The exercise pricesprice of the stock options granted in fiscal year 2015on March 3, 2022 of $75.23 and $67.34 were the fair market values at$25.68 was the closing price of Common Stock on the grant dates, February 24, 2015date. (g) Grant Date Fair Value of Stock and August 24, 2015, respectively, as adjusted by the Compensation Committee to mitigate the effect of the special dividend declared by the Company on October 1, 2015, described in the Compensation Discussion and Analysis on page 34. (g) | Grant Date Fair Value of Stock and Option Awards |
Option Awards The grant date fair value of the performance share units,PSUs, RSUs and stock options and restricted stock units was calculated in accordance with ASC 718. The reported value for performance share unitsPSUs granted to Erik Nordstrom, Peter Nordstrom, Kenneth Worzel, Alexis DePree, Anne Bramman and Edmond Mesrobian was calculated by multiplying the number of performance share unitsPSUs granted by the closing pricefair value of Common Stocka PSU on February 24, 2015, the date of grant, which was $75.23. The reported value reflects the adjustment by the Compensation Committee to mitigate the effect of the special dividend declared by the Company$22.58 on October 1, 2015, described in the Compensation Discussion and Analysis on page 34.March 3, 2022. This is not the value received. The actual value they may receive will depend on performance requirements at the Named Executive Officersend of the three-year performance cycle and the market price of Common Stock at vest. The PSU grants to Anne Bramman and Edmond Mesrobian were forfeited upon their separations on December 2, 2022 and October 14, 2022, respectively. The reported value for RSUs was calculated by multiplying the number of RSUs awarded by the fair value of an RSU on the date of grant. The fair value of the RSU grant on March 3, 2022 to Michael Maher was $23.18. The fair value of the RSU grants on May 26, 2022 to Michael Maher, Alexis DePree and Edmond Mesrobian was $22.15. The actual value they may receive will depend on whether the performancetime-based vesting requirement is met and the market price of Common Stock at the endtime of the performance cycle. any vesting. The RSUs granted to Edmond Mesrobian were forfeited upon his separation on October 14, 2022. The reported value forof stock options was calculated by multiplying the number of options awarded by the fair value of an option on the date of grant, which was $19.70 and $19.60 on February 24, 2015 and August 24, 2015, respectively.grant. The reportedfair value reflects the adjustment by the Compensation Committee to mitigate the effect of the special dividend declared by the Company on October 1, 2015, described in the Compensation Discussion and Analysis on page 34. The Named Executive Officers will only realize value fromfor the stock options if the market price of Common Stock is higher than the grant price at the time of exercise.option grants on March 3, 2022 was $10.36. The actual value received by the Named Executive OfficersNEOs may receive will be the number of options exercised multiplied by the difference between the stock price at thatthe future exercise date and the grant prices of $75.23price. The grant price on March 3, 2022 was $25.68. The stock option grants to Anne Bramman and $67.34Edmond Mesrobian were forfeited upon their separations on February 24, 2015December 2, 2022 and August 24, 2015,October 14, 2022, respectively. The reported value for restricted stock units was calculated by multiplying the number of restricted stock units awarded by the fair value of the restricted stock units on the date of grant. The reported value reflects the adjustment by the Compensation Committee to mitigate the effect of the special dividend declared by the Company on October 1, 2015, described in the Compensation Discussion and Analysis on page 34. The adjusted fair value of the restricted stock units granted on February 24, 2015 was $72.73. The adjusted fair values of restricted stock units granted on August 24, 2015 were $65.37, $64.95 and $64.53 for the restricted stock units that vest annually over three, four and five years, respectively. This is not the value received. The actual value the Named Executive Officers may receive will depend on whether the time-based vesting requirement is met and the market price of Common Stock at the time of any vesting.
| | 2023 Proxy Statement | | 52 |
Table of Contents COMPENSATION OF EXECUTIVE OFFICERS Outstanding Equity Awards at Fiscal Year-End 2015 Year End 2022 The table on the following pagetable provides information on the current holdings of stock options and stock awards by the Named Executive OfficersNEOs as of the fiscal year ended January 30, 2016.28, 2023. The table includes vested but unexercised stock options, unvested stock options, unvested restricted stock unitsRSUs and performance share units with time remaining in their three-year performance cycles.unvested PSUs. The vesting schedules for outstanding stock options and restricted stock units and additional information about the outstanding performance share units is shownRSUs are provided on pages 46 and 47.page 55, respectively. Information about the amount of Common Stock beneficially owned by the Named Executive OfficersNEOs is shownprovided in the Beneficial Ownership Table on page 59.84. Anne Bramman and Edmond Mesrobian forfeited all unvested equity upon their separation on December 2, 2022 and on October 14, 2022, respectively. NORDSTROM, INC. -2016 Proxy Statement | 44 |
| | | | | Option Awards | | Stock Awards | | | | | | | | | | | | | | | | | | | | Equity | | Equity | | | | | | | | | | Equity | | | | | | | | Market | | Incentive | | Incentive | | | | | | | | | | Incentive | | | | | | | | Value of | | Plan Awards: | | Plan Awards: | | | | | | | | | | Plan Awards: | | | | | | Number | | Shares | | Number of | | Market or | | | | | | Number of Securities | | Number of | | | | | | of Shares | | or | | Unearned | | Payout Value | | | | | | Underlying | | Securities | | | | | | or Units | | Units of | | Shares, Units | | of Unearned | | | | | | Unexercised Options | | Underlying | | | | | | of Stock | | Stock | | or Other | | Shares, Units | | | | | | (#) | | Unexercised | | Option | | | | That | | That | | Rights That | | or Other Rights | | | | | | | | Unexer- | | Unearned | | Exercise | | Option | | Have Not | | Have Not | | Have | | That Have Not | | | | Grant | | Exer- | | cisable | | Options | | Price | | Expiration | | Vested | | Vested | | Not Vested | | Vested | | Name | | Date | | cisable | | (a) | | (#) | | ($) | | Date | | (#)(b) | | ($) | | (#)(c) | | ($)(d) | | Blake W. | | 2/22/2006 | | 52,524 | | — | | | | 37.61 | | 2/22/2016 | | | | | | | | | | Nordstrom | | 3/1/2007 | | 42,847 | | — | | | | 50.09 | | 3/1/2017 | | | | | | | | | | | | 2/28/2008 | | 55,522 | | — | | | | 35.51 | | 2/27/2018 | | | | | | | | | | | | 2/27/2009 | | 127,251 | | — | | | | 12.58 | | 2/27/2019 | | | | | | | | | | | | 2/26/2010 | | 83,578 | | — | | | | 34.50 | | 2/26/2020 | | | | | | | | | | | | 2/25/2011 | | 74,994 | | — | | | | 42.48 | | 2/25/2021 | | | | | | | | | | | | 2/22/2012 | | 55,119 | | 18,374 | | | | 49.15 | | 2/22/2022 | | | | | | | | | | | | 3/4/2013 | | 49,781 | | 49,782 | | | | 50.26 | | 3/4/2023 | | | | | | | | | | | | 3/3/2014 | | 15,186 | | 45,561 | | | | 57.16 | | 3/3/2024 | | | | | | | | | | | | 3/3/2014 | | | | | | | | | | | | 5,714 | | 280,557 | | | | | | | | 2/24/2015 | | — | | 45,996 | | | | 75.23 | | 2/24/2025 | | | | | | | | | | | | 2/24/2015 | | | | | | | | | | | | 6,230 | | 305,893 | | | | | | | | | | | | | | | | | | | | | | | | 10,461 | | 513,635 | | Michael G. | | 2/28/2008 | | 38,073 | | — | | | | 35.51 | | 2/27/2018 | | | | | | | | | | Koppel | | 2/27/2009 | | 87,257 | | — | | | | 12.58 | | 2/27/2019 | | | | | | | | | | | | 2/26/2010 | | 42,983 | | — | | | | 34.50 | | 2/26/2020 | | | | | | | | | | | | 2/25/2011 | | 42,585 | | — | | | | 42.48 | | 2/25/2021 | | | | | | | | | | | | 2/22/2012 | | 35,433 | | 11,812 | | | | 49.15 | | 2/22/2022 | | | | | | | | | | | | 3/4/2013 | | 33,602 | | 33,602 | | | | 50.26 | | 3/4/2023 | | | | | | | | | | | | 3/3/2014 | | 10,556 | | 31,673 | | | | 57.16 | | 3/3/2024 | | | | | | | | | | | | 3/3/2014 | | | | | | | | | | | | 3,960 | | 194,436 | | | | | | | | 2/24/2015 | | �� | | 33,255 | | | | 75.23 | | 2/24/2025 | | | | | | | | | | | | 2/24/2015 | | | | | | | | | | | | 4,328 | | 212,505 | | | | | | | | | | | | | | | | | | | | | | | | 7,398 | | 363,242 | | Peter E. | | 3/1/2007 | | 29,992 | | — | | | | 50.09 | | 3/1/2017 | | | | | | | | | | Nordstrom | | 2/28/2008 | | 51,556 | | — | | | | 35.51 | | 2/27/2018 | | | | | | | | | | | | 2/27/2009 | | 118,161 | | — | | | | 12.58 | | 2/27/2019 | | | | | | | | | | | | 2/26/2010 | | 77,609 | | — | | | | 34.50 | | 2/26/2020 | | | | | | | | | | | | 2/25/2011 | | 69,637 | | — | | | | 42.48 | | 2/25/2021 | | | | | | | | | | | | 2/22/2012 | | 51,182 | | 17,062 | | | | 49.15 | | 2/22/2022 | | | | | | | | | | | | 3/4/2013 | | 49,781 | | 49,782 | | | | 50.26 | | 3/4/2023 | | | | | | | | | | | | 3/3/2014 | | 15,186 | | 45,561 | | | | 57.16 | | 3/3/2024 | | | | | | | | | | | | 3/3/2014 | | | | | | | | | | | | 5,945 | | 291,900 | | | | | | | | 2/24/2015 | | — | | 45,996 | | | | 75.23 | | 2/24/2025 | | | | | | | | | | | | 2/24/2015 | | | | | | | | | | | | 6,230 | | 305,893 | | | | | | | | | | | | | | | | | | | | | | | | 10,461 | | 513,635 | | Erik B. | | 3/1/2007 | | 29,992 | | — | | | | 50.09 | | 3/1/2017 | | | | | | | | | | Nordstrom | | 2/28/2008 | | 51,556 | | — | | | | 35.51 | | 2/27/2018 | | | | | | | | | | | | 2/27/2009 | | 118,161 | | — | | | | 12.58 | | 2/27/2019 | | | | | | | | | | | | 2/26/2010 | | 77,609 | | — | | | | 34.50 | | 2/26/2020 | | | | | | | | | | | | 2/25/2011 | | 69,637 | | — | | | | 42.48 | | 2/25/2021 | | | | | | | | | | | | 2/22/2012 | | 51,182 | | 17,062 | | | | 49.15 | | 2/22/2022 | | | | | | | | | | | | 3/4/2013 | | 49,781 | | 49,782 | | | | 50.26 | | 3/4/2023 | | | | | | | | | | | | 3/3/2014 | | 15,186 | | 45,561 | | | | 57.16 | | 3/3/2024 | | | | | | | | | | | | 3/3/2014 | | | | | | | | | | | | 5,945 | | 291,900 | | | | | | | | 2/24/2015 | | — | | 45,996 | | | | 75.23 | | 2/24/2025 | | | | | | | | | | | | 2/24/2015 | | | | | | | | | | | | 6,230 | | 305,893 | | | | | | | | | | | | | | | | | | | | | | | | 10,461 | | 513,635 | | Christine F. | | 8/24/2015 | | — | | 20,094 | | | | 67.34 | | 8/24/2025 | | | | | | | | | | Deputy | | 8/24/2015 | | | | | | | | | | | | 35,231 | | 1,729,842 | | | | |
NORDSTROM, INC. -2016 Proxy Statement | 45 |
| | Option Awards | | Stock Awards | Name | | Grant
Date | |
Number of
Securities
Underlying
Unexercised
Options
(#)
| | Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexer-
cised
Unearned
Options
(#) | | Option
Exercise
Price
($) | | Option
Expiration
Date | | Number
of
Shares
or Units
of Stock
That
Have
Not
Vested
(#)(b) | | Market
Value of
Shares or
Units of
Stock
That Have
Not
Vested
($) | | Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That Have
Not
Vested
(#)(c) | | Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
($)(d) | Exer-
cisable | | Unexer-
cisable
(a) | | Erik B. | | 3/4/2013 | | 99,563 | | — | | — | | 50.26 | | 3/4/2023 | | — | | — | | — | | — | Nordstrom | | 3/3/2014 | | 60,747 | | — | | — | | 57.16 | | 3/3/2024 | | — | | — | | — | | — | | | | 2/24/2015 | | 45,996 | | — | | — | | 75.23 | | 2/24/2025 | | — | | — | | — | | — | | | | 2/29/2016 | | 82,141 | | — | | — | | 51.32 | | 2/28/2026 | | — | | — | | — | | — | | | | 6/7/2016 | | 10,838 | | — | | — | | 40.50 | | 6/7/2026 | | — | | — | | — | | — | | | | 2/28/2017 | | 38,653 | | — | | — | | 46.66 | | 2/28/2027 | | — | | — | | — | | — | | | | 3/5/2019 | | 54,801 | | 18,268 | | — | | 45.33 | | 3/5/2029 | | — | | — | | — | | — | | | | 3/9/2020 | | 73,703 | | 73,704 | | — | | 26.79 | | 3/9/2030 | | — | | — | | — | | — | | | | 8/27/2020 | | 245,829 | | — | | — | | 14.79 | | 8/27/2030 | | — | | — | | — | | — | | | | 3/4/2021 | | — | | 297,619 | | — | | 35.52 | | 3/4/2031 | | — | | — | | — | | — | | | | 3/3/2022 | | — | | 102,506 | | — | | 25.68 | | 3/3/2032 | | — | | — | | — | | — | | | 3/3/2022 | | — | | — | | — | | — | | — | | — | | — | | 52,449 | | 966,111 | Michael W. | | 3/4/2013 | | 3,250 | | — | | — | | 50.26 | | 3/4/2023 | | — | | — | | — | | — | Maher | | 3/3/2014 | | 2,270 | | — | | — | | 57.16 | | 3/3/2024 | | — | | — | | — | | — | | | | 2/24/2015 | | 2,360 | | — | | — | | 75.23 | | 2/24/2025 | | — | | — | | — | | — | | | | 2/29/2016 | | 3,615 | | — | | — | | 51.32 | | 2/28/2026 | | — | | — | | — | | — | | | | 3/5/2019 | | — | | — | | — | | — | | — | | 1,426 | | 26,267 | | — | | — | | | | 3/9/2020 | | — | | — | | — | | — | | — | | 4,775 | | 87,956 | | — | | — | | | | 6/1/2020 | | 59,136 | | — | | — | | 16.59 | | 6/1/2030 | | — | | — | | — | | — | | | | 8/27/2020 | | — | | — | | — | | — | | — | | 2,799 | | 51,558 | | — | | — | | | | 3/4/2021 | | — | | 6,766 | | — | | 35.52 | | 3/4/2031 | | — | | — | | — | | — | | | | 3/4/2021 | | — | | — | | — | | — | | — | | 6,453 | | 118,864 | | — | | — | | | | 3/3/2022 | | — | | 9,578 | | — | | 25.68 | | 3/3/2032 | | — | | — | | — | | — | | | | 3/3/2022 | | — | | — | | — | | — | | — | | 12,842 | | 236,550 | | — | | — | | | 5/26/2022 | | — | | — | | — | | — | | — | | 54,177 | | 997,940 | | — | | — |
(a)53 | Number of Securities Underlying Unexercised Options: Unexercisable | 2023 Proxy Statement | |
|
Table of Contents COMPENSATION OF EXECUTIVE OFFICERS | | Option Awards | | Stock Awards | Name | | Grant
Date | |
Number of
Securities
Underlying
Unexercised
Options
(#)
| | Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexer-
cised
Unearned
Options
(#) | | Option
Exercise
Price
($) | | Option
Expiration
Date | | Number
of
Shares
or Units
of Stock
That
Have
Not
Vested
(#)(b) | | Market
Value of
Shares or
Units of
Stock
That Have
Not
Vested
($) | | Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That Have
Not
Vested
(#)(c) | | Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
($)(d) | Exer-
cisable | | Unexer-
cisable
(a) | | Peter E. | | 3/4/2013 | | 99,563 | | — | | — | | 50.26 | | 3/4/2023 | | — | | — | | — | | — | Nordstrom | | 3/3/2014 | | 60,747 | | — | | — | | 57.16 | | 3/3/2024 | | — | | — | | — | | — | | | | 2/24/2015 | | 45,996 | | — | | — | | 75.23 | | 2/24/2025 | | — | | — | | — | | — | | | | 2/29/2016 | | 82,141 | | — | | — | | 51.32 | | 2/28/2026 | | — | | — | | — | | — | | | | 6/7/2016 | | 10,838 | | — | | — | | 40.50 | | 6/7/2026 | | — | | — | | — | | — | | | | 2/28/2017 | | 38,653 | | — | | — | | 46.66 | | 2/28/2027 | | — | | — | | — | | — | | | | 3/5/2019 | | 54,801 | | 18,268 | | — | | 45.33 | | 3/5/2029 | | — | | — | | — | | — | | | | 3/9/2020 | | 73,703 | | 73,704 | | — | | 26.79 | | 3/9/2030 | | — | | — | | — | | — | | | | 8/27/2020 | | 245,829 | | — | | — | | 14.79 | | 8/27/2030 | | — | | — | | — | | — | | | | 3/4/2021 | | — | | 297,619 | | — | | 35.52 | | 3/4/2031 | | — | | — | | — | | — | | | | 3/3/2022 | | — | | 102,506 | | — | | 25.68 | | 3/3/2032 | | — | | — | | — | | — | | | 3/3/2022 | | — | | — | | — | | — | | — | | — | | — | | 52,449 | | 966,111 | Kenneth J. | | 3/4/2013 | | 40,536 | | — | | — | | 50.26 | | 3/4/2023 | | — | | — | | — | | — | Worzel | | 3/3/2014 | | 26,141 | | — | | — | | 57.16 | | 3/3/2024 | | — | | — | | — | | — | | | | 2/24/2015 | | 20,585 | | — | | — | | 75.23 | | 2/24/2025 | | — | | — | | — | | — | | | | 2/29/2016 | | 38,057 | | — | | — | | 51.32 | | 2/28/2026 | | — | | — | | — | | — | | | | 6/7/2016 | | 23,433 | | — | | — | | 40.50 | | 6/7/2026 | | — | | — | | — | | — | | | | 2/28/2017 | | 16,464 | | — | | — | | 46.66 | | 2/28/2027 | | — | | — | | — | | — | | | | 3/5/2019 | | 79,712 | | 79,713 | | — | | 45.33 | | 3/5/2029 | | — | | — | | — | | — | | | | 3/5/2019 | | — | | — | | — | | — | | — | | 4,646 | | 85,579 | | — | | — | | | | 3/9/2020 | | — | | — | | — | | — | | — | | 21,889 | | 403,195 | | — | | — | | | | 8/27/2020 | | 366,540 | | — | | — | | 14.79 | | 8/27/2030 | | — | | — | | — | | — | | | | 3/4/2021 | | — | | 68,915 | | — | | 35.52 | | 3/4/2031 | | — | | — | | — | | — | | | | 3/4/2021 | | — | | — | | — | | — | | — | | 31,636 | | 582,735 | | — | | — | | | | 3/3/2022 | | — | | 86,395 | | — | | 25.68 | | 3/3/2032 | | — | | — | | — | | — | | | 3/3/2022 | | — | | — | | — | | — | | — | | — | | — | | 44,205 | | 814,256 | Alexis | | 3/9/2020 | | — | | — | | — | | — | | — | | 10,719 | | 197,444 | | — | | — | DePree | | 3/9/2020 | | — | | — | | — | | — | | — | | 27,953 | | 514,894 | | — | | — | | | | 6/1/2020 | | 58,080 | | — | | — | | 16.59 | | 6/1/2030 | | — | | — | | — | | — | | | | 3/4/2021 | | — | | 32,649 | | — | | 35.52 | | 3/4/2031 | | — | | — | | — | | — | | | | 3/4/2021 | | — | | — | | — | | — | | — | | 15,569 | | 286,781 | | — | | — | | | | 3/3/2022 | | — | | 33,013 | | — | | 25.68 | | 3/3/2032 | | — | | — | | — | | — | | | | 3/3/2022 | | — | | — | | — | | — | | — | | — | | — | | 17,037 | | 313,822 | | | 5/26/2022 | | — | | — | | — | | — | | — | | 45,147 | | 831,608 | | — | | — | Anne L. | | | | | | | | | | | | | | | | | | | | | Bramman | | 3/5/2019 | | 61,777 | | — | | — | | 45.33 | | 3/5/2029 | | — | | — | | — | | — |
| | 2023 Proxy Statement | | 54 |
Table of Contents COMPENSATION OF EXECUTIVE OFFICERS (a) Number of Securities Underlying Unexercised Options: Unexercisable The following table shows the grant date, vesting schedule and expiration date for all unvested stock options as of the fiscal year ended January 30, 2016. All28, 2023. On March 5, 2019, Erik Nordstrom and Peter Nordstrom received a stock option grants havegrant with a four-yearfour-year vesting schedule of 25% per year. On March 5, 2019, Kenneth Worzel and Anne Bramman also received a stock option grant with a four-year vesting schedule of 50% on March 10, 2022 and 50% on March 10, 2023. Anne Bramman forfeited the unvested portion of her award upon her separation on December 2, 2022, and had 61,777 exercisable stock options as of the end of fiscal year 2022. On March 4, 2021, Erik Nordstrom and Peter Nordstrom each received a 10-year term. stock option grant that vests 50% on March 10, 2024 and 50% on March 10, 2025 subject to the condition that the average daily closing price of our Common Stock meets or exceeds $45 per share for any twenty consecutive trading day period prior to March 10, 2025. On March 4, 2021, Michael Maher, Kenneth Worzel and Alexis DePree also received a stock option grant that vests 50% on March 10, 2024 and 50% on March 10, 2025, and is not subject to a price condition for vesting. Grant Date | | Vesting Schedule | | Expiration Date | 2/22/20123/5/2019 | | 25% per year with a remaining vesting date of 2/22/20163/10/2023 | 2/22/2022 | 3/5/2029 | 3/4/20135/2019 | | 50% on 3/10/2022 and 50% on 3/10/2023 with a remaining vesting date of 3/10/2023 | | 3/5/2029* | 3/9/2020 | | 25% per year with remaining vesting dates of 3/4/201610/2023 and 3/4/201710/2024 | | 3/4/20239/2030 | 3/3/20144/2021 | 25% per year with remaining vesting dates of | 50% on 3/3/2016, 3/3/201710/2024 and 50% on 3/3/201810/2025 | | 3/3/20244/2031 | 2/24/20153/3/2022 | 25% per year with vesting dates of 2/24/2016, 2/24/2017, 2/24/2018 | 50% on 3/10/2025 and 2/24/201950% on 3/10/2026 | 2/24/2025 | 8/24/2015 | 25% per year with vesting dates of 8/24/2016, 8/24/2017, 8/24/2018 and 8/24/2019 | 8/24/20253/3/2032 |
(b) | Number of Shares or Units of Stock That Have Not Vested |
(b) Number of Shares or Units of Stock That Have Not Vested The following table shows the grant date and vesting schedule for all unvested restricted stock unitsRSUs as of the fiscal year ended January 30, 2016. The restricted stock unit grants for Blake Nordstrom,28, 2023. On March 9, 2020, Michael Koppel, Peter NordstromMaher, Kenneth Worzel and Erik Nordstrom all haveAlexis DePree received a four-yearRSU grant with a four-year vesting schedule of 25% per year. The restricted stock unit grants for Christine DeputyOn March 9, 2020, Alexis DePree received an additional RSU grant with a three-year vesting schedule of 21,034 units, 6,062 units33% in years one and 8,135 units vest equally over three, fourtwo and five years, respectively. 34% in the final year. Grant Date | | Vesting Schedule | 3/3/20145/2019 | | 25% per year with a remaining vesting date of 3/10/2023 | 3/9/2020 | | 25% per year with remaining vesting dates of 3/3/2016, 3/3/201710/2023 and 3/3/201810/2024 | 2/24/20153/9/2020 | | 33% in years one and two and 34% in the final year with a remaining vesting date of 3/10/2023 | 8/27/2020 | | 25% on 3/10/2021, 3/10/2022, 3/10/2023 and 3/10/2024, with remaining vesting dates of 3/10/2023 and 3/10/2024 | 3/4/2021 | | 25% per year with remaining vesting dates of 2/24/2016, 2/24/2017, 2/24/20183/10/2023, 3/10/2024 and 2/24/20193/10/2025 | 8/24/20153/3/2022 | 33.3% per year with vesting dates of 8/24/2016, 8/24/2017 and 8/24/2018 | 8/24/2015 | 25% per year with remaining vesting dates of 8/24/2016, 8/24/2017, 8/24/20183/10/2023, 3/10/2024, 3/10/2025 and 8/24/20193/10/2026 | 8/24/20155/26/2022 | 20% per year with vesting dates of 8/24/2016, 8/24/2017, 8/24/2018, 8/24/2019 | 50% on 6/10/2024 and 8/24/202050% on 6/10/2025 |
(c) | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested |
(c) Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested The numbers reported are therelate to outstanding performance share unitsPSUs granted in fiscal years 2014 and 2015, as adjusted by the Compensation Committee to mitigate the effect of the special dividend declared by the Company on October 1, 2015, described in the Compensation Discussion and Analysis on page 34. Both of these grantsyear 2022 that have time remaining in their three-yearthree-year performance cycles.cycle, as discussed on page 42. If the performance cycles for these grantscycle had ended as ofon the closelast day of fiscal year 2015, 0%2022, the minimum percentage of the number75% of performance share units granted in 2014 and 2015PSUs outstanding would have been earned. As required to be disclosed, the number of estimated shares reported for the 2014 and 2015 grantsearned, which is based on achieving the next higher performance measure which pays out at 75% of the number of units granted, as shownreflected in the performance share unit vesting schedule on page 34. See the Outstandingtable.
(d) Equity Incentive Plan Awards: Performance ShareMarket or Payout Value of Unearned Shares, Units table on the following page for detailed information about these awards. (d) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested |
or Other Rights That Have Not Vested The amounts reported relate to the outstanding performance share unitsPSUs granted in fiscal years 2014 and 2015, as adjusted by the Compensation Committee to mitigate the effect of the special dividend declared by the Company on October 1, 2015, described in the Compensation Discussion and Analysis on page 34. Both of these grantsyear 2022 that have time remaining in their three-yearthree-year performance cycles.cycle, as discussed on page 42. If the performance cycles for these grantscycle had ended as ofon the closelast day of fiscal year 2015, 0%2022 and the PSUs vested, the minimum percentage of the number75% of performance share units granted in 2014 and 2015PSUs outstanding would have been earned. As required to be disclosed, the payout values reported are based on achieving the next higher performance measure which pays outearned at 75% of the number of units granted. The value of estimated payouts has been calculated using$18.42, the closing price of Common Stock on January 29, 2016,27, 2023, the last market trading day of the fiscal year, of $49.10. The payout does not include estimated dividend amounts as the Company does not pay dividends on unvested performance share units. See the Outstanding Equity Awards: Performance Share Units table on the following page for detailed information about these awards.year.
Outstanding Equity Awards: Performance Share Units
The table on the following page shows the detail for the outstanding performance share units that were granted in fiscal years 2014 and 2015 under the 2010 Equity Incentive Plan, as adjusted by the Compensation Committee to mitigate the effect of the special dividend declared by the Company on October 1, 2015, described in the Compensation Discussion and Analysis on page 34. The number and value of these outstanding performance share units are shown in columns (c) and (d) of the Outstanding Equity Awards at Fiscal Year-End 2015 table on page 45. These 2014 and 2015 performance share unit grants have one and two years remaining in their three-year performance cycles, respectively. More information about performance share units and long-term incentive grant practices is provided on page 34.
NORDSTROM, INC. - 201655 | | 2023 Proxy Statement | 46 |
| | | Estimated Shares | | | | | (at 75% of the Number Granted | Value of | | | Three-Year Performance Cycle | for the 2014 and 2015 Grants) | Estimated Payout | | Name | (a) | (#) | ($) | | Blake W. Nordstrom | 2/2/2014 – 1/28/2017 | 5,944.5 | 291,875 | | | 2/1/2015 – 2/03/2018 | 4,516.5 | 221,760 | | Michael G. Koppel | 2/2/2014 – 1/28/2017 | 4,132.5 | 202,906 | | | 2/1/2015 – 2/03/2018 | 3,265.5 | 160,336 | | Peter E. Nordstrom | 2/2/2014 – 1/28/2017 | 5,944.5 | 291,875 | | | 2/1/2015 – 2/03/2018 | 4,516.5 | 221,760 | | Erik B. Nordstrom | 2/2/2014 – 1/28/2017 | 5,944.5 | 291,875 | | | 2/1/2015 – 2/03/2018 | 4,516.5 | 221,760 | | Christine F. Deputy | — | — | — |
The performance share units are earned on the last dayTable of the three-year performance cycle if performance criteria have been met, and become vested when the results have been certified by the Compensation Committee.Contents
COMPENSATION OF EXECUTIVE OFFICERS
Option Exercises and Stock Vested in Fiscal Year 2015 2022 The following table provides information for the Named Executive Officers on: • | the number of shares of Common Stock acquired and value realized from stock option exercises in fiscal year 2015; and | | | • | the number of shares of Common Stock acquired and value realized from performance share units and restricted stock units that vested with respect to fiscal year 2015. | | |
| | Option Awards | | Stock Awards | | | Number of Shares | Value Realized | | Number of Shares | Value Realized | | | Acquired on Exercise | on Exercise | | Acquired on Vesting | on Vesting | | Name | (#) | ($)(a) | | (#)(b) | ($)(c) | | Blake W. Nordstrom | — | — | | 8,306.00 | 462,711 | | Michael G. Koppel | 53,878 | 1,808,213 | | 5,829.25 | 325,982 | | Peter E. Nordstrom | 31,531 | 1,259,616 | | 8,378.00 | 468,469 | | Erik B. Nordstrom | 31,531 | 1,308,223 | | 8,378.00 | 486,878 | | Christine F. Deputy | — | — | | — | — |
(a) | Value RealizedNEOs on Exercise |
The amount realized equals the aggregate difference between the fair market value of Common Stock on the dates of exercise and the grant prices, multiplied by the number of shares of Common Stock acquired and value realized from Options exercised and Awards that vested with respect to fiscal year 2022.
| | Option Awards | | Stock Awards | Name | | Number of Shares
Acquired on
Exercise
(#) | | Value Realized
on Exercise
($) | | Number of Shares
Acquired on Vesting
(#)(a) | | Value Realized on
Vesting
($)(b) | Erik B. Nordstrom | | — | | — | | 13,656 | | 322,633 | Michael W. Maher | | — | | — | | 12,745 | | 282,788 | Peter E. Nordstrom | | — | | — | | 13,656 | | 322,633 | Kenneth J. Worzel | | — | | — | | 44,589 | | 1,064,499 | Alexis DePree | | — | | — | | 46,977 | | 1,149,135 | Anne L. Bramman | | 281,657 | | 483,943 | | 40,613 | | 973,087 | Edmond Mesrobian | | 212,207 | | 1,198,821 | | 42,287 | | 911,208 |
(a) Number of Shares Acquired on exercise. (b) | Number of Shares Acquired on Vesting |
Vesting The numbers reported include restricted stock unitsRSUs that vested during the fiscal year and performance share units granted in 20132022 for the NEOs. The amounts also include PSUs that vested at 75%for Erik Nordstrom, Peter Nordstrom and Kenneth Worzel of target based on Company Total Shareholder Return relative to other companies in our peer group, as described on page 34. The number of shares acquired on performance share unit vesting is equal to 75% of the number of performance share units granted, as adjusted by the Compensation Committee to mitigate the effect of the special dividend declared by the Company on October 1, 2015, described in the Compensation Discussion603, 603 and Analysis on page 34. The number reported for Michael Koppel includes 187 shares509, respectively, which vested on an accelerated basis in 2015fiscal year 2022 solely to satisfy Social Security, Medicare or income tax withholding obligations of retirement-eligibleretirement-eligible employees with respect to their restricted stock unit awards.PSUs. (c) | Value Realized on Vesting |
Vested performance share units are paid in shares of Common Stock or cash at the election of the executive prior to the end of the performance cycle. Blake Nordstrom, Michael Koppel and Peter Nordstrom elected to receive 100% of their 2015 payouts in cash. Erik Nordstrom elected to receive 100% of his 2015 payout in Common Stock.
(b) Value Realized on Vesting The amount realized fromamounts reported are the vested performance share units for Blake Nordstrom, Michael Koppel and Peter Nordstrom was equal to the number of shares of Common Stock available for acquisition, multiplied by $49.10, the closing price of Common Stock on January 29, 2016, the last market trading day of the three-year performance cycle. The amount realized from the vested performance share units for Erik Nordstrom was equal to the number of shares of Common Stock, multiplied by $51.92, the closing price of Common Stock on February 24, 2016, the vesting date. The amountvalues realized for Michael Koppel includesthe RSUs that vested during fiscal year 2022 for the NEOs. The amounts also include the number of shares of Common Stock withheld on the vesting of restricted stock unitsPSUs for Erik Nordstrom, Peter Nordstrom and Kenneth Worzel to satisfy tax withholding obligations as described previously, multiplied by $57.71,$16.39, the closing price of Common Stock on November 24, 2015,December 19, 2022, the vesting date.
NORDSTROM, INC. - 2016 Proxy Statement | 47 |
Pension Benefits The Company’s original Supplemental Executive Retirement Plan (“SERP”)SERP was introduced in the 1980s. Over the years, the plan design changed to better meet the current purpose of encouraging designated executives to stay with Nordstrom throughout their careers and rewarding their significant and sustained contribution to the Company’s success by adding to their financial security upon retirement. TheBeginning in 2012, the SERP was closed to new entrants, beginning in 2012.entrants. All of the Named Executive OfficersThe NEOs, except Christine Deputy,Michael Maher, Alexis DePree, Anne Bramman and Edmond Mesrobian, who joined the Company or moved into an eligible role after the SERP had been closed to new entrants, are eligible for the SERP andSERP. The eligible NEOs are entitled to receive thetheir full retirement benefit at age 58. TheTheir full benefit is equal to 1.6% multiplied by final average pay, as described in the following paragraph, and the executive’stheir years of credited service, up to a maximum of 25 years. An executiveThey may retire early and could receive a reduced benefit if he or she isthey are between the ages of 53 and57, inclusive, with at least 10 years of credited service and the BoardCPCC approves the early retirement. The early retirement benefit is reduced 10% for each year that thetheir retirement age is less than 58. If they retire after age58, they are entitled to their full retirement benefit, increased with interest of 5% per year, compounded annually, for each full year worked beyond age58, for a maximum of 10 years. The annual SERP benefit is capped at $700,000.
$700,000 after any early retirement reductions are applied. Final average pay is the average base salary and annual performance-basedperformance-based cash bonus of the highest 36 months over the longer of: • | •the most recent five years of service; or | | | • | the entire period of service after the executive’s 53rdbirthday. |
There is no offset or reduction in •the Named Executive Officers’ SERP benefit for Social Security or other Company retirement benefits such asentire period of service after the 401(k) Plan.
executive’s 53rd birthday. The annual SERP benefit is paid upon retirement for the remaining life of the executive with a 50% annuity paid to a surviving spouse or life partner after the executive’s death. A surviving spouse or life partner also receives a 50% survivor benefit if the executive dies before retiring. The amount of this survivor benefit depends on the executive’s age and years of credited service at the time of death. The SERP provides that no benefit will be paid to an executive whose employment is terminated for cause, which includes competitive behavior against the Company, as determined by the Compensation CommitteeCPCC in the exercise of its discretion in accordance with the Plan. The Compensation CommitteeCPCC also has discretion to discontinue payment of benefits under the SERP if the retired executive is found to have engaged in misconduct or in competitive behavior against the Company.
| | 2023 Proxy Statement | | 56 |
Table of Contents COMPENSATION OF EXECUTIVE OFFICERS Information about payment of the SERP benefit related to change in control is provided on page 63 in footnote (b) to the Potential Payments Upon Termination or Change in Control at Fiscal Year-End 2015 table on page 53. Year End 2022 table. Because the SERP is a nonqualified deferred compensation plan, the Company is not obligated to fund it. However, the Company does set aside funds to assist in the payment of future benefit obligations. If the Company were to become insolvent, participants would be unsecured general creditors, and there is no guarantee that funds would be available to pay all creditors in full. See the notes to the financial statements contained within the Company’s 2022 Annual Report on Form 10-K for the fiscal year ended January 30, 2016, filed with the SEC, for a discussion of the benefit obligation. NORDSTROM, INC. - 2016 Proxy Statement | 48Fiscal Year 2022 Pension Benefits Table |
Fiscal Year 2015 Pension Benefits Table
The following table shows the present value of the accumulated SERP benefitsbenefit payable to each of the Named Executive Officers,NEOs, based on the number of years of service credited under the Plan to each Named Executive OfficerNEO and actuarial assumptions consistent with those used in the Company’s financial statements2022 Annual Report to calculate the Company’s obligations under the Plan. Christine Deputy joined the Company after the SERP was closed to new entrants, so she is not eligible for the SERP benefit. See the notes to the financial statements contained within the Company’s 2022 Annual Report on Form 10-K for the fiscal year ended January 30, 2016, filed with the SEC, for a discussion of the benefit obligation and assumptions used. Name | | Plan Name | | Age
(#)(a) | | Number of Years
Credited Service
(#)(b) | | Present Value of
Accumulated Benefit
($)(c) | | Payments
During Last
Fiscal Year
($) | Erik B. Nordstrom | | SERP | | 59 | | 25 | | 10,805,200 | | — | Michael W. Maher | | | | | | | | — | | — | Peter E. Nordstrom | | SERP | | 60 | | 25 | | 10,857,560 | | — | Kenneth J. Worzel | | SERP | | 58 | | 13 | | 6,051,510 | | — | Alexis DePree | | | | | | | | — | | — | Anne L. Bramman | | | | | | | | — | | — | Edmond Mesrobian | | | | | | | | — | | — |
| | | | Number of Years | Present Value of | Payments During | | | | Age | Credited Service | Accumulated Benefit | Last Fiscal Year | | Name | Plan Name | (a) | (#)(b) | ($)(c) | ($) | | Blake W. Nordstrom | Supplemental Executive Retirement Plan | 55 | 25 | 10,286,366 | — | | Michael G. Koppel | Supplemental Executive Retirement Plan | 59 | 25 | 9,260,505 | — | | Peter E. Nordstrom | Supplemental Executive Retirement Plan | 53 | 25 | 9,566,590 | — | | Erik B. Nordstrom | Supplemental Executive Retirement Plan | 52 | 25 | 9,001,464 | — | | Christine F. Deputy | — | 50 | — | — | — |
(a) Age Age is as of January 30, 2016,28, 2023, the last day of the fiscal year. (b) | Number of Years Credited Service |
(b) Number of Years Credited Service Although Blake Nordstrom, PeterErik Nordstrom and ErikPeter Nordstrom each have 36 or more than 25 years of service, the number of years of credited service under the SERP is capped at 25. Prior to 2006, the Compensation Committee selectively awarded additional years (c) Present Value of service to executives hired mid-career so that they could earn the full 25 years of service by the time they reached the retirement age of 58. Michael Koppel received these additional years and has earned the equivalent of 25 years of service. Nine of Michael Koppel’s 25 years are additional years of service.Accumulated Benefit (c) | Present Value of Accumulated Benefit |
The amounts shown are based on a retirement age of 58. Erik Nordstrom, is not currently entitled to receive any benefits, should he leave the Company, because he is not the minimum retirement age of 53 and as such, the amount is not vested. BlakePeter Nordstrom and Peter NordstromKenneth Worzel have met the minimum full retirement age of 5358 with at least 10 years of credited service and would be eligible for early retirement with prior approval from the Board. If the Board approved early retirement, they would be entitled to receive a reducedthe SERP benefit with ahaving the present value as of the end of the fiscal year of $8,526,833 and $6,301,890, respectively. Michael Koppel has met the normal retirement age of 58 and would be entitled to receive a full SERP benefit with a present value as of the end of the fiscal year of $9,260,505,values as shown above. These amounts are reported in the Potential Payments Upon Termination or Change of Control at Fiscal Year-End 2015 table on page 51.table.
57 | | 2023 Proxy Statement | |
|
Table of Contents COMPENSATION OF EXECUTIVE OFFICERS Nonqualified Deferred Compensation The Company offers participation in the Executive Deferred Compensation Plan (“EDCP”)NDCP to designated leadership-leveleligible employees, including the Named Executive Officers, who meet a minimum compensation threshold.NEOs. Under this Plan, a participant may defer up to 80% of base salary, up to 100% of an annual performance-basedperformance-based bonus earned under the Company’s bonus plan and up to 100% of any vested performance share units,PSUs, less applicable payroll taxes. Deferral elections generally are irrevocable and are made in compliance with Section 409A of the IRC. If a participant’s EDCPNDCP deferrals cause a reduction in the Company’s 401(k) match contribution, the Company may deposit a make-upmake-up contribution into the participant’s EDCPNDCP account. Michael Koppel and Christine Deputy participate inThe Company may also provide a matching contribution, up to 4% of eligible pay over the EDCP and neither received a make-up contribution in the fiscal401(k) calendar year ended January 30, 2016. The Company’s contribution to Michael Koppel’s 401(k) Plan account was not reduced due to anycompensation limit, on deferrals into the EDCP and Christine Deputy wasNDCP by eligible participants. Participants in the Company’s SERP are not eligible for a Company contribution to the 401(k) Plan in 2015. this matching contribution. Plan participants may direct their cash deferrals to deemed investment alternatives, priced and valued similar to retail mutual funds. As of the end of the fiscal year, the Company offered 21nine deemed investment alternatives. In addition, planPlan participants are offered a fixed rate option, which was 5%4.36% for calendar year 20152022 and is 4.85%4.18% for calendar year 2016,2023, which is not subsidized by the Company but rather is a rate based on guaranteed contractual returns from a third-partythird-party insurance company provider. With the exception of the fixed rate fund, participants may change their investment allocations among these investment alternatives daily. Gains and losses for cash deferrals are credited to participant accounts daily, based on their investment elections. The deemed investment alternatives for cash do not include Common Stock. Vested performance share unitsPSUs that are deferred into the EDCPNDCP remain as stock units until distribution. NORDSTROM, INC. - 2016 Proxy Statement | 49Fiscal Year 2022 Nonqualified Deferred Compensation Table |
Fiscal Year 2015 Nonqualified Deferred Compensation Table
The following table discloses information on nonqualified deferred compensation for the Named Executive OfficersNEOs under the Company’s EDCPNDCP for the fiscal year ended January 30, 2016.28, 2023. The Company’s SERP is also a nonqualified plan. Information regarding benefits payable to Named Executive OfficersNEOs under the SERP is provided beginning on pages 48 and 49.page 57. Name | |
Executive
Contributions in
Last Fiscal Year
($)(a)
| | Registrant
Contributions in Last
Fiscal Year
($) | | Aggregate Earnings
in Last Fiscal Year
($)(b) | | Aggregate
Withdrawals/
Distributions
($) | | Aggregate
Balance at Last
Fiscal Year End
($)(c) | Erik B. Nordstrom | | — | | — | | — | | | — | | — | Michael W. Maher | | — | | — | | (11,604 | ) | | — | | 206,219 | Peter E. Nordstrom | | — | | — | | — | | | — | | — | Kenneth J. Worzel | | 86,058 | | — | | 18,013 | | | — | | 992,508 | Alexis DePree | | — | | — | | — | | | — | | — | Anne L. Bramman | | 74,173 | | — | | 12,696 | | | — | | 338,949 | Edmond Mesrobian | | — | | — | | (33,173 | ) | | — | | 167,361 |
(a) Executive Contributions in Last Fiscal Year | | Executive | Registrant | Aggregate | Aggregate | | | | Contributions in Last | Contributions in Last | Earnings in Last | Withdrawals / | Aggregate Balance at | | | Fiscal Year | Fiscal Year | Fiscal Year | Distributions | Last Fiscal Year-End | | Name | ($)(a) | ($) | ($)(b) | ($) | ($)(c) | | Blake W. Nordstrom | — | — | — | — | — | | Michael G. Koppel | — | — | (565,453) | — | 2,908,638 | | Peter E. Nordstrom | — | — | — | — | — | | Erik B. Nordstrom | — | — | — | — | — | | Christine F. Deputy | 769 | — | 1 | — | 770 |
(a) | Executive Contributions in Last Fiscal Year |
The amounts reported are the deferrals made during the fiscal year. Christine Deputy elected to defer $17,680 of base salary earned during calendar year 2016 into the EDCP. Due to the timing of our fiscal year end, $769 of this was attributed to fiscal year 2015 and the remaining $16,911 will be attributed to fiscal year 2016.
(b) | Aggregate Earnings in Last Fiscal Year |
(b) Aggregate Earnings in Last Fiscal Year The amounts include the total interest or other earnings (loss) accrued in fiscal year 2022 on the entire EDCPNDCP account balance, including deferred performance share units.PSUs. (c) | Aggregate Balance at Last Fiscal Year-End |
(c) Aggregate Balance at Last Fiscal Year End The amounts shown are the total EDCPNDCP balances, including earnings on deferrals, as of January 30, 2016. The amount for Michael Koppel, excluding earnings on deferrals, has been previously disclosed in the Summary Compensation Table in our prior Proxy Statements.28, 2023.
| | 2023 Proxy Statement | | 58 |
Table of Contents COMPENSATION OF EXECUTIVE OFFICERS Potential Payments Upon Termination or Change in Control The information on the following pages describes and quantifies certain amounts that would become payable under existing compensation plans if the Named Executive Officers’NEOs’ employment had terminated on January 30, 2016,28, 2023, the last day of the fiscal year. The amounts are based on each executive’s compensation and years of service as of that date and, if applicable, based on the closing price of Common Stock on January 29, 2016,27, 2023, the last market trading day of the fiscal year, of $49.10.$18.42. The estimates are based on all relevant plans effective at the end of the fiscal year and information available at that time. Actual values would reflect specific circumstances at the time of any termination, the plans and provisions effective if and when a termination event occurs and any other applicable factors. Employment Agreements
The Company does not have employment agreements with any Nordstrom employees, including the Named Executive Officers.NEOs. The Company maintains a leadership separationan executive severance plan to provide a broad group of leadership employeescertain NEOs an appropriate level of severance benefits in the event of involuntary separation of service, under certain circumstances.not for cause. Except as described on the following pages, there are no agreements, arrangements or plans that entitle the Named Executive OfficersNEOs to enhanced benefits upon termination of their employment. NORDSTROM, INC. - 2016 Proxy Statement | 50Potential Payments Upon Termination or Change in Control at Fiscal
Year-End 2022 |
Potential Payments Upon Termination or Change in Control at Fiscal Year-End 2015
The following table shows various termination scenarios and payments that would be triggered under the Company’s compensation plans.plans, with the exception of Anne Bramman and Edmond Mesrobian who separated prior to the end of the fiscal year on December 2, 2022 and October 14, 2022, respectively, and for whom actual payments upon termination are shown. | | | | | Termination | Change in | | | Death | Disability | Retirement | without Cause | Control | | Name and Potential Payment | ($) | ($) | ($) | ($) | ($) | | Blake W. Nordstrom | | | | | | | Continued or Accelerated Vesting of Equity Awards(a) | 586,450 | 586,450 | 586,450 | 586,450 | — | | Vested SERP Benefit(b) | 4,180,509 | — | 8,526,833 | 8,526,833 | — | | Executive Deferred Compensation Plan Survivor Benefit(c) | — | — | — | — | — | | Life Insurance Proceeds(d) | 925,000 | — | — | — | — | | Retiree Health Care Benefit(e) | 164,144 | 374,701 | 374,701 | 374,701 | — | | Separation Benefit(f) | — | — | — | — | — | | Disability Insurance Benefit(g) | — | 35,000 | — | — | — | | Executive Management Bonus(h) | — | — | — | — | — | | Total Value of Incremental Benefits | 5,856,103 | 996,151 | 9,487,984 | 9,487,984 | — | | Michael G. Koppel | | | | | | | Continued or Accelerated Vesting of Equity Awards(a) | 406,941 | 406,941 | 406,941 | 406,941 | — | | Vested SERP Benefit(b) | 4,574,057 | 9,260,505 | 9,260,505 | 9,260,505 | — | | Executive Deferred Compensation Plan Survivor Benefit(c) | 2,026,920 | — | — | — | — | | Life Insurance Proceeds(d) | 963,000 | — | — | — | — | | Retiree Health Care Benefit(e) | 134,649 | 285,248 | 285,248 | 285,248 | — | | Separation Benefit(f) | — | — | — | 217,956 | — | | Disability Insurance Benefit(g) | — | 35,000 | — | — | — | | Executive Management Bonus(h) | — | — | — | — | — | | Total Value of Incremental Benefits | 8,105,567 | 9,987,694 | 9,952,694 | 10,170,650 | — | | Peter E. Nordstrom | | | | | | | Continued or Accelerated Vesting of Equity Awards(a) | 597,793 | 597,793 | — | — | — | | Vested SERP Benefit(b) | 3,197,110 | — | 6,301,890 | 6,301,890 | — | | Executive Deferred Compensation Plan Survivor Benefit(c) | — | — | — | — | — | | Life Insurance Proceeds(d) | 925,000 | — | — | — | — | | Retiree Health Care Benefit(e) | — | — | — | — | — | | Separation Benefit(f) | — | — | — | — | — | | Disability Insurance Benefit(g) | — | 35,000 | — | — | — | | Executive Management Bonus(h) | — | — | — | — | — | | Total Value of Incremental Benefits | 4,719,903 | 632,793 | 6,301,890 | 6,301,890 | — | | Erik B. Nordstrom | | | | | | | Continued or Accelerated Vesting of Equity Awards(a) | 597,793 | 597,793 | — | — | — | | Vested SERP Benefit(b) | 2,892,365 | — | — | — | — | | Executive Deferred Compensation Plan Survivor Benefit(c) | — | — | — | — | — | | Life Insurance Proceeds(d) | 925,000 | — | — | — | — | | Retiree Health Care Benefit(e) | — | — | — | — | — | | Separation Benefit(f) | — | — | — | — | — | | Disability Insurance Benefit(g) | — | 35,000 | — | — | — | | Executive Management Bonus(h) | — | — | — | — | — | | Total Value of Incremental Benefits | 4,415,158 | 632,793 | — | — | — | | Christine F. Deputy | | | | | | | Continued or Accelerated Vesting of Equity Awards(a) | — | — | — | — | — | | Vested SERP Benefit(b) | — | — | — | — | — | | Executive Deferred Compensation Plan Survivor Benefit(c) | — | — | — | — | — | | Life Insurance Proceeds(d) | 657,000 | — | — | — | — | | Retiree Health Care Benefit(e) | — | — | — | — | — | | Separation Benefit(f) | — | — | — | 277,500 | — | | Disability Insurance Benefit(g) | — | 35,000 | — | — | — | | Executive Management Bonus(h) | — | — | — | — | — | | Total Value of Incremental Benefits | 657,000 | 35,000 | — | 277,500 | — |
Name and Potential Payment | | Death
($) | | Disability
($) | | Retirement
($) | | Termination
without
Cause
($) | | Qualifying
Termination
Following a
Change in
Control
($) | Erik B. Nordstrom | | | | | | | | | | | Continued or Accelerated Vesting of Equity Awards(a) | | 429,389 | | 429,389 | | 322,041 | | 322,041 | | 966,124 | Vested SERP Benefit(b) | | 5,209,255 | | 10,805,200 | | 10,805,200 | | 10,805,200 | | 10,805,200 | Life Insurance Proceeds(c) | | 1,517,000 | | — | | — | | — | | — | Retiree Health Care Benefit(d) | | 159,075 | | 328,029 | | 328,029 | | 328,029 | | 328,029 | Separation Benefit(e) | | — | | — | | — | | — | | — | Disability Insurance Benefit(f) | | — | | 35,000 | | — | | — | | — | Executive Management Bonus(g) | | — | | — | | — | | — | | — | Total Value of Incremental Benefits | | 7,314,719 | | 11,597,618 | | 11,455,270 | | 11,455,270 | | 12,099,353 | Michael W. Maher | | | | | | | | | | | Continued or Accelerated Vesting of Equity Awards(a) | | 726,172 | | 726,172 | | — | | — | | 1,519,134 | Vested SERP Benefit(b) | | — | | — | | — | | — | | — | Life Insurance Proceeds(c) | | 1,050,000 | | — | | — | | — | | — | Retiree Health Care Benefit(d) | | — | | — | | — | | — | | — | Separation Benefit(e) | | — | | — | | — | | 808,662 | | — | Disability Insurance Benefit(f) | | — | | 35,000 | | — | | — | | — | Executive Management Bonus(g) | | — | | — | | — | | — | | — | Total Value of Incremental Benefits | | 1,776,172 | | 761,172 | | — | | 808,662 | | 1,519,134 | Peter E. Nordstrom | | | | | | | | | | | Continued or Accelerated Vesting of Equity Awards(a) | | 429,389 | | 429,389 | | 322,041 | | 322,041 | | 966,124 | Vested SERP Benefit(b) | | 5,525,170 | | 10,857,560 | | 10,857,560 | | 10,857,560 | | 10,857,560 | Life Insurance Proceeds(c) | | 1,517,000 | | — | | — | | — | | — | Retiree Health Care Benefit(d) | | 148,341 | | 296,811 | | 296,811 | | 296,811 | | 296,811 | Separation Benefit(e) | | — | | — | | — | | — | | — | Disability Insurance Benefit(f) | | — | | 35,000 | | — | | — | | — | Executive Management Bonus(g) | | — | | — | | — | | — | | — | Total Value of Incremental Benefits | | 7,619,900 | | 11,618,760 | | 11,476,412 | | 11,476,412 | | 12,120,495 |
59 | | | NORDSTROM, INC. - 20162023 Proxy Statement | 51 |
(a) | Continued or Accelerated Vesting of Equity Awards
|
Table of Contents COMPENSATION OF EXECUTIVE OFFICERS Name and Potential Payment | | Death
($) | | Disability
($) | | Retirement
($) | | Termination
without
Cause
($) | | Qualifying
Termination
Following a
Change in
Control
($) | Kenneth J. Worzel | | | | | | | | | | | Continued or Accelerated Vesting of Equity Awards(a) | | 1,433,408 | | 1,433,408 | | 1,342,933 | | 1,342,933 | | 1,885,780 | Vested SERP Benefit(b) | | 3,075,526 | | 6,051,510 | | 6,051,510 | | 6,051,510 | | 6,051,510 | Life Insurance Proceeds(c) | | 1,790,000 | | — | | — | | — | | — | Retiree Health Care Benefit(d) | | 163,725 | | 342,065 | | 342,065 | | 342,065 | | 342,065 | Separation Benefit(e) | | — | | — | | — | | 1,043,180 | | — | Disability Insurance Benefit(f) | | — | | 35,000 | | — | | — | | — | Executive Management Bonus(g) | | — | | — | | — | | — | | — | Total Value of Incremental Benefits | | 6,462,659 | | 7,861,983 | | 7,736,508 | | 8,779,688 | | 8,279,355 | Alexis DePree | | | | | | | | | | | Continued or Accelerated Vesting of Equity Awards(a) | | 1,294,798 | | 1,294,798 | | — | | — | | 2,144,562 | Vested SERP Benefit(b) | | — | | — | | — | | — | | — | Life Insurance Proceeds(c) | | 1,300,000 | | — | | — | | — | | — | Retiree Health Care Benefit(d) | | — | | — | | — | | — | | — | Separation Benefit(e) | | — | | — | | — | | 1,321,162 | | — | Disability Insurance Benefit(f) | | — | | 35,000 | | — | | — | | — | Executive Management Bonus(g) | | — | | — | | — | | — | | — | Total Value of Incremental Benefits | | 2,594,798 | | 1,329,798 | | — | | 1,321,162 | | 2,144,562 | Anne L. Bramman | | | | | | | | | | | Continued or Accelerated Vesting of Equity Awards(a) | | — | | — | | — | | — | | — | Vested SERP Benefit(b) | | — | | — | | — | | — | | — | Life Insurance Proceeds(c) | | — | | — | | — | | — | | — | Retiree Health Care Benefit(d) | | — | | — | | — | | — | | — | Separation Benefit(e) | | — | | — | | — | | — | | — | Disability Insurance Benefit(f) | | — | | — | | — | | — | | — | Executive Management Bonus(g) | | — | | — | | — | | — | | — | Total Value of Incremental Benefits | | — | | — | | — | | — | | — | Edmond Mesrobian | | | | | | | | | | | Continued or Accelerated Vesting of Equity Awards(a) | | — | | — | | — | | — | | — | Vested SERP Benefit(b) | | — | | — | | — | | — | | — | Life Insurance Proceeds(c) | | — | | — | | — | | — | | — | Retiree Health Care Benefit(d) | | — | | — | | — | | — | | — | Separation Benefit(e) | | — | | — | | — | | 1,650,000 | | — | Disability Insurance Benefit(f) | | — | | — | | — | | — | | — | Executive Management Bonus(g) | | — | | — | | — | | — | | — | Total Value of Incremental Benefits | | — | | — | | — | | 1,650,000 | | — |
(a) Continued or Accelerated Vesting of Equity Awards As of the end of fiscal year 2015, the Named Executive Officers2022, Erik Nordstrom, Michael Maher, Peter Nordstrom, Kenneth Worzel and Alexis DePree had outstandingunvested equity awards under the 2004our 2010 and 2010 Equity Incentive Plans.2019 EIPs. Treatment of the awards under various termination scenarios is described below.in this section. Anne Bramman and Edmond Mesrobian forfeited their unvested equity upon their separations on December 2, 2022 and October 14, 2022, respectively. Stock Options •Death or Disability UnderThe stock option agreements under the Company’s 2010 Equity Incentive Plan,and 2019 EIPs generally provide that if a participant’s employment is terminated by reason of death or disability, all unvested stock options will immediately vest, with the exception of one-time stock option grants. The one-time stock option grant made on March 5, 2019 to Kenneth Worzel provides that if a participant’s employment is terminated by reason of death or disability, a prorated number of the stock options granted more than six months prior to the termination event will immediately vest andbased on the number of full months employed. Vested stock options may be exercised by the participant or participant’s beneficiary during the period ending four years after termination, provided the 10-year10-year term of the grant has not expired.
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No amounts are shown in the table for stock options because,Table of Contents
COMPENSATION OF EXECUTIVE OFFICERS The closing price of Common Stock as of the end of fiscal year 2015,2022 was lower than the exercise prices of allthe unvested stock options that would immediately vest and be exercisable during the period endingearlier of four years after termination are higher thanor the closing price of Common Stock on January 29, 2016, the last market trading day10-year term date of the fiscal year, of $49.10.grant. Therefore, no amounts are included in the table. Beginning with the 2008 stock option grant, if,If, during the term of any outstanding grant, the executive engages in any business competitive with the Company or divulges or improperly uses any of the Company’s confidential or proprietary information, of the Company, then the post-separationpost-separation vesting and exercise rights will cease immediately and all outstanding vested and unvested options and any shares of Common Stock delivered under such grants will be automatically forfeited.
•Retirement or Termination without Cause The stockStock option agreements under the 2004Company’s 2010 and 2010 Equity Incentive Plans2019 EIPs for annual grants generally provide that if a participant satisfies a minimum age and years of service requirement and theirthe participant’s employment is terminated by reason of retirement or termination without cause, stock options granted more than six months prior to termination will continue to vest and may be exercised during the period ending four years after termination, provided the 10-year10-year term of the grant has not expired. Erik Nordstrom, Peter Nordstrom and Kenneth Worzel qualify for this continued vesting for their annual stock option grants as they have reached the minimum retirement age of 55 with at least 10 years of service. The one-time stock option grant made on March 5, 2019 to Kenneth Worzel does not provide for continued vesting upon retirement or termination without cause.
No amounts are shown in the table for stock options because,The closing price of Common Stock as of the end of fiscal year 2015,2022 was lower than the exercise prices of allthe unvested stock options that would continue to vest and be exercisable during the period endingearlier of four years after termination are higher thanor the closing price of Common Stock on January 29, 2016, the last market trading day10-year term date of the fiscal year, of $49.10.grant. Therefore, no amounts are included in the table.
Beginning with the 2008 stock option grant, if,If, during the term of any outstanding grant, the executive engages in any business competitive with the Company or divulges or improperly uses any of the Company’s confidential or proprietary information, of the Company, then the post-separationpost-separation vesting and exercise rights will cease immediately and all outstanding vested and unvested options and any shares of Common Stock delivered under such grants will be automatically forfeited.
•Qualifying Termination Following a Change in Control The Named Executive Officers areStock option grants under the Company’s 2010 and 2019 EIPs do not entitled toprovide for any payment or accelerated benefit upon a change in control. In the event of a change of control, with respect to their awards. However, underoutstanding awards shall continue in effect or be assumed, or an equivalent award substituted, by the 2010 Equity Incentive Plan,successor corporation. If a Named Executive Officer will generally be entitled to accelerated vesting if the executiveparticipant experiences a qualifying termination (termination by the Company without cause or termination by the participant for good reason) within 12 months following a change in control of the Company, unlessthen the Compensation Committee actsunvested stock options will automatically vest in full. Notwithstanding, if the successor corporation refuses to prevent accelerationassume or substitute the award, is of a type which would continue in effect notwithstandingthen the occurrenceCPCC shall provide for the cancellation of the changevested portion of any such award in control.exchange for either an amount of cash (or stock, other securities or other property) and provide for the cancellation of the unvested portion of the award, if any, without payment of consideration. Generally, a change in control occurs upon:
•the merger or consolidation of the Company with or into another entity; •the sale, transfer or other disposition of all or substantially all the Company’s assets; •a change in composition of 50% or more of the Board; or •any transaction as a result of which any person is the “beneficial owner” of securities of the Company representing at least 25%30% of the total voting power of the Company’s outstanding voting securities. The closing price of Common Stock as of the end of fiscal year 2022 was lower than the exercise prices of the unvested stock options that would immediately vest and be exercisable if the NEOs experienced a qualifying termination within 12 months following a change in control of the Company. Therefore, no amounts are included in the table. RSUs •Death or Disability The RSU agreements under the 2010 and 2019 EIPs generally provide that if a participant’s employment is terminated by reason of death or disability, all unvested RSUs will immediately vest, with the exception of the one-time RSU grant made on March 9, 2020 to Alexis DePree, the RSU grant made on August 27, 2020 to Michael Maher and the RSU grants made on May 26, 2022 to Michael Maher and Alexis DePree. These one-time RSU grants provide that if employment is terminated by reason of death or disability, a prorated number of the RSUs will immediately vest based on the number of full months employed. 61 | | 2023 Proxy Statement | |
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Performance Share UnitsTable of Contents
COMPENSATION OF EXECUTIVE OFFICERS The amounts in the table for Michael Maher, Kenneth Worzel and Alexis Depree include the values, as of the end of fiscal year 2022, of unvested RSUs that would immediately vest. If, during the term of any outstanding grant, the participant engages in any business competitive with the Company or divulges or improperly uses any of the Company’s confidential or proprietary information, then any unvested RSUs and any Common Stock delivered on vesting under such grants will be automatically forfeited. Death, Disability, •Retirement or Termination without Cause
The 2014 and 2015 performance share unit awardRSU agreements for annual grants under the 2010 Equity Incentive Planand 2019 EIPs generally provide that if a participant satisfies a minimum age and years of service requirement and the participant’s employment is terminated by reason of retirement or termination without cause, RSUs granted more than six months prior to termination will continue to vest. Kenneth Worzel qualifies for this continued vesting as of the end of fiscal year 2022 as he has reached the minimum retirement age of 55 with at least 10 years of service. The amounts in the table for Kenneth Worzel include the values, as of the end of fiscal year 2022, of unvested RSUs for his annual grants that would continue to vest after termination. If, during the term of any outstanding grant, the participant engages in any business competitive with the Company or divulges or improperly uses any of the Company’s confidential or proprietary information, then any unvested RSUs and any Common Stock delivered on vesting under such grants will be automatically forfeited. •Qualifying Termination Following a Change in Control RSU grants under the 2010 and 2019 EIPs do not provide for any payment or accelerated benefit upon a change in control. In the event of a change of control, outstanding awards shall continue in effect or be assumed, or an equivalent award substituted, by the successor corporation. If a participant experiences a qualifying termination (termination by the Company without cause or termination by the participant for good reason) within 12 months following a change in control of the Company, then the unvested RSUs will automatically vest in full. Notwithstanding, if the successor corporation refuses to assume or substitute the award, then the CPCC shall provide for the cancellation of the vested portion of any such award in exchange for either an amount of cash (or stock, other securities or other property) and provide for the cancellation of the unvested portion of the award, if any, without payment of consideration. See the Change in Control paragraph under Stock Options on page 61 for information about when a change in control occurs. The amounts in the table include the values, as of the end of fiscal year 2022, of unvested RSUs that would vest if Michael Maher, Kenneth Worzel and Alexis Depree experienced a qualifying termination within 12 months following a change in control of the Company. PSUs •Death or Disability The 2022 PSU agreement under the 2019 EIP provides that if a participant’s employment is terminated before the end of a performance cycle by reason of death disability or retirement,disability, the participant, or participant’s beneficiary, will be entitled to a prorated payment, based on target performance and the periodnumber of timefull months employed during the executive workedperformance cycle. The amounts in the table for Erik Nordstrom, Peter Nordstrom, Kenneth Worzel and Alexis DePree include the values of the prorated 2022 PSUs at a payout of 100% (target) based on termination on the last day of fiscal year 2022. If, during the term of any outstanding grant, the participant engages in any business competitive with the Company or divulges or improperly uses any of the Company’s confidential or proprietary information, then any unvested PSUs and any Common Stock delivered on vesting under such grants will be automatically forfeited. •Retirement or Termination without Cause The 2022 PSU agreement under the 2019 EIP provides that if a participant satisfies a minimum age and years of service requirement and the participant’s employment is terminated before the end of the performance cycle by reason of retirement or termination without cause, the participant will be entitled to a prorated payment, based on the number of full months employed during the performance cycle, with respect to any performance share units granted more than six months prior to termination that were earned during the performance cycle. Both the 2014 Erik Nordstrom, Peter Nordstrom and 2015 grants have time remaining in their three-year performance cycles. If the performance cyclesKenneth Worzel qualify for these grants had endedthis prorated payment upon retirement as of the closeend of the fiscal year as they have reached the minimum retirement age of 55 with at least 10 years of service.
The amounts in the table for Erik Nordstrom, Peter Nordstrom and Kenneth Worzel include the values of the prorated number of PSUs at a 75% payout that would have been earned if the end of the performance cycle and retirement dates had both occurred on the last day of fiscal year 2015, 0% of the number granted in 2014 and 2015 would have been earned. Therefore, no amounts for performance share units are reported in the table. 2022. If, during the term of any outstanding performance cycle,grant, the executiveparticipant engages in any business competitive with the Company or divulges or improperly uses any of the Company’s confidential or proprietary information, of the Company, then all outstanding vested but not settled and any unvested portions of the performance share unit awards will be automatically forfeited. Change in Control
The Named Executive Officers are not entitled to any payment or accelerated benefit upon a change in control with respect to their performance share units. However, a Named Executive Officer will generally be entitled to accelerated vesting if the executive experiences a qualifying termination within 12 months following a change in control of the Company, unless the Compensation Committee acts to prevent acceleration or the award is of a type which would continue in effect notwithstanding the occurrence of the change in control.
Restricted Stock Units
Death or Disability
The 2014 and 2015 restricted stock unit award agreements under the 2010 Equity Incentive Plan provide that if a participant’s employment is terminated by reason of death or disability, restricted stock units granted more than six months prior to the termination event will immediately vest.
The amounts shown in the table include the values, as of the end of fiscal year 2015, of unvested restricted stock units that would immediately vest.
If, during the term of any outstanding grant, the executive engages in any business competitive with the Company or divulges or improperly uses any confidential or proprietary information of the Company, then any unvested unitsPSUs and any Common Stock delivered on vesting under such grants will be automatically forfeited.
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Retirement orTable of Contents
COMPENSATION OF EXECUTIVE OFFICERS •Qualifying Termination without Cause The 2014 and 2015 restricted stock unit award agreements under the 2010 Equity Incentive Plan generally provide that ifFollowing a participant’s employment is terminated by reason of retirement, restricted stock units granted more than six months prior to termination will continue to vest.
NORDSTROM, INC. - 2016 Proxy Statement | 52 |
The amounts shown in the table for Blake Nordstrom and Michael Koppel include the values, as of the end of fiscal year 2015, of unvested restricted stock units that would continue to vest after termination. These executives qualify for this continued vesting upon retirement as of the end of the fiscal year since they had each reached the minimum retirement age of 55 with at least 10 years of service.
If, during the term of any outstanding grant, the executive engages in any business competitive with the Company or divulges or improperly uses any confidential or proprietary information of the Company, then any unvested units and any Common Stock delivered on vesting under such grants will be automatically forfeited.
Change in Control UnderThe PSU grants under the 2010 Equity Incentive Plan, the Named Executive Officers are2019 EIP do not entitled toprovide for any payment or accelerated benefit upon a change in control. In the event of a change of control, with respect to their restricted stock units. However,outstanding awards shall continue in effect or be assumed, or an equivalent award substituted, by the successor corporation. If a Named Executive Officerparticipant experiences a qualifying termination (termination by the Company without cause or termination by the participant for good reason) within 12 months following a change in control of the Company, then the unvested PSUs will generally be entitled to accelerated vestingvest in full based on the CPCC’s assessment of performance through the date of the qualifying termination, or if such performance is indeterminable at that time, at the 100% “target” level of performance. Notwithstanding, if the executive experiencessuccessor corporation refuses to assume or substitute the award, then the CPCC shall provide for the cancellation of the vested portion of any such award in exchange for either an amount of cash (or stock, other securities or other property) and provide for the cancellation of the unvested portion of the award, if any, without payment of consideration. See the Change in Control paragraph under Stock Options on page 61 for information about when a change in control occurs.
If the performance cycle had ended as of the close of fiscal year 2022, 75% of the outstanding 2022 PSUs would have been earned. The amounts in the table for Erik Nordstrom, Peter Nordstrom, Kenneth Worzel and Alexis DePree include the values of unvested PSUs at a 75% payout that would vest if they experienced a qualifying termination within 12 months following a change in control of the Company, unless the Compensation Committee acts to prevent acceleration or the award is of a type which would continue in effect notwithstanding the occurrence of the change in control.Company. (b) Vested SERP Benefit The annual SERP benefit is paid upon retirement for the remaining life of the executive with a 50% survivor annuity paid to the surviving spouse or life partner for the remainder of their life after the executive’s death, as described in the Pension Benefits section beginning on page 48.56. •Death The amounts shown are the present valuevalues of the 50% survivor annuity, payable in semi-monthlyequal installments to the spouse or life partner of the executive, assuming the payments would begin on the date on which the executive would have attained minimum retirement age of 53, or the executive’s actual age, if older, and would continue for the remaining lifetime of the spouse or life partner. There would be no immediate payment of the benefit if the date of death preceded the executive’s earliest retirement age of 53. •Disability The amount shown for Michael Koppel is the present value of his SERP benefit since he has reached normal retirement age of 58 as defined in the Plan.
Retirement or Termination without Cause
The amounts shown in the table for BlakeErik Nordstrom, Michael Koppel and Peter Nordstrom and Kenneth Worzel are the present values of their SERP benefits reducedas they have met the minimum age of 58 with at least 10 years of service and would be eligible for early commencement for Blake Nordstrom and Peter Nordstrom,their full retirement benefits under the SERP. The amounts payable would be paid in semi-monthlyequal installments on the Company’s regular payroll dates, assuming the payments would begin as of the last day of fiscal year 2015. Blake2022. •Retirement or Termination without Cause The amounts shown for Erik Nordstrom, Peter Nordstrom and Peter NordstromKenneth Worzel are the present values of their SERP benefits as they have met the minimum retirement age of 5358 with at least 10 years of service and would be eligible for earlytheir full retirement with prior approval frombenefits under the Board. If the Board approved early retirement, theySERP. The amounts payable would be entitled topaid in equal installments on the Company’s regular payroll dates, assuming the payments would begin as of the last day of fiscal year 2022. •Qualifying Termination Following a reduced SERP benefit, as described in the Pension Benefits section on page 48. Change in Control No benefits are paid solely due to a change in control, although a change in control triggers immediate vesting and an obligation for the Company to fully fund accrued benefits through a trust. If an executive was separated from the Company after a change in control, a deferred annuity would be payable upon the executive reaching retirement age. If the separation occurred before the executive’s retirement age, of 58, the benefit would be paid as a reduced early retirement benefit at age 53, or the executive’s actual age, if older. In this case, The amounts shown for Erik Nordstrom, Peter Nordstrom and Kenneth Worzel are the requirementpresent values of their SERP benefits as they have met the minimum age of 58 with at least 10 years of service and would be eligible for Board approvaltheir full retirement benefits under the SERP. The amounts payable would be paid in equal installments on the Company’s regular payroll dates, assuming the payments would begin as of the early retirement is waived. Assuming the earliest retirement age without benefit reduction for age or service, the present valuelast day of this benefit at fiscal year-end would be as shown in the Fiscal Year 2015 Pension Benefits Table on page 49, column (c), “Present Value of Accumulated Benefit.” year 2022. The Compensation CommitteeCPCC has discretion to discontinue payment of benefits under the SERP if the retired executive is found to have engaged in misconduct or in competitive behavior against the Company. (c) | Executive Deferred Compensation Plan Survivor Benefit |
Under the EDCP, if a participant dies while employed by the Company, the beneficiary receives the participant’s undistributed account balance plus two times any deferrals, excluding any earnings on the deferrals, made by the participant through December 31, 2007. The pre-retirement death benefit is paid in a lump sum.
The amount shown is the death benefit equal to two times Michael Koppel’s deferrals made through December 31, 2007. The amount does not include Michael Koppel’s undistributed account balance of $2,908,638. His beneficiary is entitled to receive this account balance in the event of his death, but the amount is not shown in this table as it is already shown in the Fiscal Year 2015 Nonqualified Deferred Compensation Table on page 50, column (c), “Aggregate Balance at Last Fiscal Year-End.”
(d) | Life Insurance Proceeds |
Life Insurance Proceeds The Company provides life insurance for the Named Executive OfficersNEOs of approximately 1.252 times annual base salary. The amounts reported in the table represent the life insurance proceeds that would be payable if the Named Executive OfficersErik Nordstrom, Michael Maher, Peter Nordstrom, Kenneth Worzel or Alexis DePree had died as of the last day of the fiscal year. The premiums paid for the Company-providedCompany-provided life insurance are included in column (a)(b) in the All Other Compensation in Fiscal Year 20152022 table on page 40.50. NORDSTROM, INC. - 2016 Proxy Statement | 53 |
(e) | Retiree Health Care Benefit |
(d) Retiree Health Care Benefit The Company provides continued health care coverage for the eligible Named Executive OfficersNEOs if they separate from the Company after age 55 with at least 10 profit sharing years of service. These benefits include medical, behavioral health/substance abuse, vision, prescription drug and dental coverage. The eligible Named Executive OfficersNEOs and their spouses or liferegistered domestic partners and eligible dependents would be covered under the retiree health plan, and the executive and the Company would continue to share in the cost of the insurance premium. Coverage and cost sharing would continue for the surviving spouse or liferegistered domestic partner and eligible dependents after the executive’s death. Effective November 1, 2013, the retiree health plan was closed to new entrants. 63 | | 2023 Proxy Statement | |
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Death, Disability, Retirement or Termination without CauseTable of Contents
COMPENSATION OF EXECUTIVE OFFICERS The amounts in the table for Blake Nordstrom and Michael Koppelthe eligible NEOs are the present values of the health care cost that would be payable by the Company if they had separated on the last day of the fiscal year. BlakeErik Nordstrom, Peter Nordstrom and Michael KoppelKenneth Worzel have met the minimum retirement age of 55 with at least 10 profit sharing years of service and would be eligible for retirement. Assumptions used in determining these amounts include a discount rate of 4.57%4.95% and the RP2014PRI2012 White Collar, Fully Generational Mortality Table with projection scale MP2015. MP2021. An executive who is terminated for cause, as determined by the Company in the exercise of its discretion in accordance with the Plan, is not eligible to receive the Retiree Health Careretiree health care benefit. (e) Separation Benefit Under the Leadership SeparationNordstrom, Inc. Executive Severance Plan, Michael KoppelMaher, Kenneth Worzel and Christine DeputyAlexis DePree are eligible to receive benefits upon involuntary termination of employment by the Company, other thannot for cause, as determined by the Companycause. To be eligible to participate in the exercise of its discretion in accordance withPlan upon involuntary termination, the eligible NEO must have signed a non-competition and non-solicitation agreement. Prior to his appointment to Interim Chief Financial Officer and Chief Accounting Officer on December 5, 2022, Michael Maher was eligible, and remains eligible, for the Nordstrom, Inc. Executive Severance Plan, subject only to a non-solicitation agreement. Erik Nordstrom and Peter Nordstrom are not eligible under the Plan. The benefits for eligible employees are based on leadership level and years of service, andparticipating employees include: •lump sum cash payment for severance: 18 or 24 months of base salary for Executive Officers, depending on their roles. This is reduced by an amount equal to the participant’s gross monthly SERP benefit multiplied by the number of months used to calculate the severance payment, if applicable; • | lump sum cash payment for severance: one month of base salary per year of service, with a minimum of 6 months up to a maximum of 12 months. This is reduced by an amount equal to the participant’s gross monthly SERP benefit multiplied by the number of months used to calculate the severance payment; | | | • | lump sum cash payment for health coverage: the cost of the Company-paid•lump sum cash payment for health coverage: the cost of the Company-paid portion of the employee’s currently elected health coverage for 12 months, unless the employee is eligible for and elects the retiree health care benefit, as described in footnote (e) above; and | | | • | up to six months of outplacement services. |
The potential separation benefits for the Named Executive Officers are shown below.retiree health care benefit, as described in footnote (d), “Retiree Health Care Benefit”; and
| | | Company-Paid | Cost of | | | | Separation | Portion of | Outplacement | Total Separation | | | Payment | Medical Benefits | Services | Benefit | | Name | ($) | ($) | ($) | ($) | | Blake W. Nordstrom | — | — | — | — | | Michael G. Koppel | 213,756 | — | 4,200 | 217,956 | | Peter E. Nordstrom | — | — | — | — | | Erik B. Nordstrom | — | — | — | — | | Christine F. Deputy | 262,500 | 10,800 | 4,200 | 277,500 |
•six months of outplacement services. Michael Koppel’sKenneth Worzel’s estimated separation payment shown aboveon the following table is reduced by an amount equal to his estimated gross monthly SERP benefit multiplied by the number of months used to calculate his separation payment. No amount is included for the Company-paidCompany-paid portion of medical benefits as it is assumed he would elect the Company’squalifies for retiree health care benefit.benefits.
Under the Leadership Separation Plan, the Company may provide the executive with additional separation benefits, in cash or in kind,To be eligible to assist the executive in the transition from active employee status. To receive any benefits under the Leadership SeparationNordstrom, Inc. Executive Severance Plan, the Named Executive OfficerNEO must sign a release in which the executive agrees, among other things, not to disclose to anyone at any time any confidential information acquired during employment with the Company, and not to publish any statement, or instigate, assist or participate in the making or publication of any statement which is disparaging or detrimental in any way to the Company.Company, except in each case as required by applicable law.
The potential separation benefits for the NEOs are shown in the following table, with the exception of Anne Bramman and Edmond Mesrobian who separated prior to the end of the fiscal year, and for whom actual benefits received are shown. Anne Bramman received no separation benefits upon her separation on December 2, 2022. In connection with his separation on October 14, 2022, Edmond Mesrobian received a lump sum cash severance payment equal to 24 months of base salary, in accordance with the terms for involuntary separation without cause under the Nordstrom, Inc. Executive Severance Plan; he received no lump sum cash payment for health coverage as he was not participating in the Company’s medical benefit plans, and he did not choose to utilize outplacement services. (g) | Disability Insurance Benefit |
Name | | Separation
Payment
($) | | Company-Paid
Portion of
Medical Benefits
($) | | Cost of
Outplacement
Services
($) | | Total Separation
Benefit
($) | Erik B. Nordstrom | | — | | — | | — | | — | Michael W. Maher | | 787,500 | | 16,962 | | 4,200 | | 808,662 | Peter E. Nordstrom | | — | | — | | — | | — | Kenneth J. Worzel | | 1,038,980 | | — | | 4,200 | | 1,043,180 | Alexis DePree | | 1,300,000 | | 16,962 | | 4,200 | | 1,321,162 | Anne L. Bramman | | — | | — | | — | | — | Edmond Mesrobian | | 1,650,000 | | — | | — | | 1,650,000 |
(f) Disability Insurance Benefit The Company provides long-termlong-term disability insurance for the Named Executive Officers.NEOs. The amount reported in the table for each Named Executive OfficerNEO is the long-termlong-term disability benefit provided of up to $35,000 per month. The premiums for the Company-providedCompany-provided disability insurance are included in column (a)(b) in the All Other Compensation in Fiscal Year 20152022 table on page 40.50. (h) | Executive Management Bonus |
(g) Executive Management Bonus The performance period under the Executive Management Bonus PlanEMBP is the fiscal year. Therefore, a termination event that occurred on the last day of the fiscal year would not result in any additional or accelerated benefits under this Plan. However, if an employee died, became disabled or retired (after having met certain age and years of service requirements) during the fiscal year, the Compensation CommitteeCPCC would have the sole discretion to determine what amounts, if any, an executive would remain eligible to receive as a performance-basedperformance-based bonus award. Any bonus award would be prorated to reflect the period of service during the fiscal year.
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Table of Contents COMPENSATION OF EXECUTIVE OFFICERS Pay Ratio Disclosure SEC rules require that U.S. publicly traded companies disclose the ratio of their PEO’s compensation to that of their median employee. Our PEO is our CEO, Erik Nordstrom. For fiscal year 2022: •the annual total compensation of Erik Nordstrom was $3,470,982; and •the estimated median of the annual total compensation of all employees of our Company, other than Erik Nordstrom, was $32,185. Based on this information, for 2022 the ratio of the annual total compensation of Erik Nordstrom, our Chief Executive Officer and PEO, to the median of the annual compensation of all employees was 108 to 1. In fiscal year 2021, we previously reported Erik Nordstrom’s annual total compensation as $5,753,133 resulting in a pay ratio of 217 to 1. As discussed on page 49 in footnote (f) to the Summary Compensation Table, the negative change in pension value previously reported in fiscal year 2021 for Erik Nordstrom, reflecting a decrease of $692,013, was erroneously included in the table in fiscal year 2021. After taking into account this correction, the pay ratio for fiscal year 2021 is 243 to 1. The SEC rules for identifying the median employee and calculating the pay ratio permit companies to use various methodologies and assumptions to apply certain exclusions and to make reasonable estimates that reflect their employee population and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio that we have reported. To identify the median employee, we used the total compensation as reported on the 2022 W-2 for all of our U.S. employees, excluding our PEO, and the Canadian equivalent T4 for all of our Canadian employees, who were employed by us on January 28, 2023, the last day of our fiscal year. We included full-time, part-time, seasonal and temporary employees and did not annualize the compensation for our permanent full-time and part-time employees who were not employed with us for the entire fiscal year. We applied a Canadian to U.S. dollar exchange rate to the compensation elements paid in Canadian currency. Similar to other large retail companies, a significant portion of our workforce is employed on a part-time and seasonal basis. As of the end of fiscal year 2022, approximately 31,000 of our 60,000 employees – or 52% of our workforce – were either part-time or seasonal. After identifying the median employee, we calculated annual total compensation for the median employee using the same methodology we used for determining total compensation for our NEOs as shown in the 2022 Summary Compensation Table on page 48. 65 | | 2023 Proxy Statement | |
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PAY VERSUS PERFORMANCE DISCLOSURE We are required by SEC rules to disclose the following information regarding compensation paid to our NEOs. The amounts set forth under the headings “Compensation Actually Paid to CEO” and “Average Compensation Actually Paid for non-CEO NEOs” have been calculated in a manner consistent with Item 402(v) of Regulation S-K. Footnote (d) sets forth the adjustments from the Total Compensation for each NEO reported in the Summary Compensation Table. The following table sets forth additional compensation information for our CEO and our non-CEO NEOs, along with total shareholder return, net earnings and Incentive Adjusted EBIT performance results for fiscal years 2020, 2021 and 2022: | | | | | Value of Initial Fixed $100 Investment Based On: | | | Year (a) | Summary
Compensation
Table Total for
CEO ($) | Compensation
Actually Paid to
CEO ($) (b, c, d) | Average
Summary
Compensation
Table Total for
non-CEO NEOs
($) | Average
Compensation
Actually Paid to
non-CEO NEOs
($) (b, c, d) | Total
Shareholder
Return ($)
(e) | Peer Group
Total
Shareholder
Return ($)
(e) | Net
Earnings
($M) | Incentive
Adjusted
EBIT ($M) (f) | 2022 | 3,470,982 | 2,237,191 | 3,078,195 | 1,264,807 | 53 | 118 | 245 | 524 | 2021 | 6,445,146 | 820,766 | 5,165,440 | (534,350) | 61 | 146 | 178 | 666 | 2020 | 5,647,670 | 7,598,410 | 5,122,901 | 7,722,084 | 98 | 141 | (690) | (1,047) |
(a) NEOs included in the compensation columns reflect the following: NORDSTROM, INCYear | CEO | Non-CEO NEOs | 2022 | Erik B. Nordstrom | Michael W. Maher, Peter E. Nordstrom, Kenneth J. Worzel, Alexis DePree, Anne L. Bramman, Edmond Mesrobian | 2021 | Erik B. Nordstrom | Anne L. Bramman, Peter E. Nordstrom, Kenneth J. Worzel, Edmond Mesrobian | 2020 | Erik B. Nordstrom | Anne L. Bramman, Peter E. Nordstrom, Kenneth J. Worzel, Edmond Mesrobian |
(b) Fair value or change in fair value Compensation Actually Paid (“CAP”) was calculated by beginning with the total amount reported in the Summary Compensation Table (“SCT”) for the applicable year, (i) subtracting the grant date fair value of stock awards reported in the Stock Awards column of the SCT (“Stock Awards”), (ii) subtracting the grant date fair value of option awards reported in the Option Awards column of the SCT (“Option Awards”), (iii) subtracting the actuarial present value of the accumulated benefit under defined benefit plans reported in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column of the SCT (“Change in Pension Value”), (iv) adding the change in fair value of stock and option awards for the applicable year and (v) adding the service cost and prior service cost for all defined benefit plans for the applicable year. Fair value amounts were computed in a manner consistent with the fair value methodology used to account for stock-based compensation in accordance with ASC 718 and for PSUs, adjusted based on the probable achievement at each measurement date. The fair value amounts were calculated using our stock price on the last day of each fiscal year or the date of vesting, as applicable. The service cost and prior service cost for defined benefit plans were calculated using the same methodology as used for our financial statements under GAAP. (c) Year-end stock price For the portion of CAP that is based on year-end stock prices, the following prices were used for 2022: $18.42 (16% decrease change from prior year), for 2021: $21.85 (38% decrease change from prior year), and for 2020: $35.45 (4% decrease change from prior year). (d) Compensation Actually Paid to CEO and non-CEO NEOs CAP for the CEO and non-CEO NEOs reflects the adjustments from Total Compensation for each respective year reported in the SCT, as shown on the following table. Total Adjustments are calculated using un-rounded numbers and then rounded to the nearest dollar.
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Table of Contents PAY VERSUS PERFORMANCE DISCLOSURE CEO | 2020 | 2021 | 2022 | SCT Total ($) | 5,647,670 | 6,445,146 | 3,470,982 | - | Value of stock awards and option awards reported in SCT | 4,247,586 | 3,699,999 | 2,654,734 | - | Change in pension value and Nonqualified Deferred Compensation reported in SCT | 1,010,681 | — | — | + | Year-end value of awards granted in fiscal year that are unvested and outstanding | 7,132,586 | 1,429,354 | 1,485,367 | + | Change in fair value of prior year awards that are unvested and outstanding | 155,911 | (3,800,744) | (76,644) | + | Fair market value of awards granted this year and that vested this year | — | — | 9,883 | + | Change in fair value (from prior year end) of prior year awards that vested this year | (372,946) | 139,177 | (215,375) | - | Prior year fair value of prior year awards that failed to vest this year | — | — | — | + | Service and prior service cost for pension plans | 293,457 | 307,833 | 217,712 | = | Total Adjustments | 1,950,740 | (5,624,380) | (1,233,791) | CAP ($) | 7,598,410 | 820,766 | 2,237,191 |
Non-CEO NEO | 2020 | 2021 | 2022 | Average SCT ($) | 5,122,901 | 5,165,440 | 3,078,195 | - | Average value of stock awards and option awards reported in SCT | 3,999,378 | 2,657,792 | 2,071,922 | - | Average change in pension value and Nonqualified Deferred Compensation reported in SCT | 480,022 | 347,475 | — | + | Average year end value of awards granted in fiscal year that are unvested and outstanding | 6,928,154 | 1,298,263 | 855,524 | + | Average change in fair value of prior year awards that are unvested and outstanding | 296,961 | (4,256,482) | (121,002) | + | Average fair market value of awards granted this year and that vested this year | 12,197 | 8,747 | 3,038 | + | Average change in fair value (from prior year end) of prior year awards that vested this year | (355,907) | 46,199 | (47,797) | - | Average prior year fair value of prior year awards that failed to vest this year | — | — | 553,875 | + | Average service and prior service cost for pension plans | 197,178 | 208,750 | 122,646 | = | Total Adjustments | 2,599,184 | (5,699,789) | (1,813,389) | Average CAP ($) | 7,722,084 | (534,350) | 1,264,807 |
(e) TSR and Peer Group TSR Peer Group TSR reflects the S&P Retail Index as reflected in our Annual Report on the Form 10-K pursuant to Item 201(e) of Regulation S-K for the fiscal year ended January 28, 2023. Each year of TSR and Peer Group TSR reflects what the cumulative value of $100 would be, including the reinvestment of dividends, if such amount were invested on February 1, 2020. (f) Company-Selected Measure As discussed in the Compensation Discussion & Analysis on page 37, the NEO’s bonus opportunity for 2022 was based 100% on Incentive Adjusted EBIT subject to achievement of the Incentive Adjusted ROIC threshold. 67 | | 2023 Proxy Statement | |
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Table of Contents PAY VERSUS PERFORMANCE DISCLOSURE Pay Versus Performance Descriptive Disclosure |
We believe the CAP in each of the years reported over the three-year cumulative period are reflective of the CPCC’s emphasis on “pay-for-performance” as the CAP fluctuated year over year, primarily due to stock performance and our varying levels of achievement against pre-established performance goals under our EMBP and PSUs. The relationship between CAP, TSR and Peer Group TSR is shown below. 
The relationship between CAP and Net Earnings is shown below. 
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Table of Contents PAY VERSUS PERFORMANCE DISCLOSURE The relationship between CAP and Incentive Adjusted EBIT is shown below. 
Table of Measures Most Important to Last Fiscal Year |
The following table lists our most important performance measures used to link CAP for our NEOs to company performance in 2022. Incentive Adjusted ROIC is used to determine bonus payouts for each of the NEOs as described on page 42 and cumulative sales and EBIT margin % are used to determine 2022 PSU payouts for the NEOs as described on page 42. Most important performance measures for 2022 | | | Incentive Adjusted EBIT | | | Incentive Adjusted ROIC | | | Cumulative Sales for 2022 - 2016 Proxy Statement2024 | 54 | |
Cumulative EBIT margin % for 2022 - 2024 | | |
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PROPOSAL 3: ADVISORY VOTE REGARDING EXECUTIVE COMPENSATION The Board recommends a vote FOR this proposal. The Company is providing shareholders with an advisory (nonbinding) vote on the compensation program of our NEOs as disclosed in this Proxy Statement. At the 2017 Annual Meeting of Shareholders, over 95% of the votes cast approved our Board’s recommendation to hold advisory votes on an annual basis. At the 2022 Annual Meeting of Shareholders, over 90% of the votes cast were supportive of our compensation program. In light of this support of the compensation program for our NEOs, the CPCC continues to apply the same pay and benefits philosophy which underlies our pay-for-performance philosophy. Compensation Program Highlights As described in the CD&A beginning on page 37, our NEOs are rewarded when defined performance milestones are achieved and when value is created for our shareholders. Our CPCC and Board believe that our compensation program is effective in implementing our executive compensation philosophy and establishing a solid link between compensation and shareholder interests. Highlights of our compensation program include the following: •We deliver the majority of compensation through a pay-for-performance framework where incentives are based on achieving results. At least 70% of the value of the targeted compensation package for each of our NEOs is weighted toward pay-for-performance and variable compensation to reinforce our philosophy of compensating our executives when they and the Company are successful in ways that support shareholder interests. •Each year, the CPCC establishes the performance-based bonus measures that focus executives on the most important Company objectives. In 2022, the CPCC maintained the same financial performance measures and weighting of Incentive Adjusted EBIT, which emphasizes the importance of earnings and its role in driving shareholder value, and Incentive Adjusted ROIC, which ensures our overall performance aligns directly with shareholder returns over the long term. For additional detail on our performance-based annual bonus program, see page 42. •While the CPCC considers the 50th percentile (median) of our peer group as a reference, there is no specific percentage of target total direct compensation targeted by the CPCC other than to remain generally competitive with similarly situated peer companies. Target opportunities for individual pay elements vary by executive role based on scope of responsibilities and expected contributions. •We maintain meaningful executive stock ownership guidelines so that our executives’ interests, as shareholders, are aligned with our broader shareholder base. •We have an executive compensation clawback policy that applies to performance-based compensation. •The CPCC has retained and directs an independent compensation consultant. •We do not have employment agreements with our executives. •We do not provide tax gross-ups, except those related to relocation expenses when an executive must move to assume Company responsibilities. •We do not allow stock option grant repricing or backdating, nor do we grant options below 100% of fair market value. •We have a derivative and hedging policy that prohibits Directors and Executive Officers (as well as other key insiders and their immediate families) from engaging in hedging transactions with respect to any equity securities of the Company held by them. •We have restrictions on pledging of Common Stock. Shareholder Support We are asking our shareholders to indicate their support for our NEOs’ compensation as described in this Proxy Statement. This proposal gives our shareholders the opportunity to express their views on the compensation of our NEOs. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs and the philosophy, policies and practices described in this Proxy Statement. Accordingly, we ask our shareholders to vote “FOR” the following resolution at the 2023 Annual Meeting: “RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of the Company’s NEOs, as disclosed in the CD&A, the compensation tables and the related narrative disclosure in this Proxy Statement.” Our Board has adopted a policy of annual executive compensation advisory votes. As an advisory vote, this proposal is not binding on the Company. However, our CPCC and Board value the opinions of our shareholders and will consider the outcome of the vote when making future compensation decisions regarding the Company’s NEOs.
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PROPOSAL 4: ADVISORY VOTE REGARDING THE FREQUENCY OF FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION The Board recommends a vote for “1 YEAR” for this proposal. In addition to providing shareholders with the opportunity to cast an advisory vote on executive compensation, we are providing shareholders with an advisory vote on how frequently we should seek an advisory vote on the compensation of our NEOs. By voting on this Proposal 4, shareholders may indicate whether they would prefer an advisory vote on NEO compensation once every1,2, or 3 years. The Board has determined that holding an advisory vote on executive compensation every year is the most appropriate policy for the Company at this time, and recommends that shareholders vote for future advisory votes on executive compensation to occur every year. Many elements of our executive compensation program are reviewed and determined annually, including base salary, performance-based cash awards under the Company’s EMBP, and long-term incentive grants under the 2019 EIP. Holding an annual advisory vote on executive compensation would more closely coincide with these decisions, promote corporate transparency and shareholder awareness of the Company’s compensation policies and practices and also provides the Company with more direct and immediate feedback on our compensation disclosures and practices. Shareholders will be able to specify one of four choices for this proposal on the proxy card: 1 year, 2 years, 3 years, or abstain. Shareholders are not being asked to approve or disapprove the Board’s recommendation, but rather to indicate their own choice from among the frequency options. The option of 1 year, 2 years or 3 years that receives the highest number of votes cast by shareholders will be the frequency for future advisory votes on executive compensation that has been selected by shareholders. Because this vote is advisory, it is not binding on the Board or the Company. However, the Board values the opinions of our shareholders and will consider the outcome of the vote when setting the frequency of future advisory votes on executive compensation. 71 | | 2023 Proxy Statement | |
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PROPOSAL 5: APPROVAL OF THE NORDSTROM, INC. AMENDED AND RESTATED 2019 EQUITY INCENTIVE PLAN The Board recommends a vote FOR this proposal. Shareholders are being asked to vote on a proposal to approve the Nordstrom, Inc. Amended and Restated 2019 Equity Incentive Plan (the “Plan”). The Company has granted equity awards to its employees and directors under Nordstrom equity compensation plans since 1977 as part of a long-held approach to pay for performance. All of the Company’s prior plans have expired or were terminated when the shareholders approved the Plan at the 2019 Annual Meeting of Shareholders. The Plan was subsequently amended at the 2020 Annual Meeting of Shareholders to increase the reserves for issuance by the Company by 15,000,000shares to 24,500,000shares (the “Prior Approval”). As we move forward, we believe it is important the Company have the ability to use stock-based compensation to attract and retain key talent, provide employees with a stake in the Company’s success, and align our team with long-term shareholder outcomes. Absent shareholder approval, as a result of the volatility of the price of the Company’s Common Stock, the number of shares remaining available for grant under the Plan may become insufficient to meet the Company’s anticipated needs in 2024 – both with respect to its annual compensatory awards, as well as any potential need to address employee retention concerns. Accordingly, the Compensation, People and Culture Committee (the “Committee”) of the Company’s Board approved on February 28, 2023 an additional 15,000,000shares for issuance under the Plan, subject to shareholder approval. Therefore, we are asking the Company’s shareholders to approve this amendment to the Plan to increase the reserves for issuance by 15,000,000shares, which we expect to last 2-3 years. In addition, we have amended the Plan, among other things, to eliminate the annual per person limit on the number of shares that could be subject to Plan awards and to add a limit of $750,000 to non-employee Director compensation that can be granted during the fiscal year (including cash and stock). Equity compensation is also fundamental to our compensation philosophy and core objectives of paying for performance and aligning the interests of employees with those of shareholders. We believe that equity awards, and the potential they hold for appreciation through an increase in our stock price, support our pay-for-performance philosophy, provide further incentive to our employees to focus on creating long-term shareholder value and create an ownership culture that links employees’ interests with those of our shareholders and our long-term results, performance, and financial condition. The highlights of the Plan, as amended for this share request, are set forth below. Specifically, the Plan: •reserves for issuance by the Company of 39,500,000shares, representing the 24,500,000shares available after the Prior Approval plus the 15,000,000shares added as a result of the amendment to the Plan; •requires each share issued as part of a full-value award, such as a grant of unrestricted shares, restricted shares, restricted stock units or performance share units, and dividend equivalents to count as 1.6shares for purposes of determining shares remaining available for grant; •prohibits liberal share recycling as shares not issued as a result of the net settlement of an outstanding stock appreciation right or stock option; shares used to pay the exercise price or withholding taxes related to an outstanding award; or shares repurchased on the open market with the proceeds of a stock option exercise price will not be returned to the 2019 Plan; •provides for “double trigger” rather than “single trigger” accelerated vesting, meaning awards will be accelerated as the result of a change in control where the participant’s employment is involuntarily terminated without cause or the participant terminates for “good reason” within 12 months following a change of control and with respect to performance-based awards allowing for acceleration of vesting at target if actual performance cannot be determined upon a qualifying termination; •establishes one year as the minimum period for vesting of all awards, provided that the Committee may grant awards that vest in less than one year if the total number of such shares does not exceed 5% of the available shares authorized for issuance under the 2019 Plan; •prohibits the issuance of dividends or dividend equivalents on stock options and stock appreciation rights and prohibit delivery of dividends or dividend equivalents on all other types of awards unless such awards are earned and vested; •prohibits the repricing of stock options or stock appreciation rights without shareholder approval; •subjects all awards to the Company’s clawback policy as described on page 46; and •prohibits the transfer of awards, except in the context of death or as otherwise required by law, or as approved by the Committee. As of the Record Date, the Company had available for issuance 9,741,007shares under the Plan. In addition, the Plan permits the Company to issue shares if they are forfeited under awards previously issued under the Company’s prior (and now terminated) 2010 Equity Incentive Plan.
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Table of Contents PROPOSAL 5: APPROVAL OF THE NORDSTROM, INC. AMENDED & RESTATED 2019 EQUITY INCENTIVE PLAN The following table shows information regarding outstanding options and full-value awards as of April10, 2023 under the 2010 Equity Incentive Plan and the Plan. Outstanding Options (#) | | Weighted Average
Exercise Price
($) | | Weighted Average Remaining
Years of Contractual Life
(#) | | Unvested Full Value
Awards
(#)* | 8,398,633 | | 34.56 | | 6.04 | | 6,636,085 |
* Includes restricted stock units and performance share units granted at maximum. Each outstanding full value award reduces the shares available for grant under the 2019 Equity Incentive Plan by 1.6shares. Summary of Plan Terms The following is a summary of the Plan, a complete copy of which has been filed with the SEC as Appendix B to this Proxy Statement and is also available on the SEC’s website at www.sec.gov. This summary is qualified in its entirety by the actual terms of the Plan, which are incorporated herein by this reference. Eligible participants include the Company’s and its subsidiaries’: •employees; and •non-employee directors. The Plan is broad enough to cover all of the Company’s and its subsidiaries’ full- or part-time employees and non-employee directors, consisting of approximately 60,000 people as of the Record Date. The Company currently grants equity to approximately 615 eligible employees and its non-employee directors. The purpose of the Plan is to promote the long-term success of the Company and its subsidiaries and the creation of shareholder value by: •motivating participants to focus on the Company’s critical long-range objectives; •encouraging the attraction and retention of employees and non-employee directors; and •aligning participant and shareholder interests through stock ownership. The Committee administers the Plan, except that it may also appoint a secondary Board committee or one or more senior executive officers to administer the Plan with respect to employees who are not considered executive officers under Section 16 of the Exchange Act. The Committee may delegate certain day-to-day administrative duties under the Plan to the Company’s Compensation Department (or similar department). The types of awards that may be made under the Plan are: •options to purchase shares of Common Stock; •stock appreciation rights; •unrestricted shares of Common Stock; •restricted shares of Common Stock; •restricted stock units; and •performance share units. Share Limits and Vesting Requirements |
As originally approved, the limit on the number of shares of Common Stock that may be delivered under the Plan through the issuance of any type of award could not exceed (i) 24,500,000 plus (ii) any shares currently underlying awards outstanding under the 2010 Equity Incentive Plan and 2004 Equity Incentive Plan but which are forfeited or which expire without exercise during the term of the Plan. If approved by the shareholders, this amendment to the Plan will authorize an additional 15,000,000 for issuance under the Plan. 73 | | 2023 Proxy Statement | |
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Table of Contents PROPOSAL 5: APPROVAL OF THE NORDSTROM, INC. AMENDED & RESTATED 2019 EQUITY INCENTIVE PLAN The maximum number of shares that are available for grant under the Plan are subject to reduction by 1.6shares for each share that is delivered in settlement of an award of unrestricted shares, restricted shares, restricted stock units, performance share units, dividends and dividend equivalents. When a share is delivered in settlement of one of the foregoing types of awards, the maximum is reduced by 1.6shares and when a share is delivered in settlement of an option or stock appreciation right, the maximum is reduced by one share. All awards granted under the Plan shall vest no earlier than the first anniversary of the date of grant provided that up to 5% of the authorized shares under the Plan (including all unrestricted shares of Common Stock) may be granted without this limit. The Plan also sets forth a limit of $750,000 on non-employee Director compensation that can be granted during any fiscal year (including cash and stock). Options may be incentive stock options that qualify for favorable tax treatment for the optionee under Section 422 of the IRC or nonqualified stock options not designed to qualify for favorable tax treatment. Incentive stock options may only be granted to employees. Each option agreement will specify the type of option and the date or event when all or any installment of the option is to become exercisable. The Company has historically granted nonqualified options with a four-year vesting period. The option agreement will also specify the term of the option, provided, however, that the term of an option will in no event exceed 10 years from the date of grant. An option agreement may provide for accelerated exercisability in the event of the optionee’s death, disability or retirement and may provide for expiration prior to the end of its term in the event of the termination of the optionee’s service. The exercise price of an option may not be less than 100% of the fair market value of Common Stock on the date of grant. Options may not be repriced. At the Committee’s discretion, the exercise price of an option may be paid with: •cash; •cash equivalents; •the delivery of outstanding shares of Common Stock; •the cashless exercise method through a broker; •a net exercise method through a broker; or •a combination of these methods. No dividend or dividend equivalent rights shall accrue or be paid with respect to options. Stock Appreciation Rights |
Stock appreciation rights may be granted with such terms and conditions as may be determined by the Committee provided, however, that the term of a stock appreciation right may not exceed 10 years from the date of grant. Each grant will be evidenced by a stock appreciation rights agreement, which will specify the number of shares of Common Stock to which the right pertains. The agreement will also specify the exercise price, the date when all or any installment is to become exercisable and the term of the stock appreciation right. The agreement may provide for accelerated exercisability in the event of the optionee’s death, disability or retirement and may provide for expiration prior to the end of its term in the event of the termination of the optionee’s service. Stock appreciation rights may be awarded in combination with options, and such an award may provide that the stock appreciation rights will not be exercisable unless the related options are forfeited. At the Committee’s discretion, upon exercise of a stock appreciation right, the participant (or person having the right to exercise the right after his or her death) will receive: •cash; •shares of Common Stock; or •any combination of both. The exercise price of a stock appreciation right may not be less than 100% of the fair market value of Common Stock on the date of grant. Stock appreciation rights may not be repriced. No dividend or dividend equivalent rights shall accrue or be paid with respect to stock appreciation rights. Shares not subject to vesting may be awarded for such consideration, consisting of any tangible or intangible property or benefit to the Company, including services performed and contracts for services, as the Committee may determine.
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Table of Contents PROPOSAL 5: APPROVAL OF THE NORDSTROM, INC. AMENDED & RESTATED 2019 EQUITY INCENTIVE PLAN Restricted shares may be granted with such terms and conditions as the Committee may determine. These restricted shares may be awarded for such consideration, consisting of any tangible or property or benefit to the Company, including services performed and contracts for services, as the Committee may determine. Each award of restricted shares will be subject to vesting. Vesting will occur, in full or in installments, upon satisfaction of the conditions specified in the restricted share agreement. The Committee may include among such conditions the requirement that the performance of the Company or a business unit of the Company equal or exceed a target determined in advance by the Committee. A restricted share agreement may provide for accelerated vesting in the event of the recipient’s death, disability or retirement and may provide for expiration prior to the end of its term in the event of the termination of the recipient’s service. The holders of restricted shares will have the voting, dividend and other rights as set forth in their restricted share agreement, and may have the same voting, dividend or other rights as the Company’s other shareholders provided that any dividends accrued on restricted shares shall be held in escrow by the Company and shall only be paid if and when restricted shares vest, in cash or in shares of unrestricted Common Stock having a fair market value equal to the amount of such dividends. Common Stock distributed to the holder of restricted shares on account of a stock split or stock dividend will be subject to restrictions and risk of forfeiture to the same extent as the restricted shares with respect to which such Common Stock has been distributed. Restricted stock units may be granted with such terms and conditions as the Committee may determine. Each award of restricted stock units will be subject to vesting. Vesting will occur, in full or in installments, upon satisfaction of the conditions specified in the restricted stock unit agreement. The Committee may include among such conditions the requirement that the performance of the Company or a business unit of the Company exceed a target determined in advance by the Committee. A restricted stock unit agreement may provide for accelerated vesting in the event of the recipient’s death, disability or retirement and may provide for expiration prior to the end of its term in the event of the termination of the recipient’s service. The holders of restricted stock units will not have voting or dividend rights. Prior to settlement or forfeiture, any restricted stock unit may, at the Committee’s discretion, carry with it a right to dividend equivalents. Such right will entitle the holder to be paid an amount in cash or stock equal to the dividends that would have been paid if the restricted stock units had been issued and outstanding shares of Common Stock as of the record date for the payment of dividends, subject to applicable withholding taxes, if and when the restricted stock units vest. At the discretion of the Committee, settlement of vested units may be made in the form of: •cash; •shares of Common Stock (unrestricted or restricted shares); or •any combination of both. Performance share units may be granted with such terms and conditions as the Committee may determine. Performance share units are designated in shares of Common Stock. Each award of performance share units will be subject to vesting. Vesting will occur, in full or in installments, upon satisfaction of the conditions specified in the performance share unit agreement. The Committee may include among such conditions the requirement that the performance of the Company or a business unit of the Company exceed a target determined in advance by the Committee. A performance share unit agreement may provide for accelerated vesting in the event of the recipient’s death, disability or retirement and may provide for expiration prior to the end of the performance period in the event of the termination of the recipient’s service. A holder of performance share units will have no rights to dividends and will not be entitled to vote such units. Prior to settlement or forfeiture, any performance share unit may, at the Committee’s discretion, carry with it a right to dividend equivalents. Such right will entitle the holder to receive, if and when the applicable performance share units vest, an amount in cash or stock equal to the dividends that would have been paid if the performance share units had been settled in shares of Common Stock on or before the record date for any dividends declared on the Company’s Common Stock, subject to applicable withholding taxes. At the discretion of the Committee, settlement of vested performance share units may be made in the form of: •cash; •shares of Common Stock; or •any combination of both. 75 | | 2023 Proxy Statement | |
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Table of Contents PROPOSAL 5: APPROVAL OF THE NORDSTROM, INC. AMENDED & RESTATED 2019 EQUITY INCENTIVE PLAN In the event of a change of control, outstanding awards shall continue in effect or be assumed, or an equivalent award substituted, by the successor corporation. Under the Plan, the vesting and exercisability of the awards will accelerate, in whole or in part, upon a “qualifying termination” within 12 months following a change in control. A “qualifying termination” means an involuntary, employer-initiated termination without cause or a voluntary termination for good reason. Notwithstanding, if the successor corporation refuses to assume or substitute the award, then the CPCC shall provide for the cancellation of the vested portion of any such award in exchange for either an amount of cash (or stock, other securities or other property) and provide for the cancellation of the unvested portion of the award, if any, without payment of consideration. Federal Income Tax Consequences |
The tax consequences of the Plan are complex, and the following discussion deals only with general tax principles applicable to the Plan under federal law. Incentive stock options are options which under certain circumstances and subject to certain tax restrictions, have special tax benefits for employees under the IRC. Nonqualified stock options are options which do not receive such special tax treatment. When the Committee grants an incentive stock option and when the participant exercises an incentive stock option and acquires Common Stock, the participant realizes no taxable income and the Company can claim no deduction. (However, the differences between the fair market value of the shares upon exercise and the exercise price is an item of tax preference subject to the possible application of the alternative minimum tax.) If the participant disposes of the stock before two years from grant or one year from exercise of the incentive stock option (a disqualifying disposition), any gain will be deemed compensation and taxed as ordinary income to the extent of the lesser of: •the spread between the option price and the fair market value of the stock at exercise; or •the difference between the sale price and the exercise price. If a disqualifying disposition occurs, the Company can claim a deduction equal to the amount treated as compensation. If one- and two-year holding periods are satisfied, any gain realized when the shares are sold will be treated as capital gain, and the Company will receive no corresponding tax deduction. When the Committee grants a nonqualified stock option, the participant realizes no taxable income and the Company can claim no deduction. On exercise of a nonqualified stock option, the participant realizes ordinary income to the extent of the spread and the Company can claim a tax deduction for the same amount. When the Committee grants a stock appreciation right, the participant realizes no taxable income and the Company can claim no deduction. The cash or fair market value of stock received on a stock appreciation right exercise is taxed to the participant at ordinary income rates. The Company can claim a tax deduction in the same amount at such time. Upon grant of unrestricted shares, the participant realizes ordinary income equal to the fair market value of the Common Stock on the date of grant and the Company can generally claim a tax deduction for the same amount. Grants of restricted shares are generally not taxable to participants at the time of grant and the Company generally claims no deduction at that time. The Company receives a deduction and the participant recognizes taxable income equal to the fair market value of the stock at the time the restrictions lapse (i.e., at the time the restricted shares vest), unless the participant elects, within thirty days of notification of the award, to recognize the income on the award date, in accordance with IRC Section 83(b) (an “83(b) election”). If the participant makes an 83(b) election, the Company receives a corresponding deduction at the time of grant. Any dividends received on restricted shares prior to the date the participant recognizes income on the stock are taxable compensation income when received and the Company is entitled to a corresponding tax deduction at such time. The grant of restricted stock units and performance share units generally does not result in taxable income to the participant. Upon vesting, the number of shares issued or cash paid is treated as ordinary income, and the Company is entitled to a corresponding tax deduction at such time. The Committee has full discretion to determine the number and amount of options, stock appreciation rights, unrestricted and restricted shares, and restricted share units and performance share units to be granted to participants. Therefore, the benefits and amounts that will be received by each of the NEOs, the executive officers as a group, non-employee directors and all other employees under the Plan are not presently determinable. The fair market value as of the close of trading on April10, 2023 was $16.64 per share. Term, Termination and Amendment |
The Plan will remain in effect until May 29, 2029, unless earlier terminated by the Board. The Board may, at any time and for any reason, amend the Plan. An amendment of the Plan will be subject to the approval of the Company’s shareholders to the extent required by applicable laws, regulations or rules.
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PROPOSAL 6: APPROVAL OF THE NORDSTROM, INC. AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN The Board recommends a vote FOR this proposal. At the Annual Meeting, Shareholders will be asked to approve the Nordstrom, Inc. Amended and Restated Employee Stock Purchase Plan (the “Plan”). Shareholder approval of this amendment to the Plan will increase the maximum number of shares of Common Stock authorized for issuance under the Plan by 3,500,000shares. The Plan offers eligible employees the opportunity to acquire a stock ownership interest in the Company through periodic payroll deductions that are applied towards the purchase of Common Stock at a discount from the then-current market price. The Plan was originally adopted by the Board in November 1999 and was approved by our shareholders in May 2000. On several occasions since the original adoption of the Plan, the Board and the Compensation, People and Culture Committee (the “Committee”) have adopted and put before shareholders for approval amendments to the Plan. Those amendments have addressed changes in law applicable to the Plan and have also increased the number of shares of Common Stock which may be purchased under the Plan to a total of 16,100,000shares. As of April10, 2023, out of the authorization of 16,100,000shares, there were 1,870,905shares available for future purchase under the Plan. In February 2023, at the recommendation of the Committee, the Board approved the amendment and restatement (collectively, the “Amendment”) of the Plan which, if approved by the shareholders, will increase the aggregate number of shares of Common Stock that may be purchased under the Plan as of the Record Date by 3,500,000shares, to a total of 19,600,000 shares. The primary purpose of the Amendment is to ensure that Nordstrom will have a sufficient reserve of Common Stock available under the Plan to provide eligible employees of the Company and its participating subsidiaries with the continuing opportunity to acquire an ownership interest in the Company through participation in the Plan. The Board also approved other minor editorial amendments. These administrative changes do not require shareholder approval. The following is a summary of the principal features of the Plan. This summary is qualified in all respects by reference to the full text of the Plan, which has been filed with the SEC, in amended and restated form, as Appendix C to this Proxy Statement. Summary of the Plan Shares of Common Stock are offered under the Plan through a series of consecutive offering periods, each with a maximum duration of six months. Offering periods commence each April 1 and October 1. Purchases occur on the last trading day of each March and September. With certain exceptions, any eligible employee of the Company or of a participating subsidiary on February 1 who remains an employee through April 1 may participate in the offering period commencing April 1, and any employee of the Company or a participating subsidiary on August 1 who remains an employee through October 1 may participate in the offering period commencing October 1. The price at which the employee may purchase the Common Stock is 90% of the closing price for the Common Stock as reported by the NYSE on the day the offering period terminates. An employee may elect to have up to 15% of his or her compensation withheld for the purpose of purchasing Common Stock under the Plan. As of the last day of each offering period, each participant is deemed to have been granted an option to purchase up to the lesser of (i) 1,000shares or (ii) that whole number of shares determined by dividing the amount of the participant’s compensation withheld during the offering period by 90% of the fair market value of the Common Stock as determined at the end of the offering period. Unless the participant elects to withdraw prior to the end of an offering period, each participant who continues to be employed as an employee by the Company or a participating subsidiary as of the end of an offering period is deemed to have exercised the option and purchased on such date the number of shares as may be purchased with the amount of his or her payroll deductions at the offering price (subject to the maximum number covered by his or her option). If employees subscribe to purchase more than the number of shares of Common Stock available during any offering, the available shares are allocated on a pro-rata basis to subscribing employees. The Board may at any time amend, suspend or terminate the Plan. However, except in connection with certain reorganizations or recapitalizations of the Company, any increase in the aggregate number of shares of Common Stock issuable under the Plan is subject to approval by a vote of the Shareholders. Moreover, the Plan will automatically terminate on the date on which all shares available for issuance thereunder are sold pursuant to exercised purchase rights. The Plan is administered by the Committee, which is authorized to make rules and guidelines regarding the administration and interpretation of the Plan and to determine which of the company’s subsidiaries’ employees of the Company may participate in the Plan. All costs and expenses incurred in plan administration are paid by the Company without charge to participants. 77 | | 2023 Proxy Statement | |
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Table of Contents PROPOSAL 6: APPROVAL OF THE NORDSTROM, INC. AMENDED & RESTATED EMPLOYEE STOCK PURCHASE PLAN Federal Income Tax Consequences |
The Plan is intended to be an “employee stock purchase plan” within the meaning of Section 423 of the IRC, which provides that the employee does not have to pay federal income tax with respect to shares purchased under the Plan until he or she sells the shares. If the employee has owned the shares for more than one year and sells or otherwise disposes of them at least two years after the day the offering period commenced, the employee will recognize ordinary income in the year of sale or disposition equal to the lesser of (i) ten percent (10%) of the market price of the shares on the date the offering period commenced or (ii) the excess of the amount realized on the disposition over the price paid. Any additional gain upon the sale or disposition will be taxed as a long-term capital gain. The Company will not be entitled to an income tax deduction with respect to such sale or disposition. If an employee sells or otherwise disposes of the shares before he or she has owned them for more than one year or before the expiration of a two-year period commencing on the day the offering period commenced, that employee will recognize ordinary income in the year of sale or disposition equal to the difference between the purchase price and the fair market value of the shares on the date of purchase, and the Company will be entitled to an income tax deduction for the same amount for the taxable year in which such disposition occurs. Any additional gain or loss recognized on the sale or disposition of the stock will be short-term or long-term capital gain or loss, depending on how long the employee owned the stock. Participation in the Plan is entirely within the discretion of the eligible employees of the Company. As a result, the Company cannot forecast the extent of future participation. Therefore, the Company has omitted the tabular disclosure of the benefits or amounts allocated under the Plan. Recommendation of the Board The Board believes that it is in the best interests of the Company and its shareholders to approve the Plan in order to provide current and prospective employees of the Company and participating subsidiaries with the continuing opportunity to acquire equity interests in the Company through the Plan. Therefore, the Board believes that this Amendment to the Plan will advance the interests of the Company’s shareholders. Absent the approval of this Proposal 6, it is anticipated that the reserve of Common Stock available for purchase under the Plan may be exhausted as soon as 2024, depending on fluctuations in the Company’s stock price, which would, at that time, result in the termination of the Plan.
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PROPOSAL 7: ADVISORY VOTE ON THE EXTENSION OF THE COMPANY’S SHAREHOLDER RIGHTS PLAN UNTIL SEPTEMBER 19, 2025 The Board recommends a vote FOR this proposal. The Board adopted the Rights Plan on September 19, 2022 to protect the interests of the Company and all shareholders from the likelihood that any entity, person or group gains control of the Company through open-market accumulation or other means without payment of an adequate control premium. The Board believes that it is in the best interests of the Company and all shareholders to extend the Rights Plan until September 19, 2025, with the Board retaining the ability to terminate the Rights Plan prior to such date if warranted. While shareholder approval is not required to extend the Rights Plan, the Board is asking shareholders to approve this advisory vote on the extension of the Rights Plan as part of the Board’s commitment to good corporate governance and to ensure that shareholders have an opportunity to voice their feedback on this important matter. Although the outcome of this proposal is non-binding, the Board will carefully consider the outcome of this proposal in considering whether to extend the Rights Plan. Rationale for Extension of the Rights Plan |
On September 19, 2022, the Board adopted a Shareholder Rights Agreement, by and between the Company and Computershare Trust Company, N.A., as rights agent, and declared a dividend of one common stock right for each outstanding share of Common Stock (the “Rights”) to shareholders of record at the close of business on September 30, 2022. See “Summary Description of the Rights Plan” below for more information about the Rights Plan. The Rights Plan is similar to plans adopted by other public companies and is intended to protect the interests of the Company and all Nordstrom shareholders. As announced at the time of its adoption, the Rights Plan: •Reduces the likelihood that any entity, person or group gains control of the Company through open-market accumulation or other means without payment of an adequate control premium; •Helps ensure that the Board has sufficient time to make informed, deliberate decisions that are in the best interests of the Company and all shareholders; •Applies equally to all current and future shareholders of the Company; •Was not adopted in response to any specific takeover bid or other proposal to acquire control of the Company; and •Is not intended to deter offers that are fair and otherwise in the best interests of all shareholders. The Board adopted the Rights Plan four days after El Puerto de Liverpool, S.A.B. de C.V. (“Liverpool”) disclosed it had acquired 9.9% of the Company’s Common Stock. Liverpool is a retailer operating mid- and high-end department stores in Mexico. While representatives of the Company had occasionally crossed paths with representatives of Liverpool before this date, such as at industry conferences, the Company was unaware that Liverpool was making an investment in the Company until shortly before Liverpool’s disclosure of their ownership stake. In light of Liverpool’s rapid open-market share accumulation and the uncertainty regarding Liverpool’s intentions towards the Company, among other factors, the Board determined it was appropriate to adopt the Rights Plan. In making this determination, the Board also considered that if either Liverpool or members of the Nordstrom family increased their ownership, their combined ownership could determine the outcome of most shareholder votes if they voted together. The Rights Plan prevents Liverpool and members of the Nordstrom family from increasing their ownership of Common Stock and prevents Liverpool or any other shareholder from forming a “group” with members of the Nordstrom family, in each case except as permitted by the Rights Plan (including increases in beneficial ownership through the exercise of options and the vesting of restricted stock units granted by the Company). In addition, on March6, 2023, RC Ventures LLC (“RC Ventures”), an investment vehicle of Ryan Cohen, disclosed to the Company that it owned 4.2% of the Company’s common stock and formally requested a waiver from the Rights Plan that would permit RC Ventures to acquire up to 19.9% of the Company’s Common Stock (above the 10% trigger of the Rights Plan). If RC Ventures were permitted to and did acquire 19.9% of the Common Stock, then shareholders other than members of the Nordstrom family, Liverpool and RC Ventures (the “Other Public Shareholders”) would collectively own less than 40% of the outstanding Common Stock. The Rights Plan will terminate in accordance with its terms on September 19, 2023. The Board believes that it is in the best interests of the Company and all shareholders to extend the Rights Plan until September 19, 2025 for the following reasons: •Deters a Creeping Acquisition of Control: The Rights Plan reduces the likelihood that any entity, person or group gains control of the Company through open-market accumulation or other means without payment of an adequate control premium. As a result of the Rights Plan, no shareholder can acquire beneficial ownership (as defined in the Rights Plan) of 10% or more of the Company’s Common 79 | | 2023 Proxy Statement | |
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Table of Contents PROPOSAL 7: ADVISORY VOTE ON THE EXTENSION OF THE COMPANY’S SHAREHOLDER RIGHTS PLAN UNTIL SEPTEMBER 19, 2025 Stock, including by forming a “group” with other shareholders with total ownership in excess of that threshold. Likewise, the Rights Plan operates to prevent the Nordstrom family from forming a “group” with other shareholders or acquiring additional shares of Common Stock other than in accordance with the Rights Plan. Under the Rights Plan, Anne E. Gittinger, Bruce A. Nordstrom, Erik B. Nordstrom, James F. Nordstrom and Peter E. Nordstrom and their respective affiliates and associates are collectively “grandfathered,” but they cannot acquire additional shares of Common Stock (including by forming a “group” with shareholders other than these persons) except in accordance with the Rights Plan (including increases in beneficial ownership through the exercise of options and the vesting of restricted stock units granted by the Company). As of April10, 2023 (or the earlier date set forth under Security Ownership of Certain Beneficial Owners and Management), Liverpool beneficially owned 9.76% of the outstanding Common Stock, and Anne Gittinger, Bruce Nordstrom, Erik Nordstrom, James Nordstrom and Peter Nordstrom beneficially owned 30.23% of the outstanding Common Stock in aggregate. In the absence of the Rights Plan, these persons could freely increase their beneficial ownership, which could result in these persons collectively holding a majority of the outstanding Common Stock. •Enables the Board to Respond to Unsolicited Acquisition Proposals: The Rights Plan helps ensure that the Board has sufficient time to make informed, deliberate decisions that are in the best interests of the Company and all Nordstrom shareholders. The Rights Plan is not intended to deter offers that are fair and otherwise in the best interests of all Nordstrom shareholders, but does give the Board the ability to defend shareholders against abusive or coercive takeover tactics by a potential acquirer that could be used to gain control of the Company without the acquirer paying all shareholders a fair price for their shares, including a partial or two-tier tender offer that fails to treat all shareholders equally. •Ensures the Other Public Shareholders Have the Ability to Reject a Merger Proposal: Under Washington corporate law, approval of a merger of the Company generally requires the approval of two-thirds of the votes entitled to be cast on the approval. RC Ventures has stated that, as of March6, 2023, it beneficially owned 4.2% of the outstanding Common Stock and requested an exemption to purchase up to 19.9% of the Company’s Common Stock. If RC Ventures acquired 19.9% of the outstanding shares and RC Ventures, members of the Nordstrom family, and Liverpool all supported a merger of the Company, the merger would only require the support of approximately an additional 10% of outstanding shares to be approved. The vote on this proposal will inform the Board’s independent decision in the exercise of its fiduciary duties as to whether it is advisable and in the best interests of the Company and its shareholders to extend the Rights Plan. Accordingly, the Board retains the authority to extend the Rights Plan, with or without amending one or more of its provisions, whether or not shareholders approve this proposal. Likewise, even if shareholders approve this proposal, the Board may determine not to extend the Rights Plan or, at any time during the term of the Rights Plan, may determine that the Rights Plan should be terminated, further extended, or otherwise amended. If the Rights Plan is extended, Erik Nordstrom and Peter Nordstrom would be restricted in their acquisition of additional shares of Common Stock except to the extent such acquisitions were permitted by the Rights Plan. Summary Description of the Rights Plan |
The Rights. The Rights will attach to any shares of Common Stock that become outstanding after the record date for the Rights Plan and prior to the earlier of the Distribution Time (as defined below) and the Expiration Time (as defined below), and in certain other circumstances described in the Rights Plan. Until the Distribution Time, the Rights are associated with Common Stock and evidenced by Common Stock certificates or, in the case of uncertificated shares of Common Stock, the book-entry account that evidences record ownership of such shares, which will contain a notation incorporating the Rights Plan by reference, and the Rights are transferable with and only with the underlying shares of Common Stock. Until the Distribution Time, the surrender for transfer of any shares of Common Stock will also constitute the transfer of the Rights associated with those shares. As soon as practicable after the Distribution Time, separate rights certificates will be mailed to holders of record of Common Stock as of the Distribution Time. From and after the Distribution Time, the separate rights certificates alone will represent the Rights. The Rights are not exercisable until the Distribution Time. Until a Right is exercised, its holder will have no rights as a shareholder of the Company, including the right to vote or to receive dividends. Separation and Distribution of Rights; Exercisability. Subject to certain exceptions, the Rights become exercisable and trade separately from Common Stock only upon the “Distribution Time,” which occurs upon the earlier of: •the close of business on the tenth (10th) day after the “Share Acquisition Date” (which is defined as (a) the first date of public announcement that any person or group has become an “Acquiring Person,” which is defined as a person or group that, together with its affiliates and associates, beneficially owns 10% or more of the outstanding shares of Common Stock (with certain exceptions, including those described below) or (b) such other date, as determined by the Board, on which a person or group has become an Acquiring Person) or •the close of business on the tenth (10th) business day (or such later date as may be determined by the Board prior to such time as any person or group becomes an Acquiring Person) after the commencement of a tender offer or exchange offer that, if consummated, would result in a person or group becoming an Acquiring Person.
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Table of Contents PROPOSAL 7: ADVISORY VOTE ON THE EXTENSION OF THE COMPANY’S SHAREHOLDER RIGHTS PLAN UNTIL SEPTEMBER 19, 2025 An Acquiring Person does not include: •the Company or any subsidiary of the Company; •any officer, director or employee of the Company or any subsidiary of the Company in his or her capacity as such; •any employee benefit plan of the Company or of any subsidiary of the Company or any entity or trustee holding (or acting in a fiduciary capacity in respect of) shares of capital stock of the Company for or pursuant to the terms of any such plan or for the purpose of funding other employee benefits for employees of the Company or any subsidiary of the Company; or •any person or group that, together with its affiliates and associates, as of immediately prior to the first public announcement of the adoption of the Rights Plan, beneficially owns 10% or more of the outstanding shares of Common Stock so long as such person or group continues to beneficially own at least 10% of the outstanding shares of Common Stock and does not acquire shares of Common Stock (excluding as a result of any unilateral grant of any security by the Company, or through the exercise of any options, warrants, rights or similar interests (including restricted stock) granted by the Company to its directors, officers or employees) to beneficially own an amount equal to or greater than the greater of 10% and the sum of the lowest beneficial ownership of such person or group since the public announcement of the adoption of the Rights Plan plus 0.1% of the then outstanding shares of Common Stock. In addition, the Rights Plan provides that no person or group will become an Acquiring Person as a result of share purchases or issuances directly from the Company or through an underwritten offering approved by the Board. Also, a person or group will not be an Acquiring Person if the Board determines that such person or group has become an Acquiring Person inadvertently and such person or group as promptly as practicable divests a sufficient number of shares so that such person or group would no longer be an Acquiring Person. Certain synthetic interests in securities created by derivative positions, whether or not such interests are considered to be ownership of the underlying Common Stock or are reportable for purposes of Regulation 13D of the Securities Exchange Act of 1934, as amended, are treated as beneficial ownership of the number of shares of Common Stock equivalent to the economic exposure created by the derivative position, to the extent actual shares of Common Stock are directly or indirectly held by counterparties to the derivatives contracts. Anne E. Gittinger, Bruce A. Nordstrom, Erik B. Nordstrom, James F. Nordstrom and Peter E. Nordstrom and their respective affiliates and associates are deemed to be a “group” purely for purposes of the Rights Plan (even if such persons would not be considered to be part of a group under Regulation 13D of the Securities Exchange Act of 1934, as amended). Expiration Time. The Rights will expire on the earliest to occur of (a) the close of business on September 19, 2023 (the “Final Expiration Time”), (b) the time at which the Rights are redeemed or exchanged by the Company (as described below) or (c) upon the closing of any merger or other acquisition transaction involving the Company pursuant to a merger or other acquisition agreement that has been approved by the Board before any person or group becomes an Acquiring Person (the earliest of (a), (b) and (c) being herein referred to as the “Expiration Time”). Flip-in Event. In the event that any person or group (other than certain exempt persons) becomes an Acquiring Person (a “Flip-in Event”), each holder of a Right (other than such Acquiring Person, any of its affiliates or associates or certain transferees of such Acquiring Person or of any such affiliate or associate, whose Rights automatically become null and void) will have the right to receive, upon exercise, Common Stock having a value equal to two times the exercise price of the Right. For example, at an exercise price of $94.00 per Right, each Right not owned by an Acquiring Person (or by certain related parties) following a Flip-in Event would entitle its holder to purchase $188.00 worth of Common Stock for $94.00. Assuming that Common Stock had a per share value of $18.80 at that time, the holder of each valid Right would be entitled to purchase 10shares of Common Stock for $9.40. Flip-over Event. In the event that, at any time following the Share Acquisition Date, any of the following occurs (each, a “Flip-over Event”): •the Company consolidates with, or merges with and into, any other entity, and the Company is not the continuing or surviving entity; •any entity engages in a share exchange with or consolidates with, or merges with or into, the Company, and the Company is the continuing or surviving entity and, in connection with such share exchange, consolidation or merger, all or part of the outstanding shares of Common Stock are changed into or exchanged for stock or other securities of any other entity or cash or any other property; or •the Company sells or otherwise transfers, in one transaction or a series of related transactions, fifty percent (50%) or more of the Company’s assets, cash flow or earning power, each holder of a Right (except Rights which previously have been voided as described above) will have the right to receive, upon exercise, common stock of the acquiring company having a value equal to two times the exercise price of the Right. Anti-dilution Adjustments. The exercise price payable, and the number of shares of Common Stock or other securities or property issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent dilution: •in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Common Stock, •if holders of the Common Stock are granted certain rights, options or warrants to subscribe for Common Stock or convertible securities at less than the current market price of the Common Stock or •upon the distribution to holders of the Common Stock of evidences of indebtedness or assets (excluding regular quarterly cash dividends) or of subscription rights or warrants (other than those referred to above). 81 | | 2023 Proxy Statement | |
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Table of Contents PROPOSAL 7: ADVISORY VOTE ON THE EXTENSION OF THE COMPANY’S SHAREHOLDER RIGHTS PLAN UNTIL SEPTEMBER 19, 2025 With certain exceptions, no adjustment in the exercise price will be required until cumulative adjustments amount to at least one percent (1%) of the exercise price. No fractional shares of Common Stock will be issued and, in lieu thereof, an adjustment in cash will be made based on the market price of the Common Stock on the last trading day prior to the date of exercise. Redemption; Exchange. At any time prior to the earlier of (i) the tenth (10th) day following the Share Acquisition Date or (ii) the Final Expiration Time, the Company may redeem the Rights in whole, but not in part, at a price of $0.001 per Right (subject to adjustment and payable in cash, Common Stock or other consideration deemed appropriate by the Board). Immediately upon the action of the Board authorizing any redemption or at a later time as the Board may establish for the effectiveness of the redemption, the Rights will terminate and the only right of the holders of Rights will be to receive the redemption price. At any time before any Acquiring Person, together with all of its affiliates and associates, becomes the beneficial owner of fifty percent (50%) or more of the outstanding shares of Common Stock, the Company may exchange the Rights (other than Rights owned by the Acquiring Person, any of its affiliates or associates or certain transferees of Acquiring Person or of any such affiliate or associate, whose Rights will have become null and void), in whole or in part, at an exchange ratio of one share of Common Stock per Right (subject to adjustment). Amendment of the Rights Plan. The Company and the Rights Agent may from time to time amend or supplement the Rights Plan without the consent of the holders of the Rights. However, on or after the Share Acquisition Date, no amendment can materially adversely affect the interests of the holders of the Rights (other than the Acquiring Person, any of its affiliates or associates or certain transferees of Acquiring Person or of any such affiliate or associate). Miscellaneous. While the distribution of the Rights will not be taxable to shareholders or to the Company, shareholders may, depending upon the circumstances, recognize taxable income in the event that the Rights become exercisable for Common Stock (or other consideration) or for common stock of the acquiring company or in the event of the redemption of the Rights as described above. Additional Information. A copy of the Rights Plan has been filed with the Securities and Exchange Commission as an exhibit to a registration statement on Form 8-A and a current report on Form 8-K. A copy of the Rights Plan is also available free of charge from the Company. This description of the Rights does not purport to be complete and is qualified in its entirety by reference to the Rights Plan, which was filed as an exhibit to a Form 8-K filed by the Company with the SEC on September 20, 2022.
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EQUITY COMPENSATION PLANS The following table provides information as of the fiscal year ended January 30, 201628, 2023 about Common Stock that may be issued upon the exercise of options and rights that have been or may be granted to employees and members of the Board under all of the Company’s existing equity compensation plans. The amounts below reflect the adjustments approved by the Compensation Committee to mitigate the effect Plan Category | Number of
Securities to be
Issued Upon
Exercise of
Outstanding
Options, Warrants
and Rights
(1) (#) | Weighted-Average
Exercise Price of
Outstanding
Options, Warrants
and Rights
(2) ($) | Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation Plans
(excluding securities to be
issued as reflected in
column (1))
(3) (#) | Equity compensation plans approved by the Company’s shareholders(a) | 13,694,556(b) | 38 | 16,321,659(c) | Equity compensation plans not approved by the Company’s shareholders(d) | 993 | 6 | — | TOTAL | 13,695,549 | 38 | 16,321,659 |
| Plan Category | Number of Securities
to be Issued Upon
Exercise of Outstanding
Options, Warrants and
Rights
(1) (#) | | Weighted-Average
Exercise Price of Outstanding Options,
Warrants and
Rights
(2) ($) | | Number of Securities Remaining
Available for Future Issuance
Under Equity Compensation Plans
(excluding securities to be issued
as reflected in column (1))
(3) (#) | | | Equity compensation plans approved by the Company’s shareholders(a) | 14,467,481 | (b) | 48 | | 16,992,839 | (c) | | Equity compensation plans not approved by the Company’s shareholders(d) | 729,928 | | 4 | | — | | | TOTAL | 15,197,409 | | 47 | | 16,992,839 | |
(a) | Consist of the 2004 and 2010 Equity Incentive Plans, the Employee Stock Purchase Plan and the 2002 Nonemployee Director Stock Incentive Plan. | (b) | Includes 130,064 of deferred Director awards and 147,489 related to deferred performance share units. | (c) | Includes 13,545,184 shares from the 2010 Equity Incentive Plan, 2,980,903 shares from the Employee Stock Purchase Plan and 466,752 shares from the 2002 Nonemployee Director Stock Incentive Plan. | (d) | Consist of plans created in connection with our subsidiaries. |
NORDSTROM, INC. - 2016 Proxy Statement | 55 |
PROPOSAL 383 | ADVISORY VOTE REGARDING EXECUTIVE COMPENSATION: SAY-ON-PAY PROPOSAL | 2023 Proxy Statement | |
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The Board recommends a vote FOR this proposal.
The Company is providing shareholders with an advisory (nonbinding) vote on the compensation programTable of our Named Executive Officers as disclosed in this Proxy Statement. At the 2015 Annual Meeting of Shareholders, 98% of the votes cast were in favor of our Say-on-Pay proposal.Contents
At the 2011 Annual Meeting, over 93% of the votes cast approved our Board’s recommendation to hold advisory votes on an annual basis. The Compensation Committee recognizes this support of the compensation program for our Named Executive Officers and continues to apply the same guiding principles which underlie our pay-for-performance philosophy.
Compensation Program Highlights
As described in the Compensation Discussion and Analysis beginning on page 27, our Named Executive Officers are rewarded when defined performance milestones are achieved and when value is created for our shareholders. Our Compensation Committee and Board believe that our compensation program is effective in implementing our executive compensation philosophy and establishing a solid link between compensation and shareholder interests. Highlights of our compensation program include the following:
• | We deliver the majority of compensation through a pay-for-performance framework where incentives are based on achieving results. Eighty percent of the value of the targeted compensation package for our Named Executive Officers is weighted toward pay-for-performance and variable compensation to reinforce our philosophy of compensating our executives when they and the Company are successful in ways that support shareholder interests. | | | • | Each year, the Compensation Committee establishes the performance-based bonus measures that focus executives on the most important Company objectives. In 2015, Named Executive Officers each had the following measures: |
| – | Return on Invested Capital (“ROIC”) to ensure our overall performance aligns directly with shareholder returns over the long term. The measure is expressed as a threshold that must be met before any payout can be made on EBIT results to ensure our executives are rewarded after earnings generate a meaningful return for our shareholders. | | | | | – | Earnings Before Interest and Income Taxes (“EBIT”) to emphasize the importance of earnings and its role in driving shareholder value. Each Named Executive Officer’s performance-based bonus was weighted 100% on this measure, subject to the ROIC threshold. |
• | The Committee references the 50thpercentile of our retail peer group when assessing the Named Executive Officers’ targeted level of total direct compensation (base salary + performance-based bonus + long-term incentives). The market information is considered a reference point rather than policy for reviewing competitiveness. | | | • | We maintain meaningful executive stock ownership guidelines so that our executives’ interests, as shareholders, are aligned with our broader shareholder base. | | | • | We have an executive compensation clawback policy that applies to performance-based compensation. | | | • | Our Compensation Committee has retained and directs an independent compensation consultant. | | | • | We do not have employment agreements with our executives. | | | • | We do not provide tax gross-ups, except those related to relocation expenses when an executive must move to assume Company responsibilities. | | | • | We do not allow stock option grant repricing or backdating, nor do we grant options below 100% of fair market value. | | | • | We have a derivative and hedging policy that prohibits Directors and Executive Officers (as well as other key insiders and their immediate families) from engaging in hedging transactions with respect to any equity securities of the Company held by them. | | | • | We have restrictions on pledging of Company Common Stock. |
Shareholder Support
We are asking our shareholders to indicate their support for our Named Executive Officers’ compensation as described in this Proxy Statement.
This proposal gives our shareholders the opportunity to express their views on the compensation of our Named Executive Officers. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our Named Executive Officers and the philosophy, policies and practices described in this Proxy Statement. Accordingly, we ask our shareholders to vote “FOR” the following resolution at the 2016 Annual Meeting:
“RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of the Company’s Named Executive Officers, as disclosed in the Compensation Discussion and Analysis, the compensation tables and the related narrative disclosure in this Proxy Statement.”
Our Board has adopted a policy of annual Say-on-Pay advisory votes. As an advisory vote, this proposal is not binding on the Company. However, our Compensation Committee and Board value the opinions of our shareholders and will consider the outcome of the vote when making future compensation decisions regarding the Company’s Named Executive Officers.
NORDSTROM, INC. - 2016 Proxy Statement | 56 |
PROPOSAL 4 | APPROVAL OF THE AMENDED AND RESTATED NORDSTROM, INC. EXECUTIVE MANAGEMENT BONUS PLAN |
The Board recommends a vote FOR this proposal.
On February 24, 2016, the Compensation Committee of the Board (the “Committee”) unanimously approved the Amended and Restated Nordstrom, Inc. Executive Management Bonus Plan (the “Plan”). The Plan is an annual cash incentive plan for our executive officers that replaces a similar plan that was adopted by the Committee and our shareholders in 2012.
The Committee approved the Plan so that, subject to the approval of our shareholders at the 2016 Annual Meeting, we can make annual cash and equity incentive awards under the Plan which will be eligible for tax deductions under IRC Section 162(m). If our shareholders do not approve the Plan, a portion of the annual cash and equity incentive compensation payable to our executives, which would otherwise be deductible by the Company, may not be fully deductible as “performance-based” compensation under IRC Section 162(m).
The Committee believes that the Plan strengthens the commitment of our executive officers to create shareholder value by providing them with short-term incentive compensation based on the achievement of financial and other business performance goals. While the Plan is intended to provide performance-based compensation to certain executives that is fully deductible by us under federal tax laws, the actual deductibility of such compensation depends on a number of complex factors and approval of the Plan will not ensure that all the compensation we pay to our executives is ultimately deductible. Because the Plan allows the Committee to retain the flexibility to choose appropriate financial and business goals and to pre-establish the target level of these goals, federal tax regulations require that the Plan be resubmitted to our shareholders for approval every five years.
The following is a summary of the Plan, a complete copy of which has been filed with the SEC as Appendix A to this Proxy Statement. This summary is qualified in its entirety by the text of the Plan.
Eligible Participants
Eligibility during any given fiscal year of the Company is limited to individuals who are designated by the Company’s Board as being Executive Officers for purposes of Section 16 of the Securities Exchange Act of 1934. The Committee is authorized to further limit eligibility for the Plan.
Administration
The Committee will administer the Plan and may delegate administration of the Plan to one or more officers of the Company.
Performance Bonus Awards
For each performance period, the Committee will select the participants who are eligible to receive bonus awards, the performance measures and milestones for each participant and the amount payable to each participant upon attainment of the performance milestones. Each participant’s actual bonus will depend on the degree to which the objective, pre-established performance milestones are achieved.
Payment of any bonus earned will be made to the participant following the conclusion of the fiscal year or performance period in question upon the condition that the Committee has:
• | certified that the specified performance milestones have been achieved; and | | | • | reviewed and approved the bonus payout. |
With respect to “covered employees” under IRC Section 162(m), the Committee has the discretion to reduce or eliminate (but not increase) the amount of any performance bonus. In addition, if during any performance period a recapitalization, reorganization, merger, acquisition, divestiture, consolidation, spin-off, split-off, combination, liquidation, dissolution, sale of assets, or other similar corporate transaction or event occurs, or there is any change in applicable tax laws or accounting principles, or any unusual, extraordinary or nonrecurring event involving the Company which distorts the performance measures applicable to any performance milestone, the Committee is authorized to adjust the calculation of the performance measures and the applicable performance milestones as necessary to prevent reduction or enlargement of participants’ performance bonus awards under the Plan.
The bonus that will be paid to any participant under the Plan is not determinable at this time. However, the maximum bonus payable to any participant under the Plan is $10 million in any single fiscal year. If a performance period is shorter than a full fiscal year, the maximum potential bonus payable to any participant will be proportionately reduced. No bonus will be paid under the Plan unless the specified performance milestones have been achieved. Additionally, except in cases of death, disability or retirement, a participant must be employed by the Company on the last day of the performance period in order to receive an award under the Plan.
NORDSTROM, INC. - 2016 Proxy Statement | 57 |
Clawback
All awards pursuant to the Plan are subject to the Company’s clawback policy. The policy will comply with the requirements of the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. This policy provides for the recapture by the Company, to the extent permitted by law, of incentive compensation paid to an executive if:
• | the amount of such compensation was based on the achievement of financial results that were subsequently the subject of a material restatement of the Company’s financial statements filed with the SEC; | | | • | the executive engaged in grossly negligent or intentional misconduct that caused or substantially caused the need for the material restatement; and | | | • | the amount of vesting of the incentive compensation would have been less had the financial statements been correct. |
Form of Payment of Bonus
The normal form of bonus payments is cash. However, the Committee may either (i) pay, or (ii) allow a participant to elect to receive, all or a portion of their bonus in the form of a long-term incentive award based on the Company’s Common Stock (“Incentive Grants”). The number of shares of Incentive Grants to be received by the participant shall be based on the fair market value of the Common Stock as of the last market trading day of the applicable performance period. Incentive Grants, including shares of Common Stock, will be issued under the Company’s 2010 Equity Incentive Plan, as amended and restated February 26, 2014, or any successor plan.
Performance Criteria/Section 162(m)
IRC Section 162(m) precludes a publicly held corporation from claiming a tax deduction for compensation in excess of $1 million paid to its Chief Executive Officer or to any of its three other most highly compensated executive officers, excluding the Chief Financial Officer (the “Covered Employees”). Compensation paid to Covered Employees is exempt from this limitation if it satisfies requirements for “qualified performance-based compensation.” To qualify for this exemption from IRC Section 162(m), bonuses that are intended to qualify as performance-based compensation to Covered Employees are subject to the annual dollar limit, as described above, and are conditioned on the achievement of objective performance measures, as described below.
To be considered “qualified performance-based compensation,” bonuses payable under the Plan will be conditioned on the achievement of objective performance measures. Such measures will be based on the achievement of a specified percentage increase or quantitative level in any one or combination of the following performance criteria:
• | the Company’s shareholder return; | | | • | the trading price of the Company’s Common Stock; | | | • | the results of operations, such as sales, earnings, net income (before or after taxes), cash flow, return on assets, same-store sales, economic profit, or return on investment (including return on equity or return on invested capital); | | | • | earnings before or after taxes, interest, depreciation and/or amortization, and including/excluding capital gains and losses; | | | • | other financial results, such as profit margins, operational efficiency, expense reduction, or asset management goals; and | | | • | other strategic indicators, such as market share or customer metrics. |
The performance measures may be based on the performance of the Company generally, in the absolute or in relation to its peers, or the performance of a particular participant, department, business unit, subsidiary or other segment to which a participant is assigned.
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The Committee will identify the performance bonus opportunities for each participant, as well as the performance measures and milestones relevant to such opportunities, within the first 90 days of each performance period and before twenty-five percent (25%) of such period has elapsed. These bonus opportunities may be expressed as threshold, target and superior opportunities, or as a single incentive opportunity, in each case subject to downward adjustment by the Committee. In addition, the Committee will certify, prior to payout, that such performance milestones and any other material terms were in fact achieved.
The description of annual limits, the individuals eligible to participate in the Plan and the description of performance measures upon which awards may be conditioned are material terms of the Plan required to be disclosed to and approved by shareholders for purposes of meeting the requirements for performance-based compensation under IRC Section 162(m).
Term, Termination and Amendment
The Plan will remain in effect for a period of five years unless earlier terminated by the Company. Any proposed amendment of the Plan will be subject to the approval of the Company’s shareholders to the extent required by applicable laws, regulations or rules.
NORDSTROM, INC. - 2016 Proxy Statement | 58 |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
Beneficial Ownership Table The following table shows the amount of Common Stock beneficially owned (unless otherwise indicated) by holders of more than 5% of the outstanding shares of Common Stock, by our Directors, by the Named Executive Officers,NEOs, and by all Directors and executive officersExecutive Officers of the Company as a group. Except as otherwise noted, each of the reporting persons has sole voting and investment power with respect to the shares listed. Except as otherwise noted, all information is as of March 11, 2016.April10, 2023. Name of Beneficial Owner | Amount and Nature of
Beneficial Ownership
(#) | Percent of
Ownership
(%) | (a) | Erik B. Nordstrom | 3,539,574 | 2.18% | (b) | Peter E. Nordstrom | 3,483,992 | 2.15% | (c) | Kenneth J. Worzel | 725,520 | * | (d) | Alexis DePree | 133,161 | * | (e) | Michael W. Maher | 90,692 | * | (f) | Edmond Mesrobian | 78,761 | * | (g) | Bradley D. Tilden | 67,198 | * | (h) | Stacy Brown-Philpot | 33,740 | * | (i) | Kirsten A. Green | 24,547 | * | (j) | Glenda G. McNeal | 24,547 | * | (k) | James L. Donald | 19,457 | * | (l) | Mark J. Tritton | 19,457 | * | (m) | Amie Thuener O’Toole | 6,043 | * | (n) | Atticus N. Tysen | 1,910 | * | (o) | Eric D. Sprunk | — | * | (p) | Anne L. Bramman | — | * | (q) | Directors and Executive Officers as a group (18 persons) | 9,680,877 | 5.90% |
| Greater than 5% Security Holders | | | (r) | Bruce A. Nordstrom
1617 Sixth Avenue
Seattle, Washington 98101 | 25,241,423 | 15.64% | (s) | El Puerto de Liverpool, S.A.B. de C.V.
Mario Pani No. 200, Col. Santa Fé Cuajimalpa
Cuajimalpa, Ciudad de México, CP 05348, Mexico | 15,755,000 | 9.76% | (t) | Anne E. Gittinger
1617 Sixth Avenue
Seattle, Washington 98101 | 15,404,437 | 9.54% | (u) | BlackRock, Inc.
55 East 52nd Street
New York, New York 10055 | 9,974,728 | 6.18% | (v) | The Vanguard Group
100 Vanguard Boulevard
Malvern, Pennsylvania 19355 | 9,420,303 | 5.84% |
| | Amount and Nature of | Percent of | | | Beneficial Ownership | Ownership | | Name of Beneficial Owner | (#) | (%) | Bruce A. Nordstrom (a)
1617 Sixth Avenue
Seattle, Washington 98101-1707 | 25,699,614 | 14.86 | Anne E. Gittinger (b)
1617 Sixth Avenue
Seattle, Washington 98101-1707 | 15,403,944 | 8.91 | | Blake W. Nordstrom (c) | 3,353,885 | 1.93 | | Peter E. Nordstrom (d) | 3,321,399 | 1.91 | | Erik B. Nordstrom (e) | 3,245,840 | 1.87 | | Michael G. Koppel (f) | 414,252 | * | | Enrique Hernandez, Jr. (g) | 98,719 | * | | Robert D. Walter (h) | 77,101 | * | | Philip G. Satre (i) | 60,960 | * | | Phyllis J. Campbell (j) | 33,528 | * | | Alison A. Winter (k) | 31,660 | * | | Robert G. Miller (l) | 27,868 | * | | B. Kevin Turner (m) | 19,449 | * | | Michelle M. Ebanks (n) | 15,149 | * | | Brad D. Smith (o) | 6,549 | * | | Bradley D. Tilden (p) | 2,708 | * | | Shellye L. Archambeau (q) | 2,296 | * | | Tanya L. Domier (r) | 1,987 | * | | Gordon A. Smith (s) | 1,281 | * | | Christine F. Deputy (t) | 0 | * | | Directors and Executive Officers as a group (25 persons) (u) | 12,354,358 | 7.03 | | Other >5% Security Holders | | | The Vanguard Group (v)
100 Vanguard Blvd.
Malvern, PA 19355 | 11,721,257 | 6.78 |
*Does not exceed 1% of the Company’s outstanding Common Stock. (a)
| Bruce A. Nordstrom | 2023 Proxy Statement | | 84 |
Amount and nature of beneficial ownership includes: | | • | 7,705,608 shares owned by him directly; | | | • | 1,422 nonvoting deferred stock units. The stock units are convertible into Common Stock and payable upon the occurrence of certain events; | | | • | 256,776 shares owned by his wife individually; | | | • | 11,490,868 shares held by trusts of which he is a trustee and beneficiary; and | | | • | 6,244,940 shares held by trusts of which he is a co-trustee and for which he has shared voting and dispositive power. Mr. Nordstrom is a contingent remainderman with respect to these trusts, but disclaims any beneficial ownership with respect to the shares of Common Stock held in the trusts. |
Table of Contents SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT (a) Erik B. Nordstrom Amount and nature of beneficial ownership includes: • | 13,843,543 shares owned by her•2,600,814shares owned by him directly; | | | • | 5,201 shares held by her in the Company’s 401(k) Plan; and | | | • | 1,555,200 shares held by a trust of which she is a trustee and beneficiary. |
Does not include:•28,691shares held by him in the Company’s 401(k) Plan;
•667,828shares that may be acquired by him through stock options exercisable within 60 days after April10, 2023; • | 5,501,520 shares held by a trust of which she is the beneficiary, but over which she holds no voting or investment power and which are reported as beneficially owned by her brother, Bruce A. Nordstrom. | | |
NORDSTROM, INC. - 2016 Proxy Statement | 59 |
•42,646shares owned by his wife individually; and •199,595shares held by a trust of which he is the trustee. (b) Peter E. Nordstrom Amount and nature of beneficial ownership includes: •2,471,488shares owned by him directly, of which 230,000shares are pledged as collateral for loans and are in compliance with the Company’s policy regarding pledging; • | 2,084,182 shares owned by him directly; | | | • | 86,824 shares held by him in the Company’s 401(k) Plan; | | | • | 574,228 shares that may be acquired by him through stock options exercisable within 60 days after March 11, 2016; | | | • | 377,626 shares owned by his wife individually; | | | • | 32,794 shares held by trusts of which he is a trustee; and | | | • | 198,231 shares held by trusts of which he is the trustee, for which he has sole voting and dispositive power and for which he disclaims beneficial ownership. |
•36,860shares held by him in the Company’s 401(k) Plan; •667,828shares that may be acquired by him through stock options exercisable within 60 days after April10, 2023; •175,533shares owned by his wife individually; •494shares held by his wife in the Company’s 401(k) Plan; •49,060shares held by trusts of which he is the trustee; and •82,728shares held by trusts of which he is the trustee, for which he has sole voting and dispositive power and for which he disclaims beneficial ownership. (c) Kenneth J. Worzel Amount and nature of beneficial ownership includes: •88,239shares owned by him directly; • | 2,264,314 shares owned by him directly, of which 230,000 shares are pledged as collateral for loans and are in compliance with the Company’s policy regarding pledging; | | | • | 29,008 shares held by him in the Company’s 401(k) Plan; | | | • | 531,742 shares that may be acquired by him through stock options exercisable within 60 days after March 11, 2016; | | | • | 170,533 shares owned by his wife individually; | | | • | 406 shares held by his wife in the Company’s 401(k) Plan; | | | • | 49,060 shares held by trusts of which he is the trustee; and | | | • | 276,336 shares held by trusts of which he is the trustee, for which he has sole voting and dispositive power and for which he disclaims beneficial ownership. |
•6,310 nonvoting stock units held under the NDCP; •5,326shares held by him in the Company’s 401(k) Plan; and •625,645shares that may be acquired by him through stock options exercisable within 60 days after April10, 2023. (d) Alexis DePree Amount and nature of beneficial ownership includes: •75,081shares owned by her directly; and • | 2,370,506 shares owned by him directly, of which 457,582 shares are pledged as collateral for loans and are in compliance with the Company’s policy regarding pledging; | | | • | 22,232 shares held by him in the Company’s 401(k) Plan; | | | • | 531,742 shares that may be acquired by him through stock options exercisable within 60 days after March 11, 2016; | | | • | 42,646 shares owned by his wife individually; | | | • | 85,926 shares held by trusts of which he is the trustee; and | | | • | 192,788 shares held by trusts of which he is the trustee, for which he has sole voting and dispositive power and for which he disclaims beneficial ownership. |
•58,080shares that may be acquired by her through stock options exercisable within 60 days after April10, 2023. (e) Michael W. Maher Amount and nature of beneficial ownership includes: •23,311shares owned by him directly; and • | 41,321 shares owned by him directly; | | | • | 28,149 nonvoting stock units held under the Company’s Executive Deferred Compensation Plan; | | | • | 6,809 shares held by him in the Company’s 401(k) Plan; and | | | • | 337,973 shares that may be acquired by him through stock options exercisable within 60 days after March 11, 2016. |
•67,381shares that may be acquired by him through stock options exercisable within 60 days after April10, 2023. (g) | Enrique Hernandez, Jr. |
(f) Edmond Mesrobian Mr. Mesrobian served as the Company’s Chief Technology and Information Officer until October 14, 2022. The following beneficial ownership information is based on information contained in the last Form 4 filed by Mr. Mesrobian with the SEC prior to October 14, 2022, adjusted to give effect to subsequent transactions through April10, 2023 of which the Company is aware in connection with employment-related equity awards: •78,761shares owned by him directly. (g) Bradley D. Tilden Amount and nature of beneficial ownership includes: • | 24,534 shares owned by him directly; and | | | • | 74,185 nonvoting deferred stock units. The stock units are convertible into Common Stock and payable upon the occurrence of certain events, including his retirement from the Board. |
Amount and nature of beneficial ownership includes:
• | 54,926 shares owned by him directly; and | | | • | 22,175 nonvoting deferred stock units. The stock units are convertible into Common Stock and payable upon the occurrence of certain events, including his retirement from the Board. |
Amount and nature of beneficial ownership includes:
• | 18,599 nonvoting deferred stock units. The stock units are convertible into Common Stock and payable upon the occurrence of certain events, including his retirement from the Board; and | | | • | 42,361 shares held by a family trust, of which he is a trustee and beneficiary. |
Amount and nature of beneficial ownership includes:
• | 21,893 shares owned by her directly; and | | | • | 11,635 nonvoting deferred stock units. The stock units are convertible into Common Stock and payable upon the occurrence of certain events, including her retirement from the Board. |
Amount and nature of beneficial ownership includes:
• | 22,050 shares owned by her directly; | | | • | 9,410 shares held by a trust, of which she and her husband are trustees and beneficiaries; and | | | • | 200 shares held by her husband in a retirement account, over which she shares investment power. |
Amount and nature of beneficial ownership includes:
27,868 shares owned by him directly.
Amount and nature of beneficial ownership includes:
19,449 shares owned by him directly.
Amount and nature of beneficial ownership includes:
15,149 shares owned by her directly.
NORDSTROM, INC. - 2016 Proxy Statement | 60 |
Amount and nature of beneficial ownership includes:
6,549 •52,515shares held by a family trust, of which he is a trustee and beneficiary.
beneficiary; and•14,683 nonvoting deferred stock units. The stock units are convertible into Common Stock and payable upon the occurrence of certain events, including his retirement from the Board. (h) Stacy Brown-Philpot Amount and nature of beneficial ownership includes: 2,708 •3,444shares owned by him directly.
her directly; and•30,296 nonvoting deferred stock units. The stock units are convertible into Common Stock and payable upon the occurrence of certain events, including her retirement from the Board. (i) Kirsten A. Green Amount and nature of beneficial ownership includes: 2,296 •24,547shares owned by her directly.
(j) Glenda G. McNeal Amount and nature of beneficial ownership includes: 1,987 •24,547shares owned by her directly.
(k) James L. Donald Amount and nature of beneficial ownership includes: •19,457shares held in a trust of which he is a trustee and beneficiary. 1,281 (l) Mark J. Tritton Amount and nature of beneficial ownership includes: •19,457shares owned by him directly. (m) Amie Thuener O’Toole Amount and nature of beneficial ownership includes: •6,043shares owned by her directly. (n) Atticus N. Tysen Amount and nature of beneficial ownership includes: •1,910shares owned by him directly. (o) Eric D. Sprunk Mr.Sprunk was appointed on April16, 2023 and will receive a common stock award compensation as described under the caption “Director Compensation and Stock Ownership Guidelines” of this Proxy Statement. (p) Anne L. Bramman Ms. Bramman served as the Company’s Chief Financial Officer until December 2, 2022. The following beneficial ownership information is based on information contained in the last Form 4 filed by Ms. Bramman with the SEC prior to December 2, 2022, adjusted to give effect to subsequent transactions through April10, 2023 of which the Company is aware in connection with employment-related equity awards: •0shares owned by her directly. (t)85 | Christine F. Deputy | 2023 Proxy Statement | |
|
Ms. Deputy joined the Company during the fiscal year ended January 30, 2016Table of Contents
(q) Directors and did not have any beneficial ownershipExecutive Officers as of March 11, 2016. (u) | Directors and executive officers as a group (25 persons) |
a group (18 persons) Collectively, the combined amount and nature of beneficial ownership for the Directors and all executive officersExecutive Officers include: •5,918,364shares owned directly, of which 230,000shares are pledged as collateral for third party obligations; • | 7,600,446 shares owned directly; | | | • | 1,658,717 shares owned by spouses and trusts of which the respective Director or executive officer is a trustee, or a trustee and beneficiary; | | | • | 126,594 nonvoting stock units held by participating Directors under the Directors Deferred Compensation Plan; | | | • | 59,277 nonvoting stock units held by participating executive officers under the Company’s Executive Deferred Compensation Plan; | | | • | 186,752 shares held by participating executive officers and their eligible spouses in the Company’s 401(k) Plan; and | | | • | 2,722,572 shares that may be acquired by the executive officers as a group through stock options exercisable within 60 days after March 11, 2016. |
•945,740shares owned by spouses and trusts of which the respective Director or Executive Officer is a trustee, or a trustee and beneficiary; •44,979 nonvoting stock units held by participating Directors under the DDCP; •6,310 nonvoting stock units held by participating Executive Officers under the NDCP; •82,776shares held by participating Executive Officers and their eligible spouses in the Company’s 401(k) Plan; and •2,682,708shares that may be acquired by the Executive Officers as a group through stock options exercisable within 60 days after April10, 2023. (r) Bruce A. Nordstrom Pursuant to a Schedule 13G filing made with the SEC, as of December 31, 2015,2022, the aggregate amount beneficially owned by Mr. Nordstrom includes: •24,236,227shares for which he has sole power to vote or to dispose or to direct disposition; and •1,005,196shares for which he has shared power to vote or to dispose or to direct disposition. (s) El Puerto de Liverpool, S.A.B. de C.V. Pursuant to a Schedule 13G filing made with the SEC, as of September 8, 2022, the aggregate amount beneficially owned by El Puerto de Liverpool, S.A.B. de C.V. includes: •15,755,000shares for which it has sole power to vote or to dispose or to direct disposition. (t) Anne E. Gittinger Pursuant to a Schedule 13G filing made with the SEC, as of December 31, 2022, the aggregate amount beneficially owned by Ms. Gittinger includes: •15,404,437shares for which she has sole power to vote or to dispose or to direct disposition. (u) BlackRock, Inc. Pursuant to a Schedule 13G filing made with the SEC, as of December 31, 2022, the aggregate amount beneficially owned by BlackRock, Inc. includes: •9,618,987shares for which it has the sole power to vote or to direct the vote; and •9,974,728shares for which it has sole power to dispose or to direct disposition. (v) The Vanguard Group Pursuant to a Schedule 13G filing made with the SEC, as of December 30, 2022, the aggregate amount beneficially owned by The Vanguard Group includes: • | 11,447,102 shares for which it has sole power to vote or to dispose or to direct disposition; and | | | • | 274,155 shares for which it has shared power to dispose or to direct disposition. |
•48,798shares for which it has shared power to vote or to direct the vote; •159,867shares for which it has shared power to dispose or to direct disposition; and •9,260,436shares for which it has sole power to dispose or to direct disposition. Delinquent Section 16(a) Beneficial Ownership Reporting Compliance Reports Based upon a review of reports filed with the SEC and written representations that no other reports were required, the Company believes that during the fiscal year ended January 30, 201628, 2023 all of our Directors, Executive Officers and owners of in excess of 10% of Common Stock complied with the filing requirements of Section 16(a) of the Exchange Act, except that Tanya L. Domier filed one report on Form 4 was filed late on behalf of Michael Maher relating to two purchases of Common Stock under a dividend reinvestment plan.an RSU grant. NORDSTROM, INC. - 2016 Proxy Statement | 61 |
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
Review and Approval Process We maintain policies and procedures regarding the identification, review and approval of related party transactions. In compliance with SEC rules, the Corporate Governance and Nominating CommitteeCGNC reviews and approves or disapproves any transaction or series of related transactions in which: (1) the amount involved exceeds $120,000, (2) the Company or any of its subsidiaries is a participant, and (3) a related party (a Director or Executive Officer of the Company, any nominee for director,Director, any greater than 5% shareholders and any immediate family member of such persons) has a direct or indirect material interest. When considering a transaction, the CommitteeCPCC will review all relevant factors, including the Company’s rationale for entering into a related party transaction, alternatives to the transaction, whether the transaction is on terms at least as fair to the Company as would be the case if the transaction were entered with a third party, and the potential of an actual or apparent conflict of interest. After reviewing the information, the CommitteeCPCC will approve or ratify the transaction or transactions only if the CommitteeCPCC determines that the transaction is reasonable and fair to the Company.
| | 2023 Proxy Statement | | 86 |
Table of Contents
Related Party Transactions The following section describes all related party transactions reviewed and approved by the Corporate Governance and Nominating Committee under the policy described above. The related parties identified below provided notice to the Company of termination of all the following related party transactions (with the exception of the Property Sublease, which continues in effect in accordance with its terms), effective November 30, 2015.
Aircraft Dry Lease. During fiscal year 2015 until November 30, 2015, when the transactions were terminated, the Company leased aircraft from JBW Aircraft Leasing Company, Inc. (“JBW”). The shareholders of JBW were John N. Nordstrom (a retired Director and Co-Chairman of the Company), Bruce A. Nordstrom (a retired Director and Co-Chairman of the Company, father of Co-Presidents Blake Nordstrom, Peter Nordstrom and Erik Nordstrom and a beneficial owner of more than 5% of Common Stock) and Anne E. Gittinger (a beneficial owner of more than 5% of Common Stock). The lease arrangement was a “dry” lease, meaning that the Company paid an hourly market rate for use and provided or obtained its own fuel, crew and maintenance while using the leased aircraft. The dry lease rates were developed by a leading independent aircraft research company based on a survey of competitive rates.
During the fiscal year the Company used the JBW aircraft a total of 34.5 hours and paid JBW $95,423. Rent and Maintenance, Pilot and Administrative Services. During fiscal year 2015 until November 30, 2015, when theended January 28, 2023, there were no related party transactions were terminated, the parties listedthat require disclosure in the following table paid the Company for maintenance services, pilot services, management fees, and other miscellaneous fees related to the operation and maintenance of those parties’ personal aircraft. In addition, JBW paid the Company for hangar rent as shown in the following table. In each case, the payments exceeded the estimated cost to the Company of providing those services and were based on a survey conducted by a leading independent aircraft research company in October 2014 of competitive market rates for maintenance services, pilot services, management fees and hangar rent. Included on the JBW line item for Pilot Services for use of JBW’s aircraft is $1,095 paid by Erik Nordstrom and $3,285 paid by Peter Nordstrom, who are not shareholders of JBW.this Proxy Statement.
| | Amounts Paid to | | | | | the Company for | Amounts Paid | Amounts Paid | | | Maintenance, Pilot and | to the Company | to the Company | | | Administrative Services | for Hangar Rent | for Miscellaneous Costs | | Party/Aircraft | ($) | ($) | ($) | | JBW | 317,054 | 55,237 | 73,857 | M&B Beaver, LLC
Owned by Blake W. Nordstrom
(Co-President of the Company) and his wife | 31,870 | — | 949 | JD Plane, LLC
Owned by James F. Nordstrom, Jr.
(an Executive Vice President of the Company) and
J. Daniel Nordstrom (brother of James F. Nordstrom, Jr.) | 41,566 | — | 3,338 | TB Plane, LLC
Owned by Sally A. Nordstrom
(mother of James F. Nordstrom, Jr.) | 50,722 | — | 566 |
NORDSTROM, INC. - 2016 Proxy Statement | 62 |
Property Sublease. The Company leases a parcel of land from King County, Washington at the King County International Airport and operates its flight department from that location. The size of the Company’s flight department is such that the Company does not require access to or use of the entire parcel, and is able to sublease a portion of the property to Hangar Three LLC (“LLC”) without affecting the Company’s flight operations. LLC is owned by Blake W. Nordstrom, James F. Nordstrom, Jr. and John N. Nordstrom. LLC constructed a hangar for storage of the owners’ personal aircraft on the subleased property. All architectural, project management and construction costs for the hangar, utilities and landscaping improvements were borne by LLC and not by the Company. Upon expiration or termination of the sublease, the hangar improvements will be surrendered to the Company. The material terms of the sublease are as follows:
• | The current sublease carries a term through July 2020, with the Company having the right to terminate it at any time upon 90 days’ notice to LLC, and payment to LLC of the unamortized portion of the construction cost of the hangar. | | | • | LLC pays the Company a monthly base rent and estimated real estate tax in the form of reimbursement to the Company of its pro rata share of ground rent paid by the Company under the primary lease with King County, currently $11,306 per month. | | | • | LLC also pays the Company additional rent in the form of reimbursement to the Company of its pro rata share of maintenance costs of the common areas, currently $900 per month, plus a monthly management fee of $135. | | | • | LLC paid a one-time security deposit in August 2007 in the amount of $10,463, plus an additional sum of $6,069 was paid in August 2009 to increase the security deposit amount to the required two times the current base rent. | | | • | In total, LLC paid the Company rent of $139,249 during the fiscal year ended January 30, 2016. |
OTHER MATTERS The Board knows of no other matters that will be presented at the 2016 Annual Meeting of Shareholders.Meeting. However, if any other matters are properly presented at the Annual Meeting or any convening or reconvening of the Annual Meeting upon an adjournment or postponement of the Annual Meeting, it is the intention of the persons named as proxies to vote in accordance with their best judgment.discretion to the extent permitted by Rule 14a-4(c) promulgated under the Exchange Act. NORDSTROM, INC. - 2016 Proxy Statement | 63 |
2017
2024 ANNUAL MEETING OF SHAREHOLDERS
INFORMATION
Requirements and Deadlines for Submission of Proxy
Proposals, Nomination of Directors, and Other Business
of Shareholders If a shareholder wants usthe Company to include a shareholder proposal in our Proxy Statement for the 20172024 Annual Meeting of Shareholders pursuant to SEC Rule 14a-814a-8 promulgated under the Securities Exchange Act, of 1934, (“Exchange Act”) our Corporate Secretary must receive the proposal at our principal executive offices no later than December 9, 2016.30, 2023. Any such proposal must comply with all the requirements of Rule 14a-8.14a-8. If a shareholder intends to solicit proxies for a Director nominee other than the Company’s nominees in accordance with Rule 14a-19 promulgated under the Exchange Act for the 2024 Annual Meeting of Shareholders, our Corporate Secretary must receive notice of such intention at our executive offices no later than the close of business on April8, 2024. If the 2024 Annual Meeting changes by more than 30 calendar days from the date of the Annual Meeting, such notice must instead be provided by the later of 60 calendar days prior to the date of the 2024 Annual Meeting or the 10th calendar day following public announcement by the Company of the date of the 2024 Annual Meeting. Any such notice of intent to solicit proxies must comply with all the requirements of Rule 14a-19. The requirements of Rule 14a-19 are in addition to the requirements under our Bylaws with respect to advance notice of Director nominations. Under our Bylaws, shareholders must follow certain procedures to nominate a person for election as a directorDirector at an annual or special meeting, or to introduce an item of business at an annual meeting. Under these advance-noticeadvance-notice procedures, shareholders must submit the proposed nominee or item of business by delivering a notice to the Corporate Secretary of the Company at our principal executive offices. We must receive notice as follows: • | We must receive notice of a shareholder’s intention to introduce a nomination or proposed item of business for an annual meeting not less than 90 days nor more than 120 days before the first anniversary of the prior year’s meeting. Assuming that the 2016 Annual Meeting of Shareholders is held on schedule, we must receive notice pertaining to the 2017 Annual Meeting of Shareholders no earlier than January 19, 2017 and no later than February 18, 2017. | • | However, if we hold the 2017 Annual Meeting of Shareholders on a date that is not within 30 days before or after such anniversary date, we must receive the notice no later than ten days after the earlier of the date we first provide notice of the meeting to shareholders or announce it publicly. | • | If we hold a special meeting to elect directors, we must receive a shareholder’s notice of intention to introduce a nomination no later than ten days following the day on which notice of the annual meeting was mailed to shareholders. |
•We must receive notice of a shareholder’s intention to introduce a nomination or proposed item of business (other than a proposal pursuant to Rule 14a-8) for an annual meeting not less than 90 days nor more than 120 days before the first anniversary of the prior year’s meeting. We must receive notice pertaining to the 2024 Annual Meeting of Shareholders no earlier than February7, 2024 and no later than March8, 2024. •However, if we hold the 2024 Annual Meeting of Shareholders on a date that is not within 30 days before or after such anniversary date, we must receive the notice no later than ten days after the earlier of the date we first provide notice of the meeting to shareholders (in the case of proposed items of business) or announce it publicly (in the case of director nominations). •If we hold a special meeting to elect Directors, we must receive a shareholder’s notice of intention to introduce a nomination no later than ten days following the day on which notice of the annual meeting was mailed to shareholders. All Director nominations and items of business, other than shareholder proposals made pursuant to Rule 14a-8 under the Exchange Act, must comply with the requirements of the Company’s Bylaws. Our Bylaws provide that notice of a proposed nomination must include certain information about the nominating shareholder, related parties and theeach proposed nominee, as well as a written consent of the proposed nominee to serve if elected. A notice of a proposed item of business must include a description of and the reasons for bringing the proposed business to the meeting, any material interest of the shareholder in the business and certain other information about the shareholder.proposing shareholder and related parties. Any notice (other than a proposal pursuant to Rule 14a-8)14a-8) that is received after the times specified herein for proposed items of business will be considered untimely under Rule 14a-4c14a-4(c) under the Exchange Act. The persons named in the proxy for the meeting may exercise their discretionary voting power with respect to all such matters, including voting against them. All director nominations and shareholder proposals, other than shareholder proposals made pursuant to Rule 14a-8 under the Exchange Act, must comply with the requirements of the Company’s Bylaws. You may obtain a copy of the Company’s Bylaws at no cost from the Company’s Corporate Secretary or online atinvestor.nordstrom.com under Corporate Governance.on the Company’s Investor Relations Website. The contact information for the Company’s Corporate Secretary is on page 68.92. 87 | | 2023 Proxy Statement | |
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NORDSTROM, INC. - 2016 Proxy Statement | 64 |
Table of Contents
FREQUENTLY ASKED QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING 1. | Why am I receiving these materials? |
The Company has made these materials available to you on the Internet or, upon your request,We have delivered printed versions of these materials to you by mail, because you were a shareholder of Nordstrom, Inc.the Company as of March 11, 2016, the record date,Record Date, and were entitled to receive notice of the 20162023 Annual Meeting of Shareholders and to vote on matters that will be presented at the Annual Meeting.
2. | What items will be voted on at the Annual Meeting? | | |
Shareholders will vote on the following matters at the Annual Meeting: | Board
Recommendation: | Page Reference
(for more detail): | Proposal 1 | To elect eleven directors to serve until the 12 nominees to the Board named in this Proxy Statement2024 Annual Meeting of Shareholders | FOR each Director
Nominee | 1925 | Proposal 2 | To ratify the appointment of Deloitte & Touche as our IndependentRegisteredIndependent Registered Public Accounting Firm to serve for the fiscal year ending February 3, 2024 | FOR | 2434 | Proposal 3 | To conduct an advisory vote regarding the compensation of our NamedExecutive OfficersNEOs | FOR | 5670 | Proposal 4 | To conduct an advisory vote regarding the frequency of future advisory votes on the compensation of our Named Executive Officers | FOR “1 YEAR” | 71 | Proposal 5 | To approve the Nordstrom, Inc. Amended and Restated 2019 Equity Incentive Plan | FOR | 72 | Proposal 6 | To approve the Nordstrom, Inc. ExecutiveManagement BonusAmended and Restated Employee Stock Purchase Plan | FOR | 5777 | OtherProposal 7 | To conduct an advisory vote on the extension of the Company’s shareholder rights plan until September19, 2025 | FOR | 79 | Other | Such other business as may properly come before the Annual MeetingandMeeting and any adjournments or postponements thereof | | |
3. | How can I view the webcast? WhereWhat is the date and time of the Annual Meeting being held? Meeting? |
Date & Time: June 6, 2023 at 9:00 a.m. Pacific Daylight Time Virtual Meeting Access: www.cesonlineservices.com/jwn23_vm You can viewThis Proxy Statement was first mailed to shareholders on or about April28, 2023. It is furnished in connection with the live webcastsolicitation of proxies by the Board to be voted during the Annual Meeting for the purposes set forth in the accompanying Notice. Shareholders who execute proxies retain the right to revoke them atinvestor.nordstrom.com. Select Webcasts any time before the shares are voted by proxy during the meeting. A shareholder may revoke a proxy by delivering a signed statement to our Corporate Secretary prior to or during the Annual Meeting or by timely executing and Presentationsdelivering, by internet, telephone, or mail, another proxy dated as of a later date.
4. | How do I participate in the Meeting? |
This year’s Annual Meeting will be accessible through the internet. We have adopted a virtual format for our Annual Meeting to make participation accessible for shareholders from any geographic location with internet connectivity. We have worked to offer the same participation opportunities as were provided at the in-person portion of our past meetings while further enhancing the online experience available to all shareholders regardless of their location. These proxy materials include instructions on how to participate in the meeting and how you may vote your shares of Company stock. You are entitled to participate in the Annual Meeting if you were a shareholder as of the close of business on the Record Date or hold a valid proxy for the meeting. In order to attend the virtual Annual Meeting, you must pre-register at www.cesonlineservices.com/jwn23_vm prior to the deadline of 9:00 a.m. Pacific Daylight Time on June5, 2023. Please have your voting instruction form, proxy card or other communication containing your control number available and follow the instructions given. Ifto complete your registration request. Upon completing registration, participants will receive further instructions via email, including unique links that will allow them to access the meeting. Whether or not you would likeplan to attend the Annual Meeting, in person, it is being heldimportant that your shares be part of the voting process. We strongly encourage you to vote before the meeting to ensure that your voice is heard. To vote during the meeting, shareholders of record can click on the ballot posted on the virtual meeting site and follow the instructions provided on the ballot. If you are a street name shareholder, you will need to provide a legal proxy from your bank, broker or other nominee in order to vote during the John W. Nordstrom Room, which is locatedmeeting and must provide an electronic image (such as a pdf file or scan) of the legal proxy when voting. This year’s shareholder question and answer session will include questions submitted in advance of, and questions submitted live during, the Downtown Seattle Nordstrom, 1617 Sixth Avenue, 5thFloor, Seattle, Washington 98101-1707.Annual Meeting. You may submit a question in advance of the meeting by emailing them to JWNRegister@proxy-agent.com. Questions may be submitted during the Annual Meeting through www.cesonlineservices.com/jwn23_vm. This question and answer 4.
| Why did I receive a Notice instead of a full set of proxy materials? | | | How can I access the proxy materials online?2023 Proxy Statement | | 88 |
Table of Contents FREQUENTLY ASKED QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING session will be conducted in accordance with certain Rules of Conduct, which will be made available during the Annual Meeting. We are furnishing proxy materialswill post questions and answers if applicable to our shareholders primarily viaNordstrom’s business on the Internet as many of our shareholders prefer that method. By doing so, we increaseNordstrom Investor Relations website shortly after the convenience of our proxy materials, reducemeeting. We encourage you to access the environmental impact of our Annual Meeting and save costs. On April 8, 2016, we mailed a Notice of Internet Availability of Proxy Materials (the “Notice”) to our shareholders who had not previously requested printed materials. The Notice contains instructions about how to access our proxy materials and vote online. Ifbefore it begins. Online check-in will start shortly before the meeting on June6, 2023. Should you would like to receive a paper copy of our proxy materials,have any difficulty accessing the meeting, please followuse the instructions includedtechnical support contact information found in the Notice. If you have previously chosen to receive our proxy materials electronically, youmeeting reminder email that will receive access to these materials via email unless you elect otherwise. be sent on June5, 2023 for assistance. 5. | What is a proxy statement, and what is the purpose of this Proxy Statement? a proxy? |
IfA proxy statement is a document that SEC rules require us to provide you designatewhen we ask you to vote on certain matters at a meeting of our shareholders or when we ask you to sign a proxy designating certain individuals to vote on those matters on your behalf. A proxy is your legal designation of another person to vote your stock, that other person is calledthe shares you own at a proxy. If you designate someone as your proxy in a written document, that document is also called a proxy or a proxy card. If you vote online or completemeeting of our shareholders. By signing the proxy card enclosed with the materials sent by mailwe provide to give us your proxy,you, you will have designated Blakedesignate Michael W. Nordstrom,Maher, our Co-President,Interim Chief Financial Officer and Robert B. Sari, an Executive Vice PresidentChief Accounting Officer, and Ann Munson Steines, our Chief Legal Officer, General Counsel and Corporate Secretary, as your proxies to vote your shares as you have directed. This Proxy Statement provides information aboutdirected during the mattersAnnual Meeting. Our Board is soliciting your proxy to be voted on by shareholders atvote your shares during the Annual Meeting alongand any adjournment or postponement of the meeting. Nordstrom pays the cost of soliciting your proxy and reimburses brokers and others for forwarding you the Proxy Statement, proxy card or voting instruction form, 2022 Annual Report.
The Company has retained Innisfree M&A Incorporated (“Innisfree”) to solicit proxies. Under our agreement with other information regarding the governanceInnisfree, Innisfree will receive a fee of Nordstrom, including our Board Committee structureup to $700,000. The Company also agreed to indemnify Innisfree against certain liabilities relating to, or arising out of, its retention. Innisfree will solicit proxies by mail, telephone, facsimile and executive compensation. email. NORDSTROM, INC. - 2016 Proxy Statement6. | 65 |
6. | What is the difference between a shareholder of record and a street name shareholder? |
Many NordstromCompany shareholders hold their shares through a stockbroker, bank or other nominee rather than directly in their own names. As summarized below, there are some distinctions between shares held as a shareholder of record and those held in street name. •Shareholders of record: If your shares are registered directly in your name with the Company’s transfer agent, Computershare, you are considered the “shareholder of record” or a “registered shareholder,” and the proxy materials are being sent directly to you by the Company. As the shareholder of record, you have the right to grant your voting proxy directly to the Company or to vote at the virtual Annual Meeting. •Street name shareholders: If your shares are held in a stock brokerage account or by a bank, trustee or nominee, you are considered the beneficial owner of shares held in “street name,” and the proxy materials are being forwarded to you by your broker, bank or other holder of record who is considered the shareholder of record. As the street name shareholder you have the right to direct your broker, bank or other holder of record on how to vote your shares and you are invited to attend the virtual Annual Meeting. Your broker, bank, trustee or nominee is obligated to provide you with a voting instruction form for you to use. •8. | Shareholders of record: If your shares are registered directly in your name with Nordstrom’s transfer agent, Computershare, you are considered the “shareholder of record” or a “registered shareholder,” and the Notice or proxy materials are being sent directly to you by the Company. As the shareholder of record, you have the right to grant your voting proxy directly to Nordstrom or to vote in person at the Annual Meeting. |
• | Street name shareholders: If your shares are held in a stock brokerage account or by a bank, trustee or nominee, you are considered the beneficial owner of shares held in “street name,” and the Notice or proxy materials are being forwarded to you by your broker, bank or other holder of record who is considered the shareholder of record. As the street name shareholder you have the right to direct your broker, bank or other holder of record on how to vote your shares and you are invited to attend the Annual Meeting. Your broker, bank, trustee or nominee is obligated to provide you with a voting instruction form for you to use. |
We encourage you to vote in advance of the meeting on the Internetinternet or by telephone. It is convenient, and it saves us significant postage and processing costs. In addition, when you vote on the Internetinternet or by telephone, your vote is recorded immediately and there is no risk that postal delays will cause your vote to arrive late and therefore not be counted. The method by which you vote your proxy will not limit your right to vote at the Annual Meeting if you decide to attend in person.the Annual Meeting virtually. Shareholders of record: The Internetinternet and telephone voting procedures are designed to verify that you are a shareholder of record by using a control number and allowing you to confirm that your voting instructions have been properly recorded. Internet and telephone voting for shareholders of record are available 24 hours a day and will close at 11:59 p.m. Eastern Daylight Time on May 18, 2016. day. You can vote by any of the following methods:  | Voting on the Internet.You may vote on the Internet by using the voting portal found atwww.proxyvote.com. You can thenconfirm that your instructions have been properly recorded.
| Online At www.FCRVote.com/JWN | | | | |  
| Voting by Telephone. If you request printed materials, you may vote by telephone using the toll-free number listed on your proxycard. Voice prompts allow you to vote your shares and confirm that your instructions have been properly recorded.Toll-free Phone Call 1-866-402-3905 | | | | |  
| Voting by Mail. If you request printed materials, you may vote by signing, datingMail Sign, date and returningreturn your proxy card. | | card in the envelope provided to Nordstrom, Inc., c/o First Coast Results, Inc., 200 Business Park Circle, Suite 112, Saint Augustine, FL 32095 | |  | Voting in Person.You may vote your shares at the Annual Meeting. |
Street name shareholders: You may vote by the method explained on the proxy card or the informationvoting instruction form you receive from the bank, broker or other record holder. You may vote in advance of the meeting until 11:59 p.m. Eastern Daylight Time on June5, 2023. If you are a street name shareholder, you must obtain a proxy, executed in your favor, from the bank, broker or other holder of record to be able to vote in person at the Annual Meeting. Shareholders holding shares invested in the Company’s 401(k) Plan:If you participate in the Company’s 401(k) Plan, the number of shares of Common Stock in your account as of the record dateRecord Date are reflected on your proxy notice and may be voted as previously described above for shareholders of record. However, if your vote on those shares is not received by 11:59 p.m. Eastern Daylight Time on May 16, 2016,June2, 2023, then the Nordstrom, Inc. Retirement CommitteePlan Trustee will vote those shares in the same proportion as all other 401(k) Plan shares that have been voted. 89 | | 2023 Proxy Statement | |
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Table of Contents FREQUENTLY ASKED QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING Shareholders holding shares purchased through the Company’s Employee Stock Purchase Plan:ESPP: If you hold Common Stock that you acquired through the Company’s Employee Stock Purchase Plan,ESPP, you are the beneficial owner of those shares and your shares may be voted as previously described above for street name shareholders. 8.9. | What does it mean if I receive more than one Notice or package of proxy materials? |
This means that you have multiple accounts holding Nordstrom shares. These may include: accounts with our transfer agent, Computershare; shares held in the Nordstrom 401(k) Plan or purchased through the Employee Stock Purchase Plan;ESPP; and accounts with a broker, bank or other holder of record. Please vote all Notices, voting instruction forms and proxy cards that you receive to ensure that all of your shares are voted. 10. | Why did multiple shareholders at my address only receive one package of proxy materials? |
SEC rules allow us to use a procedure called “householding” to deliver only one copy of our Notice, and for those shareholders that received a paper copy of proxy materials in the mail, one copy of our 2022 Annual Report, to multiple shareholders who share the same address (if they appear to be members of the same family) unless we have received contrary instructions from an affected shareholder. Shareholders who participate in householding will continue to receive proxy cards if they received a paper copy of proxy materials in the mail. By using the householding process, we reduce our printing costs, mailing costs and fees, and reduce the environmental impact of our annual meeting. If you are a shareholder, share an address and last name with one or more other shareholders, and would like to revoke your householding consent, or you are a shareholder eligible for householding and would like to participate, please contact Broadridge, either by calling toll free at (866) 540-7095 or by writing to Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717. You will be removed from the householding program within 30 days of receipt of the revocation of your consent. A number of brokerage firms have also instituted householding. If you hold your shares in street name, please contact your bank, broker or other holder of record to request information about householding. NORDSTROM, INC. - 2016 Proxy Statement11. | 66 |
9. | What is a quorum and what is the voting requirement to approve each of the proposals? |
We will have a quorum and will be able to conduct the business of the Annual Meeting if at least 86,460,14780,711,896 shares, a majority of the outstanding shares of Common Stock as of the record date,Record Date, are present at the Annual Meeting, either in person or by proxy. Your shares will be counted toward the number needed for a quorum if you: (i) vote on the Internetinternet or by telephone; (ii) submit a valid proxy card or voting instruction form; or (iii) in the case of a shareholder of record, attend the Annual Meeting and vote your shares in person. person; or (iv) are a street name shareholder and your broker casts a discretionary vote on at least one of the proposals before the Annual Meeting, as described under Question 13. To elect directorsDirectors and adopt the other proposals, the following votes are required: Proposal | Vote Required | Discretionary
Voting
Allowed? | Election of Directorseleven directors to serve until the 2024 Annual Meeting of Shareholders | Plurality of Votes Cast | No | Ratification of the appointment of Deloitte as our Independent Registered Public Accounting Firm to serve for the 2024 fiscal year | Majority of Votes Cast | NoYes | Ratification of the Appointment of Independent Registered PublicAccounting FirmAdvisory vote regarding Executive Compensation: Say on Pay | Majority of Votes Cast | YesNo | Advisory Vote Regardingvote regarding the frequency of future advisory votes on Executive Compensation | Majority of Votes Cast | No | Approval of the Nordstrom, Inc. Amended and Restated Nordstrom, Inc. ExecutiveManagement Bonus2019 Equity Incentive Plan | Majority of Votes Cast | No | Approval of the Nordstrom, Inc. Amended and Restated Employee Stock Purchase Plan | Majority of Votes Cast | No | Advisory vote on the extension of the Company’s shareholder rights plan until September19, 2025 | Majority of Votes Cast | No |
Under Washington corporation law and our Articles of Incorporation and Bylaws, the approval of any corporate action taken at a shareholder meeting is based on votes cast. “Votes cast” means votes actually cast “for” or “against” a particular proposal, whether by proxy or in person. Broker nonvotes (broker nonvotes and discretionary voting are explained in the answeranswers to Question 12)Questions 13. and 14.) abstentions and withhold votes are not considered “votes cast” and have no effect on the proposals. Washington corporation law does not provide shareholders any dissenters’ or appraisal rights with respect to the matters to be voted on at the Annual Meeting, and shareholders do not have cumulative voting rights with respect to the election of directors. The Board recommends a vote FOR each of the following proposals. •Election of Eleven Directors: Because the Company received a notice from a shareholder stating its intention to nominate two candidates for election to the Board at the Annual Meeting, the election of directors is contested under our Bylaws even though such shareholder subsequently withdrew its notice. As a result, directors will be elected by a plurality of votes cast. A plurality of votes cast means that the eleven nominees receiving the highest number of votes in favor of their election will be elected to our Board. You may vote “for” or “withhold” from any director.
| | 2023 Proxy Statement | | 90 |
Table of Contents FREQUENTLY ASKED QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING •Ratification of the Appointment of Independent Registered Public Accounting Firm: Under the Company’s Bylaws, the votes cast “for” must exceed the votes cast “against” to ratify the appointment of Deloitte as the Company’s independent registered public accounting firm for the fiscal year ending February3, 2024. You may vote “for,” “against” or “abstain” on this proposal. •Advisory Vote Regarding Executive Compensation: The votes cast “for” must exceed the votes cast “against” to approve, on an advisory basis, the Company’s executive compensation program. You may vote “for,” “against” or “abstain” on this proposal. •Approval of the Nordstrom, Inc. Amended and Restated 2019 Equity Incentive Plan and approval of the Nordstrom, Inc. Amended and Restated Employee Stock Purchase Plan: Under the Company’s Bylaws, the votes cast “for” must exceed the votes cast “against” to approve such measures. You may vote “for,” “against” or “abstain” on this proposal. •Advisory Vote on the Extension of the Company’s Shareholder Rights Plan until September 19, 2025: Under the Company’s Bylaws, the votes cast “for” must exceed the votes cast “against” to approve this non-binding advisory vote. You may vote “for,” “against” or “abstain” on this proposal. The Board recommends a vote of “1 Year” for the following proposal. •Advisory Vote Regarding the Frequency of Future Advisory Votes on Executive Compensation: A plurality of votes cast means the highest number of “for” votes will be the advisory vote of the shareholders. You may vote “1 Year,” “2 Years,” “3 Years,” or abstain on this proposal. •12. | Election of Directors; Majority Vote Policy: In the election of Directors, the Company has adopted a majority voting standard as described in more detail on page 13 under Director Elections. Because this is an uncontested election, an incumbent director nominee will be elected if the votes cast “for” the nominee’s election exceed the votes cast “against” the nominee. If a director nominee does not receive the requisite votes, that Director’s term will end on the date on which an individual is selected by the Board to fill the position held by such Director or ninety (90) days after the date the election results are determined, whichever occurs first. You may vote “for,” “against” or “abstain” with respect to the election of each nominee. | • | Ratification of the Appointment of Independent Registered Public Accounting Firm: Under the Company’s Bylaws, the votes cast “for” must exceed the votes cast “against” to ratify the appointment of Deloitte as the Company’s independent registered public accounting firm for the fiscal year ending January 28, 2017. You may vote “for,” “against” or “abstain” on this proposal. | • | Advisory Vote Regarding Executive Compensation: The votes cast “for” must exceed the votes cast “against” to approve, on an advisory basis, the Company’s executive compensation program. You may vote “for,” “against” or “abstain” on this proposal. | • | Approval of the Amended and Restated Nordstrom, Inc. Executive Management Bonus Plan: The votes cast “for” must exceed the votes cast “against” to approve the Company’s Amended and Restated Executive Management Bonus Plan. You may vote “for,” “against” or “abstain” on this proposal. | | |
10. | Can I change my mind after I vote? |
Yes, if you are a shareholder of record and vote by proxy, you may revoke that proxy at any time before it is voted at the Annual Meeting. You may do this by: •delivering written notice of revocation to the Corporate Secretary at 1617 Sixth Avenue, Seattle, Washington 98101, Attn: Corporate Secretary that is received on or before 5:00 p.m. Pacific Daylight Time on June5, 2023; •voting again on the internet or by telephone prior to the Annual Meeting; •signing another proxy card with a later date and mailing it to Nordstrom, Inc., c/o First Coast Results, Inc., 200 Business Park Circle, Suite 112, Saint Augustine, FL 32095, prior to the Annual Meeting; or •delivering your proxy or casting a ballot during the meeting. If you are a street name shareholder, you should contact your bank, broker or other holder of record to revoke your proxy or change your vote. •13. | voting again on the Internet or by telephone prior to the Annual Meeting; | • | signing another proxy card with a later date and mailing it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717, prior to the Annual Meeting; or | • | attending the Annual Meeting in person and delivering your proxy or casting a ballot. | | |
11. | What if I do not return my proxy card or voting instruction form or return my proxy card and do not provide voting instructions? |
•Shareholders of record: If you are a registered shareholder and do not vote by internet or phone or return your voted proxy card, your shares will not be voted. If you submit a validly executed proxy card with no voting designation at all, your shares will be voted: for each of the Board’s nominees to be elected on Proposal1, for Proposals2,3,5,6, and7, and for “1 Year” on Proposal 4. •Street name shareholders: If you are a beneficial owner whose shares are held by a broker, your broker has discretionary voting authority under NYSE rules to vote your shares for the ratification of Deloitte if the broker does not receive voting instructions from you. However, your broker does not have discretionary authority to vote on any other proposal before the Annual Meeting. If your broker casts a discretionary vote on the ratification of Deloitte, a broker nonvote will occur as to each other proposal. Since shares that constitute broker nonvotes will not be included in vote totals and have no effect on the outcome of any of the proposals before the Annual Meeting, it is important that you instruct your broker on how to vote your shares. •Shareholders with shares invested in the Company’s 401(k) Plan: If your vote of shares held through the Company’s 401(k) Plan is not received by 11:59 p.m. Eastern Daylight Time on June2, 2023, then the Plan Trustee will vote your shares in the same proportion as shares that have been voted in the 401(k) Plan. If you submit your proxy card with an unclear voting designation or no voting designation at all, your shares will be voted by the Plan Trustee “for” all proposals. If any additional proposals are properly presented at the Annual Meeting and any adjournment thereof, the Plan Trustee will vote on the additional proposals in accordance with its discretion. •14. | Shareholders of record: If you are a registered shareholder and do not vote by Internet or phone or return your voted proxy card, your shares will not be voted. If you submit your proxy card with an unclear voting designation or no voting designation at all, your shares will be voted for the ratification of Deloitte, but not on any of the other proposals. | • | Street name shareholders: If you are a beneficial owner whose shares are held by a broker, your broker has discretionary voting authority under NYSE rules to vote your shares for the ratification of Deloitte even if the broker does not receive voting instructions from you. However, your broker does not have discretionary authority to vote on the election of Directors, the advisory vote regarding executive compensation, the approval of the Amended and Restated Nordstrom, Inc. Executive Management Bonus Plan or on any shareholder proposal without instructions from you, in which case a broker nonvote will occur. Since shares that constitute broker nonvotes will not be included in vote totals and have no effect on the outcome of the election of Directors, the approval of the Amended and Restated Nordstrom, Inc. Executive Management Bonus Plan, the advisory vote regarding executive compensation, or any other matters properly brought before the meeting, it is important that you instruct your broker on how to vote your shares. |
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• | Shareholders with shares invested in the Company’s 401(k) Plan:If your vote of shares held through the Company’s 401(k) Plan is not received by 11:59 p.m. Eastern Daylight Time on May 16, 2016, then the Company’s Retirement Committee will vote your shares in the same proportion as shares that have been voted in the 401(k) Plan. If you submit your proxy card with an unclear voting designation or no voting designation at all, your shares will be voted by the Retirement Committee “for” all proposals. If any additional proposals are properly presented at the Annual Meeting and any adjournment thereof, the Retirement Committee will vote on the additional proposals in accordance with its discretion. | | |
12. | Will abstentions or broker nonvotes affect the voting results? |
If you abstain from voting on a proposal, or if a broker or bank casts a discretionary vote on the ratification of Deloitte but indicates it does not have discretionary authority to vote on aanother proposal, the shares will be counted for the purpose of determining if a quorum is present, but will have no effect on the other proposals to be considered at the Annual Meeting since these actions do not represent votes cast by shareholders. 13.15. | Who will count the vote? |
Broadridge Investor Communication Services (“Broadridge”)First Coast Results, Inc. was appointed by the Board to tabulate the vote and act as Inspector of Election. Information about Broadridge is available atbroadridge.com. Proxies and ballots that identify the votes
91 | | 2023 Proxy Statement | |
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Table of individual shareholders are kept confidential from the Company’s management and Directors. Only Broadridge, as the proxy tabulator and the Inspector of Election, has access to the ballots, proxy forms and voting instructions. Broadridge will disclose information taken from the ballots, proxy forms and voting instructions only in the event of a proxy contest or as otherwise required by law.Contents FREQUENTLY ASKED QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING 14.16. | Where can I find the voting results of the Annual Meeting? |
We intend to announce preliminary voting results at the Annual Meeting and publish final results on a current report on Form 8-K8-K within four business days of the Annual Meeting. The Form 8-K8-K will be available online under the “SEC Filings” tab atinvestor.nordstrom.com. the Investor Relations Website. 17. | How can I communicate with the Board? |
Shareholders and other interested parties may communicate with Directors by contacting the Corporate Secretary’s Office at: 15.
| Who will bear the cost of this proxy solicitation? | Telephone: 206-303-2541 | 
| | E-mail: board@nordstrom.com | 
| | Mail: Nordstrom, Inc. 1617 Sixth Avenue Seattle, Washington 98101 Attn: Corporate Secretary |
The Corporate Secretary will relay the question or message to the specific Director with whom the shareholder or interested party wishes to communicate. If no specific Director is requested, the Corporate Secretary will relay the question or message to the Chairman. Certain items that are unrelated to the duties and responsibilities of the Board, such as business solicitations, advertisements, junk mail and other mass mailings, will not be relayed to Directors. Nordstrom will bearThe AFC has established procedures to respond to possible concerns about ethics and accounting-related practices. To report your concerns, you may use the cost of this proxy solicitation, including reimbursing banks and brokers for reasonable expenses of sending out proxy materials to street name shareholders.
Company’s confidential Whistleblower Hotline at: 16.
| | Telephone: 1-888-832-8358 | 
| | Internet: ethicspoint.com |
Your concerns will be investigated and communicated to the AFC, as necessary. 18. | What if I have additional questions that are not addressed here? |
If you have any questions or require any assistance regarding our Annual Meeting, please contact our proxy solicitor: 
Innisfree M&A Incorporated
Shareholders may call toll-free +1 (877) 750-8312
Banks and Brokers may call collect +1 (212) 750-5833
| | 2023 Proxy Statement | | 92 |
You may call Nordstrom Investor Relations at 206-303-3200, e-mail Investor Relations atinvrelations@nordstrom.com, or callTable of Contents
APPENDIX A: RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES Incentive Adjusted ROIC and Incentive Adjusted EBIT We believe that Incentive Adjusted ROIC is a useful financial measure for investors in evaluating the Corporate Secretary’s Office at 206-303-2542. NORDSTROM, INC. - 2016 Proxy Statement | 68 |
Appendix A | Amended and Restated Nordstrom, Inc. Executive Management Bonus Plan |
Effective January 31, 2016
The purposeefficiency and effectiveness of the Plan iscapital we have invested in our business to promote the interests of the Company and its shareholders by providing incentives to the Company’s leadership employees for positively influencing the Company’s business results. The mechanism for providing incentives under this Plan is Performance Bonus Awards. The specific group of employees eligible for these awards are those individuals designated by the Company’s Board of Directors as being executive officers of the Company for purposes of Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Performance Bonus Awards are designed to create alignment between the Company’s business strategy and operating performance, while preserving for the benefit of the Company the federal income tax deduction for performance-based compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended (“IRC”).
2.1 | “Compensation Committee” means the Compensation Committee of the Board of Directors of the Company. For purposes of administration of the Plan, the Compensation Committee shall consist solely of two or more outside directors, as required by Section 162(m). | 2.2 | “Cause” means misconduct by the Participant, including without limitation any of the following, as determined by the Compensation Committee in the exercise of its discretion: | | (a) | the Participant’s breach of a duty to the Company in the course of his or her employment involving fraud, dishonesty, or disloyalty; | | (b) | conduct by the Participant thatgenerate returns over time. In addition, we have incorporated it detrimental, monetarily or otherwise, to the Company or any of its subsidiaries, or reflects unfavorably on the Company or any of its subsidiaries or on the Participant; | | (c) | the Participant’s failure to comply with or to enforce the Company’s or any of its subsidiaries’ codes of conduct or other employment policies; | | (d) | the Participant’s repeated insubordination; | | (e) | the Participant’s failure to devote his or her full working time and best efforts to the performance of his or her duties to the Company or its subsidiaries; or | | (f) | the Participant’s conviction of, or entry into a plea agreement or similar arrangement with respect to, a felony, other serious criminal offense, or violation of state or federal securities laws. | 2.3 | “Covered Employee” means a Participant who is, or is expected to be, a “covered employee” within the meaning of Section 162(m) with respect to the Performance Period in which the Participant is granted a Performance Bonus Award. | 2.4 | “Disability” shall have the same meaning prescribed to that term under the Nordstrom, Inc. Supplemental Executive Retirement Plan, as amended and restated effective January 1, 2009. | 2.5 | “Participant” means an individual who, with respect to any fiscal year of the Company, has been designated by the Company’s Board of Directors as being an executive officer of the Company for purposes of Section 16 of the Exchange Act for all or some portion of such fiscal year. | 2.6 | “Performance Bonus Award” or “Award” means an incentive compensation award under the Plan. | 2.7 | “Performance Measure” refers to the performance measures determined in accordance with Section 4.1 of the Plan. | 2.8 | “Performance Milestone” means an objective level of performance with respect to a Performance Measure, the achievement of which may determine the degree of payout of a Performance Bonus Award. | 2.9 | “Performance Period” means the fiscal year of the Company, or a shorter period within the fiscal year of the Company that the Compensation Committee may prescribe for a Participant or group of Participants. | 2.10 | “Plan” means this Amended and Restated Nordstrom, Inc. Executive Management Bonus Plan. | 2.11 | “Retirement” shall have the same meaning prescribed to that term under the Nordstrom, Inc. Supplemental Executive Retirement Plan, as amended and restated January 1, 2009. | 2.12 | “Section 162(m)” means IRC Section 162(m) and applicable Treasury Regulations thereunder, both as may be amended from time to time. | | |
| | 3.1 | Eligible Employees. Eligibility for the Plan is limited to individuals meeting the definition of Participant hereunder. The Compensation Committee may further limit eligibility for this Plan. | | | 3.2 | Employment Requirement. Except as provided under Article IV of the Plan, or as otherwise provided by the Compensation Committee, a Participant is required to be an employee of the Company on the last day of the Performance Period in order to remain eligible for a Performance Bonus Award. Notwithstanding anything to the contrary, a Participant whose employment is terminated for Cause after the last day of the Performance Period, but before the payment of a Performance Bonus Award, shall not be eligible to receive any Performance Bonus Award that otherwise would have been payable. |
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ARTICLE IV | Grant and Evaluation of Performance Bonus Award |
| | 4.1 | Establishment of Written Terms. Within the first ninety (90) days of the designated Performance Period (or if the Performance Period is less than twelve (12) months, the number of days that is equal to twenty-five percent (25%) of the Performance Period) or such shorter period as required to comply with the requirements of Section 162(m), the Compensation Committee will determine in writing (a) the Participants receiving Performance Bonus Awards for the Performance Period, (b) the Performance Measures and Performance Milestones for each Participant for the Performance Period and (c) the amount payable to a Participant upon attainment of the applicable Performance Milestones for the Performance Period. | 4.2 | Performance Milestones and Measures. Performance Milestones may be based upon the relative or comparative achievement of Performance Measures, whether in absolute terms or relative to the performance of one or more similarly situated companies or a published index covering the performance of a number of companies, as determined by the Compensation Committee for the applicable Performance Period, which Performance Measures may include: | | (a) | the Company’s shareholder return as compared to any designated industry or other comparator group; | | (b) | the trading price of the Company’s Common Stock; | | (c) | the results of operations, such as sales, earnings, net income (before or after taxes), cash flow, return on assets, same-store sales, economic profit, or return on investment (including return on equity or return on invested capital); | | (d) | earnings before or after taxes, interest, depreciation and/or amortization, and including/excluding capital gains and losses; | | (e) | other financial results, such as profit margins, operational efficiency, expense reduction, or asset management goals; and | | (f) | other strategic indicators, such as market share or customer metrics. | | The Performance Measures may be based on the performance of the Company generally, in the absolute or in relation to its peers, or the performance of a particular Participant, department, business unit, subsidiary, or other segment to which a particular Participant is assigned. The Compensation Committee may establish different Performance Measures and Milestones for individual Participants or groups of Participants. For each Participant, each Performance Measure will be weighted to reflect its relative significance to the Company for the Performance Period. | 4.3 | New Participants. The Compensation Committee may grant a Performance Bonus Award to an individual who becomes a Participant during a Company fiscal year based on performance during the balance of the fiscal year or such other Performance Period as the Committee may determine. If the Performance Period for such Performance Bonus Award is less than 12 months, within the first 25% of the Performance Period or any other date required or permitted under Section 162(m), the Compensation Committee shall determine in writing (a) the Performance Measures and Performance Milestones for the Performance Period, and (b) the amount payable to the Participant upon attainment of the applicable Performance Milestones for the Performance Period. | 4.4 | Evaluation of Performance. At the end of each Performance Period, the Compensation Committee will evaluate the performance of each Participant by comparing each Participant’s actual performance to the Performance Milestones established for such Participant by the Compensation Committee at the start of the Performance Period.The Compensation Committee will certify in writing the degree of achievement of each Performance Milestone by each Participant. Approved minutes of the Compensation Committee meeting in which the certification is made will be treated as adequate written certification. | 4.5 | Calculation of Performance Bonus Award. After the end of each Performance Period, the Compensation Committee will approve the amount of a Participant’s Performance Bonus Award for the Performance Period, applying the actual performance certified under Section 4.4 to the Performance Bonus Awards established under this Article IV. With respect to a Performance Bonus Award granted to a Covered Employee, the Compensation Committee may, in its absolute discretion, reduce or eliminate (but may not increase) the amount of such Performance Bonus Award based on factors that the Compensation Committee deems relevant. With respect to Performance Bonus Awards granted to Participants who are not Covered Employees, the Compensation Committee may, in its absolute discretion, increase, reduce or eliminate the Performance Bonus Award based upon factors that the Compensation Committee deems relevant. A Participant has no legal entitlement or expectation to receive a Performance Bonus Award unless and until the Compensation Committee has certified the Performance Bonus Award. No amounts shall be paid to a Participant under a Performance Bonus Award prior to the Compensation Committee’s certification under Section 4.4 above that actual performance satisfies the applicable Performance Milestones set forth in the Participant’s written Performance Bonus Award. | | Moreover, except in the case of the Participant’s death, Disability or Retirement prior to the end of a Performance Period, a Participant also must remain employed as of the end of the Performance Period in order to be eligible to receive payment of a Performance Bonus Award to such Participant. The Compensation Committee has the sole and exclusive discretion for determining whether and when, and in what amounts, Participants will remain eligible for the payment of their Performance Bonus Award in the event, for example, of such employee’s death, Disability, or Retirement. Where the Compensation Committee exercises its discretion to pay a Performance Bonus Award to a Participant who has terminated employment due to death, Disability or Retirement, and where the Compensation Committee has certified that the actual performance requirements have been met with respect to such Performance Bonus Award under Section 4.5, such Performance Bonus Award will be paid at the same time such bonuses are paid to Participants who remain employed by the Company and, in no event, will such amounts be paid later than the end of the calendar year in which such amounts first become payable. | | Moreover, any Performance Bonus Award payable to a Participant whose employment terminated during the Performance Period on account of death, Disability or Retirement shall be pro-rated to reflect the portion of the Performance Period during which the Participant was actually employed by the Company. For the avoidance of doubt, the Compensation Committee’s exercise of discretion under this Section 4.5 to increase or decrease an amount payable as a Performance Bonus Award shall not result in the increase of amounts payable as Performance Bonus Awards for any Covered Employees. | 4.6 | Absolute Limit on Amount of Award. Notwithstanding any other provision of the Plan, the maximum Performance Bonus Award payable to any Participant for a Performance Period that it is a full fiscal year will be $10,000,000. For Performance Periods of less than 12 months, the maximum Performance Bonus Award payable for the shorter Performance Period shall be proportionately reduced. |
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4.7 | Clawback Policy. All Performance Bonus Awards are subject to the Clawback Policy adopted by the Company’s Board of Directors and as may be amended from time to time. For the avoidance of doubt, the Clawback Policy that applies to Performance Bonus Awards shall at all times comply with the requirements of the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. Moreover, the Compensation Committee may impose other such clawback, recovery or recoupment provisions in the written statement referenced above in Section 4.1 as the Compensation Committee deems necessary or appropriate. | 4.8 | Adjustment of Performance Bonus Awards. The Compensation Committee shall adjust the calculation of the Performance Measures and the applicable Performance Milestones in the event of the occurrence during the Performance Period of any of the following: | | (a) | Extraordinary, unusual or non-recurring items of gain or loss; | | (b) | Gains or losses on the disposition of a business, a segment of a business, or significant assets outside the ordinary course of business; | | (c) | Changes in tax or accounting standards, principles, regulations or laws; | | (d) | The effect of a merger or acquisition, including all financial results derived therefrom during the period from the merger or acquisition date through the end of the Performance Period in which the merger or acquisition occurred; | | (e) | Gains or losses due to non-cash adjustments which relate to the valuation of long-term assets rather than current-year performance (including but not necessarily limited to gain or loss recognized from store closures, lease terminations, pension adjustments and mark-to-market adjustments); and | | (f) | The impact of other similar occurrences outside the Company’s core, on-going business activities (including but not necessarily limited to litigation or tax reserves, financing activities, foreign exchange rate fluctuations and restructuring charges). | | | The Compensation Committee shall make an adjustment as is necessary to prevent reduction or enlargement of Participants’ Performance Bonus Awards under the Plan for such Performance Period attributable to such transaction or event described above. For a Covered Employee, the Compensation Committee’s determination of an adjustment shall comply with Section 4.5 above. Such adjustments shall be conclusive and binding for all purposes. | | |
ARTICLE V | Form and timing of Payment |
| | 5.1 | Normal Form. The normal form of payment of Performance Bonus Awards will be cash, paid as soon as practicable following the Compensation Committee’s certification of the Performance Bonus Awards, but not later than the end of the calendar year containing the last day of the Plan Year to which the Award relates, and no one shall have the discretion or authority to extend this deadline. All Award payments are subject to federal, state, and local laws regarding taxes and other deductions in effect on the date of payment. | 5.2 | Election to Receive Company Stock. The Compensation Committee has the sole and exclusive discretion to determine whether and when the Company may either (a) pay, or (b) allow a Participant to elect to receive, all or a portion of an Award in the form of long-term incentive awards based on the Common Stock of the Company (“Incentive Grants”). The number of shares of Incentive Grants to be received by the Participant shall be based on the fair market value of the Common Stock as of the last market trading day of the applicable Performance Period. Incentive Grants (including shares of Common Stock) will be issued under the 2010 Equity Incentive Plan (“Incentive Plan”) and any successor plan to the Incentive Plan. | | |
ARTICLE VI | Administrative Provisions |
| | 6.1 | Authority of Compensation Committee. Subject to Section 6.2, the Compensation Committee has the right and authority, in its sole and absolute discretion, to: | | (a) | adopt, amend, or rescind administrative and interpretative rules, policies, and procedures relating to the Plan; | | (b) | construe and interpret the terms of the Plan; | | (c) | make all other determinations necessary or advisable for administering the Plan; | | (d) | exercise the powers conferred on the Compensation Committee under the Plan; | | (e) | correct any defect or supply any omission or reconcile any inconsistency in the Plan in the manner and to the extent it deems appropriate to effectuate the purpose of the Plan; | | (f) | amend, modify, suspend, or terminate the Plan at any time; and | | (g) | delegate administration of the Plan to one or more officers of the Company, and the term “Delegates” shall apply to any officer or officers of the Company to whom such authority has been delegated. If administration is delegated to Delegates under this subparagraph (g), Delegates shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Compensation Committee, including the power to delegate to a sub-delegate or sub-delegates any of the administrative powers Delegates are authorized to exercise (and references in this Plan to the Compensation Committee shall thereafter be to Delegates or sub-delegates, as applicable), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Compensation Committee. The Compensation Committee may cancel a prior delegation to Delegates at any time, in which case all previously delegated administrative authority shall revert back to the Compensation Committee, subject to future delegation under this subparagraph (g). | 6.2 | Limits on Authority. Except as otherwise provided in Article IV, the Compensation Committee has no discretionary authority to increase the amount of a Performance Bonus Award or to accelerate the payment of an Award under this Plan. In addition, the scope of the Compensation Committee’s amendment authority under Section |
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| 6.1(f) shall be limited to those amendments which can be adopted without shareholder approval under applicable laws, regulations or rules (such as the then-current rules of the New York Stock Exchange, the Securities and Exchange Commission, or as required by Section 162(m)); provided, however, that any such amendment that is later ratified by the Company’s shareholders shall be retroactively effective to the extent allowed by such rules. | 6.3 | Compliance with Code Section 409A. Performance Bonus Awards under the Plan are intended to comply with IRC Section 409A and all Performance Bonus Awards shall be interpreted in a manner that results in compliance with Section 409A, Department of Treasury regulations, and other interpretative guidance under Section 409A. Notwithstanding any provision of the Plan or an Award to the contrary, if the Compensation Committee determines that any Award does not comply with IRC Section 409A, the Company may adopt such amendments to the Plan and the affected Award (without consent of the Participant) or adopt other policies or procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Compensation Committee determines are necessary and appropriate to (a) exempt the Plan and the Award from application of IRC Section 409A and/or preserve the intended tax treatment of amounts payable with respect to the Award, or (b) comply with the requirements of IRC Section 409A. | | |
ARTICLE VII | Limitation of Rights |
| | 7.1 | Not Employment Contract. Nothing in the Plan, including an employee’s eligibility to participate in the Plan, will confer on such employee the right to continued employment with the Company or any subsidiary thereof or any limitation on the right of the Company or any subsidiary to terminate the employment of any Participant. The loss of any existing or potential value of Performance Bonus Awards will not constitute an element of damages, or otherwise be recoverable, in any cause of action related to the termination of a Participant’s employment, regardless of the reason for such termination. | 7.2 | Assignment and Alienation. No Participant shall have the right to alienate, sell, transfer, pledge, or encumber his or her actual or anticipated right to receive a Performance Bonus Award under the Plan. | 7.3 | Unfunded Plan. The Plan constitutes an unfunded, unsecured commitment of the Company. No Participant shall have any lien on any assets of the Company or any subsidiary thereof by reason of any actual or anticipated right to receive a Performance Bonus Award. | 7.4 | Indemnification. No member of the Compensation Committee shall be liable for any act, omission, or determination taken or made in good faith with respect to the Plan or any Performance Bonus Awards paid under the Plan. The Company will indemnify, defend, and reimburse members of the Compensation Committee in relation to any claim, loss, damage, or expenses (including attorney fees and costs) arising from the Compensation Committee’s good faith performance of duties under the Plan to the full extent permitted by law and under any directors’ and officers’ liability or similar insurance policy or indemnification agreement. The Company reserves the right to select counsel to defend any litigation covered by this Section 7.4. | 7.5 | Future of Plan. The adoption, modification, or amendment of the Plan does not imply or impose an obligation on the Company to continue or adopt the same plan, or any modification of the Plan, or any other incentive compensation plan, for any future period. | 7.6 | Governing Law. The laws of the state of Washington shall govern the Plan, to the extent not preempted by the IRC or other federal law. | 7.7 | Successors. The Plan shall be binding on the Company and on any successors thereto. | 7.8 | Effective Date. The amended and restated Plan has been adopted by the Compensation Committee as of February 24, 2016. The effective date of this amended and restated Plan (the “Effective Date”) shall be January 31, 2016, which is the first day of the Company’s fiscal year starting in calendar year 2016, provided that it is approved by the holders of a majority of the shares of Company Common Stock present, or represented, and entitled to vote at the next annual meeting of shareholders of the Company held subsequent to the Effective Date. If the Plan is not approved by shareholders as described in this Section 7.8, the amendments to the Plan approved by the Compensation Committee on February 24, 2016 shall be null and void. |
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Appendix B | Reconciliation of GAAP and Non-GAAP Financial Measures |
Incentive Earnings before Interest and Income Tax Expense (“Incentive EBIT”) and Incentive Return on Invested Capital (“Incentive ROIC”)
We incorporate Incentive EBIT and Incentive ROIC in our executive incentive compensation measures. These measures contemplate nonoperating related adjustments.and we believe it is an important indicator of shareholders’ return over the long term.
Beginning in 2019, income statement activity for adjusted net operating profit and balance sheet amounts for average invested capital are measured under the Lease Standard and the 2018 amounts disclosed are under the previous lease standard. Under the previous lease standard, we estimated the value of our operating leases as if they met the criteria for capital leases or we had purchased the properties. This provided additional supplemental information that estimated the investment in our operating leases. Estimated depreciation on capitalized operating leases and average estimated asset base of capitalized operating leases are not calculated in accordance with, nor an alternative for, GAAP and should not be considered in isolation or as a substitute for our results as reported under GAAP. We define Incentive Adjusted ROIC as our adjusted net operating profit after tax divided by our average invested capital. Incentive Adjusted EBIT represents net earnings before income tax expense, interest expense and interest income, and contemplates nonoperating related adjustments. We define Incentive ROIC as our net operating profit after tax divided by our average invested capital using the trailing 12-month average, and contemplates nonoperatingnon-operating related adjustments. These metrics are not measures of financial performance under generally accepted accounting principles (“GAAP”)GAAP and should be considered in addition to, and not as a substitute for, net earnings, return on assets, net earnings, total assets or other GAAP financial measures prepared in accordance with GAAP.measures. Our method of determining non-GAAPcalculating a non-GAAP financial measuresmeasure may differ from other companies’ methods and therefore may not be comparable to those used by other companies. The financial measures calculated under GAAP which are most directly comparable to Incentive Adjusted EBIT and Incentive Adjusted ROIC are net earnings and return on assets. The following shows the components to reconcile the return on assets whichcalculation to Incentive Adjusted ROIC: | | 12 Fiscal Months Ended | ($ in millions) | | February 2, 2019 | | February 1, 2020 | | January 30, 2021 | | January 29, 2022 | | January 28, 2023 | Net earnings (loss) | | $ | 564 | | | $ | 496 | | | $ | (690 | ) | | $ | 178 | | | $ | 245 | | Income tax expense (benefit) | | | 169 | | | | 186 | | | | (538 | ) | | | 68 | | | | 92 | | Interest expense, net | | | 104 | | | | 102 | | | | 181 | | | | 246 | | | | 128 | | EBIT | | | 837 | | | | 784 | | | | (1,047 | ) | | | 492 | | | | 465 | | Non-operating related adjustments | | | 72 | | | | 24 | | | | — | | | | (32 | ) | | | 38 | | Interest income | | | 15 | | | | 10 | | | | 3 | | | | 1 | | | | 10 | | Operating lease interest(a) | | | — | | | | 101 | | | | 95 | | | | 87 | | | | 85 | | Rent expense, net | | | 251 | | | | — | | | | — | | | | — | | | | — | | Estimated depreciation on capitalized operating leases(b) | | | (134 | ) | | | — | | | | — | | | | — | | | | — | | Adjusted net operating profit (loss) | | | 1,041 | | | | 919 | | | | (949 | ) | | | 548 | | | | 598 | | Estimated income tax (expense) benefit(c) | | | (248 | ) | | | (244 | ) | | | 416 | | | | (150 | ) | | | (162 | ) | Adjusted net operating profit (loss) after tax | | $ | 793 | | | $ | 675 | | | $ | (533 | ) | | $ | 398 | | | $ | 436 | | Average total assets | | $ | 8,282 | | | $ | 9,765 | | | $ | 9,718 | | | $ | 9,301 | | | $ | 9,069 | | Average estimated asset base of capitalized operating leases(b) | | | 2,018 | | | | — | | | | — | | | | — | | | | — | | Average deferred property incentives and deferred rent liability | | | (616 | ) | | | (307 | ) | | | — | | | | — | | | | — | | Average deferred property incentives in excess of
right-of-use assets(d) | | | — | | | | — | | | | (276 | ) | | | (232 | ) | | | (197 | ) | Average non-interest-bearing current liabilities | | | (3,479 | ) | | | (3,439 | ) | | | (3,138 | ) | | | (3,352 | ) | | | (3,185 | ) | Non-operating related adjustments | | | 4 | | | | — | | | | — | | | | — | | | | — | | Average invested capital | | $ | 6,209 | | | $ | 6,019 | | | $ | 6,304 | | | $ | 5,717 | | | $ | 5,687 | | Return on assets | | | 6.8 | % | | | 5.1 | % | | | (7.1 | %) | | | 1.9 | % | | | 2.7 | % | Incentive Adjusted ROIC | | | 12.8 | % | | | 11.2 | % | | | (8.5 | %) | | | 7.0 | % | | | 7.7 | % |
| | | 12 fiscal months ended | | ($ in millions) | | January 30, 2016 | | | January 31, 2015 | | | Net earnings | | $ | 600 | | | $ | 720 | | | Add: income tax expense | | | 376 | | | | 465 | | | Add: interest expense, net | | | 125 | | | | 138 | | | Earnings before interest and income tax expense | | | 1,101 | | | | 1,323 | | | Add: nonoperating related adjustments | | | 145 | | | | 68 | | | Incentive EBIT | | | 1,246 | | | | 1,391 | | | Add: interest income | | | — | | | | 1 | | | Incentive ROIC earnings before interest and income tax expense | | | 1,246 | | | | 1,392 | | | Add: rent expense | | | 176 | | | | 137 | | | Less: estimated depreciation on capitalized operating leases(a) | | | (94 | ) | | | (74 | ) | | Net operating profit | | | 1,328 | | | | 1,455 | | | Less: estimated income tax expense | | | (512 | ) | | | (561 | ) | | Net operating profit after tax | | $ | 816 | | | $ | 894 | | | Average total assets | | $ | 9,076 | | | $ | 8,860 | | | Less: average non-interest-bearing current liabilities | | | (2,993 | ) | | | (2,730 | ) | | Less: average deferred property incentives | | | (548 | ) | | | (502 | ) | | Add: average estimated asset base of capitalized operating leases(b) | | | 1,236 | | | | 1,058 | | | Add (Less): nonoperating related adjustments | | | 623 | | | | (100 | ) | | Average invested capital | | $ | 7,394 | | | $ | 6,658 | | | Return on assets | | | 6.6% | | | | 8.1% | | | Incentive ROIC | | | 11.0% | | | | 13.6% | |
(a)A-1 | Capitalized operating leases is our best estimate of the asset base we would record for our leases that are classified as operating if they had met the criteria for a capital lease or we had purchased the property. Asset base is calculated as described in footnote (b) below. | (b) | Based upon the trailing 12-month average of the monthly asset base. The asset base for each month is calculated as the trailing 12 months rent expense multiplied by eight. The multiple of eight times rent expense is a commonly used method of estimating the asset base we would record for our capitalized operating leases described in footnote (a). | | | |
NORDSTROM, INC. - 20162023 Proxy Statement | B-1 |
Appendix C | Audit Committee Charter
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As amended February 24, 2016Table of Contents
APPENDIX A: RECONCILIATION OF GAAP AND NON-GAAP FINANCIAL MEASURES The following is a reconciliation of net earnings (loss) to Incentive Adjusted EBIT: | | 12 Fiscal Months Ended | ($ in millions) | | February 2, 2019 | | February 1, 2020 | | January 30, 2021 | | January 29, 2022 | | January 28, 2023 | Net earnings (loss) | | $ | 564 | | $ | 496 | | $ | (690 | ) | | $ | 178 | | $ | 245 | Income tax expense (benefit) | | | 169 | | | 186 | | | (538 | ) | | | 68 | | | 92 | Interest expense, net | | | 104 | | | 102 | | | 181 | | | | 246 | | | 128 | EBIT | | | 837 | | | 784 | | | (1,047 | ) | | | 492 | | | 465 | Non-operating related and other adjustments(a) | | | 72 | | | 24 | | | — | | | | 174 | | | 59 | Incentive Adjusted EBIT | | | 909 | | | 808 | | | (1,047 | ) | | | 666 | | | 524 |
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PurposeTable of Contents
APPENDIX B: NORDSTROM, INC. AMENDED AND RESTATED 2019 EQUITY INCENTIVE PLAN ARTICLE 1.INTRODUCTION The purpose of the Plan is to promote the long-term success of the Company and Scopeits Subsidiaries. Specific objectives are intended to encourage the attraction and retention of Employees and Nonemployee Directors, focus such individuals’ results on the Company’s critical, long-range goals and align such individuals’ interests with those of the Company’s shareholders. The Plan seeks to achieve this purpose by providing for Awards in the form of Options (which may constitute incentive stock options (ISOs), for Employees only, or nonqualified stock options (NSOs)), stock appreciation rights (SARs), Unrestricted Shares, Restricted Shares, Restricted Stock Units and Performance Share Units. The Plan replaces the Nordstrom, Inc. 2010 Equity Incentive Plan (as amended and restated February 16, 2017) and the Nordstrom, Inc. 2002 Nonemployee Director Stock Incentive Plan (as amended on November 14, 2007). On February 28, 2023, the Board amended and restated the Plan, as set forth herein, subject to the approval of the Company’s shareholders. ARTICLE 2.ADMINISTRATION 2.1Committee Composition. The Compensation, People and Culture Committee shall administer the Plan. 2.2Committee Responsibilities. The Committee, in its absolute and sole discretion, shall (a) select the Employees and Nonemployee Directors who are to receive Awards under the Plan, (b) determine the type, number, vesting requirements and other features and conditions of such Awards, (c) interpret the Plan and (d) make all other decisions relating to the operation of the Plan. The Committee may adopt such rules or guidelines as it deems appropriate to implement the Plan. The Committee may delegate its authority hereunder to one or more Subcommittees or Company officers, to the extent permitted under the Code, applicable laws and regulations and any applicable exchange rules; actions taken by any Subcommittee or officers shall be subject to review by the full Committee. The Committee’s determinations under the Plan shall be final and binding on all persons. 2.3Committee for Non-Officer/Non-Director Awards. The Board may also appoint a secondary committee of the Board or one or more senior executive officers of the Company to administer the Plan with respect to Employees who are not considered officers or Directors of the Company under Section 16 of the Exchange Act. That committee or senior executive officer may grant Awards under the Plan to such Employees and may determine all features and conditions of such Awards. Within the limitations of this Section 2.3, any reference in the Plan to the Committee shall include such secondary committee or senior executive officer, as the case may be. 2.4Compensation Department Powers and Duties. Until such time as the Committee shall modify, revoke or rescind such authority, the Company’s Compensation department, or any successor department within the Company, regardless of name, has the powers and duties set forth below. Determinations made by the Compensation department (or other department) under this Section 2.4 shall be final and binding on all persons, but may, in the Committee’s absolute and sole discretion, be reviewed by the Committee. The powers and duties delegated by the Committee hereunder are to: (a)work with Plan service providers to ensure the effective administration of the Plan; (b)determine whether a Participant’s disability, as defined by a qualified medical professional acceptable to the Company’s Compensation department (or other department), qualifies as Disability as defined under the Plan; and (c) perform any and all tasks, duties, and responsibilities delegated by the Company or the Committee. The Company’s Compensation department has authority to interpret the terms of the Plan and any Award in carrying out the powers and duties as set forth above. ARTICLE 3.SHARES AVAILABLE FOR AWARDS AND GENERAL VESTING REQUIREMENTS 3.1Basic Limitation. Shares issued pursuant to the Plan shall be authorized but unissued shares. The aggregate number of Shares available for Awards of Options, SARs, Unrestricted Shares, Restricted Shares, Restricted Stock Units or Performance Share Units granted under the Plan shall not exceed (a) 39,500,000 Shares, all of which may be granted as ISOs, plus (b) the additional shares of Common Stock described in Section 3.3. The limitations of this Section 3.1 and Sections 3.2 and 3.3 shall be subject to adjustment pursuant to Article 12. The aggregate number of Shares available for issuance as Plan Awards shall be reduced by 1.6 (one point six) Shares for each Share delivered in settlement of any Award of Unrestricted Shares, Restricted Shares, Restricted Stock Units, Performance Share Units, dividends, or dividend equivalents, and by 1 (one) Share for each Share delivered in settlement of any Option Award or SAR. Awards that are required to be settled in cash will not reduce the number of Shares available for delivery under the Plan. 3.2Additional Shares. If any Shares covered by an Award of Options, SARs, Restricted Shares, Restricted Stock Units or Performance Share Units terminate, lapse or are forfeited or cancelled, or such Award is otherwise settled without the delivery of the full number of Shares underlying the Award, then the Shares covered by such Award, or to which such Award relates, to the extent of any such forfeiture, termination, lapse, cancellation, etc., shall again be, or shall become, available for issuance under the Plan; provided, B-1 | | 2023 Proxy Statement | |
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The primary functionTable of Contents
APPENDIX B: NORDSTROM, INC. AMENDED AND RESTATED 2019 EQUITY INCENTIVE PLAN however, that Shares (a) delivered in payment of the Auditexercise price of an Award, (b) not issued upon the net settlement or net exercise of SARs, (c) delivered to or withheld by the Company to pay withholding taxes related to an Award, or (d) purchased in the open market using option proceeds, shall not become available again for issuance under this Plan. Shares that again become available for issuance under the Plan pursuant to this Section 3.2 shall be added to the number of Shares available under Section 3.1 in the same ratios as applied to them at the time they were originally granted (e.g., 1.6 (one point six) Shares for each Share attributable to previously granted Awards of Restricted Shares, Restricted Stock Units or Performance Share Units and 1 (one) Share for each Share attributable to previously granted Option Awards or SARs). 3.3Additional Shares from Prior Plan. Shares available for issuance under the Plan shall be increased by any shares of Common Stock subject to outstanding Awards under the Prior Plans on the effective date of the Plan, May 23, 2019, that later cease to be subject to such Awards for any reason other than the exercise, or vesting of such Awards (as the case may be), or any amounts withheld from such Awards by the Company for taxes on the Awards, which Shares shall, as of the date such Shares cease to be subject to such Awards, cease to be available for grant and issuance under the Prior Plans, but shall be available for issuance under the Plan under Section 3.1. Shares that become available for issuance under the Plan pursuant to this Section 3.3, shall become available for issuance under the Plan in such amount as they previously reduced the number of Shares available for issuance under the Prior Plans. 3.4General Vesting Requirements. Awards granted under the Plan shall vest no earlier than the first anniversary of the date of grant. Notwithstanding the previous sentence, the Committee may grant Awards representing up to an aggregate maximum of five percent (5%) of the available Share reserve authorized for issuance under the Plan pursuant to Section 3.1 (subject to adjustment under Section 3.3) without regard to the foregoing minimum vesting requirement. 3.5Nonemployee Director Award Limit. Notwithstanding any provision to the contrary in the Plan or in any policy of the Company regarding non-employee director compensation, the sum of the grant date fair value (determined as of the grant date in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor thereto) of all equity-based Awards and the maximum amount of cash that may become payable to an individual as compensation for Services as a Nonemployee Director during any calendar year shall not exceed $750,000. The Committee may make exceptions to this limit for Nonemployee Directors in extraordinary circumstances, as the Committee may determine in its discretion, provided that the Nonemployee Director receiving such additional compensation may not participate in the decision to award such compensation or in other contemporaneous compensation decisions involving Nonemployee Directors. ARTICLE 4.ELIGIBILITY 4.1Awards. Employees and Nonemployee Directors shall be eligible for the grant of Awards of NSOs, SARs, Unrestricted Shares, Restricted Shares, Restricted Stock Units or Performance Share Units. 4.2Incentive Stock Options. Only Employees who are common-law employees of the Company or a Subsidiary shall be eligible for the grant of ISOs. In addition, an Employee who owns more than ten percent (10%) of the total combined voting power of all classes of outstanding stock of the Company or any of its Subsidiaries shall not be eligible for the grant of an ISO unless the requirements set forth in section 422(c)(6) of the Code are satisfied. ARTICLE 5.OPTIONS Options granted under the Plan are subject to the following terms and conditions: 5.1Stock Option Agreement. Each grant of an Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the Company. Such Option shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The Stock Option Agreement shall specify whether the Option is an NSO or an ISO. The provisions of the various Stock Option Agreements entered into under the Plan need not be identical. 5.2Number of Shares. Each Stock Option Agreement shall specify the number of shares of Common Stock subject to the Option, which shall be subject to adjustment in accordance with Article 12. Holders of Options shall have no right to dividend equivalents and prior to exercise, no rights to dividends. The limitation set forth in the preceding sentence shall be subject to adjustment in accordance with Article 12. 5.3Exercise Price. Each Stock Option Agreement shall specify the Exercise Price; provided that the Exercise Price under an Option shall in no event be less than one hundred percent (100%) of the Fair Market Value of a share of Common Stock on the date of grant. 5.4Exercisability and Term. Each Stock Option Agreement shall specify the date or event when all or any installment of the Option is to become exercisable, subject to Section 3.4. The Stock Option Agreement shall also specify the term of the Option; provided that the term shall in no event exceed ten (10) years from the date of grant. A Stock Option Agreement may provide for accelerated exercisability in the event of the Optionee’s Disability, death or Retirement and may provide for expiration prior to the end of its term in the event of the termination of the Optionee’s Service. Options may be granted in combination with SARs, and such an Award may provide that the Options will not be exercisable unless the related SARs are forfeited. 5.5Dividend Rights. No dividends or dividend equivalent rights shall be paid or accrued with respect to Options.
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Table of Contents APPENDIX B: NORDSTROM, INC. AMENDED AND RESTATED 2019 EQUITY INCENTIVE PLAN ARTICLE 6.PAYMENT FOR OPTION SHARES 6.1General Rule. The entire Exercise Price of shares of Common Stock issued upon exercise of Options shall be payable in cash or cash equivalents at the time when such shares of Common Stock are purchased, except as follows: (a)In the case of an ISO granted under the Plan, payment shall be made only pursuant to the express provisions of the applicable Stock Option Agreement. The Stock Option Agreement may specify that payment may be made in any form(s) described in this Article 6. (b)In the case of an NSO, the Committee may at any time accept payment in any form(s) described in this Article 6. 6.2Stock Swap. To the extent specifically provided in an Option Agreement, all or any part of the Exercise Price may be paid by surrendering, or attesting to the ownership of, shares of Common Stock that are already owned by the Optionee. Such shares of Common Stock shall be valued at their Fair Market Value on the date when the new shares of Common Stock are purchased under the Plan. 6.3Exercise/Sale. To the extent that this Section 6.3 is applicable and to the extent so provided in the Stock Option Agreement, all or any part of the Exercise Price and any withholding taxes may be paid by delivery to the Company of other Common Stock, duly endorsed for transfer to the Company, with a Fair Market Value on the date of delivery equal to the Option Exercise Price (or portion thereof) due for the number of shares being acquired, or by means of attestation whereby the Participant identifies for delivery specific shares of Common Stock that have an aggregate Fair Market Value on the date of attestation equal to the Option Exercise Price (or portion thereof) and receives a number of shares of Common Stock equal to the difference between the number of shares thereby purchased and the number of identified attestation shares of Common Stock (a “Stock for Stock Exchange”); (ii) a “cashless” exercise program established with a broker; (iii) Net Exercise; (iv) by any combination of the foregoing methods; or (v) in any other form of legal consideration that may be acceptable to the Committee. ARTICLE 7.STOCK APPRECIATION RIGHTS SARs granted under the Plan are subject to the following terms and conditions: 7.1SAR Agreement. Each SAR granted under the Plan shall be evidenced by an SAR Agreement between the Participant and the Company. Such SAR shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various SAR Agreements entered into under the Plan need not be identical. 7.2Number of Shares. Each SAR Agreement shall specify the number of shares of Common Stock to which the SAR pertains and shall provide for the adjustment of such number in accordance with Article 12. 7.3Exercise Price. Each SAR Agreement shall specify the Exercise Price; provided that the Exercise Price under an SAR shall in no event be less than one hundred percent (100%) of the Fair Market Value of a share of Common Stock on the date of grant. 7.4Exercisability and Term. Each SAR Agreement shall specify the date when all or any installment of the SAR is to become exercisable, subject to Section 3.4. The SAR Agreement shall also specify the term of the SAR; provided, however, that the term shall in no event exceed ten (10) years from the date of grant. A SAR Agreement may provide for accelerated exercisability in the event of the Participant’s Disability, death or Retirement and may provide for expiration prior to the end of its term in the event of the termination of the Participant’s Service. SARs may be granted in combination with Options, and such an SAR Agreement may provide that the SARs will not be exercisable unless the related Options are forfeited. 7.5Exercise of SARs. Upon exercise of an SAR, the Participant (or any person having the right to exercise the SAR after his or her death) shall receive from the Company (a) shares of Common Stock, (b) cash or (c) a combination of shares of Common Stock and cash, as the Committee shall determine. The amount of cash and/or the Fair Market Value of shares of Common Stock received upon exercise of SARs shall, in the aggregate, be equal to the amount by which the Fair Market Value (on the date of surrender) of the shares of Common Stock subject to the SARs exceeds the Exercise Price. 7.6Dividend Rights. No dividends or dividend equivalent rights shall be paid or accrued with respect to SARS. ARTICLE 8.UNRESTRICTED SHARES Unrestricted Shares granted under the Plan are subject to the following terms and conditions: 8.1Unrestricted Shares. Unrestricted Shares shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan, subject to adjustment in accordance with Article 12 or together with all other Awards the limits set forth in Section 3.4. 8.2Payment for Awards. Unrestricted Shares may be granted under the Plan for such consideration consisting of any tangible or intangible property or benefit to the Company as the Committee may determine, including cash, services performed and contracts for services to be performed. B-3 | | 2023 Proxy Statement | |
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Table of Contents APPENDIX B: NORDSTROM, INC. AMENDED AND RESTATED 2019 EQUITY INCENTIVE PLAN ARTICLE 9.RESTRICTED SHARES Restricted Shares granted under the Plan are subject to the following terms and conditions: 9.1Restricted Share Agreement. Each grant of Restricted Shares under the Plan shall be evidenced by a Restricted Share Agreement between the recipient and the Company. Such Restricted Shares shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various Restricted Share Agreements entered into under the Plan need not be identical, subject to adjustment in accordance with Article 12. 9.2Payment for Awards. Restricted Shares may be granted under the Plan for such consideration consisting of any tangible or intangible property or benefit to the Company as the Committee may determine, including cash, services performed and contracts for services to be performed. 9.3Vesting Conditions. Each Award of Restricted Shares shall be subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Restricted Share Agreement, subject to Section 3.4. The Committee may include among such conditions the requirement that the performance of the Company or a business unit of the Company for a Performance Cycle equal or exceed a target determined in advance by the Committee. Such target shall be based on any one or combination of the Performance Criteria. If the Participant’s employment with the Company or Subsidiary is terminated before the end of a Performance Cycle for any reason other than Disability, death or Retirement, the Participant shall forfeit all rights with respect to any Restricted Shares that were being earned during the Performance Cycle. The Committee, in its absolute and sole discretion, may establish guidelines providing that if a Participant’s employment is terminated before the end of a Performance Cycle by reason of Disability, death or Retirement, the Participant shall be entitled to a prorated payment with respect to any Restricted Shares that were being earned during the Performance Cycle, as determined at the end of such Performance Cycle. A Restricted Share Agreement may provide for accelerated service-based vesting in the event of the Participant’s Disability, death or Retirement (provided that, with respect to accelerated vesting in the event of Retirement, such Restricted Share Agreement shall comply with the requirements of Code Section 409A and include specific provisions regarding any tax withholding requirements, as required). 9.4Voting and Dividend Rights. The holders of Restricted Shares granted under the Plan shall have the voting, dividend and other rights as set forth in their Restricted Share Agreement, and may have the same voting, dividend and other rights as the Company’s other shareholders. Any dividends paid on Restricted Shares shall not be paid at the dividend payment date and shall only be paid if and when Restricted Shares vest, in cash or in shares of unrestricted Common Stock having a Fair Market Value equal to the amount of such dividends. Common Stock distributed in connection with a stock split or stock dividend, and distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Shares with respect to which such Common Stock has been distributed. ARTICLE 10.RESTRICTED STOCK UNITS Restricted Stock Units granted under the Plan are subject to the following terms and conditions: 10.1Restricted Stock Units. Restricted Stock Units are designated in shares of Common Stock. 10.2Restricted Stock Unit Agreement. Each grant of Restricted Stock Units under the Plan shall be evidenced by a Restricted Stock Unit Agreement between the recipient and the Company. Such Restricted Stock Units shall be subject to all applicable terms of the Plan and may be subject to any other terms of the applicable Restricted Stock Unit Agreement that are not inconsistent with the Plan. The provisions of the various Restricted Stock Unit Agreements entered into under the Plan need not be identical, subject to adjustment in accordance with Article 12. 10.3Payment for Awards. To the extent that an Award is granted in the form of Restricted Stock Units, no cash consideration shall be required of the Award recipients. 10.4Vesting Conditions. Each Award of Restricted Stock Units shall be subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Restricted Stock Unit Agreement, subject to Section 3.4. The Committee may include among such conditions the requirement that the performance of the Company or a business unit of the Company for a Performance Cycle equal or exceed a target determined in advance by the Committee. Such target shall be based on any one or combination of the Performance Criteria. If the Participant’s employment with the Company or Subsidiary is terminated before the end of a Performance Cycle for any reason other than Disability, death or Retirement, the Participant shall forfeit all rights with respect to any Restricted Stock Units that were being earned during that Performance Cycle. The Committee, in its absolute and sole discretion, may establish guidelines providing that if a Participant’s employment is terminated before the end of a Performance Cycle by reason of Disability, death or Retirement, the Participant shall be entitled to a prorated payment with respect to any shares of Restricted Stock Units that were being earned during the Performance Cycle, as determined at the end of such Performance Cycle. A Restricted Stock Unit Agreement may provide for accelerated service-based vesting in the event of the Participant’s Disability, death or Retirement (provided that, with respect to accelerated vesting in the event of Retirement, such Restricted Stock Unit Agreement’s accelerated vesting provisions shall comply with the requirements of Code Section 409A).
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Table of Contents APPENDIX B: NORDSTROM, INC. AMENDED AND RESTATED 2019 EQUITY INCENTIVE PLAN 10.5Dividend Rights. Shares underlying an Award of Restricted Stock Units shall not be entitled to dividends and shall be entitled to dividend equivalents with respect to such Restricted Stock Units only as set forth under a Restricted Stock Unit Agreement and in compliance with this Section 10.5. If a Restricted Stock Unit Agreement includes rights to dividend equivalents, an amount equal to the dividends that would have been paid if the Restricted Stock Units had been issued and outstanding shares of Common Stock on or before the record date for any declared dividend shall be paid to the holder of such Restricted Stock Units, in cash or stock, subject to applicable withholding taxes, only if and when the Restricted Stock Units vest. Any dividend equivalents payable pursuant to this Section 10.5 shall be paid no later than March 1 of the calendar year after the calendar year in which the underlying Restricted Stock Units vest as provided in the applicable Restricted Stock Unit Agreement. 10.6Form and Time of Settlement of Restricted Stock Unit Awards. Settlement of vested Restricted Stock Units may be made in the form of (a) cash, (b) shares of Common Stock or (c) any combination of both, as determined by the Committee. For the avoidance of doubt, settlement of vested Restricted Stock Units in shares of Common Stock shall not be considered an Award of Unrestricted Shares under Article 8. Methods of converting Restricted Stock Units into cash may include (without limitation) a method based on the average Fair Market Value of shares of Common Stock over a series of trading days. Vested Restricted Stock Units shall be settled in a lump sum before the later of (i) two and one half (21/2) months after the end of the Company’s fiscal year during which all vesting conditions applicable to the Restricted Stock Units have been satisfied or have lapsed or (ii) March 15 following the calendar year in which all vesting conditions applicable to the Restricted Stock Units have been satisfied or have lapsed. Until an Award of Restricted Stock Units is settled, the number of such Restricted Stock Units shall be subject to adjustment pursuant to Article 12. 10.7Creditors’ Rights. A holder of Restricted Stock Units shall have no rights other than those of a general creditor of the Company. Restricted Stock Units represent an unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Restricted Stock Unit Agreement. ARTICLE 11.PERFORMANCE SHARE UNITS Performance Share Units granted under the Plan are subject to the following terms and conditions: 11.1Performance Share Units. Performance Share Units are designated in shares of Common Stock. 11.2Agreement. Each grant of Performance Share Units under the Plan shall be evidenced by an Agreement between the recipient and the Company, shall be subject to all applicable terms of the Plan, and may be subject to any other terms that are not inconsistent with the Plan. The provisions of the various Performance Share Unit Agreements entered into under the Plan need not be identical. Performance Share Units may be granted in consideration of a reduction in the recipient’s other compensation. 11.3Payment for Awards. To the extent that an Award is granted in the form of Performance Share Units, no cash consideration shall be required of the Award recipients. 11.4Vesting Conditions. Each Award of Performance Share Units shall be subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Performance Share Unit Agreement, subject to Section 3.4. The Committee may include among such conditions the requirement that the performance of the Company or a business unit of the Company for a Performance Cycle equal or exceed a target determined in advance by the Committee. Such target shall be based on any one or combination of the Performance Criteria. If the Participant’s employment with the Company or Subsidiary is terminated before the date that Performance Share Units vest, the Participant shall forfeit all rights with respect to any unvested Performance Share Units. However, with respect to Performance Share Units subject to performance-based vesting conditions, the Committee, in its absolute and sole discretion at the time an Award of Performance Share Units is made, may establish guidelines providing that if a Participant’s employment is terminated before the end of a Performance Cycle by reason of Disability, death or Retirement, the Participant shall be entitled to a prorated payment with respect to any Performance Share Units that were being earned during the Performance Cycle, as determined at the end of such Performance Cycle. A Performance Share Unit Agreement may provide for accelerated service-based vesting in the event of a Participant’s Disability, death or Retirement (provided, in the case of Retirement, that such Performance Share Unit Agreement’s accelerated vesting provisions shall comply with the requirements of Code Section 409A). 11.5Dividend Rights. Shares underlying an Award of Performance Share Units shall not be entitled to dividends and shall be entitled to dividend equivalents with respect to such Performance Share Units only as set forth under a Performance Share Unit Agreement and in compliance with this Section 11.5. If a Performance Share Unit Agreement includes rights to dividend equivalents, an amount equal to the dividends that would have been paid if the Performance Share Units had been settled shares of Common Stock on or before the record date for any declared dividend shall be paid to the holder of such Performance Share Units, in cash or stock, subject to applicable withholding taxes, only if and when such Performance Share Units actually vest and are settled in shares of Common Stock. Any dividend equivalents payable pursuant to this Section 11.5 shall be paid no later than March 1 of the calendar year after the calendar year in which the underlying Performance Share Units vest as provided in the applicable Performance Share Unit Agreement. B-5 | | 2023 Proxy Statement | |
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Table of Contents APPENDIX B: NORDSTROM, INC. AMENDED AND RESTATED 2019 EQUITY INCENTIVE PLAN 11.6Form and Time of Settlement of Units. Settlement of vested Performance Share Units may be made in the form of (a) cash, (b) shares of Common Stock or (c) any combination of both, as determined by the Committee. For the avoidance of doubt, settlement of vested Performance Share Units in shares of Common Stock shall not be considered an Award of Unrestricted Shares under Article 8. Methods of converting Performance Share Units into cash may include (without limitation) a method based on the average Fair Market Value of shares of Common Stock over a series of trading days. Vested Performance Share Units shall be settled in a lump sum by the last day of the calendar year in which all vesting conditions applicable to the Performance Share Units have been satisfied or have lapsed. Until an Award of Performance Share Units is settled, the number of such Share Units shall be subject to adjustment pursuant to Article 12. 11.7Creditors’ Rights. A holder of Performance Share Units shall have no rights other than those of a general creditor of the Company. Performance Share Units represent an unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Performance Share Unit Agreement. ARTICLE 12.PROTECTION AGAINST DILUTION 12.1Equity Restructuring. In the event of any equity restructuring (within the meaning of Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor thereto), such as a stock dividend, stock split, reverse stock split, spinoff, rights offering, or recapitalization through a large, nonrecurring cash dividend, the Committee shall, in such manner, to such extent (if any) and at such time as it deems appropriate and equitable in the circumstances, proportionately adjust any or all of (i) the number and type of shares of Common Stock (or other securities) that thereafter may be made the subject of Awards (including the specific share limits, maximums and numbers of shares set forth elsewhere in this Plan), (ii) the number, amount and type of shares of Common Stock (or other securities or property) subject to any or all outstanding Awards, (iii) the grant, purchase, or exercise price of any or all outstanding Awards, (iv) the securities, cash or other property deliverable upon exercise of any or all outstanding Awards, or (v) the performance standards appropriate to any or all outstanding Awards. With respect to any ISO, in the absolute and sole discretion of the Committee, the adjustments set forth in this Article 12 may be made in a manner that would cause the Option to cease to qualify as an ISO. For the avoidance of doubt, this Article 12 does not apply to normal cash dividends with respect to Company Stock other than extraordinary dividends or to stock issued in lieu of such dividends. 12.2Corporate Transaction. In the event of any reorganization, merger, consolidation, split-up, spin off, combination, amalgamation, repurchase, recapitalization, liquidation, dissolution, or sale, transfer, exchange or other disposition of all or substantially all of the assets of the Company, or sale or exchange of Common Stock or other securities of the Company, Change in Control, issuance of warrants or other rights to purchase Common Stock or other securities of the Company, other similar corporate transaction or event (including the sale, merger or other corporate transaction involving a Subsidiary), the Committee may make any of the adjustments set forth in Section 12.1 above and may also make provision for a cash payment or for the assumption, substitution or exchange of any or all outstanding share-based Awards or the cash, securities or property deliverable to the holder of any or all outstanding share-based Awards, based upon the distribution or consideration payable to holders of the outstanding shares of Common Stock upon or in respect of such event, and may, in its discretion, accelerate the vesting of outstanding Awards. The Committee may adopt such valuation methodologies for outstanding Awards as it deems reasonable in the event of a cash or property settlement and, in the case of Options, SARs or similar rights, but without limitation on other methodologies, may base such settlement solely upon the excess, if any, of the per share amount payable upon or in respect of such event over the grant price of the Award, unless otherwise provided in, or by authorized amendment to, the Award or provided in another applicable agreement with the Participant. 12.3Change in Control. (a)In the event of a Change in Control, a Participant’s unvested Awards shall not automatically vest, except as otherwise provided by the Committee in an Award Agreement. Instead, except as provided in Section 12.3(b) below, outstanding Awards shall continue in effect or be assumed, or an equivalent Award substituted, by the successor corporation or a parent or subsidiary of the successor corporation (with appropriate adjustments to the Awards as set forth in Section 12.1 and 12.2 above). Notwithstanding anything to the contrary contained in the foregoing, in the event that the Participant experiences a Qualifying Termination within twelve (12) months following a Change in Control, then the unvested Awards held by that Participant automatically shall vest in full upon the date of such Qualifying Termination, with any performance-based awards deemed earned based on Committee’s assessment of performance through the date of the Qualifying Termination, or if such performance is indeterminable at that time, at the 100% “target” level of performance. (b)If the successor corporation and its parent in a Change in Control refuse to assume or substitute for an Award as provided in Section 12.3(a) above, then the Committee shall, without the consent of the affected Participants: (i) provide for the cancellation of the vested portion of any such Award as of the date of the Change in Control in exchange for either an amount of cash (or stock, other securities or other property) as provided in Section 12.2 above (and with performance-based awards deemed earned based on Committee’s assessment of performance through the date of the Qualifying Termination, or if such performance is indeterminable at that time, at the 100% “target” level of performance); provided that, if the amount that could have been obtained upon the exercise or settlement of the vested portion of such Award is equal to or less than zero, then the Award shall be cancelled without payment of consideration, and (ii) provide for the cancellation of the unvested portion of the Award, if any, without payment of consideration as of the date of the Change in Control. ARTICLE 13.AWARDS UNDER OTHER PLANS The Company may grant Awards under other equity plans or programs. Such Awards may be settled in the form of shares of Common Stock issued under this Plan.
| | 2023 Proxy Statement | | B-6 |
Table of Contents APPENDIX B: NORDSTROM, INC. AMENDED AND RESTATED 2019 EQUITY INCENTIVE PLAN ARTICLE 14.LIMITATION ON RIGHTS 14.1Retention Rights. Neither the Plan nor any Award granted under the Plan shall be deemed to give any individual a right to remain an Employee or Nonemployee Director. The Company and its Subsidiaries reserve the right to terminate the Service of any Employee or Nonemployee Director at any time, with or without cause, subject to applicable laws, the Company’s Restated Articles of Incorporation and Bylaws and a written employment agreement (if any). 14.2Shareholders’ Rights. Unless otherwise provided in this Plan or in any Award, a Participant shall have no dividend rights, voting rights or other rights as a shareholder with respect to any shares of Common Stock covered by his or her Award prior to the time when a stock certificate for such shares of Common Stock is issued or, if applicable, the time when he or she becomes entitled to receive such shares of Common Stock by filing any required notice of exercise and paying any required Exercise Price. No adjustment shall be made for normal cash dividends or other rights for which the record date is prior to such time, except as expressly provided in the Plan. 14.3Regulatory Requirements. Any other provision of the Plan notwithstanding, the obligation of the Company to issue shares of Common Stock under the Plan shall be subject to all applicable laws, rules and regulations and such approval by any regulatory body as may be required. The Company reserves the right to restrict, in whole or in part, the delivery of shares of Common Stock pursuant to any Award prior to the satisfaction of all legal requirements relating to the issuance of such shares of Common Stock related to their registration, qualification or listing or to an exemption from registration, qualification or listing. 14.4Compliance with Code Section 409A. Awards under the Plan are intended to comply with Code Section 409A and all Awards shall be interpreted in a manner that results in compliance with Section 409A, Department of Treasury regulations, and other interpretive guidance under Section 409A. Notwithstanding any provision of the Plan or an Award to the contrary, if the Committee determines that any Award does not comply with Code Section 409A, the Company may adopt such amendments to the Plan and the affected Award (without consent of the Participant) or adopt other policies or procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Committee determines are necessary and appropriate to (a) exempt the Plan and the Award from application of Code Section 409A and/or preserve the intended tax treatment of amounts payable with respect to the Award, or (b) comply with the requirements of Code Section 409A. 14.5Clawback Policy. Each Award issued under the Plan is subject to the Company’s clawback policy, which is amended from time to time, whether or not such policy was in place at the time of grant of an Award. 14.6Transferability. Except in the context of death of a Participant, or as otherwise required by law, or as approved by the Committee for no consideration, Awards issued under the Plan may not be transferred to any third party. 14.7Governing Law. The Plan shall be governed by, and construed in accordance with, the laws of the State of Washington, without giving effect to any conflicts of laws principles. 14.8No Re-Pricing. Except as otherwise provided in Article 12 above, the terms of outstanding Awards may not be amended to reduce any exercise price associated with such Awards or to cancel any outstanding Awards in exchange for cash, other Awards or other securities with an exercise price that is less than the exercise price of the original Awards without shareholder approval. ARTICLE 15.WITHHOLDING TAXES 15.1General. To the extent required by applicable federal, state, local or foreign law, a Participant or his or her successor shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise in connection with the Plan. The Company shall not be required to issue any shares of Common Stock or make any cash payment under the Plan until such obligations are satisfied. 15.2Share Withholding. To the extent that applicable law subjects a Participant to tax withholding obligations, the Committee may permit such Participant to satisfy all or part of such obligations by having the Company withhold all or a portion of any shares of Common Stock that otherwise would be issued to him or her or by surrendering all or a portion of any shares of Common Stock that he or she previously acquired, in each case having a Fair Market Value equal to the minimum amount required by applicable law to be withheld or paid (or such other amount that will not result in adverse accounting consequences for the Company or a Subsidiary). Such shares of Common Stock shall be valued at their Fair Market Value on the date when they are withheld or surrendered, and shall be deemed to have been issued for purposes of identifying any shares which may become available for grant pursuant to Section 3.3 above. ARTICLE 16.FUTURE OF THE PLAN 16.1Term of the Plan. The Plan, as set forth herein, became effective on the date of shareholder approval, May 23, 2019, and shall remain in effect for a period of ten (10) years unless earlier terminated under Section 16.2. 16.2Amendment or Termination. The Board may, at any time and for any reason, amend, alter or terminate the Plan or an Award Agreement. Notwithstanding the foregoing and except as provided in Section 14.4, no amendment, alteration or termination of the Plan or an Award Agreement shall be made that would impair the rights of a Participant under any Award theretofore granted without such Participant’s express written consent. An amendment of the Plan shall be subject to the approval of the Company’s shareholders for any amendment that would (a) require shareholder approval in order to satisfy the applicable requirements of Code section 422, or other applicable laws, regulations or rules, including but not limited to any stock exchange rules; (b) increase amounts payable under the Plan to Participants (provided that shareholder approval shall not be required for increases that are not material and do not require such B-7 | | 2023 Proxy Statement | |
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Table of Contents APPENDIX B: NORDSTROM, INC. AMENDED AND RESTATED 2019 EQUITY INCENTIVE PLAN approval under applicable law or stock exchange rules); (c) increase the number of shares of Common Stock authorized to be issued under the Plan; (d) permit the repurchase by the Company of any outstanding Awards with an Exercise Price greater than the then-current Fair Market Value of Common Stock; or (e) modify the Plan’s eligibility provisions. No Awards shall be granted under the Plan after the termination thereof. ARTICLE 17.DEFINITIONS 17.1“Award” means any grant of an Option, an SAR, an Unrestricted Share, a Restricted Share, a Restricted Stock Unit or a Performance Share Unit under the Plan. 17.2“Award Agreement” means the written agreement between the Company and the recipient that contains the terms, conditions and restrictions pertaining to a particular Award. 17.3“Board” means the Company’s Board of Directors, as constituted from time to time. 17.4“Cause” means as a reason for a Participant’s termination of employment or service shall have the meaning provided in the applicable employment agreement between the Company or a Subsidiary and the Participant, or severance plan covering the Participant, if any, or if there is no such agreement or plan, as applicable, that defines the term, then “Cause” shall mean (a) the Participant’s conviction of, or plea of guilty or no contest to, (i) any felony (or its international equivalent) or (ii) any other crime that results, or could reasonably be expected to result, in material harm to the business or reputation of the Company or any Subsidiary, (b) an act of personal dishonesty or disloyalty in the course of fulfilling the Participant’s duties to the Company or a Subsidiary, or an act of fraud or misappropriation, embezzlement, or misuse of funds or property belonging to the Company or any Subsidiary, (c) the Participant’s deliberate and continued failure to perform substantially such Participant’s material duties to the Company or a Subsidiary, (d) a material violation of the written policies of the Company and its Subsidiaries, including but not limited to those relating to sexual harassment or the disclosure or misuse of confidential information, or those set forth in the manuals or statements of policy of the Company and its Subsidiaries, (e) the Participant’s engagement in willful misconduct in connection with the Participant’s employment or services with the Company and its Subsidiaries, which results, or could reasonably be expected to result, in material harm to the business or reputation of the Company or any Subsidiary, and (f) breach of any restrictive covenants applicable to the Participant as a result of any agreement with the Company or any Subsidiary or any policy or plan maintained by the Company or any Subsidiary. The foregoing, however, shall not be deemed an exclusive list of all acts or omissions that the Company (or the Parent or Subsidiary employing the Participant) may consider as grounds for the discharge of the Participant without Cause. 17.5“Change in Control” means the happening of any of the following: (a)the consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, if persons who were not shareholders of the Company immediately prior to such merger, consolidation or other reorganization own immediately after such merger, consolidation or other reorganization in excess of fifty percent (50%) of the voting power of the outstanding securities of each of (i) the continuing or surviving entity and (ii) any direct or indirect parent corporation of such continuing or surviving entity; (b)the sale, transfer or other disposition of all or substantially all of the Company’s assets; (c) a change in the composition of the Board as a result of which fewer than fifty percent (50%) of the incumbent Directors are Directors who either (i) had been Directors of the Company on the date twenty-four (24) months prior to the date of the event that may constitute a Change in Control (the “original Directors”) or (ii) were elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the aggregate of the original Directors who were still in office at the time of the election or nomination and the Directors whose election or nomination was previously so approved, but excluding, for this purpose, any such Director whose initial assumption of office occurs as a result of either an actual or threatened election contest or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors, (the “Committee”including by reason of agreement intended to avoid or settle any such actual or threatened contest or solicitation; or (d)any transaction as a result of which any person is the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing at least thirty percent (30%) of the total voting power represented by the Company’s then outstanding voting securities. For purposes of this Paragraph (d), the term “person” shall have the same meaning as when used in sections 13(d) and 14(d) of the Exchange Act but shall exclude (i) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or of a Subsidiary and (ii) a corporation owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of the common stock of the Company. A transaction shall not constitute a Change in Control if its sole purpose is to representchange the state of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction. 17.6“Code” means the Internal Revenue Code of 1986, as amended. 17.7“Committee” means the Compensation, People and assistCulture Committee of the Board in fulfilling its oversight responsibilities by reviewing and appraising:Company’s Board. 17.8“Common Stock” means shares of the common stock of the Company. 17.9“Company” means Nordstrom, Inc., a Washington corporation. 1.
| The integrity of the Company’s financial statements | | | 2023 Proxy Statement | 2. | The accounting, auditing and financial reporting processes of the Company; | | | | 3. | The management of business and financial risk and the internal controls environment; | | | 4. | The Company’s compliance with legal and regulatory requirements and the ethics programs as established by management and the Board, which shall be in conjunction with any recommendations by the Corporate Governance and Nominating Committee with respect to the corporate governance standards; | | | 5. | Reports resulting from the performance of audits by the independent auditor and the internal auditor; | | | 6. | The qualifications, independence and performance of the Company’s independent auditors; and | | | 7. | The performance of the Company’s internal audit function.B-8 |
Table of Contents APPENDIX B: NORDSTROM, INC. AMENDED AND RESTATED 2019 EQUITY INCENTIVE PLAN 17.10“Disability” means the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months. 17.11“Employee” means a common-law employee of the Company, a Parent or a Subsidiary. 17.12“Exchange Act” means the Securities Exchange Act of 1934, as amended. 17.13“Exercise Price,” in the case of an Option, means the amount for which one share of Common Stock may be purchased upon exercise of such Option, as specified in the applicable Stock Option Agreement. “Exercise Price,” in the case of an SAR, means an amount, as specified in the applicable SAR Agreement, which is subtracted from the Fair Market Value of one share of Common Stock in determining the amount payable upon exercise of such SAR. 17.14“Fair Market Value” means, as of any date, the value of the Common Stock determined as follows: (a) If the Common Stock is (i) listed on any established securities exchange (such as the New York Stock Exchange or Nasdaq Stock Market), (ii) listed on any national market system or (iii) listed, quoted or traded on any automated quotation system, the Fair Market Value of a share of Common Stock shall be the closing sales price for a share as quoted on such exchange or system for such date or, if there is no closing sales price for a share on the date in question, the closing sales price for a share on the last preceding date for which such quotation exists, as reported in The AuditWall Street Journal or such other source as the Committee deems reliable; (b) If the Common Stock is not listed on an established securities exchange, national market system or automated quotation system, but the Common Stock is regularly quoted by a recognized securities dealer, the Fair Market Value of a share of Common Stock shall preparebe the report requiredmean of the high bid and low asked prices for such date or, if there are no high bid and low asked prices for a share on such date, the high bid and low asked prices for a share on the last preceding date for which such information exists, as reported in The Wall Street Journal or such other source as the Committee deems reliable; or (c) If the Common Stock is neither listed on an established securities exchange, national market system or automated quotation system nor regularly quoted by a recognized securities dealer, the Fair Market Value of a share of Common Stock shall be established by the rulesCommittee in good faith. Such determination shall be conclusive and binding on all persons. 17.15“Good Reason” means the occurrence of one or more of the Securitiesfollowing without the Participant’s express written consent and Exchange Commission (the “SEC”) to be includedwithin twelve (12) months following a Change in Control: (a)a material diminution in the Company’s annual proxy statement. Participant’s base salary; (b)a material diminution in the Participant’s authority, duties, or responsibilities; (c) a material change in the geographic location at which the Participant must perform his or her services to a place that is more than fifty (50) miles from where the Participant was based immediately prior to the Change in Control; and (d)any other action or inaction that constitutes a material breach by the Company of this Plan with respect to a Participant’s Award. The Audit Committeeevent or events described above shall annually reviewconstitute Good Reason only if the Audit Committee’s own performance.Company (or the Parent or Subsidiary employing the Participant) fails to cure such event or events within ninety (90) days after receipt from the Participant of written notice of the event or events which constitutes Good Reason. Such notice must be provided to the Company (or the Parent or Subsidiary employing the Participant) and must provide a reasonably detailed description of the facts that the Participant believes constitute a Good Reason event. Good Reason shall cease to exist for an event on the ninetieth (90th) day following the later of its occurrence or the Participant’s knowledge thereof, unless the Participant has given written notice to the Company thereof prior to such date. 17.16“ISO” means an incentive stock option described in Section 422(b) of the Code. Authority
In fulfilling its responsibilities,17.17“Net Exercise” means in lieu of exercising an Option for cash, the Committee shall:
Optionee may elect to receive shares equal to the value of the Option (or the portion thereof being exercised) by surrender of the Option. The Company shall issue to such Optionee a number of shares of Common Stock computed using the following formula: 1.X = | Have authority to conduct or authorize investigations into any relevant matters; | | | | 2. | Have authority to access Company records, information, facilities and personnel; | | | 3. | Have sole authority to engage, evaluate and terminate the Company’s independent registered public accounting firm (“independent auditor”), which independent auditor shall report directly to the Committee; | | | 4. | Have direct access to the independent auditor, the head of internal audit as well as anyone within the Company; | | | 5. | Be directly responsible for the approval of all audit engagement fees and terms and resolution of disagreements between management and the independent auditor regarding financial reporting; | | | 6. | Have sole authority to pre-approve all auditing services, internal control-related services and permitted non-audit services to be performed by the Company’s independent auditors; | | | 7. | Have authority to form and delegate authority to subcommittees consisting of one or more members when appropriate, including the authority to grant pre-approvals of audit services, internal control-related services and permitted non-audit services, provided that decisions of such subcommittee to grant pre-approvals shall be presented to the full Committee at its next scheduled meeting. | | | 8. | Establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal control or auditing matters; and | | | 9. | Have the resources and the sole authority to engage any consultants, legal counsel or advisors to provide services the Committee deems necessary and advisable to carry out the foregoing responsibilities, to approve all of the terms of such engagement including compensation, and to terminate any such engagement. |
Y (A - B) Committee Composition, Meetings and Administrative Matters
1. | Member Requirements. Audit Committee members shall meet the requirements of the Securities and Exchange Commission (SEC) and the New York Stock Exchange (NYSE) as follows: | | |
| • | Number of Directors. The Committee shall consist of at least three independent directors. | | | | | | • | Independent Directors Only. As defined by the NYSE and the SEC. | | | | | • | Finance/Accounting Qualifications. All Committee members shall be financially literate as such qualification is interpreted by the Board in its business judgment, including at least one member with accounting or related financial management expertise. | | | | | • | “Audit Committee Financial Expert.” At least one member will qualify as an “audit committee financial expert”, as defined by the SEC, and the identity of the audit committee financial expert shall be disclosed in the Company’s annual report on Form 10-K. | | | | | • | Simultaneous Service. If a member of the Committee simultaneously serves on the audit committee of more than three public companies, the Board must make a determination that the simultaneous service does not impair the effectiveness of that member. | A | | |
2. | Committee Appointment. The Committee and its Chairperson shall be appointed annually by the Board based on the recommendation of the Corporate Governance and Nominating Committee and members’ independence shall be confirmed by the Board during the appointment process. | | |
NORDSTROM, INC. - 2016 Proxy Statement | C-1 |
Where X=The number of shares to be issued to the Optionee pursuant to the Net Exercise. Y=The number of shares purchasable under this Option or, if only a portion of the Option is being exercised, the portion of the Option being cancelled (at the date of such calculation). A=The fair market value of one (1) share (at the date of such calculation). B=The Exercise Price (as adjusted to the date of such calculations). 17.18“NSO” means a stock option not described in Sections 422 or 423 of the Code. 3. | Meeting Frequency. The Committee shall meet at least four times per year, or more often as deemed necessary by the Chairperson. | | | 4. | Meeting Attendees. In addition to the Committee members, the Committee may ask that members of management, Internal Audit, the Company’s independent auditors, or others be present at Committee meetings. | | | 5. | Minutes. Minutes of each meeting shall be prepared by the designee of the Chairperson of the Committee. Draft minutes shall be distributed to Committee members, as soon as practicable after each meeting, for approval at the next meeting of the Committee. The approved minutes shall be provided to the Secretary of the Company for retention with the permanent records of the Company. | | | 6. | Private Communications. At each Committee meeting, there shall be an opportunity for Committee members to have private communication with management, the internal auditors and the independent auditors in separate executive sessions. | | | 7. | Reporting to the Board. The Chairperson or his or her designee will report Committee actions to the Board of Directors with such recommendations as the Committee may deem appropriate. | | | 8. | Audit Committee Charter Update and Disclosure. The Committee shall, at least annually and in conjunction with the Corporate Governance and Nominating Committee, review its Charter and, if appropriate, propose revisions to the full Board of Directors for approval. | | | 9. | Proxy Statement Disclosure. The Company shall post an electronic copy of the Charter on the Company’s website and disclose the availability of the Charter and the website in the Company’s proxy statement in accordance with Securities and Exchange Commission regulations. | | | 10. | Annual NYSE Certification Letter. As required by the NYSE, the Committee shall annually submit a certification letter to the NYSE confirming members meet financial qualifications, the Board confirmed members’ independence, and the Committee reevaluated its Charter within the last year. | | | 11. | Funding. The Company shall provide appropriate funding, as determined by the Committee, for payment of: | | |
| • | Compensation to any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the Company; | B-9 | | | | • | Compensation to any advisers employed by the Committee; and | 2023 Proxy Statement | | | | • | Ordinary administrative expenses of the Committee. |
Corporate Accounting, Auditing, Financial Controls and Reporting
1. | Accounting Principles and Financial Reporting Policies. The Committee will review with financial management and approve the Company’s significant accounting and reporting policies and any changes thereto. The Committee will periodically discuss with the independent auditor their judgments about the quality of the Company’s accounting principles as applied in its financial reporting, including such matters as the clarity of disclosures, and other significant matters of judgment. | | | 2. | Quarterly Financial Statements and Independent Auditor’s Review. The Committee will review and discuss with financial management and the independent auditors the Company’s quarterly financial statements including the Company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations, prior to the filing of Form 10-Q. The Committee Chairperson will discuss any significant changes to the Company’s accounting principles and any items required to be communicated by the independent auditors in accordance with PCAOB Auditing Standard 16,Communication With Audit Committees (AS 16); SEC Regulation S-X Rule 2-07,Communication with Audit Committees (Rule 2-07); PCAOB Ethics and Independence Rule 3526,Communication with Audit Committees Concerning Independence (Rule 3526), the NYSE Corporate Governance Rules, and any other required communications under applicable PCAOB and SEC rules. The Committee will review disclosures made to the Committee by the Company’s President and CFO during their certification process for the Form 10-Q about any significant deficiencies in the design or operation of internal controls or material weaknesses therein and any fraud involving management or other employees who have a significant role in the Company’s internal controls. | | | 3. | Annual Financial Statements and Independent Auditor’s Audit Results. Prior to filing Form 10-K, the Committee will discuss the annual financial report and audit results with financial management and the independent auditors, including the Company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. The Committee will discuss with the independent auditors those matters required in accordance with AS 16, Rule 2-07, Rule 3526, the NYSE Corporate Governance Rules, and any other required communications under applicable PCAOB and SEC rules. The Committee will review disclosures made to the Committee by the Company’s President and CFO during their certification process for the Form 10-K about any significant deficiencies in the design or operation of internal controls or material weaknesses therein and any fraud involving management or other employees who have a significant role in the Company’s internal controls. | | | 4. | Financial Controls. The Committee will review financial controls with management and assess the internal processes for determining and managing key risk areas to safeguard assets and provide appropriate assurance of accurate financial reporting. | | | 5. | Significant Deficiencies and/or Material Weaknesses. The Committee will consider and review with the independent auditors, internal audit and management, any significant deficiencies and/or material weaknesses, audit problems or difficulties the independent auditor encountered in the course of the audit work, including any restrictions on the scope of the independent auditor’s activities or on access to requested information, and any significant disagreements with management. The review shall include management’s timetable and corrective action plans. | | | 6. | Internal Controls Report. Prior to filing Form 10-K, the Committee will review with the independent auditors, internal audit and management, the Company’s internal controls report. | | | 7. | Annual Financial Statement Recommendation to the Board. Based on its review, the Committee will recommend to the Board the inclusion of the Company’s audited financial statements in the annual report on Form 10-K. | | | 8. | Earnings Press Releases and Financial Guidance. The Committee will discuss with management the Company’s earnings press releases, as well as financial information and earnings guidance provided to analysts and rating agencies. Such discussion may be done generally (consisting of discussing the types of information to be disclosed and the types of presentations to be made). | | | 9. | Proxy Disclosure - Annual Audit Committee Report to Shareholders. The Committee will annually review a report for inclusion in the proxy statement. | | |
NORDSTROM, INC. - 2016 Proxy Statement | C-2 |
Risk Oversight
1. | Review reports from management on the Company’s enterprise risk management program. Review with management the framework for assessing and managing the risk exposures of the Company, including compliance, financial and operational risks1and the steps management has taken to monitor and control them. | | | 2. | Review and assess the Company policies and procedures relating to risk assessment, management and reporting, including limits and tolerances, risk roles and responsibilities, risk mitigation decisions and risk-related assumptions. | | | 3. | Review quarterly the update on the Enterprise Risk Mapping and the activities of the Company’s Enterprise Risk Management Committee. | | | 4. | Coordinate with the other Committees of the Board or other relevant governance bodies the oversight of specific risks. |
Legal, Regulatory, Ethics & Compliance
1. | Legal Matters. The Committee will review with management and counsel, any legal matters that could have a material impact on the Company’s financial statements and the Company’s compliance with applicable laws and regulations, including reports received from regulators or governmental agencies. | | | 2. | Compliance Programs. The Committee shall periodically review and discuss with management, the internal auditors and the independent auditors the overall adequacy and effectiveness of the Company’s legal, regulatory and ethical compliance programs, including the Company’s Code of Business Conduct and Ethics. The Committee shall also recommend any changes to the Company’s compliance programs to the Board for its approval, which shall be in conjunction with any recommendations by the Corporate Governance and Nominating Committee with respect to the corporate governance standards. | | | 3. | Complaint Procedures. The Committee shall maintain procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters, including the confidential, anonymous submissions by Company employees about any questionable accounting or auditing practices |
Independent Auditor
1. | Independent Auditor Appointment. The independent auditor is ultimately accountable to the Audit Committee. The Committee shall be directly responsible for the appointment, compensation, retention and oversight of the work of the Company’s independent auditor, including the approval of any significant non-audit relationship with the independent auditor and resolution of disagreements between management and the independent auditor regarding financial reporting. The appointment by the Audit Committee of the independent auditor may be put before the shareholders for an advisory vote. | | | 2. | Independent Auditor’s Plan and Fees. The Committee will review and discuss with the independent auditors their risk assessment, scope and approach, and related fees, for the annual audit. The Committee will also review the nature of and fees for all other professional services provided to the Company by the independent auditor or its affiliates. | | | 3. | Independent Auditor Independence and performance. The Committee shall require from the independent auditor formal written disclosures regarding the independent auditor’s independence consistent with PCAOB rules and, at least annually, obtain and review a report describing their internal quality control procedures, any material issues raised by recent internal quality control, peer or governmental reviews of the firm, any inquiry or investigation by governmental or professional authorities within the last five years respecting independent audits carried out by the firm, and any steps taken to deal with any such issues, and (to assess the auditor’s independence) all relationships between the independent auditor and the Company. The Committee shall discuss with the independent auditor any disclosed relationships or services that may impact the objectivity and independence of the auditor and shall take appropriate action to reasonably assure the independence of the auditor. | | | 4. | Rotation Matters. The Committee shall ensure the rotation of the lead audit partner having primary responsibility for the audit and the audit partner responsible for the concurring review of the audit as required by law. The Committee shall also periodically review whether to request proposals for the engagement of the independent auditing firm. |
1 | Examples of areas of risk oversight include but are not limited to: | a. | Retail operations, supply chain management, protection of intellectual property and technology, business interruption and contingency planning; | b. | Financial reporting accuracy and completeness | c. | Product liability, and Regulatory compliance | d. | Privacy and data security and protection | | |
NORDSTROM, INC. - 2016 Proxy Statement | C-3 |
Internal Auditor
1. | Appointment of Vice President (“VP”) of Internal Audit. The Committee shall review and approve the appointment, replacement or dismissal of the VP of Internal Audit. | | | 2. | The Committee will review and discuss with internal audit the process used to assess risks and develop appropriate annual plans to audit and provide assurance on adequate mitigation of the Company’s key risks. | | | 3. | The Audit Committee will approve the internal audit risk assessment and the related internal audit plan annually. | | | 4. | The Committee will review and discuss the budget (including principal line items) and staffing required for the annual audit plan to be implemented by the internal audit function, the risk assessment methodology used in preparing the audit plan, the adequacy of their resources (including staff levels and turnover rates), and the appropriateness of their access within the Company to perform their work. | | | 5. | The Committee will consider and review any difficulties encountered in the course of internal audit work. The Committee will review any significant changes to the internal audit plan. | | | 6. | The committee will review at least annually the performance of the internal audit function and an analysis of its ability to discharge its responsibilities. The committee will receive the IIA required External Quality Assessment (QA) every five years. | | |
NORDSTROM, INC. - 2016 Proxy Statement | C-4 |
NORDSTROM CARES:
LEAVE IT BETTER
THAN WE FOUND IT
At Nordstrom, our commitment to being a socially responsible company is guided by a simple idea: leave it better than we found it. Our corporate social responsibility (CSR) strategy focuses on ensuring our efforts to take care of our communities and respect the environment also drive meaningful business results.
Our customers and employees have told us transparency around our approach and results is increasingly important to them. To steer our work and hold ourselves accountable, we’ve established measurable targets and report annually on our environmental, human rights and giving programs—including what we’ve accomplished and opportunities to improve.
HERE ARE A FEW OF OUR HIGHLIGHTS FROM 2015:
| |  | GIVING— In response to feedback from our customers and employees, we evolved our giving program. Our new 1% Gift Card Give Back program allowed us to increase our giving to support nearly 500 local organizations in every market where we do business through cash grants, and launch our Employee Charitable Match program.
|  | HUMAN RIGHTS— 100% of Nordstrom Product Group (NPG) factories have been audited to our Partnership Guidelines (expectations for following local laws and providing safe and healthy workplaces). When issues were found, we worked with the factories to create corrective plans that will help them sustainably remediate the findings. In addition, together with our long-term manufacturers, we helped provide social development programs such as HERhealth and HERfinance.
|  | ENERGY— We reduced the energy we use per square foot by 7%, bringing our total amount reduced since 2009 to 19%. We’re committed to making an additional 15% reduction by 2020, ensuring we’re doing our part, based on science, to help reduce our contribution to climate change.
|  | WASTE— Thanks to recycling and composting programs in our stores and buildings, the hard work of our employees and the support of our customers, we were able to divert the majority of our waste away from landfills.
|  | PACKAGING AND PAPER— We continued to make changes to help reduce the amount of paper we use, such as finding opportunities to package orders from our Fulfillment Center more efficiently. Moving forward, we’ll be using different paper and fewer pages in our catalogs, which will save 2.1 million pounds of paper in 2016.
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EarlierTable of Contents
APPENDIX B: NORDSTROM, INC. AMENDED AND RESTATED 2019 EQUITY INCENTIVE PLAN 17.19“Nonemployee Director” means a member of the Company’s Board or the Board of Directors of a Subsidiary who is not an Employee. Service as a Nonemployee Director shall be considered employment for all purposes of the Plan, except as provided in Section 4.2. 17.20“Option” means an NSO or an ISO granted under Article 5 of the Plan and entitling the holder to purchase shares of Common Stock pursuant to an Award. 17.21“Optionee” means an individual or estate who holds an Option. 17.22“Participant” means an individual or estate who holds an Award. 17.23“Performance Criteria” shall mean a specified percentage or quantitative level in one or more criteria, which may include one or more of the following performance measures: (a)the Company’s shareholder return as compared to any designated industry or other comparator group; (b)the trading price of the Company’s common stock; (c) the results of operations, such as sales, earnings, net income (before or after taxes), cash flow, return on assets, same-store sales, economic profit, or return on investment (including return on equity, return on capital employed, or return on assets); (d)earnings before or after taxes, interest, depreciation and/or amortization, and including/excluding capital gains and losses; (e)other financial results, such as profit margins, operational efficiency, expense reduction, or asset management goals; and (f) the internal or external market share of a product or line of products. Each of the foregoing performance measures may be based on the performance of the Company generally, in the absolute or in relation to its peers, or the performance of a particular Participant, department, business unit, subsidiary, or other segment to which a particular Participant is assigned. The Committee may establish different performance measures and milestones for individual Participants or groups of Participants. For each Participant, each performance measure will be weighted to reflect its relative significance to the Company for the Performance Cycle. Except as otherwise specified in an individual Award, applicable performance measures may be adjusted to exclude the following items that occur during a given Performance Cycle: (i) Extraordinary, unusual or non-recurring items of gain or loss; (ii) Gains or losses on the disposition of a business, a segment of a business, or significant assets outside the ordinary course of business; (iii)Changes in tax or accounting standards, principles, regulations or laws; (iv)The effect of a merger or acquisition, including all financial results derived therefrom during the period from the merger or acquisition date through the end of the Performance Cycle in which the merger or acquisition occurred; (v) Gains or losses due to non-cash adjustments which relate to the valuation of long-term assets rather than current-year performance (including but not necessarily limited to gain or loss recognized for store closures, lease terminations, pension adjustments and mark to market adjustments); and (vi)The impact of other similar occurrences outside of the Company’s core, on-going business activities (including but not necessarily limited to litigation or tax reserves, financing activities, foreign exchange rate fluctuations and restructuring charges). Except as otherwise determined by the Committee, performance measures comprising Performance Criteria for an Award shall be calculated in accordance with the Company’s financial statements, under generally accepted accounting principles (GAAP), or under a non-GAAP methodology established by the Committee prior to the issuance of an Award. The method of calculating performance measurements shall be consistently applied and identified in the audited financial statements, including footnotes, or the Compensation Discussion and Analysis section of the Company’s annual report. 17.24“Performance Cycle” means a predetermined period of time, not less than one year, over which Performance Criteria will be measured with respect to an Award. 17.25“Performance Share Unit” means a bookkeeping entry representing the equivalent of one (1) share of Common Stock, as granted under the Plan pursuant to an Award. 17.26“Performance Share Unit Agreement” means the written agreement between the Company and the recipient of a Performance Share Unit that contains the terms, conditions and restrictions pertaining to such Performance Share Unit. 17.27“Plan” means this Nordstrom, Inc. 2019 Equity Incentive Plan, as amended from time to time. 17.28“Prior Plans” mean the Nordstrom 2010 Equity Incentive Plan and 2004 Equity Incentive Plan, as subsequently amended in 2007 and 2008.
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Table of Contents APPENDIX B: NORDSTROM, INC. AMENDED AND RESTATED 2019 EQUITY INCENTIVE PLAN 17.29“Qualifying Termination” means (a) the Participant’s employment is involuntarily terminated by the Company (or the Parent or Subsidiary employing the Participant) without Cause, or (b) the Participant terminates employment from the Company (or the Parent or Subsidiary employing the Participant) for Good Reason. The twelve-month period will be extended by one (1) additional month if the thirty-day cure period in Section 17.15 is triggered in the eleventh or twelfth month following a Change in Control. It is intended that any Qualifying Termination shall be an “involuntary Separation from Service,” as that term is defined in Treasury Regulation Section 1.409A-1(n). 17.30“Restricted Share” means a share of Common Stock granted under Article 9 pursuant to an Award, with such restrictions as set forth in the applicable Restricted Share Agreement. 17.31“Restricted Stock Unit” means a right granted under Article 10 to receive Common Stock or cash at the end of a specified deferral period pursuant to an Award, which right may be conditioned on the satisfaction of certain requirements (including the satisfaction of certain performance goals). 17.32“Restricted Share Agreement” means the written agreement between the Company and the recipient of a Restricted Share that contains the terms, conditions and restrictions pertaining to such Restricted Share. 17.33“Restricted Stock Unit Agreement” means the written agreement between the Company and the recipient of a Restricted Stock Unit that contains the terms, conditions and restrictions pertaining to such Restricted Stock Unit. 17.34“Retirement” means Participant’s termination from Service on or after his or her Retirement Date. 17.35“Retirement Date” shall have the meaning as set forth in a particular Award Agreement. 17.36“SAR” means a stock appreciation right granted under Article 7 of the Plan pursuant to an Award. 17.37“SAR Agreement” means the written agreement between the Company and a Participant that contains the terms, conditions and restrictions pertaining to his or her SAR. 17.38“Service” means service as an Employee or Nonemployee Director. 17.39“Stock Option Agreement” means the written agreement between the Company and an Optionee that contains the terms, conditions and restrictions pertaining to his or her Option. 17.40“Subcommittee” means a separate committee established by and consisting of members of the Committee. 17.41“Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date. 17.42“Unrestricted Share” means a share of Common Stock granted under Article 8 of the Plan pursuant to an Award. B-11 | | 2023 Proxy Statement | |
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Table of Contents
APPENDIX C: NORDSTROM, INC. AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN SECTION 1.PURPOSE OF THE PLAN. The purpose of the Plan is to provide Eligible Employees with an opportunity to increase their proprietary interest in the success of the Company by purchasing Stock from the Company on favorable terms and to pay for such purchases through payroll deductions. The Plan is intended to qualify under Section 423 of the Code. The Plan was originally adopted by the Company’s Board of Directors in November of 1999, and was approved by the Company’s shareholders in May of 2000. The Plan was subsequently amended in several respects and was completely restated in 2005, 2006, 2008, 2011 and 2020. This 2023 Restatement increases the authorized number of shares of Stock under the Plan. The 2023 Restatement is effective for Offering Periods beginning on and after April 1, 2023. SECTION 2.ADMINISTRATION OF THE PLAN. (a)Committee Composition. The Plan shall be administered by the Committee. (b)Committee Responsibilities. The Committee shall interpret the Plan and make all other policy decisions relating to the operation of the Plan. The Committee may adopt such rules, guidelines and forms as it deems appropriate to implement the Plan. The Committee’s determinations under the Plan shall be final and binding on all persons. SECTION 3.ENROLLMENT AND PARTICIPATION. (a)Offering Periods. While the Plan is in effect, two Offering Periods shall commence in each calendar year. Offering Periods shall consist of the six-month periods commencing on each April 1 and October 1. (b)Enrollment. Any individual who, on the day preceding the first day of an Offering Period, qualifies as an Eligible Employee may elect to become a Participant in the Plan for such Offering Period by completing the enrollment process prescribed for this purpose by the Committee. (c)Duration of Participation. Once enrolled in the Plan, a Participant shall continue to participate in the Plan until he or she (1) ceases to be an Eligible Employee, (2) withdraws from the Plan under Section 5(a), or (3) reaches the end of the Offering Period in which his or her employee contributions were discontinued under Section 8(b). A Participant who withdrew from the Plan under Section 5(a) may again become a Participant, if he or she then is an Eligible Employee, by following the procedure described in Subsection (b) above. A Participant whose employee contributions were discontinued automatically under Section 8(b) shall automatically resume participation at the beginning of the earliest Offering Period ending in the next calendar year, our company leadersif he or she then is an Eligible Employee. SECTION 4.EMPLOYEE CONTRIBUTIONS. (a)Frequency of Payroll Deductions. A Participant may purchase shares of Stock under the Plan solely by means of payroll deductions. Payroll deductions, as designated by the Participant pursuant to Subsection (b) below, shall occur during the Offering Period on the Compensation payment date while a Participant is in the Plan. (b)Amount of Payroll Deductions. An Eligible Employee shall designate in the enrollment process the portion of his or her Compensation that he or she elects to have withheld for the purchase of Stock. Such portion shall be a whole percentage of the Eligible Employee’s Compensation, but not less than one percent (1%) or more than fifteen percent (15%). (c)Changing Withholding Rate. If a Participant wishes to change the rate of payroll withholding, he or she may do so by notifying the Company using the process prescribed for this purpose by the Committee. The new withholding rate shall be effective as soon as reasonably practicable after such notification by the Company. (d)Discontinuing Payroll Deductions. If a Participant wishes to discontinue employee contributions entirely, he or she may do so at any time by using the process prescribed for this purpose by the Committee. Payroll withholding shall cease as soon as reasonably practicable after such notification. (In addition, employee contributions may be discontinued automatically pursuant to Section 8(b).) A Participant who has discontinued employee contributions may resume such contributions by using the process prescribed for this purpose by the Committee. Payroll withholding shall resume as soon as reasonably practicable after such notification. SECTION 5.WITHDRAWAL FROM THE PLAN. (a)Withdrawal. A Participant may elect to withdraw from the Plan by using the process and timing prescribed for this purpose by the Committee. As soon as reasonably practicable after the effective date of a Participant’s withdrawal, payroll deductions shall cease and the entire amount credited to the Participant’s Plan Account shall be refunded to him or her in cash, without interest. No partial withdrawals shall be permitted. (b)Re-enrollment After Withdrawal. A former Participant who has withdrawn from the Plan shall not be a Participant until he or she re-enrolls in the Plan under Section 3(b). Re-enrollment may be effective only at the commencement of an Offering Period. C-1 | | 2023 Proxy Statement | |
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Table of Contents APPENDIX C: NORDSTROM, INC. AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN SECTION 6.CHANGE IN EMPLOYMENT STATUS. (a)Termination of Employment. Termination of employment as an Eligible Employee for any reason, including death, shall be treated as an automatic withdrawal from the Plan under Section 5(a). A transfer from one Participating Company to another shall not be treated as a termination of employment. (b)Leave of Absence. For purposes of the Plan, employment shall not be deemed to terminate when the Participant goes on an approved leave of absence. Employment shall be deemed to terminate in any event when the approved leave ends, unless the Participant immediately returns to work. (c)Death. In the event of the Participant’s death, the amount credited to his or her Plan Account shall be paid in the same manner as his or her final paycheck from the Company. Any shares of Stock held by the broker designated by the Committee pursuant to Section 7(e) shall be paid or delivered to a beneficiary or beneficiaries designated by the Participant pursuant to the relevant rules established our 2020 CSR goals. These goals take into account our business needs, feedbackby the broker with respect to the brokerage account. SECTION 7.PLAN ACCOUNTS AND PURCHASE OF SHARES. (a)Plan Accounts. A Plan Account shall be maintained in the name of each Participant. Whenever an amount is deducted from many stakeholdersthe Participant’s Compensation under the Plan, such amount shall be credited to the Participant’s Plan Account. Amounts credited to Plan Accounts shall not be trust funds and our overall commitmentmay be commingled with the Company’s general assets and applied to doinggeneral corporate purposes. No interest shall be credited to Plan Accounts. (b)Purchase Price. The Purchase Price for each share of Stock purchased at the close of an Offering Period shall be ninety percent (90%) of the Fair Market Value of such share on the last trading day in such Offering Period. (c)Number of Shares Purchased. As of the last day of each Offering Period, each Participant shall be deemed to have elected to purchase the number of shares of Stock calculated in accordance with this Subsection (c), unless the Participant has previously elected to withdraw from the Plan in accordance with Section 5(a). The amount then in the Participant’s Plan Account shall be divided by the Purchase Price, and the number of shares that results shall be purchased from the Company with the funds in the Participant’s Plan Account. The foregoing notwithstanding, no Participant shall purchase more than one thousand (1,000) shares of Stock with respect to any Offering Period nor more than the amounts of Stock set forth in Sections 8(b) and 13(a). Any fractional share, as calculated under this Subsection (c), shall be rounded down to the next lower whole share. (d)Available Shares Insufficient. In the event that the aggregate number of shares that all Participants elect to purchase during an Offering Period exceeds the maximum number of shares remaining available for issuance under Section 13(a), then the number of shares to which each Participant is entitled shall be determined by multiplying the number of shares available for issuance by a fraction, the numerator of which is the number of shares that such Participant has elected to purchase and the denominator of which is the number of shares that all Participants have elected to purchase. (e)Issuance of Stock. Certificates representing shares of Stock purchased by a Participant under the Plan shall be held for each Participant’s benefit by a broker designated by the Committee for the Plan. Shares may be registered in the name of the Participant or jointly in the name of the Participant and his or her spouse as joint tenants with right of survivorship or as community property. A Participant may elect the following with respect to such shares, in accordance with and subject to the process prescribed for this purpose by the Committee: (i)that the Stock certificates be issued to him or her in exchange for the whole shares held within the Participant’s Account, or (ii)that shares held within the Participant’s Account be transferred to an appropriate broker designated by the Participant. Each Participant shall be required to notify the Company in the event of the sale or disposition of any of such shares. For purposes of the previous sentence, the term “disposition” shall have the meaning prescribed under Section 424(c)(1) of the Code. (f)Unused Cash Balances. Any amount remaining in the Participant’s Plan Account that represents the Purchase Price for a fractional share shall be carried over in the Participant’s Plan Account to the next Offering Period. Any amount remaining in the Participant’s Plan Account that represents the Purchase Price for whole shares that could not be purchased by reason of Subsection (c) above, Section 8(b) or Section 13(a) shall be refunded to the Participant in cash, without interest. (g)Shareholder Approval. Any other provision of the Plan notwithstanding, no shares of Stock shall be purchased under the Plan unless and until the Company’s shareholders have approved the adoption of the Plan. SECTION 8.LIMITATIONS ON STOCK OWNERSHIP. (a)Five Percent Limit. Any other provision of the Plan notwithstanding, no Participant shall be granted a right to purchase Stock under the Plan if such Participant, immediately after his or her election to purchase such Stock, would own stock possessing 5% or more of the total combined voting power or value (determined under Code Section 423) of all classes of stock of the Company or any parent or Subsidiary of the Company. For purposes of this Subsection (a), the following rules shall apply: (i)Ownership of stock shall be determined after applying the attribution rules of Section 424(d) of the Code; (ii)Each Participant shall be deemed to own any stock that he or she has a right or option to purchase under this or any other plan; and
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Table of Contents APPENDIX C: NORDSTROM, INC. AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN (iii)For purposes of applying subsection (ii), each Participant shall be deemed to have the right thing: reducing our carbon footprint, conserving resources, offering our customers sustainableor option to purchase one thousand (1,000) shares of Stock under this Plan with respect to each Offering Period. (b)Dollar Limit. Any other provision of the Plan notwithstanding, no Participant shall purchase Stock with a Fair Market Value in excess of the following limit: (i)In the case of Stock purchased during an Offering Period that commenced in the current calendar year, the limit shall be equal to (A) $25,000 minus (B) the Fair Market Value of the Stock that the Participant previously purchased in the current calendar year under this Plan. (ii)In the case of Stock purchased during an Offering Period that commenced in the immediately preceding calendar year, the limit shall be equal to (A) $50,000 minus (B) the Fair Market Value of the Stock that the Participant previously purchased under this Plan in the current calendar year and healthier products, giving backin the immediately preceding calendar year. For purposes of this Subsection (b), the Fair Market Value of Stock shall be determined in each case as of the beginning of the Offering Period in which such Stock is purchased. If a Participant is precluded by this Subsection (b) from purchasing additional Stock under the Plan, then his or her employee contributions shall automatically be discontinued and shall resume at the beginning of the earliest Offering Period ending in the next calendar year (if he or she then is an Eligible Employee). SECTION 9.RIGHTS NOT TRANSFERABLE. The rights of any Participant under the Plan, or any Participant’s interest in any Stock or moneys to our communitieswhich he or she may be entitled under the Plan, shall not be transferable by voluntary or involuntary assignment or by operation of law, or in any other manner other than by the laws of descent and supporting humandistribution. If a Participant in any manner attempts to transfer, assign or otherwise encumber his or her rights or interest under the Plan, other than by the laws of descent and distribution, then such act shall be treated as an election by the Participant to withdraw from the Plan under Section 5(a). SECTION 10.NO RIGHTS AS AN EMPLOYEE. Nothing in factoriesthe Plan or in any right granted under the Plan shall confer upon the Participant any right to continue in the employ of a Participating Company for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Participating Companies or of the Participant, which rights are hereby expressly reserved by each, to terminate his or her employment at any time and for any reason, with or without cause. SECTION 11.NO RIGHTS AS A SHAREHOLDER. A Participant shall have no rights as a shareholder with respect to any shares of Stock that he or she may have a right to purchase under the Plan until such shares have been purchased on the last day of the applicable Offering Period. SECTION 12.SECURITIES LAW REQUIREMENTS. Shares of Stock shall not be issued under the Plan unless the issuance and delivery of such shares comply with (or are exempt from) all applicable requirements of law, including (without limitation) the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, state securities laws and regulations, and the regulations of any stock exchange or other securities market on which the Company’s securities may then be traded. SECTION 13.STOCK OFFERED UNDER THE PLAN. (a)Authorized Shares. Effective for Offering Periods commencing on and after April 1, 2023, the aggregate authorized number of shares of Stock available for purchase under the Plan is increased by three million five hundred thousand (3,500,000) shares, conditioned on approval of the increase by the Company’s shareholders within 12 months after the Board approves the increase. If the shareholders approve the increase, the aggregate authorized number of shares of Stock available for purchase under the Plan shall equal nineteen million six hundred thousand (19,600,000) shares, subject to adjustment pursuant to this Section 13. Previously, the aggregate authorized number of shares of Stock available for purchase under the Plan was sixteen million one hundred thousand (16,100,000) shares. In the event the increase is not timely approved by the Company’s shareholders, the aggregate authorized number of shares of Stock available for purchase under the Plan shall remain at 16,100,000shares. (b)Antidilution Adjustments. The aggregate number of shares of Stock offered under the Plan, the one thousand (1,000) share limitation described in Section 7(c) and the price of shares that any Participant has elected to purchase shall be adjusted proportionately by the Committee for any increase or decrease in the number of outstanding shares of Stock resulting from a subdivision or consolidation of shares or the payment of a stock dividend, any other increase or decrease in such shares effected without receipt or payment of consideration by the Company, the distribution of the shares of a Subsidiary to the Company’s shareholders or a similar event. (c)Reorganizations. Any other provision of the Plan notwithstanding, immediately prior to the effective time of a Corporate Reorganization, the Offering Period then in progress shall terminate and shares shall be purchased pursuant to Section 7, unless the Plan is assumed by the surviving corporation or its parent corporation pursuant to the plan of merger or consolidation. The Plan shall in no event be construed to restrict in any way the Company’s right to undertake a dissolution, liquidation, merger, consolidation or other reorganization. C-3 | | 2023 Proxy Statement | | 
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Table of Contents APPENDIX C: NORDSTROM, INC. AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN SECTION 14.AMENDMENT OR DISCONTINUANCE. The Board shall have the right to amend, suspend or terminate the Plan at any time and without notice. Any amendment that increases the aggregate number of shares of Stock to be issued under the Plan shall be subject to approval by a vote of the shareholders of the Company within 12 months before, or 12 months after, the Board’s adoption of the amendment. In addition, any other amendment of the Plan shall be subject to approval by a vote of the shareholders of the Company to the extent required by an applicable law or regulation. To the extent an amendment does not require shareholder or Board approval (as described above), the Committee shall have the authority to make our private label products. Wetechnical and administrative amendments to the Plan for the sole purpose of carrying out its administrative responsibilities under the Plan. SECTION 15.DEFINITIONS. (a)“Board” means the Board of Directors of the Company, as constituted from time to time. (b)“Code” means the Internal Revenue Code of 1986, as amended. (c)“Committee” means the Compensation, People and Culture Committee of the Board. (d)“Company” means Nordstrom, Inc., a Washington corporation. (e)“Compensation” means (i) the total compensation paid in cash to a Participant by a Participating Company, including salaries, wages, incentive compensation, commissions, overtime pay and shift premiums, plus (ii) any pre-tax contributions made by the Participant under Section 401(k) or 125 of the Code. “Compensation” shall exclude all non-cash items, bonuses, moving or relocation allowances, cost-of-living equalization payments, reimbursement and expense allowances, imputed income, severance pay, fringe benefits, contributions or benefits received under employee benefit plans, income attributable to the exercise of stock options, restricted stock unit or performance share detailsunit vests and similar items (such as amounts resulting from grants or awards under any stock-based compensation program). The Committee shall determine whether a particular item is included in Compensation. (f)“Corporate Reorganization” means: (i)The consummation of a merger or consolidation of the Company with or into another entity, or any other corporate reorganization; or (ii)The sale, transfer or other disposition of all or substantially all of the Company’s assets or the complete liquidation or dissolution of the Company. (g)“Eligible Employee” means any common-law employee who is employed by a Participating Company on those goals,February 1 or August 1. The following are excluded from the definition of an Eligible Employee: (i)any individual whose participation in the Plan is prohibited by the law of any country which has jurisdiction over him or her, (ii)any employee who is covered by a collective bargaining agreement, if the collective bargaining agreement excludes the employee (or the bargaining unit of which the employee is a member) from participation in the Plan, and plans (iii)to reachthe extent permitted by Code Section 423, any individual designated by a Participating Company as an independent contractor, even if the individual later is determined by a court of competent jurisdiction to be a common law employee of a Participating Company. (h)“Exchange Act” means the Securities Exchange Act of 1934, as amended. (i)“Fair Market Value” means, as of any date, the value of the Stock determined as follows: (a) If the Stock is (x) listed on any established securities exchange (such as the New York Stock Exchange or Nasdaq Stock Market), (y) listed on any national market system or (z) listed, quoted or traded on any automated quotation system, the Fair Market Value of a share of Stock shall be the closing sales price for a share of Stock as quoted on such exchange or system for such date or, if there is no closing sales price for a share on the date in question, the closing sales price for a share on the last preceding date for which such quotation exists, as reported in The Wall Street Journal or such other source as the Committee deems reliable; (b) If the Stock is not listed on an established securities exchange, national market system or automated quotation system, but the Stock is regularly quoted by a recognized securities dealer, the Fair Market Value of a share of Stock shall be the mean of the high bid and low asked prices for such date or, if there are no high bid and low asked prices for a share on such date, the high bid and low asked prices for a share on the last preceding date for which such information exists, as reported in The Wall Street Journal or such other source as the Committee deems reliable; or (c) If the Stock is neither listed on an established securities exchange, national market system or automated quotation system nor regularly quoted by a recognized securities dealer, the Fair Market Value of a share of Stock shall be established by the Committee in good faith. Such determination shall be conclusive and binding on all persons. (j)“Offering Period” means a six-month period with respect to which the right to purchase Stock may be granted under the Plan, as determined pursuant to Section 3(a). (k)“Participant” means an Eligible Employee who elects to participate in the Plan, as provided in Section 3(b). Only Eligible Employees may become Participants in this Plan.
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Table of Contents APPENDIX C: NORDSTROM, INC. AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN (l)“Participating Company” means (i) the Company, (ii) each Subsidiary that is a Participating Company as of February 1, 2020, and (iii) each present or future Subsidiary that is affirmatively designated by the Committee as a Participating Company after February 1, 2020. Except as provided in the preceding sentence, no other Subsidiary shall be a Participating Company. The Committee is authorized to change a present or future Subsidiary’s designation as a Participating Company at any time without additional shareholder approval. The Company will maintain a record of all Participating Companies. (m)“Plan” means this Nordstrom, Inc. Employee Stock Purchase Plan, as it may be amended from time to time. (n)“Plan Account” means the account established for each Participant pursuant to Section 7(a). (o)“Purchase Price” means the price at which Participants may purchase Stock under the Plan, as determined pursuant to Section 7(b). (p)“Stock” means the Common Stock of the Company, no par value per share. (q)“Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. C-5 | | 2023 Proxy Statement | |
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Table of Contents Table of Contents 
PLEASE VOTE TODAY! SEE REVERSE SIDE FOR THREE EASY WAYS TO VOTE. TO VOTE BY MAIL, PLEASE DETACH HERE, SIGN AND DATE THE PROXY CARD, AND RETURN IN THE POSTAGE-PAID ENVELOPE PROVIDED NORDSTROM, INC. Annual Meeting of Shareholders This proxy is solicited by the Board of Directors The undersigned hereby acknowledges receipt of the Notice of the Annual Meeting of Shareholders and Proxy Statement of Nordstrom, Inc. (the “Company”) and hereby appoints Michael W. Maher and Ann Munson Steines and each of them, acting individually, with full power of substitution and re-substitution and all powers that the undersigned would possess if personally present in our annual Corporate Social Responsibility Sharing Our Progress Report, whicheach, as proxies of the undersigned, to represent the undersigned and vote all shares of the Company’s common stock that the undersigned may be entitled to vote at the Annual Meeting of Shareholders and at any adjournment or postponement thereof (the “Annual Meeting”) scheduled to be held on June 6, 2023, at 9:00 a.m. Pacific Daylight Time, as provided for herein. This proxy, when properly executed, will be posted online at NordstromCares.com. To receivevoted in the manner directed herein by the undersigned shareholder. WHERE NO INSTRUCTION IS SPECIFIED AS TO ANY ITEM, THIS PROXY WILL BE VOTED “FOR” EACH OF THE BOARD’S NOMINEES IN PROPOSAL 1, “FOR” PROPOSALS 2, 3, 5, 6, AND 7, AND “1 YEAR” ON PROPOSAL 4, AND, TO THE EXTENT AUTHORIZED UNDER RULE 14A-4(C) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, IN THE DISCRETION OF THE PROXIES NAMED HEREIN WITH RESPECT TO SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING. YOUR VOTE IS VERY IMPORTANT PLEASE SUBMIT YOUR PROXY TODAY CONTINUED AND TO BE SIGNED ON REVERSE SIDE PROXY CARD Table of Contents 
NORDSTROM, INC. YOUR VOTE IS IMPORTANT Please take a copymoment now to vote your shares of the report via email, email us at csr@nordstrom.com.Company’s Common Stock for the upcoming Annual Meeting of Shareholders. YOU CAN VOTE TODAY IN ONE OF THREE WAYS: 1. Vote by Internet Please access www.FCRVOTE.com/JWN, and follow the simple instructions provided. You will be required to provide the unique control number printed below. OR 2. Vote by Telephone Call toll-free 1-866-402-3905, on a touch-tone telephone. You will be required to provide the unique control number printed below. CONTROL NUMBER: OR 3. Vote by Mail If you do not have access to a touch-tone telephone or to the Internet, please sign, date and return the proxy card in the envelope provided, or mail to: Nordstrom, Inc., c/o First Coast Results, Inc., 200 Business Park Circle, Suite 112, Saint Augustine, FL 32095. You may submit your proxy by telephone or Internet 24 hours a day, 7 days a week. Your telephone or Internet vote authorizes the proxyholder(s) to vote your shares in the same manner as if you had marked, signed and returned a proxy card.1. Election of eleven directors to serve until the 2024 Annual Meeting of Shareholders and until their successors have been duly elected and qualified. X TO VOTE BY MAIL, PLEASE DETACH HERE, SIGN AND DATE THE PROXY CARD, AND RETURN IN THE POSTAGE-PAID ENVELOPE PROVIDED Please mark vote as in this exmple FOR AGAINST ABSTAIN THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE BOARD’S NOMINEES LISTED IN PROPOSAL 1, “FOR” PROPOSALS 2, 3, 5, 6, AND 7, AND “1 YEAR” ON PROPOSAL 4. DATED: (Signature if held jointly) (Signature if held jointly) (Title) WHEN SHARES ARE HELD JOINTLY, JOINT OWNERS SHOULD EACH SIGN. EXECUTORS, ADMINISTRATORS, TRUSTEES, ETC., SHOULD INDICATE THE CAPACITY IN WHICH SIGNING. PLEASE SIGN EXACTLY AS NAME APPEARS ON THIS PROXY. BOARD NOMINEES 1A. Stacy Brown-Philpot 1B. James L. Donald 1C. Kirsten A. Green 1D. Glenda G. McNeal 1E. Erik B. Nordstrom 1F. Peter E. Nordstrom 1G. Eric D. Sprunk 1H. Amie Thuener O’Toole 1I. Bradley D. Tilden 1J. Mark J. Tritton 1K. Atticus N. Tysen 2. Ratification of the appointment of Deloitte as the Company’s Independent Registered Public Accounting Firm to serve for the fiscal year ending February 3, 2024. 3. Advisory voter regarding the compensation of our Named Executive Officers. 4. Advisory vote regarding the frequency of future advisory votes on the compensation of our Named Executive Officers. 5. To approve the Nordstrom, Inc. Amended and Restated 2019 Equity Incentive Plan. 6. To approve the Nordstrom, Inc. Amended and Restated Employee Stock Purchase Plan 7. Advisory vote on the extension of the Company’s shareholder rights plan until September 19, 2025. OR 3. Vote by Mail – If you do not have access to a touch-tone telephone or to the Internet, please sign, date and return the proxy card in the envelope provided, or mail to: []. You may submit your proxy by telephone or Internet 24 hours a day, 7 days a week. Your telephone or Internet vote authorizes the proxyholder(s) to vote your shares in the same manner as if you had marked, signed and returned a proxy card. FOR WITHHOLD FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN 1 YEAR 2 YEARS 3 YEARS ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN  RECYCLING IS ALWAYS IN STYLE.
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