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þ
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Filed by the Registrant
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¨
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Filed by a Party other than the Registrant
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Check the appropriate box:
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¨
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Preliminary Proxy Statement
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¨
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CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
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þ
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Definitive Proxy Statement
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¨
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Definitive Additional Materials
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¨
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Soliciting Material Pursuant to §.240.14a-12
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Payment of Filing Fee (Check the appropriate box):
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||
þ
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No fee required.
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¨
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11
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(set forth the amount on which the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Brad D. Smith
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Chairman of the Board
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Peter E. Nordstrom
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Erik B. Nordstrom
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Co-President
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Co-President
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Notice of Annual Meeting
of Shareholders
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1.
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To elect
11
Directors to serve until the
2020
Annual Meeting of Shareholders;
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2.
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To ratify the appointment of Deloitte & Touche LLP (“Deloitte”) as the Company’s Independent Registered Public Accounting Firm to serve for the
2019
fiscal year;
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3.
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To conduct an advisory vote regarding the compensation of our Named Executive Officers;
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4.
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To approve the Nordstrom, Inc. 2019 Equity Incentive Plan; and
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5.
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To transact any other business that may properly come before the Annual Meeting and any adjournment or postponement thereof.
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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2019 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON May 23, 2019
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The accompanying Proxy Statement and the 2018 Annual Report on Form 10-K are available at investor.nordstrom.com
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Date and Time:
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May 23, 2019 at 9:00 a.m. Pacific Daylight Time
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Meeting Webcast:
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investor.nordstrom.com,
select Events & Presentations and follow the instructions given. The webcast will be archived and available for one year following the Annual Meeting.
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Place:
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John W. Nordstrom Room, 5th floor
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Nordstrom Downtown Seattle Store
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1617 Sixth Avenue
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Seattle, Washington 98101
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Internet:
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(www.proxyvote.com), until 11:59 p.m. Eastern Daylight Time on May 22, 2019;
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*
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Mail:
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by completing, signing and returning your proxy or voting instruction card on or before May 22, 2019; or
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Telephone:
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if you requested printed materials, by using the toll-free number listed on your proxy card until 11:59 p.m. Eastern Daylight Time on May 22, 2019;
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In person:
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if you are a shareholder of record, by voting your shares at the Annual Meeting. If your shares are held in the name of a broker, nominee or other intermediary, you must obtain a proxy, executed in your favor, to bring to the meeting.
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Board Vote
Recommendation
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Page Reference
(for more detail)
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1.
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Election of Directors
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FOR each Director Nominee
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19
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2.
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Ratification of the Appointment of Independent Registered Public Accounting Firm
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FOR
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25
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3.
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Advisory Vote Regarding Executive Compensation
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FOR
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4.
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Approval of the Nordstrom, Inc. 2019 Equity Incentive Plan
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FOR
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Name
|
|
Age
|
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Director
Since
|
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Occupation
|
|
Committee Memberships
|
|
Other Public
Company Boards
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Shellye L. Archambeau*
|
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56
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2015
|
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Former Chief Executive Officer of MetricStream, Inc.
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Corporate Governance and Nominating, Technology
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Verizon, Inc., Okta, Roper Technologies, Inc.
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Stacy Brown-Philpot*
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43
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2017
|
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Chief Executive Officer of TaskRabbit, Inc.
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Audit and Finance, Technology
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HP Inc.
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Tanya L. Domier*
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53
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|
2015
|
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Chief Executive Officer of Advantage Solutions
|
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Audit and Finance, Compensation (Chair)
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YUM! Brands, Inc.
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Kirsten A. Green*
|
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47
|
|
2019
|
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Founder and Managing Partner of Forerunner Ventures
|
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Audit and Finance, Technology
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Glenda G. McNeal*
|
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58
|
|
2019
|
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President Enterprise Strategic Partnerships of American Express
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Compensation, Corporate Governance and Nominating
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RLJ Lodging Trust
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Erik B. Nordstrom
|
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55
|
|
2006
|
|
Co-President of Nordstrom, Inc.
|
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N/A
|
|
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Peter E. Nordstrom
|
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57
|
|
2006
|
|
Co-President of Nordstrom, Inc.
|
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N/A
|
|
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Brad D. Smith*
|
|
55
|
|
2013
|
|
Executive Chairman of Intuit, Inc.
|
|
Compensation, Corporate Governance and Nominating
|
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Intuit, Inc., SurveyMonkey
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Gordon A. Smith*
|
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60
|
|
2015
|
|
Co-President and Chief Operating Officer of JPMorgan Chase & Co.
|
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Compensation, Corporate Governance and Nominating (Chair)
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Bradley D. Tilden*
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58
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2016
|
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Chairman and Chief Executive Officer of Alaska Air Group, Inc.
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Audit and Finance (Chair)
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Alaska Air Group, Inc.
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B. Kevin Turner*
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54
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2010
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President and Chief Executive Officer of Core Scientific
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Corporate Governance and Nominating, Technology (Chair)
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*
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Independent Director
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•
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9
of
11
Director nominees are independent.
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•
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Independent Directors meet regularly in executive session.
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•
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The roles of Co-Presidents and Chairman of the Board are separate.
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•
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Only independent Directors are Committee members.
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•
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Director elections have a majority voting standard and all Directors are elected annually.
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•
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The Board has stock ownership guidelines for Directors and Executive Officers.
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•
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Board, Committee and Director performance evaluations are conducted annually.
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•
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The Board and its Committees are responsible for risk oversight.
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•
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Co-President and management succession planning is one of the Board’s highest priorities.
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Achieved $15.5B in sales, reflecting scaling of our generational investments.
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Grew comparable sales 1.7%, reflecting Full-Price increase of 0.9% and Off-Price increase of 3.5%.
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Generated earnings of $564M, reflecting lower income tax expense associated with corporate tax reform.
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•
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We continued to see positive customer trends. In 2018, over 35 million customers shopped with us, an increase of 6% from last year. One-third of our customers shopped across our multiple channels, which generally leads to higher customer spend.
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•
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Di
gital sales increased 16% and made up 30% of net sales. Additionally, Nordstrom.com achieved scale, with the profitability of Full-Price digital sales at parity with store sales. We believe our early investments to build a robust digital business have given us a competitive advantage.
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•
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Our generational investments continued to scale, contributing approximately $2 billion in sales and an improvement in profitability. Nordstromrack.com/HauteLook became our fastest business to reach $1 billion in sales. Trunk Club delivered sales growth of 35%. We opened our Men’s Store in New York City and furthered our expansion into Canada with the introduction of six Nordstrom Rack stores.
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•
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We l
aunched our local market strategy in Los Angeles, which drove outsized market share gains in this market by increasing product selection, delivery speed and convenience for customers.
|
INCENTIVE COMPENSATION PAYOUTS
|
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2014
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2015
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2016
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2017
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2018
|
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Incentive Earnings Before Interest and Income Tax Expense (“Incentive EBIT”)
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$1,391M
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$1,246M
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$1,076M
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$952M
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$909M
|
|||||
Incentive Adjusted Return on Invested Capital
(“Incentive Adjusted ROIC”) |
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13.6
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%
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11.0
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%
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12.4
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%
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10.0
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%
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12.8
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%
|
Annual bonus
(payout as a % of Target*) |
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83
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%
|
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0
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%
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80
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%
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96
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%
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89
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%
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3-year TSR percentile ranking within comparator group
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63%ile
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53%ile
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16%ile
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10%ile
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24%ile
|
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Performance Share Unit (“PSU”) vesting
(payout as a % of Target) |
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75
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%
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75
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%
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0
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%
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0
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%
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0
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%
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PSU comparator group
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Retail
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Retail
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S&P 500
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S&P 500
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S&P 500
|
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*
|
Actual bonus payout for fiscal year 2017 as a % of Target for the Co-Presidents was 94%. Actual bonus payout for fiscal year 2018 as a % of Target for the Co-Presidents was 63%. See pages 35 and 36 for more information.
|
GRANT REALIZABLE VALUES
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
2017
|
|
|
2018
|
|
PSUs (realizable value as a % of grant value)
|
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
|
51
|
%
|
|
N/A
|
|
RSUs (realizable value as a % of grant value)
|
|
94
|
%
|
|
75
|
%
|
|
111
|
%
|
|
111
|
%
|
|
94
|
%
|
Stock options (realizable value as a % of grant value)
|
|
38
|
%
|
|
0
|
%
|
|
6
|
%
|
|
6
|
%
|
|
N/A
|
|
The Compensation Committee reviews these results and other analyses with the goal of ensuring that the Named Executive Officers’ aggregate compensation aligns with shareholder interests. Based on these and other outcomes, the Compensation Committee believes that total direct compensation for our Named Executive Officers reflects our pay-for-performance objective and is well aligned with shareholder interests.
|
•
|
determining the appropriate structure for the senior leadership of the Company;
|
•
|
selecting and evaluating the performance of the Co-Presidents;
|
•
|
planning for succession with respect to the positions of the Co-Presidents and monitoring management’s succession planning for other senior executives;
|
•
|
reviewing and approving our major financial objectives, our strategic and operational plans and other significant actions;
|
•
|
monitoring the conduct of our business and the assessment of our business risks to promote the proper management of the business;
|
•
|
overseeing the management of cybersecurity, including oversight of appropriate risk mitigation strategies, systems, processes and controls; and
|
•
|
overseeing the processes for maintaining integrity with regard to our financial statements and other public disclosures, and compliance with laws and our Code of Business Conduct and Ethics.
|
•
|
considers and determines the Company’s risk appetite, which is the amount of risk the organization is willing to accept;
|
•
|
oversees management’s implementation of an appropriate system to manage risks (i.e., to identify, assess, mitigate, monitor and communicate these risks) and monitors the effectiveness of this process as the business environment changes;
|
•
|
provides risk oversight through the Board’s committee structure and processes; and
|
•
|
manages directly certain risks, in particular, the risks associated with the Company’s strategic direction, which are reviewed at an annual strategy planning meeting and periodically throughout the year.
|
Shellye L. Archambeau
|
Kirsten A. Green
|
Gordon A. Smith
|
Stacy Brown-Philpot
|
Glenda G. McNeal
|
Bradley D. Tilden
|
Tanya L. Domier
|
Brad D. Smith
|
B. Kevin Turner
|
•
|
presides at meetings of the Board;
|
•
|
assists in establishing the agenda for each Board and Board Committee meeting;
|
•
|
serves as the Presiding Director to lead regular executive sessions of the Board in which only independent Directors participate;
|
•
|
calls special meetings of the Board and/or the shareholders;
|
•
|
provides input and support to the Chair of the Corporate Governance and Nominating Committee on nominees to fill vacant Board seats and the selection of Committee Chairs and membership on Board Committees;
|
•
|
advises the Co-Presidents and other members of the Executive Team on such matters as strategic direction, corporate governance and overall risk assessment; and
|
•
|
performs such other duties as the Board may from time to time delegate to assist the Board in the fulfillment of its responsibilities.
|
|
Telephone:
1-888-832-8358
|
|
|
|
Internet:
ethicspoint.com
|
Director
|
Audit and Finance Committee
|
|
Compensation Committee
|
|
Corporate Governance and Nominating Committee
|
|
Technology Committee
|
Shellye L. Archambeau
|
|
|
|
|
ü
|
|
ü
|
Stacy Brown-Philpot
|
ü
|
|
|
|
|
|
ü
|
Tanya L. Domier
|
ü
|
|
|
|
|
|
|
Kirsten A. Green
|
ü
|
|
|
|
|
|
ü
|
Glenda G. McNeal
|
|
|
ü
|
|
ü
|
|
|
Philip G. Satre*
|
ü
|
|
ü
|
|
|
|
|
Brad D. Smith
|
|
|
ü
|
|
ü
|
|
|
Gordon A. Smith
|
|
|
ü
|
|
|
|
|
Bradley D. Tilden
|
|
|
|
|
|
|
|
B. Kevin Turner
|
|
|
|
|
ü
|
|
|
|
Chair
|
*
|
Mr. Satre is not seeking re-election and will be retiring from the Board at the end of his current term in May 2019.
|
Audit and Finance Committee
|
•
|
the integrity of the Company’s financial statements;
|
•
|
the accounting, auditing and financial reporting processes of the Company;
|
•
|
the management of business and financial risk and the internal controls environment;
|
•
|
the Company’s compliance with legal and regulatory requirements and ethics programs as established by management and the Board, in conjunction with any recommendations by the Corporate Governance and Nominating Committee with respect to corporate governance standards;
|
•
|
the reports resulting from the performance of audits by the independent auditor and the internal audit team;
|
•
|
the qualifications, independence and performance of the Company’s independent auditors; and
|
•
|
the performance of the Company’s internal audit team.
|
•
|
assisting the Board in fulfilling its oversight responsibilities with respect to the Company’s capital structure, financial policies, capital investments, business and financial planning and related matters;
|
•
|
reviewing and discussing the Company’s tax strategies and the implications of actual or proposed tax law changes;
|
•
|
reviewing and discussing the Company’s dividend payment and share repurchase strategies, banking relationships, borrowing facilities and cash management; and
|
•
|
monitoring the ratings assigned by rating agencies to the Company’s long-term debt.
|
Compensation Committee
|
•
|
approving an overall compensation philosophy for the Company’s Executive Officers in light of the Company’s goals and objectives. The Executive Officers are referenced on pages 27 and 28 and include the Named Executive Officers shown in the Compensation Discussion and Analysis on page 29 and other business unit presidents and Company executives over major organizational functions reporting to the Co-Presidents or other senior executives;
|
•
|
selecting performance measures aligned with the Company’s business strategy;
|
•
|
reviewing and approving the Company’s cash and equity-based compensation plans for executives;
|
•
|
recommending to the Board the form and amount of Director compensation;
|
•
|
reviewing and approving any benefit plans, retirement and deferred compensation or other perquisites offered to the Executive Officers and other eligible employees; and
|
•
|
reviewing the Company’s compensation practices so that they do not encourage imprudent risk taking.
|
Corporate Governance and Nominating Committee
|
•
|
reviewing and recommending individuals to the Board for nomination as members of the Board and its Committees;
|
•
|
reviewing possible conflicts of interest of Board members and the Company’s Executive Officers;
|
•
|
developing and reviewing the Company’s Corporate Governance Guidelines;
|
•
|
reviewing and considering revisions to the corporate governance standards contained in the Company’s Codes of Business Conduct and Ethics;
|
•
|
reviewing and recommending approval of the policies and practices of the Company in the area of corporate governance;
|
•
|
producing and providing to the Board an annual performance evaluation of the Board, the Directors and each Committee of the Board;
|
•
|
establishing succession procedures in the case of an emergency or the retirement of one or both Co-Presidents; and
|
•
|
reviewing the overall performance of the Co-Presidents on an annual basis.
|
Technology Committee
|
•
|
assisting the Board in its oversight with respect to the Company’s technology strategy;
|
•
|
reviewing and discussing the Company’s technology acquisition and development process to assure ongoing business growth;
|
•
|
reviewing and discussing the Company’s data management and automation processes, and measurement and tracking systems;
|
•
|
reviewing and discussing the Company’s policies and safeguards for information technology and data security; and
|
•
|
making recommendations to the Board with respect to investments in technology.
|
Annual Compensation Elements for 2018
|
Amount
($)*
|
|
Director Retainer
|
85,000
|
|
Audit and Finance Committee Chair Retainer
|
20,000
|
|
Compensation Committee Chair Retainer
|
20,000
|
|
Corporate Governance and Nominating Committee Chair Retainer
|
15,000
|
|
Technology Committee Chair Retainer
|
15,000
|
|
Special Committee Member Retainer**
|
20,000
|
|
Special Committee Working Member Retainer**
|
35,000
|
|
Special Committee Chair Retainer**
|
100,000
|
|
Director Equity Grant of Common Stock having a grant date value of
|
140,000
|
|
Chairman of the Board Equity Grant of Common Stock having a grant date value of
|
200,000
|
|
*
|
Directors may elect to take some or all of their cash retainer fees in Common Stock.
|
**
|
In addition to the standing board committees identified above, the Board formed a special committee, consisting of: Ms. Archambeau, Ms. Brown-Philpot, Mr. Satre, Mr. Brad Smith, Mr. Gordon Smith, Mr. Tilden, and Mr. Turner, in connection with the announcement in June 2017 by the Nordstrom family that it was exploring the potential of a going-private transaction. This special committee was disbanded in March 2018, following the conclusion of that process.
|
Director Summary Compensation Table
|
Name
|
Fees Earned
or Paid in Cash
($)(a)(b)
|
|
|
Stock
Awards
($)(b)(c)
|
|
|
All Other
Compensation
($)(d)
|
|
|
Total
($)
|
|
Shellye L. Archambeau
|
105,000
|
|
|
139,977
|
|
|
10,395
|
|
|
255,372
|
|
Stacy Brown-Philpot
|
105,000
|
|
|
139,977
|
|
|
4,804
|
|
|
249,781
|
|
Tanya L. Domier
|
105,000
|
|
|
139,977
|
|
|
17,722
|
|
|
262,699
|
|
Kirsten A. Green*
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Glenda G. McNeal*
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Philip G. Satre
|
185,000
|
|
|
339,929
|
|
|
2,068
|
|
|
526,997
|
|
Brad D. Smith
|
105,000
|
|
|
239,968
|
|
|
3,228
|
|
|
348,196
|
|
Gordon A. Smith
|
120,000
|
|
|
139,977
|
|
|
13,937
|
|
|
273,914
|
|
Bradley D. Tilden
|
125,000
|
|
|
139,977
|
|
|
4,237
|
|
|
269,214
|
|
B. Kevin Turner
|
135,000
|
|
|
139,977
|
|
|
27,186
|
|
|
302,163
|
|
*
|
Kirsten Green and Glenda McNeal were appointed on February 26, 2019, and received no compensation in fiscal year 2018.
|
PROPOSAL 1
|
ELECTION OF DIRECTORS
|
Director Qualifications and Experience
|
Director Nominating Process
|
|
Shellye L. Archambeau
|
Stacy Brown-Philpot
|
Tanya L. Domier
|
Kirsten A. Green
|
Glenda G. McNeal
|
Erik B. Nordstrom
|
Peter E. Nordstrom
|
Brad D. Smith
|
Gordon A. Smith
|
Bradley D. Tilden
|
B. Kevin Turner
|
|
Global/International Commerce
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
|
Retail Industry
|
|
|
ü
|
|
|
ü
|
ü
|
ü
|
ü
|
|
ü
|
|
eCommerce/Technology
|
ü
|
ü
|
ü
|
ü
|
|
ü
|
|
ü
|
|
|
ü
|
|
Finance/Accounting
|
ü
|
ü
|
ü
|
ü
|
ü
|
|
|
ü
|
|
ü
|
ü
|
|
Senior Executive Management
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
|
Legal
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer-Focused Business
|
ü
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ü
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ü
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ü
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ü
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ü
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ü
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ü
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ü
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ü
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ü
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General Business Management
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ü
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ü
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ü
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ü
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ü
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ü
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ü
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ü
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ü
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ü
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ü
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Communications/Marketing
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ü
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ü
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ü
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ü
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ü
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ü
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ü
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ü
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ü
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Governance
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ü
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ü
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ü
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ü
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Public Company Board
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ü
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ü
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ü
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ü
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ü
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ü
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Loyalty/Rewards Program
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ü
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ü
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ü
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Our Director Nominees
|
|
Shellye L. Archambeau
|
Director since 2015
|
|
Age 56
|
|
Former
Chief Executive Officer of MetricStream, Inc.,
a global provider of governance, risk, compliance and quality management solutions to corporations across diverse industries from 2002 to January 2018. Prior to joining MetricStream, Ms. Archambeau was Chief Marketing Officer and Executive Vice President of Sales for Loudcloud, Inc., a provider of Internet infrastructure services, from 2001 to 2002; Chief Marketing Officer of NorthPoint Communications from 2000 to 2001; and President of Blockbuster Inc.’s ecommerce division from 1999 to 2000. Before joining Blockbuster, Ms. Archambeau held domestic and international executive positions during a 15-year career at IBM. Ms. Archambeau has been a director of Verizon, Inc. since December 2013, a director at Roper Technologies, Inc. since April 2018, and a director at Okta since December 2018. She served as a director of Arbitron, Inc. from 2005 to 2013.
Ms. Archambeau brings to the Board, among other skills and qualifications, leadership experience in technology, ecommerce, digital media and communications. Her technology and international experience position her to advise the Board and senior management on global operations and on technology innovations to elevate the customer experience.
|
|
Stacy Brown-Philpot
|
Director since 2017
|
|
Age 43
|
|
Chief Executive Officer of TaskRabbit, Inc., a digital home services labor platform company, since April 2016. Previously, Ms. Brown-Philpot served as the company’s Chief Operating Officer from January 2013 to April 2016. From May 2012 to December 2012, Ms. Brown-Philpot was an Entrepreneur-in-Residence at Google Ventures, the venture capital investment arm of Alphabet, Inc. Prior to that, she spent nearly a decade, from 2003 to 2012, in various directorial positions at Google, including two years as the company’s senior director of global consumer operations. Ms. Brown-Philpot also has a background in finance where she served as a senior analyst at Goldman Sachs and senior associate at PricewaterhouseCoopers. She has been a director of HP Inc. since 2015.
Ms. Brown-Philpot brings to the Board innovation, operational and entrepreneurial experience, digital, branding and marketing expertise, as well as financial and accounting skills. She provides unique insights to elevate the consumer experience in a global digital economy. Her service on the board of HP Inc. provides her with experience in corporate governance matters and key skills in working with directors, understanding board processes and functions, assessing risk and overseeing management.
|
|
Tanya L. Domier
|
Director since 2015
|
|
Age 53
|
|
Chief Executive Officer of Advantage Solutions,
a global business solutions services firm, since 2013 and has served on Advantage Solutions’ board of directors since 2008. Ms. Domier was President and Chief Operating Officer from 2010 to 2012 and President of Marketing Services Division and Integrated Marketing Services from 2000 to 2010. Before joining Advantage Solutions (formerly known as Advantage Sales & Marketing) in 1990, Ms. Domier held management positions with the J.M. Smucker Company. She has been a director of Yum! Brands, Inc. since January 2018.
Ms. Domier brings to the Board extensive experience in global sales and marketing focused on the customer, successful strategic planning expertise and senior leadership skills. Further, Ms. Domier possesses financial and accounting skills, and knowledge of and experience with executive compensation programs.
|
|
Kirsten A. Green
|
Director since 2019
|
|
Age 47
|
|
Founder and Managing Partner of Forerunner Ventures,
a venture capital firm, since 2010.
Prior to founding Forerunner, Ms. Green was an equity research analyst and investor at Banc of America Securities, formerly Montgomery Securities. Ms. Green began her career at Deloitte & Touche LLP where she earned her CPA license. Ms. Green has served as a member of the board of directors of numerous private companies since 2013.
Ms. Green brings to the Board extensive experience in consumer and commerce focused businesses and provides unique insights with respect to the challenges and opportunities of today’s rapidly evolving digital commerce landscape. Ms. Green has deep domain expertise and an understanding of consumer behaviors, brand building and products.
|
|
Glenda G. McNeal
|
Director since 2019
|
|
Age 58
|
|
President Enterprise Strategic Partnerships of American Express
,
since 2017.
Prior to that role, from 2011 to March 2017, Ms. McNeal served as Executive Vice President and General Manager of the Global Client Group of American Express. Ms. McNeal has held positions of increasing responsibility at American Express since 1989 when she first joined the company. Before joining American Express, Ms. McNeal worked with the accounting firm of Arthur Andersen, LLP and with the investment banking firm of Salomon Brothers, Inc. Ms. McNeal has been a director of RLJ Lodging Trust since 2011. Ms. McNeal served on the board of directors of United States Steel Corporation from 2007 to 2018.
Ms. McNeal brings to the Board extensive experience in business development, innovation, and customer relationship management, as well as financial, accounting and senior leadership skills. Ms. McNeal provides unique insights on strategic planning, risk oversight and operational matters. Ms. McNeal’s service on public company boards provides her with experience with corporate governance matters and key skills in working with directors, understanding board processes and functions, and assessing risk and overseeing management.
|
|
Erik B. Nordstrom
|
Director since 2006*
|
|
Age 55
|
|
Co-President 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 for the Company. From August 2000 to February 2006, he 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.
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 57
|
|
Co-President of Nordstrom, Inc.
since May 2015. Mr. Nordstrom served as Executive Vice President and President, Merchandising for the Company from February 2006 to May 2015. From September 2000 to February 2006, he 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 February 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.
|
|
Brad D. Smith
|
Director since 2013
|
|
Age 55
|
|
Executive Chairman and former Chief Executive Officer of Intuit, Inc.,
a global provider of business and financial management solutions since 2016 and President and Chief Executive Officer from 2008 to 2019. 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 has served on the board of directors of SurveyMonkey since 2017, and 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!, SurveyMonkey, 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.
|
*
|
Erik Nordstrom and Peter Nordstrom are brothers, great grandsons of the Company’s founder and the second cousins of James F. Nordstrom, Jr., President, Stores for the Company.
|
|
Gordon A. Smith
|
Director since 2015
|
|
Age 60
|
|
Co-President and Chief Operating Officer of JP Morgan Chase & Co.,
a global financial services firm since January 2018. Mr. Smith was Chief Executive Officer, Consumer and Community Banking, JP Morgan Chase & Co. from 2007 to January 2018. He previously was President, Global Commercial Card Group for American Express Travel Related Services, Inc., from 2005 to 2007, President 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 served on the board of directors of Choice Hotels International from 2004 until 2017.
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 58
|
|
Chairman and Chief Executive Officer of Alaska Air Group, Inc.,
an airline holding company, since January 2014. In May 2012, Mr. Tilden was named President and Chief Executive Officer of Alaska Air Group. 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 Air Group, and prior to 2000, was Vice President of Finance at 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 54
|
|
President and Chief Executive Officer of Core Scientific,
a company focused on Blockchain and Artificial Intelligence infrastructure. Mr. Turner was previously Chief Executive Officer of Citadel Securities, a global market maker, and Vice Chairman of Citadel LLC, a global financial institution, from August 2016 to January 2017. He served as Chief Operating Officer of Microsoft Corporation from 2005 to 2016, and 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 Core Scientific, Microsoft and Walmart have provided him extensive experience in highly competitive and customer centric businesses. He provides insight and expertise in strategy, digital, global operations, supply chain, merchandising, branding, marketing and technology. Further, Mr. Turner’s deep experience in both technology and retail uniquely positions him to advise the Board and senior management on the intersection of digital technology and retail.
|
•
|
review 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 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;
|
•
|
review 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;
|
•
|
review 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 and Finance Committees Concerning Independence; and
|
•
|
review with Deloitte regarding their independence, the audited consolidated financial statements, the matters required to be discussed by
Auditing Standard No. 16 Communications with Audit and Finance Committees
, as amended, and other matters, including Rule 2-07 of SEC Regulation S-X.
|
Audit and Finance Committee
|
Bradley D. Tilden, Chair
|
Stacy Brown-Philpot
|
Tanya L. Domier
|
Kirsten A. Green
|
Philip G. Satre
|
PROPOSAL 2
|
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
Audit Fees
|
|
|
Fiscal Year Ended
February 2, 2019 |
|
Fiscal Year Ended
February 3, 2018 |
||||||||
Type of Fee
|
|
($)
|
|
|
(%)
|
|
|
($)
|
|
|
(%)
|
|
Audit Fees
(a)
|
|
3,657,000
|
|
|
83
|
|
|
2,924,000
|
|
|
55
|
|
Audit-Related Fees
(b)
|
|
581,000
|
|
|
13
|
|
|
683,000
|
|
|
13
|
|
Other Fees
(c)
|
|
152,000
|
|
|
4
|
|
|
1,680,000
|
|
|
32
|
|
TOTAL
|
|
4,390,000
|
|
|
100
|
|
|
5,287,000
|
|
|
100
|
|
Pre-Approval Policy
|
•
|
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.
|
|
Anne L. Bramman
|
Employee since 2017
|
|
Age 51
|
|
Chief Financial Officer since June 2017, when she joined the Company. From March 2015 to March 2017, Ms. Bramman served as Senior Vice President and Chief Financial Officer of Avery Dennison Corporation. She previously served as Chief Financial Officer of Carnival Cruise Line from December 2010 to March 2015. She was employed by L Brands in various finance leadership positions from July 2004 to December 2010, including Senior Vice President, Chief Financial Officer of Henri Bendel from 2008 to 2010.
|
|
|
|
|
Christine F. Deputy
|
Employee since 2015
|
|
Age 53
|
|
Chief Human Resources Officer since June 2015, when she joined the Company. Ms. Deputy previously served as Group Human Resources Director at Aviva plc from March 2013 to June 2015. From February 2012 to March 2013, she was Human Resources Director — Global Retail Banking for Barclays Bank. From July 2009 to February 2012, she was Chief Human Resource Officer at Dunkin’ Brands. She was employed at Starbucks Corporation 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.
|
|
|
|
|
Kelley K. Hall
|
Employee since 2017
|
|
Age 46
|
|
Chief Accounting Officer and Treasurer since August 2017, when Ms. Hall joined the Company. From October 2008 to August 2017, she held various senior finance leadership positions at NIKE, Inc. most recently as Vice President and Chief Financial Officer for NIKE, Inc.’s Enterprise Operations. Prior to NIKE, she spent 14 years with Starbucks Corporation in a variety of finance leadership roles, including several roles as vice president supporting U.S. retail and corporate finance.
|
|
|
|
|
Scott A. Meden
|
Employee since 1985
|
|
Age 56
|
|
Chief Marketing Officer since August 2016. From February 2010 to August 2016, Mr. Meden served as Executive Vice President and General Merchandise Manager, Shoe Division. He previously served as Executive Vice President and President, Nordstrom Rack from February 2006 to February 2010, as Divisional Merchandise Manager from September 2002 to January 2006, as Director of Business Planning and Analysis from 2001 to September 2002, and as Financial Manager, Shoes from 1999 to 2001.
|
|
|
|
|
Edmond Mesrobian
|
Employee since 2018
|
|
Age 58
|
|
Chief Technology Officer since August 2018, when he joined the Company. Previously he was Chief Technology Officer for multi-national grocery retailer Tesco PLC from 2015 to July 2018. From 2011 to 2014, he served as Chief Technology Officer for global travel company Expedia Group, Inc., which includes online travel brands Expedia.com, Hotels.com and Hotwire.com. Prior to joining Expedia, he held the role of Chief Technology Officer at RealNetworks, Inc. from 2003 to 2010, where he led development across multiple digital media services and software.
|
|
|
|
|
James F. Nordstrom, Jr.
|
Employee since 1986
|
|
Age 46
|
|
President, Stores since May 2014. 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.
|
|
|
|
|
Robert B. Sari
|
Employee since 2009
|
|
Age 63
|
|
General Counsel and Corporate Secretary since April 2009, when he joined the Company. Mr. Sari previously served as Executive Vice President, General Counsel, and Secretary 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 a Senior Vice President, Deputy General Counsel and Secretary from 2000 to 2002. He served in other roles for Rite Aid beginning in 1997.
|
|
|
|
|
Geevy S.K. Thomas
|
Employee since 1983
|
|
Age 54
|
|
President, Nordstrom Rack since January 2018. Mr. Thomas previously served as Chief Innovation Officer since January 2017. From 2010 to 2017, he served as Executive Vice President and President, Nordstrom Rack. 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, he held various merchandise strategy, store and regional management positions with the Company.
|
|
|
|
|
Kenneth J. Worzel
|
Employee since 2010
|
|
Age 54
|
|
Chief Digital Officer since May 2018 and President of Nordstrom.com since 2016. From 2010 to 2016, Mr. Worzel 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.
|
Erik B. Nordstrom
|
|
Co-President
|
Anne L. Bramman
|
|
Chief Financial Officer
|
Peter E. Nordstrom
|
|
Co-President
|
Kenneth J. Worzel
|
|
Chief Digital Officer and President, Nordstrom.com
|
Christine F. Deputy
|
|
Chief Human Resources Officer
|
Blake W. Nordstrom
|
|
Former Co-President
|
2018 Snapshot
|
Achieved $15.5B in sales, reflecting scaling of our generational investments.
|
|
Grew comparable sales 1.7%, reflecting Full-Price increase of 0.9% and Off-Price increase of 3.5%.
|
|
Generated earnings of $564M, reflecting lower income tax expense associated with corporate tax reform.
|
•
|
We continued to see positive customer trends. In 2018, over 35 million customers shopped with us, an increase of 6% from last year. One-third of our customers shopped across our multiple channels, which generally leads to higher customer spend.
|
•
|
Di
gital sales increased 16% and made up 30% of net sales. Additionally, Nordstrom.com achieved scale, with the profitability of Full-Price digital sales at parity with store sales. We believe our early investments to build a robust digital business have given us a competitive advantage.
|
•
|
Our generational investments continued to scale, contributing approximately $2 billion in sales and an improvement in profitability. Nordstromrack.com/HauteLook became our fastest business to reach $1 billion in sales. Trunk Club delivered sales growth of 35%. We opened our Men’s Store in New York City and furthered our expansion into Canada with the introduction of six Nordstrom Rack stores.
|
•
|
We l
aunched our local market strategy in Los Angeles, which drove outsized market share gains in this market by increasing product selection, delivery speed and convenience for customers.
|
•
|
We believe that
if our customers win, our employees and shareholders win
– our interests are aligned.
|
•
|
We
pay for performance
by investing in talent that delivers results and demonstrates the behaviors that drive our success, while not encouraging excessive risk taking.
|
•
|
We deliver
competitive pay and benefits
for all jobs and
differentiate pay for critical jobs
that directly impact our ability to deliver on our 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.
|
•
|
We provide
equal pay and promotion opportunities
for all employees and give them the information they need to clearly understand their pay and effectively manage their careers.
|
INCENTIVE COMPENSATION PAYOUTS
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
2017
|
|
|
2018
|
|
|||||
Incentive Earnings Before Interest and Income Tax Expense (“Incentive EBIT”)
|
|
|
$1,391
|
M
|
|
|
$1,246
|
M
|
|
|
$1,076
|
M
|
|
|
$952
|
M
|
|
|
$909
|
M
|
Incentive Adjusted Return on Invested Capital
(“Incentive Adjusted ROIC”) |
|
13.6
|
%
|
|
11.0
|
%
|
|
12.4
|
%
|
|
10.0
|
%
|
|
12.8
|
%
|
|||||
Annual bonus
(payout as a % of Target*) |
|
83
|
%
|
|
0
|
%
|
|
80
|
%
|
|
96
|
%
|
|
89
|
%
|
|||||
3-year TSR percentile ranking within comparator group
|
|
63%ile
|
|
|
53%ile
|
|
|
16%ile
|
|
|
10%ile
|
|
|
24%ile
|
|
|||||
Performance Share Unit (“PSU”) vesting
(payout as a % of Target) |
|
75
|
%
|
|
75
|
%
|
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
|||||
PSU comparator group
|
|
Retail
|
|
|
Retail
|
|
|
S&P 500
|
|
|
S&P 500
|
|
|
S&P 500
|
|
*
|
Actual bonus payout for fiscal year 2017 as a % of Target for the Co-Presidents was 94%. Actual bonus payout for fiscal year 2018 as a % of Target for the Co-Presidents was 63%. See pages 35 and 36 for more information.
|
GRANT REALIZABLE VALUES
|
|
2014
|
|
|
2015
|
|
|
2016
|
|
|
2017
|
|
|
2018
|
|
PSUs (realizable value as a % of grant value)
|
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
|
51
|
%
|
|
N/A
|
|
RSUs (realizable value as a % of grant value)
|
|
94
|
%
|
|
75
|
%
|
|
111
|
%
|
|
111
|
%
|
|
94
|
%
|
Stock options (realizable value as a % of grant value)
|
|
38
|
%
|
|
0
|
%
|
|
6
|
%
|
|
6
|
%
|
|
N/A
|
|
The Compensation Committee reviews these results and other analyses with the goal of ensuring that the Named Executive Officers’ aggregate compensation aligns with shareholder interests. Based on these and other outcomes, the Compensation Committee believes that total direct compensation for our Named Executive Officers reflects our pay-for-performance objective and is well aligned with shareholder interests.
|
Context for Understanding Our Compensation Program and Decisions
|
•
|
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 total direct compensation (base salary + performance-based bonus + long-term incentives) with financial performance metrics of our peer group.
|
•
|
collective representation of our primary business areas
including our Full-Price, Off-Price, in store, 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.
|
Bed Bath & Beyond, Inc.
|
J. C. Penney Company, Inc.
|
Tapestry, Inc.
|
Capri Holdings Limited*
|
Kohl’s Corporation
|
Tiffany & Co.
|
Dillard’s, Inc.
|
L Brands, Inc.
|
The TJX Companies, Inc.
|
Estée Lauder Companies Inc.
|
Macy’s, Inc.
|
Urban Outfitters, Inc.
|
Foot Locker, Inc.
|
Neiman Marcus Group LTD LLC
|
VF Corporation
|
Gap, Inc.
|
Ralph Lauren Corporation
|
Williams-Sonoma, Inc.
|
Hudson’s Bay Company
|
Ross Stores, Inc.
|
|
Compensation Element
|
|
Purpose
|
Base Salary
(See below)
|
|
Reflect scope of the role and individual performance through base-line cash compensation.
|
Performance-Based Annual
Cash Bonus
(Pages 35 and 36)
|
|
Motivate and reward contributions to annual operating performance and long-term business strategy with cash that varies based on results.
|
Long-Term Incentives
(Page 37)
|
|
Promote alignment of executive decisions with Company goals and shareholder interests through restricted stock units where value varies with Company stock performance.
|
Benefits
(Page 38)
|
|
Provide meaningful and competitive broad-based, leadership and retirement benefits that support healthy lifestyles and contribute to financial security.
|
|
|
Base Salary
($)
|
|
Performance-Based
Annual Cash Bonus
(Target Opportunity
as a % of Base Salary)
|
|
Long-Term Incentives
Annual Grant Target
(Grant Value as a % of
Base Salary)*
|
||||||||||||
Name
|
|
FYE 2017
|
|
|
FYE 2018
|
|
|
FYE 2017
|
|
|
FYE 2018
|
|
|
FYE 2017
|
|
|
FYE 2018
|
|
Erik B. Nordstrom
|
|
758,500
|
|
|
same
|
|
|
200
|
|
|
same
|
|
|
350
|
|
|
same
|
|
Anne L. Bramman
|
|
750,000
|
|
|
775,000
|
|
|
90
|
|
|
same
|
|
|
175
|
|
|
same
|
|
Peter E. Nordstrom
|
|
758,500
|
|
|
same
|
|
|
200
|
|
|
same
|
|
|
350
|
|
|
same
|
|
Kenneth J. Worzel
|
|
750,000
|
|
|
800,000
|
|
|
80
|
|
|
125
|
|
|
150
|
|
|
250
|
|
Christine F. Deputy
|
|
567,000
|
|
|
585,000
|
|
|
80
|
|
|
same
|
|
|
150
|
|
|
same
|
|
Blake W. Nordstrom
|
|
758,500
|
|
|
—
|
|
|
200
|
|
|
—
|
|
|
350
|
|
|
—
|
|
*
|
In
2017
, actual annual long-term incentive grant values varied from target grant values for certain Named Executive Officers. See page 37 to learn more about the long-term incentive pay elements for
2018
.
|
About Our Compensation Elements: What We Paid in 2018 and Why
|
•
|
Target bonus opportunity:
In determining the target percentage of base salary, the Committee 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.
|
•
|
Performance measures:
The Committee establishes the performance measures to focus executives on the most important annual and long-term strategic goals. For fiscal year
2018
, the Named Executive Officers had the following measures:
|
–
|
Incentive Adjusted 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 Incentive EBIT results to ensure our executives are rewarded only after earnings generate meaningful returns for our shareholders
.
|
–
|
Incentive EBIT
to emphasize the importance of earnings and its role in driving shareholder value. Erik Nordstrom, Peter Nordstrom and Blake Nordstrom each had this performance measure weighed at 100%, subject to the achievement of the Incentive Adjusted ROIC threshold. Anne Bramman, Kenneth Worzel and Christine Deputy each had this performance measure weighed at 67%, again subject to the achievement of the Incentive Adjusted ROIC threshold
.
|
–
|
Individual Measure
to enable differentiation in bonus payout opportunity based on individual contributions and execution against goals. This measure was added for fiscal year 2018 for Anne Bramman, Kenneth Worzel and Christine Deputy. The individual bonus measure accounted for 33% of the total bonus opportunity for these Named Executive Officers
.
|
•
|
Performance measure milestones:
The Committee defines financial milestones for Incentive Adjusted ROIC (as a threshold) and Incentive 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. Quantitative and qualitative goals were established for the individual bonu
s measures.
|
–
|
Our Incentive Adjusted ROIC for our Named Executive Officers other than the Co-Presidents was
12.8%
for fiscal
2018
, exceeding our threshold goal of
9.5%
.
This result reflects an adjustment that the Committee approved to remove the impact of an estimated $72 million non-operating credit-related charge
(see page 42 of the
Company’s Annual Report on Form 10-K for the fiscal year ended February 2, 2019). The Committee did not approve this adjustment to Incentive Adjusted ROIC for the Co-Presidents. For that reason, their Incentive Adjusted ROIC result was 12.0%, which also exceeded the threshold goal of 9.5%.
|
–
|
Our Incentive EBIT achievement fell below our target goal of $941 million, warranting a payout level of less than 100%. As shown in the table below, the Incentive EBIT achievement for the Co-Presidents was 63%, and was 89% for the other Named Executive Officers. This achievement includes the above-noted adjustment to remove the impact of an estimated $72 million non-operating credit-related charge for the Named Executive Officers, excluding the Co-Presidents.
|
–
|
After reviewing the Company’s Full-Price sales, Off-Price sales, selling, general and administrative expenses and free cash flow results for the fiscal year, the Committee determined that Anne Bramman achieved 100% of her target performance with respect to the
aggregate individual performance measures.
|
–
|
After reviewing the Company’s Full-Price sales, Full-Price EBIT and total sales, and the Company’s market share results for the Los Angeles market, the Committee determined that Kenneth Worzel achieved 75% of his target performance with respect to the aggregate individual performance measures.
|
–
|
After reviewing the Company’s Full-Price sales, Off-Price sales, selling, general and administrative expenses and progress on organizational capabilities and effectiveness, the Committee determined that Christine Deputy achieved 100% of her target performance with respect to the aggregate individual performance measures.
|
|
|
|
Milestones
|
|
Total Bonus Payout
(as a % of Target)
|
|
||||||||
Named Executive Officer
|
Bonus Measures
|
Weight
|
|
Threshold (25%)
|
|
Target (100%)
|
|
Superior (250%)
|
Result /
Payout %
|
|
||||
Co-Presidents
|
Incentive EBIT
|
100
|
%
|
|
$728
|
M
|
|
$941
|
M
|
≥$1,153M
|
$837M/
63%
|
|
63
|
%
|
Subject to Incentive Adjusted ROIC threshold
|
|
9.5
|
%
|
|
|
12.0
|
%
|
|||||||
Anne L. Bramman
|
Incentive EBIT
|
67
|
%
|
|
$728
|
M
|
|
$941
|
M
|
≥$1,153M
|
$909M/
89%
|
|
93
|
%
|
Subject to Incentive Adjusted ROIC threshold
|
|
9.5
|
%
|
|
|
12.8
|
%
|
|||||||
Individual Measure
|
33
|
%
|
|
|
|
100
|
%
|
|||||||
Kenneth J. Worzel
|
Incentive EBIT
|
67
|
%
|
|
$728
|
M
|
|
$941
|
M
|
≥$1,153M
|
$909M/
89%
|
|
84
|
%
|
Subject to Incentive Adjusted ROIC threshold
|
|
9.5
|
%
|
|
|
12.8
|
%
|
|||||||
Individual Measure
|
33
|
%
|
|
|
|
75
|
%
|
|||||||
Christine F. Deputy
|
Incentive EBIT
|
67
|
%
|
|
$728
|
M
|
|
$941
|
M
|
≥$1,153M
|
$909M/
89%
|
|
93
|
%
|
Subject to Incentive Adjusted ROIC threshold
|
|
9.5
|
%
|
|
|
12.8
|
%
|
|||||||
Individual Measure
|
33
|
%
|
|
|
|
100
|
%
|
*
|
The Incentive EBIT achievement for the Co-Presidents was less than that for the other Named Executive Officers as the Committee determined that the adjustment they approved to remove the impact of an estimated $72 million non-operating credit-related charge described above would not apply for the Co-Presidents. Also, the Committee approved a discretionary bonus for Blake Nordstrom in the amount of $
82,026
so that the sum of his performance-based bonus and the discretionary award equaled what his performance-based bonus would have been had he been an active employee on the last day of the fiscal year.
|
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
|
—
|
|
Required Percentile Rank for Vesting
|
% of Granted Performance Share Units Paid Out at Vesting
|
|
>85th
|
175
|
|
>75th
|
150
|
|
>65th
|
125
|
|
>55th
|
100
|
|
>40th
|
50
|
|
≤40th
|
—
|
|
Position
|
Multiple of Base Salary Used to Establish Ownership Target
|
Co-President
|
10x
|
Chief Financial Officer
|
4x
|
Chief Digital Officer and President, Nordstrom.com
|
3x
|
Chief Human Resources Officer
|
3x
|
|
|
Benefit
|
|
Where to Learn More
|
Broad-Based
|
●
|
Company contribution to medical, dental and vision coverage; short- and long-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. Merchandise discount. Paid time off.
|
●
|
For merchandise discount, see All Other Compensation in Fiscal Year 2018, footnote (a) on page 44.
|
Leadership
|
●
|
Salary continuance; long-term disability coverage; life insurance
|
●
|
For long-term disability and life insurance, see All Other Compensation in Fiscal Year 2018, footnote (d) on page 45.
|
|
●
|
Deferred Compensation Plan; Company match and discretionary profit-based match for eligible participants
|
●
|
See Nonqualified Deferred Compensation beginning on page 53 and All Other Compensation in Fiscal Year 2018, footnote (c) on page 44.
|
|
●
|
Leadership Separation Plan
|
●
|
See Potential Payments Upon Termination or Change in Control at Fiscal Year-End 2018, footnote (e) on page 59.
|
Retirement
|
●
|
401(k) match and discretionary profit-based match
|
●
|
See All Other Compensation in Fiscal Year 2018, footnote (b) on page 44.
|
●
|
Retiree health care (closed to new entrants in 2013)
|
●
|
See Potential Payments Upon Termination or Change in Control at Fiscal Year-End 2018, footnote (d) on page 59.
|
|
●
|
Supplemental Executive Retirement Plan (closed to new entrants in 2012; annual benefit capped for current participants)
|
●
|
See Pension Benefits beginning on page 51.
|
•
|
Anne Bramman and Christine Deputy each received increases of approximately 3%, effective April 1, 2019, to maintain their relative market competitiveness.
|
•
|
Erik Nordstrom, Peter Nordstrom and Kenneth Worzel’s base salaries remained unchanged.
|
•
|
The
2019
annual equity grant mix for the Co-Presidents was changed to 60% performance-based equity and 40% stock options. This mix is closely aligned with the Company’s pay for performance philosophy. The 2019 annual grant mix for the other Named Executive Officers was changed to 60% performance-based equity and 40% restricted stock units. This mix provides a balance of the key retention and performance objectives of the long-term incentive plan. Performance-based equity was reintroduced into the annual grant mix to support the Company’s communicated forward-looking strategy. Free cash flow growth and EBIT margin percent are the core measures for the performance-based equity with market share serving as a payout modifier. The Committee believes that these measures reflect the Company’s key areas of strategic focus over the next three years. Two-thirds of the performance-based equity grant for 2019 has a three-year performance period. The remaining one-third of the performance-based equity grant for 2019 has a one-year performance period for the core measures and a three-year performance period for the market share modifier.
|
•
|
Anne Bramman’s target equity grant value as a percent of base salary increased from 175% to 200% to maintain relative market competitiveness for the Chief Financial Officer role.
|
Additional Information
|
•
|
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 leading fashion 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 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 their shareholder return.
|
•
|
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 Audit and Finance 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.
|
•
|
Section 162(m) of the Internal Revenue Code (“IRC”),
which generally disallows a tax deduction to public companies for annual compensation over $1 million paid to their Named Executive Officers. Prior to the enactment of corporate tax reform in 2017 (the “Tax Act”), the IRC generally excluded from the calculation of the $1 million limit compensation that was based on the attainment of pre-established, objective performance goals established under a shareholder-approved plan. The exclusion for performance-based compensation was repealed by the Tax Act, effective for taxable years beginning after December 31, 2017, such that compensation paid to our Named Executive Officers in excess of $1 million is not deductible unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017. The Tax Act also expanded the category of covered officers for purposes of the limitations of Section 162(m). Following passage of the Tax Act, the Committee anticipates that compensation paid to the Company’s Named Executive Officers in excess of $1 million will not be deductible by the Company.
|
•
|
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 718, Stock Compensation (“ASC 718”),
where stock options, performance share units and restricted stock units are accounted for based on their grant date fair value (see the notes to the financial statements contained within the Company’s Annual Report on Form 10-K for the fiscal year ended
February 2, 2019
, filed with the SEC). The Committee regularly considers the accounting implications of our equity-based awards.
|
•
|
Section 409A of the IRC,
the limitations of which primarily relate to the deferral and payment of benefits under the Nordstrom Deferred Compensation Plan and Supplemental Executive Retirement Plan. The Committee continues to consider the impact of Section 409A and in general, the evolving tax and regulatory landscape in which its compensation decisions are made.
|
Compensation Committee
|
Tanya L. Domier, Chair
|
Glenda G. McNeal
|
Philip G. Satre
|
Brad D. Smith
|
Gordon A. Smith
|
Name and Principal Position
|
Fiscal Year
|
Salary
($)(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
|
2018
|
756,393
|
|
—
|
|
2,654,705
|
|
—
|
|
963,144
|
|
—
|
|
77,504
|
|
4,451,746
|
|
Co-President
|
2017
|
771,142
|
|
—
|
|
1,760,169
|
|
616,272
|
|
1,431,290
|
|
988,659
|
|
50,395
|
|
5,617,927
|
|
|
2016
|
751,152
|
|
—
|
|
1,630,746
|
|
1,437,210
|
|
1,213,601
|
|
721,831
|
|
46,222
|
|
5,800,762
|
|
Anne L. Bramman
|
2018
|
768,889
|
|
150,000
|
|
3,562,483
|
|
—
|
|
645,066
|
|
—
|
|
38,716
|
|
5,165,154
|
|
Chief Financial Officer
|
2017
|
504,173
|
|
—
|
|
749,965
|
|
—
|
|
430,384
|
|
—
|
|
316,516
|
|
2,001,038
|
|
2016
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Peter E. Nordstrom
|
2018
|
756,393
|
|
—
|
|
2,654,705
|
|
—
|
|
963,144
|
|
—
|
|
59,386
|
|
4,433,628
|
|
Co-President
|
2017
|
771,142
|
|
—
|
|
1,760,169
|
|
616,272
|
|
1,431,290
|
|
1,030,787
|
|
40,774
|
|
5,650,434
|
|
|
2016
|
751,152
|
|
—
|
|
1,630,746
|
|
1,437,210
|
|
1,213,601
|
|
758,249
|
|
47,811
|
|
5,838,769
|
|
Kenneth J. Worzel
|
2018
|
786,875
|
|
—
|
|
3,562,483
|
|
—
|
|
835,167
|
|
754,441
|
|
45,813
|
|
5,984,779
|
|
Chief Digital Officer and President, Nordstrom.com
|
2017
|
762,500
|
|
—
|
|
749,703
|
|
262,497
|
|
574,620
|
|
725,676
|
|
32,380
|
|
3,107,376
|
|
2016
|
657,417
|
|
—
|
|
1,742,820
|
|
907,475
|
|
424,932
|
|
412,356
|
|
35,880
|
|
4,180,880
|
|
|
Christine F. Deputy
|
2018
|
604,587
|
|
—
|
|
2,551,421
|
|
—
|
|
432,819
|
|
—
|
|
86,153
|
|
3,674,980
|
|
Chief Human Resources Officer
|
2017
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2016
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Blake W. Nordstrom
|
2018
|
791,274
|
|
82,026
|
|
2,654,705
|
|
—
|
|
881,118
|
|
—
|
|
66,907
|
|
4,476,030
|
|
Former Co-President
|
2017
|
771,142
|
|
—
|
|
1,760,169
|
|
616,272
|
|
1,431,290
|
|
998,647
|
|
57,181
|
|
5,634,701
|
|
|
2016
|
751,152
|
|
—
|
|
1,630,746
|
|
1,437,210
|
|
1,213,601
|
|
748,859
|
|
49,711
|
|
5,831,279
|
|
(a)
|
Salary
|
|
Broad-Based Benefit
|
|
Broad-Based Retirement Benefit
|
|
Leadership
Benefit
|
|
Other
|
|
|
|||||||||
Name
|
Merchandise Discount
($)(a)
|
|
|
401(k) Plan Company Match
($)(b)
|
|
|
NDCP Company Match
($)(c)
|
|
Premium on Insurance
($)(d)
|
|
SERP
($)(e)
|
|
|
Personal Use of Company Aircraft
($)(f)
|
|
|
Total
($)
|
|
Erik B. Nordstrom
|
58,100
|
|
|
15,840
|
|
|
—
|
|
1,939
|
|
—
|
|
|
1,625
|
|
|
77,504
|
|
Anne L. Bramman
|
20,902
|
|
|
15,840
|
|
|
—
|
|
1,974
|
|
—
|
|
|
—
|
|
|
38,716
|
|
Peter E. Nordstrom
|
39,995
|
|
|
15,840
|
|
|
—
|
|
1,939
|
|
—
|
|
|
1,612
|
|
|
59,386
|
|
Kenneth J. Worzel
|
27,948
|
|
|
15,840
|
|
|
—
|
|
2,025
|
|
—
|
|
|
—
|
|
|
45,813
|
|
Christine F. Deputy
|
25,661
|
|
|
15,840
|
|
|
43,156
|
|
1,496
|
|
—
|
|
|
—
|
|
|
86,153
|
|
Blake W. Nordstrom
|
49,128
|
|
|
15,840
|
|
|
—
|
|
1,939
|
|
—
|
|
|
—
|
|
|
66,907
|
|
(a)
|
Merchandise Discount
|
(b)
|
401(k) Plan Company Match
|
(c)
|
NDCP Company Match
|
(d)
|
Premium on Insurance
|
(e)
|
SERP
|
(f)
|
Personal Use of Company Aircraft
|
|
|
|
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards
(b)
|
|
Estimated Future Payouts Under Equity Incentive
Plan Awards
|
All Other
Stock
Awards:
Number of Shares
of Stock or Units (#)(c)
|
All Other
Option
Awards:
Number of Securities
Underlying Options
(#)
|
Exercise
or Base Price of
Option Awards
($/Sh)
|
Grant
Date Fair
Value of
Stock and Option Awards ($)(d)
|
|||||||
Name and Award
|
Grant Date
(a)
|
Approval Date
|
Threshold ($)
|
|
Target
($)
|
|
Maximum ($)
|
|
|
Threshold (#)
|
Target (#)
|
Maximum (#)
|
||||
Erik B. Nordstrom
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
Management Bonus
|
|
|
379,250
|
|
1,517,001
|
|
3,792,502
|
|
|
|
|
|
|
|
|
|
Restricted Stock Unit
Award
|
3/6/2018
|
3/3/2018
|
|
|
|
|
|
|
|
|
|
|
54,233
|
|
|
2,654,705
|
Anne L. Bramman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Management
Bonus
|
|
|
174,375
|
|
697,500
|
|
1,743,751
|
|
|
|
|
|
|
|
|
|
Restricted Stock Unit
Award
|
3/6/2018
|
3/3/2018
|
|
|
|
|
|
|
|
|
|
|
72,778
|
|
|
3,562,483
|
Peter E. Nordstrom
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Management
Bonus
|
|
|
379,250
|
|
1,517,001
|
|
3,792,502
|
|
|
|
|
|
|
|
|
|
Restricted Stock Unit
Award
|
3/6/2018
|
3/3/2018
|
|
|
|
|
|
|
|
|
|
|
54,233
|
|
|
2,654,705
|
Kenneth J. Worzel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Management
Bonus |
|
|
247,875
|
|
991,500
|
|
2,478,752
|
|
|
|
|
|
|
|
|
|
Restricted Stock Unit Award
|
3/6/2018
|
3/3/2018
|
|
|
|
|
|
|
|
|
|
|
72,778
|
|
|
3,562,483
|
Christine F. Deputy
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Management Bonus
|
|
|
117,000
|
|
468,000
|
|
1,170,000
|
|
|
|
|
|
|
|
|
|
Restricted Stock Unit Award
|
3/6/2018
|
3/3/2018
|
|
|
|
|
|
|
|
|
|
|
52,123
|
|
|
2,551,421
|
Blake W. Nordstrom
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Management Bonus
|
|
|
379,250
|
|
1,517,001
|
|
3,792,502
|
|
|
|
|
|
|
|
|
|
Restricted Stock Unit Award
|
3/6/2018
|
3/3/2018
|
|
|
|
|
|
|
|
|
|
|
54,233
|
|
|
2,654,705
|
|
Option Awards
|
|
Stock Awards
|
|||||||||||||
|
|
|
|
Equity Incentive Plan Awards:
Number of Securities Underlying Unexer-
cised Unearned Options
(#)
|
|
|
|
Number of Shares or Units of Stock That Have Not Vested
(#)(b)
|
Market Value of Shares or Units of Stock That Have Not Vested
($)
|
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
($)(d)
|
|
|||
|
|
Number of Securities
Underlying
Unexercised Options
(#)
|
Option Exercise Price
($)
|
|
Option Expiration Date
|
|
||||||||||
Name
|
Grant Date
|
Exer-
cisable
|
|
Unexer-
cisable (a)
|
|
|
||||||||||
Erik B. Nordstrom
|
2/26/2010
|
77,609
|
|
—
|
|
|
34.50
|
|
2/26/2020
|
|
|
|
|
|
||
2/25/2011
|
69,637
|
|
—
|
|
|
42.48
|
|
2/25/2021
|
|
|
|
|
|
|||
|
2/22/2012
|
68,244
|
|
—
|
|
|
49.15
|
|
2/22/2022
|
|
|
|
|
|
||
|
3/4/2013
|
99,563
|
|
—
|
|
|
50.26
|
|
3/4/2023
|
|
|
|
|
|
||
|
3/3/2014
|
60,747
|
|
—
|
|
|
57.16
|
|
3/3/2024
|
|
|
|
|
|
||
|
2/24/2015
|
34,497
|
|
11,499
|
|
|
75.23
|
|
2/24/2025
|
|
|
|
|
|
||
|
2/24/2015
|
|
|
|
|
|
|
|
1,499
|
67,950
|
|
|
||||
|
2/29/2016
|
|
|
|
|
|
|
|
6,348
|
287,755
|
|
|
||||
|
2/29/2016
|
41,070
|
|
41,071
|
|
|
51.32
|
|
2/28/2026
|
|
|
|
|
|
||
|
6/7/2016
|
—
|
|
10,838
|
|
|
40.50
|
|
6/7/2026
|
|
|
|
|
|
||
|
6/7/2016
|
|
|
|
|
|
|
5,573
|
252,624
|
|
|
|||||
|
2/28/2017
|
|
|
|
|
|
|
|
|
|
13,207
|
|
598,673
|
|
||
|
2/28/2017
|
9,663
|
|
28,990
|
|
|
46.66
|
|
2/28/2027
|
|
|
|
|
|
||
|
2/28/2017
|
|
|
|
|
|
|
|
20,724
|
939,419
|
|
|
||||
|
3/6/2018
|
|
|
|
|
|
|
52,210
|
2,366,679
|
|
|
|||||
Anne L. Bramman
|
8/21/2017
|
|
|
|
|
|
|
|
12,234
|
554,567
|
|
|
||||
3/6/2018
|
|
|
|
|
|
|
|
45,965
|
2,083,593
|
|
|
|||||
|
3/6/2018
|
|
|
|
|
|
|
26,813
|
1,215,433
|
|
|
|||||
Peter E. Nordstrom
|
2/26/2010
|
77,609
|
|
—
|
|
|
34.50
|
|
2/26/2020
|
|
|
|
|
|
||
2/25/2011
|
69,637
|
|
—
|
|
|
42.48
|
|
2/25/2021
|
|
|
|
|
|
|||
|
2/22/2012
|
68,244
|
|
—
|
|
|
49.15
|
|
2/22/2022
|
|
|
|
|
|
||
|
3/4/2013
|
99,563
|
|
—
|
|
|
50.26
|
|
3/4/2023
|
|
|
|
|
|
||
|
3/3/2014
|
60,747
|
|
—
|
|
|
57.16
|
|
3/3/2024
|
|
|
|
|
|
||
|
2/24/2015
|
34,497
|
|
11,499
|
|
|
75.23
|
|
2/24/2025
|
|
|
|
|
|
||
|
2/24/2015
|
|
|
|
|
|
|
1,497
|
67,859
|
|
|
|||||
|
2/29/2016
|
|
|
|
|
|
|
|
6,338
|
287,302
|
|
|
||||
|
2/29/2016
|
41,070
|
|
41,071
|
|
|
51.32
|
|
2/28/2026
|
|
|
|
|
|
||
|
6/7/2016
|
—
|
|
10,838
|
|
|
40.50
|
|
6/7/2026
|
|
|
|
|
|
||
|
6/7/2016
|
|
|
|
|
|
|
5,573
|
252,624
|
|
|
|||||
|
2/28/2017
|
|
|
|
|
|
|
|
|
|
13,207
|
|
598,673
|
|
||
|
2/28/2017
|
9,663
|
|
28,990
|
|
|
46.66
|
|
2/28/2027
|
|
|
|
|
|
||
|
2/28/2017
|
|
|
|
|
|
|
|
20,691
|
937,923
|
|
|
||||
|
3/6/2018
|
|
|
|
|
|
|
52,210
|
2,366,679
|
|
|
|
Option Awards
|
|
Stock Awards
|
|||||||||||||
|
|
|
|
Equity Incentive Plan Awards:
Number of Securities Underlying Unexer-
cised Unearned Options
(#)
|
|
|
|
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)
|
|
|||
|
|
Number of Securities
Underlying
Unexercised Options
(#)
|
Option Exercise Price
($)
|
|
Option Expiration Date
|
|
||||||||||
Name
|
Grant Date
|
Exer-
cisable
|
|
Unexer-
cisable (a)
|
|
|
||||||||||
Kenneth J. Worzel
|
3/4/2013
|
40,536
|
|
—
|
|
|
50.26
|
|
3/4/2023
|
|
|
|
|
|
||
3/3/2014
|
26,141
|
|
—
|
|
|
57.16
|
|
3/3/2024
|
|
|
|
|
|
|||
|
2/24/2015
|
15,438
|
|
5,147
|
|
|
75.23
|
|
2/24/2025
|
|
|
|
|
|
||
|
2/24/2015
|
|
|
|
|
|
|
697
|
31,595
|
|
|
|||||
|
2/29/2016
|
|
|
|
|
|
|
3,056
|
138,528
|
|
|
|||||
|
2/29/2016
|
19,028
|
|
19,029
|
|
|
51.32
|
|
2/28/2026
|
|
|
|
|
|
||
|
6/7/2016
|
—
|
|
23,433
|
|
|
40.50
|
|
6/7/2026
|
|
|
|
|
|
||
|
6/7/2016
|
|
|
|
|
|
|
12,049
|
546,181
|
|
|
|||||
|
11/21/2016
|
|
|
|
|
|
|
1,596
|
72,347
|
|
|
|||||
|
2/28/2017
|
|
|
|
|
|
|
|
|
5,625
|
|
254,981
|
|
|||
|
2/28/2017
|
4,116
|
|
12,348
|
|
|
46.66
|
|
2/28/2027
|
|
|
|
|
|
||
|
2/28/2017
|
|
|
|
|
|
|
9,170
|
415,676
|
|
|
|||||
|
3/6/2018
|
|
|
|
|
|
|
26,813
|
1,215,433
|
|
|
|||||
|
3/6/2018
|
|
|
|
|
|
|
45,965
|
2,083,593
|
|
|
|||||
Christine F. Deputy
|
8/24/2015
|
15,070
|
|
5,024
|
|
|
67.34
|
|
8/24/2025
|
|
|
|
|
|
||
8/24/2015
|
|
|
|
|
|
|
1,517
|
68,766
|
|
|
||||||
|
8/24/2015
|
|
|
|
|
|
|
3,254
|
147,504
|
|
|
|||||
|
2/29/2016
|
|
|
|
|
|
|
2,674
|
121,212
|
|
|
|||||
|
2/29/2016
|
16,650
|
|
16,650
|
|
|
51.32
|
|
2/28/2026
|
|
|
|
|
|
||
|
6/7/2016
|
—
|
|
15,432
|
|
|
40.50
|
|
6/7/2026
|
|
|
|
|
|
||
|
6/7/2016
|
|
|
|
|
|
|
7,935
|
359,694
|
|
|
|||||
|
2/28/2017
|
|
|
|
|
|
|
|
|
5,497
|
|
249,179
|
|
|||
|
2/28/2017
|
4,021
|
|
12,066
|
|
|
46.66
|
|
2/28/2027
|
|
|
|
|
|
||
|
2/28/2017
|
|
|
|
|
|
|
8,960
|
406,157
|
|
|
|||||
|
3/6/2018
|
|
|
|
|
|
|
34,749
|
1,575,172
|
|
|
|||||
|
3/6/2018
|
|
|
|
|
|
|
17,374
|
787,563
|
|
|
(a)
|
Number of Securities Underlying Unexercised Options: Unexercisable
|
Grant Date
|
Vesting Schedule
|
Expiration Date
|
2/24/2015
|
25% per year with a remaining vesting date of 2/24/2019
|
2/24/2025
|
8/24/2015
|
25% per year with a remaining vesting date of 8/24/2019
|
8/24/2025
|
2/29/2016
|
25% per year with remaining vesting dates of 3/10/2019 and 3/10/2020
|
2/28/2026
|
6/7/2016
|
100% on 6/10/2019
|
6/7/2026
|
2/28/2017
|
25% per year with remaining vesting dates of 3/10/2019, 3/10/2020 and 3/10/2021
|
2/28/2027
|
(b)
|
Number of Shares or Units of Stock That Have Not Vested
|
Grant Date
|
|
Vesting Schedule
|
2/24/2015
|
|
25% per year with a remaining vesting date of 2/24/2019
|
8/24/2015
|
|
25% per year with a remaining vesting date of 8/24/2019
|
8/24/2015
|
|
20% per year with remaining vesting dates of 8/24/2019 and 8/24/2020
|
2/29/2016
|
|
25% per year with remaining vesting dates of 3/10/2019 and 3/10/2020
|
6/7/2016
|
|
50% in years 2 and 3 with a remaining vesting date of 6/10/2019
|
11/21/2016
|
|
33% in years 1 and 2 and 34% in year 3 with a remaining vesting date of 12/10/2019
|
2/28/2017
|
|
25% per year with remaining vesting dates of 3/10/2019, 3/10/2020 and 3/10/2021
|
8/21/2017
|
|
33% in years 1 and 2 and 34% in year 3 with remaining vesting dates of 9/10/2019 and 9/10/2020
|
3/6/2018
|
|
25% per year with vesting dates of 3/10/2019, 3/10/2020, 3/10/2021 and 3/10/2022
|
(c)
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested
|
(d)
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
|
•
|
the number of shares of Common Stock acquired and value realized from stock option exercises in fiscal year
2018
; 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
2018
.
|
|
|
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
($)(b)
|
|
Erik B. Nordstrom
|
|
169,717
|
|
|
5,646,094
|
|
|
22,718
|
|
|
1,170,494
|
|
Anne L. Bramman
|
|
—
|
|
|
—
|
|
|
6,116
|
|
|
400,537
|
|
Peter E. Nordstrom
|
|
169,717
|
|
|
5,557,886
|
|
|
21,061
|
|
|
1,083,875
|
|
Kenneth J. Worzel
|
|
64,818
|
|
|
1,298,088
|
|
|
23,618
|
|
|
1,260,447
|
|
Christine F. Deputy
|
|
—
|
|
|
—
|
|
|
22,412
|
|
|
1,262,623
|
|
Blake W. Nordstrom
|
|
182,773
|
|
|
6,914,212
|
|
|
21,122
|
|
|
1,087,145
|
|
(a)
|
Number of Shares Acquired on Vesting
|
(b)
|
Value Realized on Vesting
|
•
|
the most recent five years of service; or
|
•
|
the entire period of service after the executive’s 53
rd
birthday.
|
Name
|
|
Plan Name
|
|
|
Age
(a)
|
|
|
Number of Years Credited Service
(#)(b)
|
|
|
Present Value of Accumulated Benefit
($)(c)
|
|
|
Payments During Last Fiscal Year
($)
|
|
Erik B. Nordstrom
|
|
SERP
|
|
|
55
|
|
|
25
|
|
|
10,576,866
|
|
|
—
|
|
Anne L. Bramman
|
|
—
|
|
|
51
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Peter E. Nordstrom
|
|
SERP
|
|
|
56
|
|
|
25
|
|
|
11,232,918
|
|
|
—
|
|
Kenneth J. Worzel
|
|
SERP
|
|
|
54
|
|
|
9
|
|
|
2,936,884
|
|
|
—
|
|
Christine F. Deputy
|
|
—
|
|
|
53
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Blake W. Nordstrom
|
|
SERP
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(a)
|
Age
|
(b)
|
Number of Years Credited Service
|
(c)
|
Present Value of Accumulated Benefit
|
Name
|
|
Executive Contributions in Last Fiscal Year
($)(a)
|
|
|
Registrant Contributions in Last Fiscal Year
($)(b)
|
|
|
Aggregate Earnings in Last Fiscal Year
($)(c)
|
|
|
Aggregate Withdrawals/Distributions
($)
|
|
|
Aggregate Balance at Last Fiscal Year-End
($)(d)
|
|
Erik B. Nordstrom
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Anne L. Bramman
|
|
2,695
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
2,700
|
|
Peter E. Nordstrom
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Kenneth J. Worzel
|
|
23,913
|
|
|
—
|
|
|
(21,675
|
)
|
|
—
|
|
|
669,043
|
|
Christine F. Deputy
|
|
30,852
|
|
|
43,156
|
|
|
4,674
|
|
|
—
|
|
|
137,300
|
|
Blake W. Nordstrom
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(a)
|
Executive Contributions in Last Fiscal Year
|
(b)
|
Registrant Contributions in Last Fiscal Year
|
(c)
|
Aggregate Earnings in Last Fiscal Year
|
(d)
|
Aggregate Balance at Last Fiscal Year-End
|
Employment Agreements
|
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)
|
|
4,166,952
|
|
|
4,166,952
|
|
|
3,861,980
|
|
|
3,861,980
|
|
|
4,266,134
|
|
Vested SERP Benefit
(b)
|
|
4,220,346
|
|
|
—
|
|
|
8,730,232
|
|
|
8,730,232
|
|
|
8,730,232
|
|
Life Insurance Proceeds
(c)
|
|
948,125
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Retiree Health Care Benefit
(d)
|
|
159,465
|
|
|
362,387
|
|
|
362,387
|
|
|
362,387
|
|
|
362,387
|
|
Separation Benefit
(e)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Disability Insurance Benefit
(f)
|
|
—
|
|
|
35,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Executive Management Bonus
(g)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total Value of Incremental Benefits
|
|
9,494,888
|
|
|
4,564,339
|
|
|
12,954,599
|
|
|
12,954,599
|
|
|
13,358,753
|
|
Anne L. Bramman
|
|
|
|
|
|
|
|
|
|
|
|||||
Continued or Accelerated Vesting of Equity Awards
(a)
|
|
3,853,594
|
|
|
3,853,594
|
|
|
—
|
|
|
—
|
|
|
3,853,594
|
|
Vested SERP Benefit
(b)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Life Insurance Proceeds
(c)
|
|
968,750
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Retiree Health Care Benefit
(d)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Separation Benefit
(e)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
400,564
|
|
|
400,564
|
|
Disability Insurance Benefit
(f)
|
|
—
|
|
|
35,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Executive Management Bonus
(g)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total Value of Incremental Benefits
|
|
4,822,344
|
|
|
3,888,594
|
|
|
—
|
|
|
400,564
|
|
|
4,254,158
|
|
Peter E. Nordstrom
|
|
|
|
|
|
|
|
|
|
|
|||||
Continued or Accelerated Vesting of Equity Awards
(a)
|
|
4,164,912
|
|
|
4,164,912
|
|
|
3,859,940
|
|
|
3,859,940
|
|
|
4,264,094
|
|
Vested SERP Benefit
(b)
|
|
5,090,904
|
|
|
—
|
|
|
10,018,456
|
|
|
10,018,456
|
|
|
10,018,456
|
|
Life Insurance Proceeds
(c)
|
|
948,125
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Retiree Health Care Benefit
(d)
|
|
150,366
|
|
|
333,284
|
|
|
333,284
|
|
|
333,284
|
|
|
333,284
|
|
Separation Benefit
(e)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Disability Insurance Benefit
(f)
|
|
—
|
|
|
35,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Executive Management Bonus
(g)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total Value of Incremental Benefits
|
|
10,354,307
|
|
|
4,533,196
|
|
|
14,211,680
|
|
|
14,211,680
|
|
|
14,615,834
|
|
Kenneth J. Worzel
|
|
|
|
|
|
|
|
|
|
|
|||||
Continued or Accelerated Vesting of Equity Awards
(a)
|
|
4,701,801
|
|
|
4,701,801
|
|
|
—
|
|
|
—
|
|
|
4,744,049
|
|
Vested SERP Benefit
(b)
|
|
1,494,790
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Life Insurance Proceeds
(c)
|
|
1,000,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Retiree Health Care Benefit
(d)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Separation Benefit
(e)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
549,455
|
|
|
549,455
|
|
Disability Insurance Benefit
(f)
|
|
—
|
|
|
35,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Executive Management Bonus
(g)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total Value of Incremental Benefits
|
|
7,196,591
|
|
|
4,736,801
|
|
|
—
|
|
|
549,455
|
|
|
5,293,504
|
|
Christine F. Deputy
|
|
|
|
|
|
|
|
|
|
|
|||||
Continued or Accelerated Vesting of Equity Awards
(a)
|
|
3,623,921
|
|
|
3,623,921
|
|
|
—
|
|
|
—
|
|
|
3,665,217
|
|
Vested SERP Benefit
(b)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Life Insurance Proceeds
(c)
|
|
731,250
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Retiree Health Care Benefit
(d)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Separation Benefit
(e)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
308,622
|
|
|
308,622
|
|
Disability Insurance Benefit
(f)
|
|
—
|
|
|
35,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Executive Management Bonus
(g)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total Value of Incremental Benefits
|
|
4,355,171
|
|
|
3,658,921
|
|
|
—
|
|
|
308,622
|
|
|
3,973,839
|
|
(a)
|
Continued
or Accelerated Vesting of Equity Awards
|
•
|
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 30% of the total voting power of the Company’s outstanding voting securities.
|
(b)
|
Vested SERP Benefit
|
(c)
|
Life Insurance Proceeds
|
(d)
|
Retiree Health Care Benefit
|
(e)
|
Separation Benefit
|
•
|
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, if applicable;
|
•
|
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 (d) above; and
|
•
|
six months of outplacement services.
|
Name
|
|
Separation
Payment
($)
|
|
|
Company-Paid
Portion of
Medical Benefits
($)
|
|
|
Cost of
Outplacement
Services
($)
|
|
|
Total Separation
Benefit
($)
|
|
Erik B. Nordstrom
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Anne L. Bramman
|
|
387,500
|
|
|
8,864
|
|
|
4,200
|
|
|
400,564
|
|
Peter E. Nordstrom
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Kenneth J. Worzel
|
|
533,333
|
|
|
11,922
|
|
|
4,200
|
|
|
549,455
|
|
Christine F. Deputy
|
|
292,500
|
|
|
11,922
|
|
|
4,200
|
|
|
308,622
|
|
(f)
|
Disability Insurance Benefit
|
(g)
|
Executive Management Bonus
|
•
|
the annual total compensation of
Erik Nordstrom
was $
4,451,746
; and
|
•
|
the estimated median of the annual total compensation of all employees of our Company, other than
Erik Nordstrom
, was $34,454.
|
PROPOSAL 3
|
ADVISORY VOTE REGARDING EXECUTIVE COMPENSATION
|
Compensation Program Highlights
|
•
|
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 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
2018
, Named Executive Officers had the following measures:
|
–
|
Incentive Adjusted Return on Invested Capital (“Incentive Adjusted 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 Incentive EBIT results to ensure our executives are rewarded only after earnings generate meaningful returns for our shareholders
;
|
–
|
Incentive Earnings Before Interest and Income Tax Expense (“Incentive EBIT”)
to emphasize the importance of earnings and its role in driving shareholder value. Erik Nordstrom, Peter Nordstrom and Blake Nordstrom each had this performance measure weighed at 100%, subject to the achievement of the Incentive Adjusted ROIC threshold. Anne Bramman, Kenneth Worzel and Christine Deputy each had this performance measure weighed at 67%, again subject to the achievement of the Incentive Adjusted ROIC threshold
; and
|
–
|
Individual Measure
to enable differentiation in bonus payout opportunity based on individual contributions and execution against goals. This measure was added for fiscal year 2018 for Anne Bramman, Kenneth Worzel and Christine Deputy. The individual bonus measure accounted for 33% of the total bonus opportunity for these Named Executive Officers
.
|
•
|
The Committee references the 50th percentile 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 Common Stock.
|
Shareholder Support
|
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)
|
12,581,984
|
|
(b)
|
53
|
|
|
14,615,907
|
|
(c)
|
Equity compensation plans not approved by the Company’s shareholders
(d)
|
8,092
|
|
|
5
|
|
|
—
|
|
|
TOTAL
|
12,590,076
|
|
|
53
|
|
|
14,615,907
|
|
|
(a)
|
Consist of the 2004 and 2010 Equity Incentive Plans, the Employee Stock Purchase Plan and the 2002 Nonemployee Director Stock Incentive Plan. Performance share units and restricted stock units do not have an exercise price and therefore have been excluded from the weighted average exercise price calculation in column (2).
|
(b)
|
Includes
43,910
of deferred Director awards and
110,631
related to deferred performance share units.
|
(c)
|
Includes
12,541,502
shares from the 2010 Equity Incentive Plan,
1,814,978
shares from the Employee Stock Purchase Plan and
259,427
shares from the 2002 Nonemployee Director Stock Incentive Plan.
|
(d)
|
Consist of plans created in connection with our subsidiaries.
|
PROPOSAL 4
|
APPROVAL OF THE NORDSTROM, INC. 2019 EQUITY INCENTIVE PLAN
|
•
|
reserve for issuance by the Company 9,500,000 shares;
|
•
|
require 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 1.6 shares for purposes of determining shares remaining available for grant. Under the 2010 Equity Incentive Plan, full-value awards were counted as 1.6 shares, while under the 2002 Director Plan such awards were counted as 1 share;
|
•
|
prohibit 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;
|
•
|
provide 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 or the participant terminates for “good reason” within 12 months following a change of control and with respect to performance-based awards allow for acceleration of vesting at target if actual performance cannot be determined upon a qualifying termination;
|
•
|
establish one year as the minimum period for vesting of all awards, provided that the Compensation Committee (“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. Under the 2010 Equity Incentive Plan, this 5% limit applied only to grants of Unrestricted Shares;
|
•
|
prohibit 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;
|
•
|
subject all awards to the Company’s clawback policy as described on page 40; and
|
•
|
prohibit the transfer of awards, except in the context of death or otherwise required by law, or as approved by the Committee.
|
Shares Available under Plans
|
•
|
2002 Nonemployee Director Stock Incentive Plan
with 257,883 shares available as of our record date, March 15, 2019. Once the 2019 Plan is approved by the shareholders, the 2002 Director Plan will be terminated, and therefore no additional shares will be granted from it.
|
•
|
2010 Equity Incentive Plan
with 9,103,009 shares available as of March 15, 2019. Once the 2019 Plan is approved by the shareholders, the 2010 Equity Incentive Plan will be terminated, and therefore no additional shares will be granted from it.
|
Outstanding Options
(#)
|
|
Weighted Average Exercise Price
($)
|
|
Weighted Average Remaining Years of Contractual Life
(#)
|
|
|
Unvested Full Value Awards
(#)
|
9,245,495
|
|
52.34
|
|
4.93
|
|
|
4,606,812*
|
*
|
Includes restricted stock units and performance share units granted at maximum. Each outstanding full value award reduces the shares available for grant under the 2010 Equity Incentive Plan by 1.6 shares.
|
Summary of 2019 Plan Terms
|
•
|
employees; and
|
•
|
nonemployee directors
|
•
|
motivating participants to focus on the Company’s critical long-range objectives;
|
•
|
encouraging the attraction and retention of employees and nonemployee directors; and
|
•
|
aligning participant and shareholder interests through stock ownership.
|
•
|
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.
|
•
|
options to purchase more than 500,000 shares of Common Stock;
|
•
|
more than 500,000 stock appreciation rights;
|
•
|
more than 100,000 unrestricted shares of Common Stock;
|
•
|
more than 500,000 restricted shares of Common Stock;
|
•
|
more than 500,000 restricted stock units; or
|
•
|
more than 500,000 performance share units.
|
•
|
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.
|
•
|
cash;
|
•
|
shares of Common Stock; or
|
•
|
any combination of both.
|
•
|
cash;
|
•
|
shares of Common Stock (unrestricted or restricted shares); or
|
•
|
any combination of both.
|
•
|
cash;
|
•
|
shares of Common Stock; or
|
•
|
any combination of both.
|
•
|
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.
|
Name of Beneficial Owner
|
|
Amount and Nature of
Beneficial Ownership
(#)
|
|
|
Percent of
Ownership
(%)
|
|
|
(a)
|
Bruce A. Nordstrom
1617 Sixth Avenue
Seattle, Washington 98101-1707
|
|
25,241,278
|
|
|
16.29
|
|
(b)
|
Anne E. Gittinger
1617 Sixth Avenue
Seattle, Washington 98101-1707
|
|
15,403,689
|
|
|
9.94
|
|
(c)
|
Peter E. Nordstrom
|
|
3,389,278
|
|
|
2.18
|
|
(d)
|
Erik B. Nordstrom
|
|
3,177,793
|
|
|
2.04
|
|
(e)
|
Kenneth J. Worzel
|
|
153,852
|
|
|
*
|
|
(f)
|
Anne L. Bramman
|
|
18,396
|
|
*
|
|
|
(g)
|
Christine F. Deputy
|
|
61,212
|
|
|
*
|
|
(h)
|
Philip G. Satre
|
|
87,196
|
|
*
|
|
|
(i)
|
B. Kevin Turner
|
|
36,720
|
|
*
|
|
|
(j)
|
Brad D. Smith
|
|
18,585
|
|
*
|
|
|
(k)
|
Gordon A. Smith
|
|
17,779
|
|
*
|
|
|
(l)
|
Shellye L. Archambeau
|
|
17,175
|
|
|
*
|
|
(m)
|
Bradley D. Tilden
|
|
12,783
|
|
*
|
|
|
(n)
|
Tanya L. Domier
|
|
12,062
|
|
|
*
|
|
(o)
|
Stacy Brown-Philpot
|
|
8,100
|
|
*
|
|
|
(p)
|
Kirsten A. Green
|
|
772
|
|
*
|
|
|
(q)
|
Glenda G. McNeal
|
|
772
|
|
*
|
|
|
(r)
|
Directors and Executive Officers as a group (21 persons)
|
|
8,164,921
|
|
|
5.21
|
|
|
Other >5% Security Holders
|
|
|
|
|
|
|
(s)
|
The Vanguard Group
100 Vanguard Blvd.
Malvern, PA 19355
|
|
13,686,020
|
|
|
8.83
|
|
*
|
Does not exceed 1% of the Company’s outstanding Common Stock.
|
(a)
|
Bruce A. Nordstrom
|
•
|
10,243,647 shares owned by him directly;
|
•
|
355 nonvoting deferred stock units. The stock units are convertible into Common Stock and payable upon the occurrence of certain events;
|
•
|
261,776 shares owned by his wife individually;
|
•
|
8,490,560 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.
|
(b)
|
Anne E. Gittinger
|
•
|
13,844,023 shares owned by her directly;
|
•
|
4,466 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.
|
•
|
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.
|
•
|
2,471,488 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;
|
•
|
32,330 shares held by him in the Company’s 401(k) Plan;
|
•
|
502,727 shares that may be acquired by him through stock options exercisable within 60 days after March 15, 2019;
|
•
|
175,533 shares owned by his wife individually;
|
•
|
445 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
|
•
|
157,695 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.
|
•
|
2,583,088 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;
|
•
|
24,802 shares held by him in the Company’s 401(k) Plan;
|
•
|
502,727 shares that may be acquired by him through stock options exercisable within 60 days after March 15, 2019;
|
•
|
42,646 shares owned by his wife individually; and
|
•
|
24,530 shares held by a trust of which he is the trustee.
|
•
|
19,923 shares owned by him directly;
|
•
|
5,671 nonvoting stock units held under the Company’s Executive Deferred Compensation Plan;
|
•
|
4,222 shares held by him in the Company’s 401(k) Plan; and
|
•
|
124,036 shares that may be acquired by him through stock options exercisable within 60 days after March 15, 2019.
|
•
|
18,396 shares owned by her directly.
|
•
|
13,124 shares owned by her directly; and
|
•
|
48,088 shares that may be acquired by her through stock options exercisable within 60 days after March 15, 2019.
|
•
|
20,366 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
|
•
|
66,830 shares held by a family trust, of which he is a trustee and beneficiary.
|
•
|
36,720 shares owned by him directly.
|
•
|
18,585 shares held by a family trust, of which he is a trustee and beneficiary.
|
•
|
17,779 shares owned by him directly.
|
•
|
2,296 shares owned by her directly; and
|
•
|
14,879 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.
|
•
|
12,783 shares held by a family trust, of which he is a trustee and beneficiary.
|
•
|
12,062 shares owned by her directly.
|
•
|
3,444 shares owned by her directly; and
|
•
|
4,656 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.
|
•
|
772 shares owned by her directly.
|
•
|
772 shares owned by her directly.
|
•
|
5,698,405 shares owned directly, of which 705,977 shares are pledged as collateral for third party obligations;
|
•
|
730,713 shares owned by spouses and trusts of which the respective Director or executive officer is a trustee, or a trustee and beneficiary;
|
•
|
39,902 nonvoting stock units held by participating Directors under the Directors Deferred Compensation Plan;
|
•
|
5,671 nonvoting stock units held by participating executive officers under the Nordstrom Deferred Compensation Plan;
|
•
|
81,410 shares held by participating executive officers and their eligible spouses in the Company’s 401(k) Plan; and
|
•
|
1,608,820 shares that may be acquired by the executive officers as a group through stock options exercisable within 60 days after March 15, 2019.
|
•
|
13,502,343 shares for which it has sole power to vote or to dispose or to direct disposition; and
|
•
|
183,677 shares for which it has shared power to dispose or to direct disposition.
|
•
|
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 $11,082 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, $3,141 was paid in August 2015, and $491 was paid in August 2018 to increase the security deposit amount to the required two times the current base rent of $10,082.
|
•
|
In total, LLC paid the Company rent of $143,685 during the fiscal year ended
February 2, 2019
(total rent is inclusive of the month of February).
|
•
|
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 Annual Meeting is held on schedule, we must receive notice pertaining to the 2020 Annual Meeting of Shareholders no earlier than
January 24, 2020
and no later than
February 23, 2020
.
|
•
|
However, if we hold the
2020
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.
|
1.
|
Why am I receiving these materials?
|
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 the 11 nominees to the Board named in this Proxy Statement
|
FOR each Director Nominee
|
|
Proposal 2
|
To ratify the appointment of Deloitte & Touche as our Independent Registered Public Accounting Firm
|
FOR
|
|
Proposal 3
|
To conduct an advisory vote regarding the compensation of our Named Executive Officers
|
FOR
|
|
Proposal 4
|
To approve the Nordstrom, Inc. 2019 Equity Incentive Plan
|
FOR
|
64
|
Other
|
Such other business as may properly come before the Annual Meeting and any adjournments or postponements thereof
|
|
|
3.
|
How can I view the webcast? Where is the Annual Meeting being held?
|
4.
|
Why did I receive a Notice instead of a full set of proxy materials? How can I access the proxy materials online?
|
5.
|
What is a proxy and what is the purpose of this Proxy Statement?
|
6.
|
What is the difference between a shareholder of record and a street name shareholder?
|
•
|
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 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 the Company 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.
|
7.
|
How do I cast my vote?
|
8.
|
What does it mean if I receive more than one Notice or package of proxy materials?
|
9.
|
What is a quorum and what is the voting requirement to approve each of the proposals?
|
|
|
|
Discretionary
|
Proposal
|
Vote Required
|
|
Voting Allowed?
|
Election of Directors
|
Majority of Votes Cast
|
|
No
|
Ratification of the Appointment of Independent Registered Public Accounting Firm
|
Majority of Votes Cast
|
|
Yes
|
Advisory Vote Regarding Executive Compensation
|
Majority of Votes Cast
|
|
No
|
Approval of the Nordstrom, Inc. 2019 Equity Incentive Plan
|
Majority of Votes Cast
|
|
No
|
•
|
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 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
February 2, 2019
. 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. 2019 Equity Incentive Plan:
Under the Company’s Bylaws, the votes cast “for” must exceed the votes cast “against” to ratify the Nordstrom, Inc. 2019 Equity Incentive Plan. You may vote “for,” “against” or “abstain” on this proposal.
|
10.
|
Can I change my mind after I vote?
|
•
|
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 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 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 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 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.
|
•
|
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 19, 2019
, 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?
|
13.
|
Who will count the vote?
|
14.
|
Where can I find the voting results of the Annual Meeting?
|
15.
|
Who will bear the cost of this proxy solicitation?
|
16.
|
What if I have additional questions that are not addressed here?
|
Appendix A
|
Reconciliation of GAAP and Non-GAAP Financial Measures
|
Incentive Earnings Before Interest and Income Tax Expense (“Incentive EBIT”) and Incentive Adjusted Return on Invested Capital (“Incentive Adjusted ROIC”)
|
|
12 Fiscal Months Ended
|
||||||||||||||||||
($ in millions)
|
February 2, 2019
|
|
|
February 3, 2018
|
|
|
January 28, 2017
|
|
|
January 30, 2016
|
|
|
January 31, 2015
|
|
|||||
Net earnings
|
$
|
564
|
|
|
$
|
437
|
|
|
$
|
354
|
|
|
$
|
600
|
|
|
$
|
720
|
|
Add: income tax expense
|
169
|
|
|
353
|
|
|
330
|
|
|
376
|
|
|
465
|
|
|||||
Add: interest expense, net
|
104
|
|
|
136
|
|
|
121
|
|
|
125
|
|
|
138
|
|
|||||
Earnings before interest and income tax expense
|
837
|
|
|
926
|
|
|
805
|
|
|
1,101
|
|
|
1,323
|
|
|||||
Add: non-operating related adjustments
|
72
|
|
|
26
|
|
|
271
|
|
|
145
|
|
|
68
|
|
|||||
Incentive EBIT
|
909
|
|
|
952
|
|
|
1,076
|
|
|
1,246
|
|
|
1,391
|
|
|||||
Add: interest income
|
15
|
|
|
5
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Incentive Adjusted ROIC earnings before interest and income tax expense
|
924
|
|
|
957
|
|
|
1,077
|
|
|
1,246
|
|
|
1,392
|
|
|||||
Add: rent expense
|
251
|
|
|
250
|
|
|
202
|
|
|
176
|
|
|
137
|
|
|||||
Less: estimated depreciation on capitalized operating leases
*
|
(134
|
)
|
|
(133
|
)
|
|
(108
|
)
|
|
(94
|
)
|
|
(74
|
)
|
|||||
Net operating profit
|
1,041
|
|
|
1,074
|
|
|
1,171
|
|
|
1,328
|
|
|
1,455
|
|
|||||
Less: estimated income tax expense
|
(248
|
)
|
|
(480
|
)
|
|
(444
|
)
|
|
(512
|
)
|
|
(561
|
)
|
|||||
Net operating profit after tax
|
$
|
793
|
|
|
$
|
594
|
|
|
$
|
727
|
|
|
$
|
816
|
|
|
$
|
894
|
|
Average total assets
|
$
|
8,282
|
|
|
$
|
8,055
|
|
|
$
|
7,917
|
|
|
$
|
9,076
|
|
|
$
|
8,860
|
|
Less: average non-interest-bearing current liabilities**
|
(3,479
|
)
|
|
(3,261
|
)
|
|
(3,012
|
)
|
|
(2,993
|
)
|
|
(2,730
|
)
|
|||||
Less: average deferred property incentives and deferred rent liability
(b)
|
(616
|
)
|
|
(644
|
)
|
|
(644
|
)
|
|
(548
|
)
|
|
(502
|
)
|
|||||
Add: average estimated asset base of capitalized operating leases
(a)
|
2,018
|
|
|
1,805
|
|
|
1,512
|
|
|
1,236
|
|
|
1,058
|
|
|||||
Add (Less): non-operating related adjustments
|
4
|
|
|
3
|
|
|
90
|
|
|
623
|
|
|
(100
|
)
|
|||||
Average invested capital
|
$
|
6,209
|
|
|
$
|
5,958
|
|
|
$
|
5,863
|
|
|
$
|
7,394
|
|
|
$
|
6,586
|
|
Return on assets
|
6.8
|
%
|
|
5.4
|
%
|
|
4.5
|
%
|
|
6.6
|
%
|
|
8.1
|
%
|
|||||
Incentive Adjusted ROIC
|
12.8
|
%
|
|
10.0
|
%
|
|
12.4
|
%
|
|
11.0
|
%
|
|
13.6
|
%
|
*
|
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. The asset base is calculated 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 of 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
. We do not expect the adoption of the new Lease Standard to have a material impact on our Incentive Adjusted ROIC.
|
**
|
Balances associated with our deferred rent liability have been classified as long-term liabilities as of January 28, 2017.
|
Appendix B
|
Nordstrom, Inc. 2019 Equity Incentive Plan
|
ARTICLE 1
|
Introduction
|
ARTICLE 2
|
Administration
|
ARTICLE 3
|
Shares Available for Awards and General Vesting Requirements
|
ARTICLE 4
|
Eligibility
|
ARTICLE 5
|
Options
|
ARTICLE 6
|
Payments For Option Shares
|
ARTICLE 7
|
Stock Appreciation Rights
|
ARTICLE 8
|
Unrestricted Shares
|
ARTICLE 9
|
Restricted Shares
|
ARTICLE 10
|
Restricted Stock Units
|
ARTICLE 11
|
Performance Share Units
|
ARTICLE 12
|
Protection Against Dilution
|
ARTICLE 13
|
Awards Under Other Plans
|
ARTICLE 14
|
Limitation on Rights
|
ARTICLE 15
|
Withholding Taxes
|
ARTICLE 16
|
Future of the Plan
|
ARTICLE 17
|
Definitions
|
NORDSTROM, INC.
|
|
By:
|
|
|
Christine Deputy
|
Title:
|
Chief Human Resources Officer
|