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Election of Directors
Item 1 – Election of Directors

Age: 67 Director since: 2015 Committees: Audit Review, Finance		SHEILA G. TALTON President and Chief Executive Officer of Gray Matter Analytics (healthcare analytics for healthcare providers, payers, and pharma companies) (since 2013)
		Past Positions —President and Chief Executive Officer of SGT Ltd. (strategy and technology consulting services) — 2011 to 2013 —Vice President of Cisco Systems, Inc. (information technology and solutions) — 2008 to 2011		Other Current Directorships —OGE Energy Corp. —Sysco Corporation Previous Directorships —Acco Brands Corporation —Wintrust Financial Corporation
		Key Qualifications, Experiences, and Attributes
		In addition to her professional background and prior Deere Board experience, the following qualifications led the Board to conclude that Ms. Talton should serve on Deere’s Board of Directors: her leadership qualities developed from her service as President and Chief Executive Officer of Gray Matter Analytics and as an officer of other global technology and consulting firms; the breadth of her experiences in compensation, governance, risk management, and other areas of oversight while serving as a member of the boards of directors of other global public corporations; and her subject matter knowledge in the areas of technology, data analytics, and global strategies.

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Our Values
At Deere, our actions are guided by our core values: integrity, quality, commitment, and innovation. We strive to live up to these values in everything we do — not just because it is good business, but because we are committed to strong corporate governance. We are committed to strong corporate governance as a means of upholding these values and ensuring that we are accountable to our shareholders.

Director Independence
The Board has adopted categorical standards (see Appendix A) that help us evaluate each director’s independence. Specifically, these standards are intended to assist the Board in determining whether certain relationships between our directors and Deere or its affiliates are “material relationships” for purposes of the New York Stock Exchange (NYSE) independence standards. The categorical standards establish thresholds, short of which any such relationship is deemed not to be material. In addition, each director’s independence is evaluated under our Related Person Transactions Approval Policy, as discussed in the “Review and Approval of Related Person Transactions” section. Deere’s independence standards meet or exceed the NYSE’s independence requirements.

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Election of Directors
Corporate Governance

In November 2019, we reviewed the independence of each then-sitting director, applying the independence standards set forth in our Corporate Governance Policies. The reviews considered relationships and transactions between each director (and the director’s immediate family and affiliates) and Deere, Deere’s management, and Deere’s independent registered public accounting firm. Based on this review, the Board affirmatively determined at its regular December 2019 meeting that no director other than Mr. Allen and Mr. May has a material relationship with Deere and its affiliates and that each director other than Mr. Allen and Mr. May are independent as defined in our Corporate Governance Policies and the NYSE’s listing standards. Mr. Allen and Mr. May are not independent directors because of their employment relationship with Deere.

Board Leadership Structure
Samuel R. Allen currently serves as Deere’s Chairman. John C. May serves as Deere’s Chief Executive Officer and President. Although the position of Chairman has traditionally been held by Deere’s Chief Executive Officer, the Board believes the decisions as to who should serve as Chairman and as Chief Executive Officer and whether the offices shall be combined or separated is the proper responsibility of the Board. The Board also believes that having an independent Chairman is unnecessary in normal circumstances. The Board’s governance processes preserve Board independence by ensuring discussion among independent directors and independent evaluation of and communication with members of senior management. Additionally, the enhanced role of the independent Presiding Director provides a strong counterbalance to the non-independent Chairman and Chief Executive Officer roles.

Presiding Director
Vance D. Coffman has served as our independent Presiding Director since the 2016 Annual Meeting. Upon Mr. Coffman’s retirement in February 2020, Charles O. Holliday, Jr. will become Presiding Director.

The Presiding Director is elected by a majority of the independent directors upon a recommendation from the Corporate Governance Committee. The Presiding Director is appointed for a one-year term beginning upon election and expiring upon the selection of a successor.

The Board has assigned the Presiding Director the following duties and responsibilities:

The Board believes the role of the Presiding Director exemplifies Deere’s continuing commitment to strong corporate governance and Board independence.

Board Meetings
Under Deere’s bylaws, regular meetings of the Board are held at least quarterly. Our typical practice is to schedule at least one Board meeting per year at a company location other than our World Headquarters so directors have an opportunity to observe different aspects of our business first-hand. The Board met four times during fiscal 2019.

Directors are expected to attend Board meetings, meetings of committees on which they serve, and shareholder meetings. More to the point, directors are expected to spend the time needed and meet as frequently as necessary to properly discharge their responsibilities. During fiscal 2019, all incumbent directors attended 75% or more of the meetings of the Board and committees on which they served. Overall attendance at Board and committee meetings was 100%. All directors then in office attended the Annual Meeting of Shareholders in February 2019.

Each Board meeting normally begins or ends with a session among the Chairman, the CEO, and the independent directors. This provides a platform for discussions outside the presence of the non-Board management attendees. The independent

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Election of Directors
Corporate Governance

directors may meet in executive session, without the Chairman and CEO, at any time, but such non-management executive sessions are scheduled and typically occur at each regular Board meeting. The Presiding Director presides over these executive sessions.

Board Committees
The Board has delegated some of its authority to five committees: the Executive Committee, the Audit Review Committee, the Compensation Committee, the Corporate Governance Committee, and the Finance Committee.

Periodically, the Board approves the rotation of certain directors’ committee memberships. The Board believes that committee rotation is generally desirable to ensure that committees regularly benefit from new perspectives. Effective February 2020, Michael O. Johanns is appointed to the Compensation Committee and will leave the Audit Review Committee, and Sheila G. Talton is appointed to the Corporate Governance Committee and will leave the Finance Committee. In addition, Dmitri L. Stockton will become Chair of the Compensation Committee effective February 2020.

Each of our Board committees has adopted a charter that complies with current NYSE rules relating to corporate governance matters. Copies of the committee charters are available at www.JohnDeere.com/corpgov and may also be obtained upon request to the Deere & Company Shareholder Relations Department. Each committee (other than the Executive Committee, which did not meet in 2019 and of which Mr. Allen serves as chair) is composed solely of independent directors.

The committee structure and memberships described below do not reflect the changes that become effective in February 2020. Every committee other than the Executive Committee regularly reports on its activities to the full Board.

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Election of Directors
Corporate Governance

Board Oversight of Risk Management
The Board believes that strong and effective internal controls and risk management processes are essential for achieving long-term shareholder value. The Board, directly and through its committees, is responsible for monitoring risks that may affect Deere.

RISK MANAGEMENT APPROACH

We maintain a structured risk management approach to facilitate our strategic business objectives. To that end, we identify and categorize risks and then escalate them as needed. Our internal risk management structure is administered by a Management Risk Committee consisting of the CEO and his direct reports. This committee provides periodic reports to the Board regarding Deere’s risk management processes and reviews with the Board high-priority areas of enterprise risk.

Dedicated risk management reports typically take place at regularly scheduled Board meetings each February and August, and risk management topics are discussed as needed at other Board and committee meetings.

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Election of Directors
Corporate Governance

Shareholder Outreach
To ensure the continued delivery of sustainable, long-term value to our shareholders, we engage in regular dialogue with them. During 2019, we discussed governance, executive compensation, sustainability, and other issues with shareholders representing more than 40% of our outstanding shares. The Board considers feedback from these conversations during its deliberations, and we regularly review and adjust our corporate governance structure and executive compensation policies and practices in response to comments from our shareholders.

Communication with the Board
If you wish to communicate with the Board, you may send correspondence to: Corporate Secretary, Deere & Company, One John Deere Place, Moline, Illinois 61265-8098. The Corporate Secretary will submit your correspondence to the Board or the appropriate committee, as applicable.

You may communicate directly with the Presiding Director by sending correspondence to: Presiding Director, Board of Directors, Deere & Company, Department A, One John Deere Place, Moline, Illinois 61265-8098.

Corporate Governance Policies
Because we believe corporate governance is integral to creating long-term shareholder value, our Board of Directors has adopted company-wide Corporate Governance Policies, which are periodically reviewed and revised as appropriate to ensure that they reflect the Board’s corporate governance objectives.

Please visit the Corporate Governance section of our website (www.JohnDeere.com/corpgov) to learn more about our corporate governance practices and to access the following materials:

Political Contributions
To promote transparency and good corporate citizenship we have provided voluntary disclosure relating to the political contributions of Deere and its political action committee. This information is publicly available at www.JohnDeere.com/politicalcontributions.

Sustainability
Sustainability is deeply rooted in John Deere’s higher purpose—to improve the quality of life for people around the world through our commitment to serving those linked to the land. To find out more about how executing the Deere strategy is delivering sustainable outcomes for all stakeholders, visit and read the Deere & Company Sustainability report at www.JohnDeere.com/sustainabilityreport.

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Election of Directors
Compensation of Directors

We have structured the compensation of our non-employee directors with the following objectives in mind:

We pay non-employee directors an annual retainer. In addition, committee chairpersons and the Presiding Director receive fees for assuming those responsibilities. Directors who are employees receive no additional compensation for serving on the Board. We do not pay committee member retainers or meeting fees, but we do reimburse directors for expenses related to meeting attendance.

To supplement their cash compensation and align their interests with those of our shareholders, non-employee directors are awarded restricted stock units (RSUs) after each Annual Meeting. A person who serves a partial term as a non-employee director will receive a prorated retainer and a prorated RSU award.

Compensation for non-employee directors is reviewed annually by the Corporate Governance Committee. At its December 2016 and December 2018 meetings, the Board approved compensation as noted below for non-employee directors as recommended by the Corporate Governance Committee. The cash components are effective on January 1 following approval and the equity component is effective for the annual award in March following approval.

The following chart describes amounts we pay and the value of awards we grant to non-employee directors:

Under our Non-employee Director Deferred Compensation Plan, directors may choose to defer some or all of their annual retainers until they retire from the Board. For deferrals through December 2016, a director could elect to have these deferrals invested in either an interest-bearing account or an account with a return equivalent to an investment in Deere common stock. For deferrals effective in January 2017 and later, directors may choose from a list of investment options, none of which yields an above-market earnings rate.

Our stock ownership guidelines require each non-employee director to own Deere common stock equivalent in value to at least three times the director’s annual cash retainer. This ownership level must be achieved within five years of the date the director joins the Board. Restricted shares (regularly granted to non-employee directors prior to 2008), RSUs, and any common stock held personally by the non-employee director are included in determining whether the applicable ownership threshold has been reached. Each non-employee director has achieved stockholdings in excess of the applicable multiple as of the date of this Proxy Statement.

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Election of Directors
Compensation of Directors

We require non-employee directors to hold all equity awards until the occurrence of one of the following triggering events: retirement from the Board, total and permanent disability, death, or a change in control of Deere combined with a qualifying termination of the director. Directors may not sell, gift, or otherwise dispose of their equity awards before the occurrence of a triggering event. While the restrictions are in effect, non-employee directors may vote their restricted shares (but not shares underlying RSUs) and receive dividends on the restricted shares and dividend equivalents on the RSUs.

In fiscal 2019, we provided the following compensation to our non-employee directors:

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Election of Directors
Security Ownership of Certain Beneficial Owners and Management

The following table shows the number of shares of Deere common stock beneficially owned as of December 31, 2019, (unless otherwise indicated) by:

A beneficial owner of stock (represented in column (a)) is a person who has sole or shared voting power (meaning the power to control voting decisions) or sole or shared investment power (meaning the power to cause the sale or other disposition of the stock). A person also is considered the beneficial owner of shares to which that person has the right to acquire beneficial ownership (within the meaning of the preceding sentence) within 60 days. For this reason, the following table includes exercisable stock options (represented in column (b)), restricted shares, and RSUs that could become exercisable or be settled within 60 days of December 31, 2019, at the discretion of an individual identified in the table (represented in column (c)).

All individuals listed in the table have sole voting and investment power over the shares unless otherwise noted.
As of December 31, 2019, Deere had no preferred stock issued or outstanding.

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Election of Directors
Review and Approval of Related Person Transactions

The Board has adopted a written Related Person Transactions Approval Policy that assigns our Corporate Governance Committee the responsibility for reviewing, approving, or ratifying all related person transactions.

The written Related Person Transactions Approval Policy is concerned with three types of “related persons”:

Each year, our directors and executive officers complete questionnaires designed to elicit information about potential related person transactions. In addition, the directors and officers must promptly advise our Corporate Secretary if there are any changes to the information they previously provided. After consultation with our General Counsel, management, and outside counsel, as appropriate, our Corporate Secretary determines whether any transaction is reasonably likely to be a related person transaction. Transactions deemed reasonably likely to be related person transactions are submitted to the Corporate Governance Committee for consideration at its next meeting, unless action is required sooner. In such a case, the transaction would be submitted to the Chairperson of the Corporate Governance Committee, whose determination would be reported to the full committee at its next meeting.

When evaluating potential related person transactions, the Corporate Governance Committee or its Chairperson, as applicable, considers all reasonably available relevant facts and circumstances and approves only those related person transactions determined in good faith to be in compliance with or not inconsistent with our Code of Ethics and Code of Business Conduct and in the best interests of our shareholders.

The sister of Mary K. W. Jones, Senior Vice President & General Counsel, is an employee in the Company’s global communications department. Mrs. Jones does not directly or indirectly supervise her sister. During fiscal 2019, the employee earned approximately $135,797 in direct cash compensation along with customary employee benefits available to salaried employees generally. The employee’s compensation is consistent with that of other employees at the same grade level. Pursuant to the Related Person Transactions Approval Policy, this transaction was approved by the Corporate Governance Committee after determining that it is not inconsistent with our Code of Ethics or Code of Business Conduct.

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Item 2 – Approval of Bylaw Amendment to Provide that the Courts Located in Delaware Will Be the Exclusive Forum for Certain Legal Disputes

We are asking shareholders to approve an amendment (the “Amendment”) to the Company’s Amended Bylaws (the “Bylaws”) that, if adopted, would result in the courts located within the State of Delaware serving as the exclusive forum for the adjudication of certain legal actions involving the Company. Specifically, if this proposal is approved by shareholders, the Bylaws will be amended to insert a new provision as Article VIII, Section 5 to the Bylaws and to make appropriate conforming changes. The text of the proposed new Article VIII, Section 5 is set forth below.

Supporting Statement
The Board believes that adopting the Amendment is in the best interests of the Company and its shareholders for the following reasons:

—	The Amendment provides that all intra-corporate disputes will be litigated in the State of Delaware, where the Company is incorporated and whose law governs such disputes;
—	The Delaware courts have developed considerable expertise in dealing with corporate law issues, as well as a substantial and influential body of case law construing Delaware’s corporate law and long-standing precedent regarding corporate governance;
—	The Amendment will help the Company avoid multiple lawsuits in multiple jurisdictions relating to such disputes, thus saving significant costs and effort in addressing cases brought in multiple jurisdictions;
—	The Amendment will reduce the risk that the outcome of cases in multiple jurisdictions could be inconsistent, even though each jurisdiction purports to follow Delaware law;
—	The Amendment will regulate only the forum where our shareholders may file claims relating to the specified intra-corporate disputes; it does not restrict the ability of our shareholders to bring such claims, nor does it affect the remedies available if such claims are ultimately successful;
—	The Amendment will not apply to suits, including derivative actions, to enforce duties or liabilities created by the Securities Act of 1933, the Securities Exchange Act of 1934 or any other claim for which the federal courts have exclusive jurisdiction;

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Bylaw Amendment
Item 2 – Approval of Bylaw Amendment to Provide that the Courts Located
in Delaware Will Be the Exclusive Forum for Certain Legal Disputes

—	The Company will retain the ability to consent to an alternative forum in appropriate circumstances where the Company determines that its interests and those of its shareholders are best served by permitting a particular dispute to proceed in a forum other than Delaware;
—	Delaware law expressly permits companies incorporated in Delaware to include in bylaws exclusive forum provisions of the type being proposed; and
—	The Amendment is not being proposed in anticipation of any specific litigation or transaction.

The Board is committed to strong corporate governance practices, as evidenced by this proposal and the other key corporate governance practices described under “Election of Directors—Corporate Governance” above.

After considering the foregoing, the Board believes the Amendment is in the best interests of the Company and its shareholders and recommends that our shareholders approve the Amendment. If approved by shareholders, the Amendment will be immediately effective. If the Amendment is not approved, the Board will reconsider whether the Amendment is in the best interests of the Company and its shareholders and may conduct further outreach to shareholders on the topic.

Shareholder approval is not required for the Board to amend our Bylaws; however, we believe it is beneficial to seek shareholder input on such important governance issues and to serve the best interests of our shareholders. Approval of the Amendment requires the affirmative “for” vote of a majority of shares present in person or represented by proxy and entitled to vote on the proposal. Abstentions are treated as shares represented in person or by proxy and entitled to vote on the proposal and, therefore, will have the same effect as a vote “against” the proposal. Broker non-votes will have no effect on the outcome of the vote.

TEXT OF PROPOSED ARTICLE VIII, SECTION 5:
FORUM FOR ADJUDICATION OF CERTAIN DISPUTES. Unless the Company consents in writing to the selection of an alternative forum (an “Alternative Forum Consent”), the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, stockholder, employee or agent of the Company to the Company or the Company’s stockholders, (iii) any action asserting a claim against the Company or any director, officer, stockholder, employee or agent of the Company arising out of or relating to any provision of the General Corporation Law of Delaware or the Company’s Certificate of Incorporation or Bylaws, or (iv) any action asserting a claim against the Company or any director, officer, stockholder, employee or agent of the Company governed by the internal affairs doctrine of the State of Delaware, provided, however, that, in the event that the Court of Chancery of the State of Delaware lacks subject matter jurisdiction over any such action or proceeding, the sole and exclusive forum for such action or proceeding shall be another state or federal court located within the State of Delaware, in each such case, unless the Court of Chancery (or such other state or federal court located within the State of Delaware, as applicable) has dismissed a prior action by the same plaintiff asserting the same claims because such court lacked personal jurisdiction over an indispensable party named as a defendant therein. Failure to enforce the foregoing provisions would cause the Company irreparable harm and the Company shall be entitled to equitable relief, including injunctive relief and specific performance, to enforce the foregoing provisions. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of the Company shall be deemed to have notice of and consented to the provisions of this Section 5. If any action the subject matter of which is within the scope of this Section 5 is filed in a court other than the Court of Chancery of the State of Delaware (or any other state or federal court located within the State of Delaware, as applicable) (a “Foreign Action”) by or in the name of any stockholder, such stockholder shall be deemed to have consented to (i) the personal jurisdiction of the Court of Chancery of the State of Delaware (or such other state or federal court located within the State of Delaware, as applicable) in connection with any action brought in any such court to enforce this Section 5 and (ii) having service of process made upon such stockholder in any such action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder. The existence of any prior Alternative Forum Consent shall not act as a waiver of the Company’s ongoing consent right as set forth above in this Section 5 with respect to any current or future actions or claims.

FOR THE REASONS STATED, THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE AMENDMENT TO OUR BYLAWS ESTABLISHING THE COURTS LOCATED WITHIN THE STATE OF DELAWARE AS THE EXCLUSIVE FORUM FOR THE ADJUDICATION OF CERTAIN LEGAL DISPUTES

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Item 3 – Advisory Vote on Executive Compensation

In accordance with Section 14A of the Exchange Act, we are asking our shareholders to approve, on an advisory basis, the compensation of the executives named in the Summary Compensation Table of this Proxy Statement. Deere’s practice, which was approved by our shareholders at the 2017 Annual Meeting, is to conduct this non-binding vote annually.

Supporting Statement
PAY FOR PERFORMANCE
Deere’s compensation philosophy is to pay for performance, support Deere’s business strategies, and offer competitive compensation. Our compensation programs consist of complementary elements that reward achievement of both short-term and long-term objectives. The metrics used for our incentive programs are either associated with operating performance or are based on a function of Deere’s stock price with linkage to revenue growth and Total Shareholder Return (TSR). See “Review of Pay for Performance Relative to Peer Group” in the CD&A, which highlights our success in connecting executive compensation with Deere’s financial performance.

PROGRAM DESIGN
The CD&A offers a detailed description of our compensation programs and philosophy. Our compensation approach is supported by the following principles, among others, as fully described in the CD&A:

—	We strive to attract, retain, and motivate high-caliber executives
—	As executives assume more responsibility, we increase the portion of their total compensation that is at-risk and that is tied to long-term incentives
—	We recognize the cyclical nature of our equipment businesses and the need to manage value throughout the business cycle
—	We provide opportunities for NEOs to be long-term shareholders of Deere
—	We structure our compensation program to be regarded positively by our shareholders and employees

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Advisory Vote on Executive Compensation
Compensation Discussion and Analysis

At our 2019 Annual Meeting, we held a shareholder advisory vote on executive compensation in which shareholders approved the advisory vote on the compensation of our NEOs.

The Board believes that the executive compensation as disclosed in the CD&A, the accompanying tables, and other disclosures in this Proxy Statement is consistent with our compensation philosophy and aligns with the pay practices of our peer group.

FOR THE REASONS STATED, THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE FOLLOWING NON-BINDING RESOLUTION:

“RESOLVED, that the shareholders approve the compensation of the NEOs as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the SEC, including the CD&A, tabular disclosures, and other narrative executive compensation disclosures.”

Effect of Proposal
The say-on-pay resolution is non-binding, but the Board values your opinion as expressed through your votes and other communications. Therefore, the Board and the Compensation Committee will carefully consider the outcome of the advisory vote and those opinions when making future compensation decisions. However, the Board believes that the Compensation Committee is in the best position to consider the extensive information and factors necessary to make independent, objective, and competitive compensation recommendations and decisions that are in the best interests of Deere and its shareholders. Therefore, the final decision regarding the compensation and benefits of our executive officers and whether and how to address shareholder concerns remains with the Board and the Compensation Committee.

Compensation Discussion and Analysis

We design our compensation plans to reward planning and behavior that:

—	Help us pivot quickly in a chronically cyclical sector;
—	Emphasize research and development in an ever-changing global economy; and
—	Enable us to benefit from the diversity of our products, services, and geographic locations.

Our competitive base pay promotes stable planning and prudent risk taking. In addition, our benefits plans are designed to secure a healthy, loyal, and long-term focused employee base. Our business strategy emphasizes achieving superior operating and financial performance throughout the business cycle. This includes maintaining aggressive goals for operating margin and asset turns, while achieving sustained Shareholder Value Added growth through disciplined expansion. Our at-risk pay is designed to motivate NEOs to execute this strategy. Since aligning the metrics of our compensation program with our strategy in 2002, we have demonstrated our ability to operate profitably at every point throughout the business cycle.

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Advisory Vote on Executive Compensation
Compensation Discussion and Analysis

Following is a detailed description of our compensation programs, including the underlying philosophy and strategy, the individual elements, the Board’s and the Compensation Committee’s (“Committee”) methodology and processes used to make compensation decisions, and the relationship between our performance and compensation delivered in fiscal 2019. We focus on the compensation of our CEO who served during 2019, two officers who served as CFO during fiscal 2019, and the next three most highly compensated executive officers for fiscal year 2019, as noted in the chart directly below:

Name		Title at the Close of Fiscal 2019
Samuel R. Allen		Chairman and Chief Executive Officer (1)
Ryan D. Campbell		Senior Vice President and Chief Financial Officer (2)
Rajesh Kalathur		President, John Deere Financial and Chief Information Officer (3)
James M. Field		President, Worldwide Construction & Forestry and Power Systems (4)
John C. May		President and Chief Operating Officer (5)
Cory J. Reed		President, Worldwide Agriculture & Turf Division: Americas and Australia; Global Harvesting and Turf Platforms; and Ag Solutions (6)

(1)	Effective November 4, 2019, Mr. Allen became Chairman of the Board.
(2)	Effective April 1, 2019, Mr. Campbell became Senior Vice President and Chief Financial Officer.
(3)	Effective November 15, 2018, Mr. Kalathur became Senior Vice President and Chief Financial Officer and Chief Information Officer. Effective April 1, 2019, Mr. Kalathur became President, John Deere Financial and Chief Information Officer.
(4)	Effective November 15, 2018, Mr. Field became President, Worldwide Construction & Forestry Division. Effective January 1, 2019, Mr. Field also became President of John Deere Power Systems.
(5)	Effective November 15, 2018, Mr. May became President, Worldwide Agriculture & Turf Division: Global Harvesting and Turf Platforms, Ag Solutions Americas and Australia. Effective April 1, 2019, Mr. May became President and Chief Operating Officer. Effective November 4, 2019, Mr. May became Chief Executive Officer. Mr. May was also named a board director in fiscal year 2019.
(6)	Effective April 1, 2019, Mr. Reed became President, Worldwide Agriculture & Turf Division: Americas and Australia; Global Harvesting and Turf Platforms; and Ag Solutions.

Leadership Transition
As part of an orderly succession and leadership transition in April 2019, John C. May was promoted to President and Chief Operating Officer due to his record of success, proven leadership skills, and his guiding role in the company’s precision-agriculture initiative and experience as Chief Information Officer. After a thorough succession planning process, in August 2019 the Board elected Mr. May as member of the Board immediately and Chief Executive Officer effective November 4, 2019. Mr. May has 22 years of service with the company and has been a senior officer since 2012. Mr. May’s broad range of experience, keen intellect, collaborative style, and understanding of the vital importance of technology make him highly qualified to assume these important duties and become the company’s 10^th chief executive. In addition, Samuel R. Allen was named Chairman of the Board and will continue to chair Deere’s Board of Directors and work closely with Mr. May on long-term strategic initiatives for the Company.

Over the last year, there were several other leadership transitions to support the continued development of leadership talent as part of Deere’s ongoing leadership succession planning coordinated with the retirement of two senior officers. James M. Field was appointed initially as President, Worldwide Construction & Forestry and later his responsibilities were expanded to also include Power Systems. In addition to Mr. Field leading two critical components of the business, his leadership is also critical to the integration of the Wirtgen business, the company’s largest acquisition ever. To ensure the continuity of his leadership and reward him for his successful performance, Mr. Field was granted a special equity award in March 2019. The $4 million award was made up of Restricted Stock Units and Performance Stock Units. The time-based award vests over a three-year period. The performance portion, which was one-fourth of the award, is based on Construction & Forestry Division profit margin targets and continuing to build synergies among the Construction & Forestry businesses.

For further details of the leadership changes for all NEO’s please see the Base Salary section in the Compensation Discussion and Analysis.

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Executive Summary

Advisory Vote on Executive Compensation Compensation Discussion and Analysis Executive Summary

Our business strategy emphasizes achieving superior operating and financial performance throughout the business cycle. This includes maintaining aggressive goals for operating margin and asset turns while realizing sustainable Shareholder Value Added growth through disciplined expansion. Deere’s compensation program is designed to motivate NEOs to execute this strategy.

NET SALES & REVENUES	NET INCOME* (attributable to Deere & Company)	SHAREHOLDER VALUE ADDED
$39.26	$3.25	$1.52
BILLION	BILLION	BILLION
UP 5%	UP 37%	DOWN 19%
	*Excluding the discrete tax reform effects, adjusted net income was $3.19 billion in 2019.

In fiscal 2019, net sales and revenues reached $39.258 billion — a record high — while net income attributable to Deere & Company totaled $3.253 billion, second highest in company history. Execution was hindered by higher production costs, unfavorable effects of foreign exchange, increased research and development costs, and higher selling, administrative, and general expenses. Shareholder Value Added, our measure of economic profit, dropped to $1.515 billion, down 19 percent.

Since aligning the metrics of our compensation program with our strategy in 2002, Deere has shown an ability to operate profitably throughout the business cycle.

Financial Performance and Compensation Metrics
As outlined below, the metrics Deere uses to measure success in its business strategy are the same used in our compensation programs to ensure that employees are working in aligned, high-performance teams. Further details below illustrate how the company’s compensation plans and payouts are sensitive to fluctuations in business conditions. Deere has made no significant changes to the compensation structure in fiscal 2019 and as we look ahead for fiscal 2020. Wirtgen financials were excluded from the OROA and SVA compensation metrics for fiscal 2019 and will be for 2020.

DRIVERS OF ONE-YEAR OROA, ROE, AND REVENUE GROWTH (STI) —Operating cost management —Disciplined asset management —Efficient use of equity —Near-term business execution

DRIVERS OF THREE-YEAR SVA (LTIC) —Cost management decisions with a long-term focus —Efficient use of long-term assets —Long-term investment decisions for capital and research and development —World-class distribution systems —Technology innovation

DRIVERS OF REVENUE GROWTH AND TSR (LTI) —Market conditions —Market share —Successful execution of business strategy —Stock price appreciation over the long term

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Advisory Vote on Executive Compensation
Compensation Discussion and Analysis
Executive Summary

				2018		2019		% Change		Fiscal 2019 Actions and Results
STI		OROA (1)		24.42%		21.55%		-12%		The STI payout was 69% of target, resulting in an award of $1.6 million for the CEO and awards ranging from $0.3 million to $0.7 million for the other NEOs.
		ROE		11.06%		10.70%		-3%
		Net Sales and Revenues		$37,358M		$39,258M		5%
		Payout as a % of Target		98%		69%		-30%
LTIC		3-Year Accumulated SVA (1)		$3,493M		$4,684M		34%		The LTIC payout for the 2017-2019 performance period was 117% of target. With TSR performance at the 88th percentile, there was no adjustment to the payout due to the TSR modifier. This resulted in an award of $2.1 million for the CEO and awards of approximately $0.2 for the CFO (2) and $0.8 million for each of the other NEOs.
		3-Year TSR as of 31 Oct.		22.94%		27.83%		+4.89 pts
		TSR Performance Results as Compared to S&P Industrial Sector		85th percentile		88th percentile		4%
		TSR Modifier		100%		100%		0%
		Payout as a % of Target		83%		117%		41%
LTI-Revenue Growth		Deere Growth Rate		8.98%		13.79%		+4.81 pts		The LTI grant for the 2019-2021 performance period was received in December 2018 and was based solely on Revenue Growth. The CEO received an LTI award valued at $9.1 million, a 20% increase over the base-level award; LTI awards for the other NEOs were increased an average of 12%, valued at $1.5 million; adjustments reflect strong operating performance and rapid response to challenging business conditions.
		Revenue Growth Performance Results as Compared to S&P Industrial Sector		80th percentile		89th percentile		11%
		PSU Payout as a % of Target		200%		200%		0%
LTI-TSR		Stock Price as of 31 Oct.		$135.44		$174.14		29%
		3-Year TSR as of 31 Oct.		22.94%		27.83%		+4.89 pts
		TSR Performance Results as Compared to S&P Industrial Sector		85th percentile		88th percentile		4%
		PSU Payout as a % of Target		200%		200%		0%

(1)	Wirtgen financials were excluded from the OROA and SVA compensation metrics for fiscal 2018 and 2019.
(2)	Effective April 1, 2019, Mr. Campbell became Senior Vice President and Chief Financial Officer. His LTIC award was based upon the median of his position as of September 30, 2018.

Shareholder Outreach
As part of our ongoing annual review in 2019, we invited our top shareholders to participate in discussions regarding executive compensation, sustainability, and governance issues. During the year, we met with shareholders representing over 40% of our outstanding shares, to ensure changes to our program were understood and aligned with their expectations. We discussed our approach to executive compensation programs, as well as various sustainability and corporate governance topics important to investors. Discussions with shareholders did not indicate any significant issues with current compensation programs.

Our learnings included:

—	Deere has strong alignment between business strategy and compensation design
—	Our shareholders understand how OROA, ROE, and SVA are linked to successful operating performance
—	The STI and LTIC programs contribute to successful operating performance, drive the right employee behavior and promote the creation of long-term value throughout the business cycle
—	Shareholders understand the exclusion of Wirtgen in certain 2020 STI and LTIC program metrics recognizing the ongoing efforts to integrate Wirtgen financials to Deere performance metrics
—	Shareholders appreciate the linkage between our strategy and ability to deliver sustainable outcomes to our stakeholders

We regularly analyze our practices to ensure we remain a leader in executive compensation best practices and remain aware of shareholder concerns. We recognize the value of the ongoing feedback and will continue regular shareholder engagement activities to gain their perspective firsthand.

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2019 Compensation Overview

Deere is committed to a compensation philosophy that incorporates the principles of paying for performance, supporting business strategies, and paying competitively. The Committee believes this philosophy continues to drive our NEOs and salaried employees to produce sustainable, positive results for Deere and our shareholders.

Snapshot of Compensation Governance

To ensure that our compensation program meets Deere’s business objectives without compromising our core values, we regularly compare our compensation practices and governance against market best practices. Here are some of the best practices we have implemented.

WE DO:		WE DON’T:
▲use a combination of short-term and long-term incentives to ensure a strong connection between Deere’s operating performance and actual compensation delivered   ▲regularly evaluate our peer group and pay positioning under a range of performance scenarios   ▲annually review all our compensation plans, policies, and significant practices   ▲annually review risks associated with compensation   ▲include a “double-trigger” change in control provision in our executive Change in Control Severance Program, as well as our current equity plan, so participants will receive severance benefits only if both a change in control and a qualifying termination occur   ▲annually review and limit executive perquisites   ▲retain an independent compensation consultant who does not perform other significant services for Deere   ▲have an Executive Incentive Compensation Recoupment Policy to ensure accountability in the presentation of our financial statements   ▲enforce stock ownership requirements to ensure that directors and executives have interests in common with our shareholders   ▲provide executive officers with benefits such as health care insurance, life insurance, disability, and retirement plans on the same basis as other full-time Deere employees		▼offer employment agreements to our U.S.-based executives   ▼provide tax gross-ups for executives, except for those available to all employees generally   ▼provide excise tax gross-ups upon a change in control to any employees   ▼offer above-market earnings on new contributions to deferred compensation accounts   ▼grant stock options with an exercise price less than the fair market value of Deere’s common stock on the date of grant   ▼re-price stock options without the prior approval of our shareholders   ▼cash out underwater stock options   ▼include reload provisions in any stock option grant   ▼permit directors or employees, or their respective related persons, to engage in short sales of Deere’s stock or to trade in instruments designed to hedge against price declines in Deere’s stock   ▼permit directors or officers to hold Deere securities in margin accounts or to pledge Deere securities as collateral for loans or other obligations

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Snapshot of Compensation Elements

The components of our 2019 compensation program are:

	Total Direct Compensation				Total Indirect Compensation
	Short-Term Compensation		Long-Term Compensation		Other Compensation and Benefits
	Base Salary	Short-term Incentive (STI)	Cash (LTIC)	Equity (LTI)
Purpose	Based on level of responsibility, experience, and sustained individual performance	Annual cash award for profitability and efficient operations during the fiscal year	Cash award for sustained profitable growth during a three-year period	Equity award for creating shareholder value as reflected by stock price and revenue growth	Perquisites, retirement benefits, deferred compensation benefits, additional benefits payable upon a change in control
Characteristics	Fixed cash component generally targeted at the peer group median	A target STI award is designed to contribute to annual cash compensation and overall compensation at the peer group median	A target LTIC award is designed to contribute to overall compensation at the peer group median	Awarded in a combination of RSUs, PSUs, and stock options, a base-level LTI award is designed to contribute to overall compensation at the peer group median
Metrics	- CEO: Increase to $1.6M for 2019 - Other NEOs: Various increases to align with market median and related to company reorganization as of April 1, 2019	- Operating Return on Operating Assets (OROA), Return On Equity (ROE), and net sales and revenues in current-year performance(1)	- Shareholder Value Added (SVA)(1) and Total Shareholder Return (TSR) modifier to the payout	- Revenue Growth(2) - LTI awards can be increased by up to 20% to recognize individual performance"

(1)	Wirtgen is excluded from both the Equipment Operations OROA and SVA calculations for FY19 variable pay to allow time for integration and assimilation. See Appendix B for details.
(2)	The equity award for performance periods starting in FY2018 will only be based on revenue growth. Prior to FY2018, PSUs were based on revenue growth and TSR.

As this table suggests, we compare each component of compensation to the median level for that component awarded by our peers. In addition, we strive to have each NEO’s total annual cash compensation and overall compensation at target compare favorably to the median levels for comparable executives. For example, in fiscal 2019, our CEO’s base salary and target STI were 29% of his overall compensation, compared to an average of 26% for CEOs in our peer group.

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2019 Target Direct Compensation Mix

Pay for performance is an essential element of our compensation philosophy. We believe compensation should motivate our executives to substantially contribute — both individually and collaboratively — to Deere’s long-term, sustainable growth. To that end, our performance-based compensation program consists of three components (STI, LTIC, and LTI), all driven by metrics that align with Deere’s business strategy and reflect the cyclical nature of the industries in which Deere operates.

To enhance the connection between pay and performance, as our NEOs assume greater responsibility, we award a larger portion of their total compensation in the form of “at risk” incentive awards and a larger portion of their incentive awards in the form of equity. This practice is apparent in the following charts, which illustrate the allocation of all fiscal 2019 Direct Compensation components at target for our CEO and for our other NEOs as a group.

CEO TARGET COMPENSATION MIX		NEO TARGET COMPENSATION MIX

(a)	”At risk” implies awards that are subject to performance conditions and stock price performance
(b)	Variable pay that is metric driven
(c)	Variable pay that is stock price driven

Direct Compensation Elements

As shown in the Target Compensation Mix charts under 2019 Compensation Overview, the majority of direct compensation for the CEO and NEOs is based on “at-risk,” variable pay. Our performance-based compensation programs fall into two categories: short-term incentives based on annual metrics and long-term incentives based on a three-year performance period. Long-term performance based incentives are awarded in the form of cash and equity (RSUs, PSUs, and stock options). The following information describes each direct compensation element, including the applicable performance metrics.

Base Salary

In determining salary levels for each of our NEOs, the Committee considers factors such as the financial and operational performance, leadership, development of people, time in position, internal equity, and potential. The Committee also considers each NEO’s current salary as compared to the salary range and median salary practices of our peer group. With recent senior

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officer retirements, the Company reorganized and consolidated roles to the current senior officer group. As a result, salaries were increased to reflect the broader responsibilities. The following increases reflect the Committee’s assessment of the NEOs’ favorable performances and to position base salaries closer to market median given the NEO’s broadened responsibilities. Senior officer salary levels still remain below the market median for similar positions after increases in fiscal 2019. Deere has developed a multi-year plan to reward and retain our senior officers and to position them to market medians assuming continued favorable performance by the senior officer.

After considering all relevant information, the Board determined that Samuel R. Allen’s fiscal 2019 base salary as Chairman and Chief Executive Officer should increase to reflect his successful 2018 performance. As of November 4, 2019, Mr. Allen has stepped down as Chief Executive Officer. He will remain on the Board of Directors and will serve as Chairman. Mr. Allen’s base salary has been adjusted to $1,100,000 as he provides guidance and support to the senior officer group during the leadership transition.

During 2019, John C. May initially transitioned to President, Worldwide Agriculture & Turf Division: Global Harvesting and Turf Platforms, Ag Solutions Americas and Australia and then to President and Chief Operating Officer on April 1, 2019. Mr. May received salary increases during 2019 for his promotions and favorable performance. On August 28, 2019, the Board of Directors of Deere & Company elected Mr. May Chief Executive Officer of Deere & Company, effective November 4, 2019 which also aligns with the start of fiscal 2020. With the new role and expanded responsibilities, Mr. May’s annual base salary increased to $1,200,000. The Board also voted to elect Mr. May as a Director effective immediately. Mr. May is still below the market median and may receive salary increases in the future to more closely align with market median assuming continued favorable performance by Mr. May.

Ryan D. Campbell was promoted to Senior Vice President and Chief Financial Officer in 2019 and received an increase in salary with his promotion. Mr. Campbell was named Vice President and Deputy Financial Officer in 2018. He previously served as Vice President and Comptroller, and as a Finance Director for the Company’s Agriculture & Turf Division. Mr. Campbell joined the company in 2007.

During 2019, Rajesh Kalathur was named President, John Deere Financial and Chief Information Officer. As a result, his base salary was increased for the new responsibilities. Mr. Kalathur had served as Senior Vice President, Chief Financial Officer and Chief Information Officer since November 2018.

James M. Field’s salary increased due to broadened responsibilities with the consolidation of Construction & Forestry and Power Systems, which resulted in his new title of President, Worldwide Construction & Forestry and Power Systems.

In 2019, Cory J. Reed became President, Worldwide Agriculture & Turf Division: Americas and Australia; Global Harvesting and Turf Platforms; and Ag Solutions and as a result received an increase to his salary. Mr. Reed joined the company in 1998 and, prior to this, he had roles as the President, John Deere Financial and also led our Intelligent Solutions Group.

Officer	Base Salary as of Dec. 1, 2017	Salary Increase %	Base Salary as of Apr. 1, 2019 (1)
Samuel R. Allen (2)	$1,500,000	7%	$1,600,000
Ryan D. Campbell	n/a	n/a	$567,768
Rajesh Kalathur	$658,608	10%	$724,476
James M. Field	$726,264	10%	$798,900
John C. May (3)	$647,004	55%	$1,000,764
Cory J. Reed	$579,660	21%	$701,400

(1)	This column reflects that a number of salary changes occurred between the window of December 2017 to April 2019.
(2)	Effective November 4, 2019, Mr. Allen stepped down as Chief Executive Officer and his salary was adjusted to $1,100,000 to reflect his new role.
(3)	Effective November 4, 2019, Mr. May was elected Chief Executive Officer and his salary was increased to $1,200,000 to reflect his new responsibilities.

Short-Term Incentive (STI)

PERFORMANCE METRICS FOR STI

The Committee believes that operating margins, efficient deployment of our assets (both fixed and working capital), and growth are key drivers in creating long-term shareholder value. For this reason, the Committee has designed the STI program to motivate our executives and most other salaried employees to focus on reducing costs and optimizing asset and capital efficiency no matter where we are in the business cycle each fiscal year.

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—	OROA (for our Equipment Operations segments) supports our strategic approach to sound investment of capital and asset utilization. ROE (for our financial service segment) effectively measures the efficient use of equity.
—	Net sales and revenues measure our growth.

By consistently managing OROA results through all points in the business cycle, we have paid out more than half of cash flow from our operations to investors through dividends and net share repurchases since 2004.

For fiscal 2019, the performance results for these metrics are combined to determine STI awards as follows:

Company Performance Factor Weighting:
Enterprise OROA/ROE Metric*	67%
Net Sales and Revenues Metric	33%

Enterprise OROA/ROE Metric Weighting:
Equipment Operations OROA	50%
Agriculture & Turf Operations OROA	25%
Construction & Forestry Operations OROA	15%
Financial Services ROE	10%

*	Appendix B, “Deere & Company Reconciliation of Variable Compensation Measures to Non-GAAP Measures” illustrates in detail how OROA and ROE are calculated.

The emphasis on the OROA performance of the Equipment Operations in calculating STI reflects the critical position these operations have as drivers of our business: Equipment Operations’ net sales accounted for 89% of our net sales and revenues in fiscal 2019. The 50% weighting for the combined Equipment Operations reflects the importance of employees’ aligning with the overall business strategies, including working together to develop technology and drive synergies.

OROA – Equipment Operations Metric
OROA goals are formulaically adjusted to reflect the cyclical nature of our business. We are primarily a manufacturing company with high investment in fixed assets, such as buildings and machinery, and significant expenses with longer-term payoffs, such as research and development. As a result, our business can be affected by external economic factors beyond our control. For instance: when commodity prices are low or the housing and infrastructure sectors are weak, our customers may elect to delay equipment purchases and upgrades, affecting our short-term financial forecast.

Thus, our long-term strategy, which includes a focus on OROA performance, is designed to enable management to respond promptly and purposefully to changing business conditions to drive sustained operational results across business cycles. Because business conditions can quickly change, the Committee sets a range of OROA goals for a range of potential conditions rather than for a static forecast. This allows us to be agile, encourages us to prepare in advance for a variety of business conditions, and to quickly make necessary structural changes, such as those related to cost reduction, capacity, and assets (especially inventory) as business conditions change during the year.

WHAT IS MID-CYCLE?

—	We calculate mid-cycle sales for each product line by annually gathering historical information on the size of the industry (for example, the total number of tractors sold in the U.S. market) and our market share for every product line (in this example, the number of tractors sold by Deere).
—	At the peak of a typical business cycle, actual sales constitute 120% of mid-cycle sales; at the trough, actual sales constitute 80% of mid-cycle sales, generally speaking. OROA goals vary each year to reflect where we are on this spectrum.

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—

To maintain the rigor of the program, the specific goals for any year are determined based on where we are in the business cycle. This ensures that our employees are not unduly rewarded when the economy is strong and penalized for poor economic conditions. The Committee fixes threshold, target, and maximum OROA goals that are more ambitious at the peak of a business cycle, when it is easier to cover fixed costs and achieve a higher asset turnover (and thus a better OROA), and less ambitious at the trough.

—

Our position in the business cycle is calculated by comparing current sales to projected mid-cycle sales. Performance targets are adjusted accordingly based upon position to the mid-cycle.

●	Equipment Operations sales are at 101% of mid-cycle
●	Construction & Forestry sales are at 121% of mid-cycle
●	Agriculture & Turf sales are at 95% of mid-cycle

How do OROA goals work? For an example of how our multi-tiered OROA goals work in practice, assume we determined that mid-cycle sales are $30 billion. If actual sales for the year are $27 billion, that means we are at 90% of mid-cycle (27 ÷ 30 = .90). In that case, OROA goals would be lower than the goals for mid-cycle. On the other hand, if actual sales are $33 billion, that means we are at 110% of mid-cycle (33 ÷ 30 =1.1). In that case, OROA goals would be greater than the goals for mid-cycle. Both scenarios are illustrated below:

OROA GOALS INCREASED IN 2018 TO ENSURE THEIR RIGOR
To continue to improve operational performance and seize the benefits of our structural transformation, the Committee raised OROA goals for STI purposes to align more appropriately to the current business strategy. As the following charts show, the OROA goals implemented in fiscal 2018 are significantly more rigorous at mid-cycle and peak than they have been historically.

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OROA GOAL

	2015 OROA Goals			2016 OROA Goals			2017 OROA Goals			Current OROA Goals*
	Trough	Mid-Cycle	Peak	Trough	Mid-Cycle	Peak	Trough	Mid-Cycle	Peak	Trough	Mid-Cycle	Peak
Maximum	12%	20%	28%	13%	24%	36%	16%	26%	36%	17%	35%	48%
Target	8%	12%	20%	10%	18%	26%	12%	19%	26%	14%	29%	40%
Threshold	4%	8%	12%	8%	12%	16%	8%	12%	16%	12%	20%	28%

*	Current goals established in 2018.

ROE – Financial Services Metric
The ROE metric is the STI performance metric for the Financial Services business, a key differentiator for how we deliver value to our dealers and customers. ROE was selected because it effectively measures the efficient use of the segment’s equity. We have two distinct business models within Financial Services and we use different ROE goals for each.

Subsidized business: Historically, approximately 70% of Financial Services’ business has been subsidized by the Equipment Operations to reduce the interest rates that our customers and dealers would otherwise pay on financial products. The ROE goal for the subsidized business — 10% — is the same regardless of the business cycle as maximizing profitability is not the purpose of this segment. The goal is rigorous; however, our threshold goal, which is based on the implied after-tax cost of equity, represents upper-quartile performance compared to other financial institutions.

Non-subsidized business: The remaining offerings, which are non-subsidized, are intended to utilize equity to earn a profitable return. Consequently, this business has more traditional (and progressively more challenging) goals. The threshold goal equals the implied after-tax cost of equity for Financial Services; the ROE goals of 13% at target and 16% at maximum represent an even greater level of stretch both internally and compared to our peers.

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ROE goals are weighted based on the actual mix of subsidized versus non-subsidized business in a fiscal year. The Committee approved the following ROE goals at the beginning of fiscal 2019:

Fiscal 2019 ROE Goals		Subsidized business			Non-subsidized business			Weighted Goals
% of Business		64	%		36	%
Maximum		10	%		16	%		12	%
Target		10	%		13	%		11	%
Threshold		10	%		10	%		10	%

Net Sales and Revenues – Corporate Metric
Company wide net sales and revenues together account for one-third of the STI payout. These metrics were added in 2017 to incorporate a growth factor into the incentive calculation.

For 2019, our net sales and revenues target goal is $39.84B. Net sales and revenues that fall more than 15% below target will result in no payout on that metric. Conversely, net sales and revenues that exceeds target by at least 15% will result in a maximum (200%) payout on that metric.

APPROVAL OF STI AWARD RATES

At the beginning of the fiscal year, after review and consideration of Deere’s peer group data for target cash bonuses, the Committee approves target STI rates as a percentage of each NEO’s base salary. The target STI rates for fiscal 2019 and 2020 are as follows:

	2019 Target Rate			2020 Target Rate
CEO	150	%		150	%
Chairman	n/a			120	%
Other NEOs	100	%		100	%

Regardless of the award amount reached by applying these payout rates, no individual award under the STI plan may exceed $5 million or 200% of target.

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FISCAL 2019 PERFORMANCE RESULTS AND PAYOUT AMOUNTS

The chart below shows OROA results for the Agriculture & Turf Operations, the Construction & Forestry Operations, and Equipment Operations as a whole, based on actual sales volumes:

Those results, together with ROE for Financial Services, are weighted to determine STI, as follows:

Fiscal 2019 Performance Results for STI	Fiscal 2019 Performance Results	Performance as % of Target	Fiscal 2019 OROA/ROE Award Weighting	Weighted Award Results	Fiscal 2019 Award STI Weighting	Actual Performance Results
Equipment Operations OROA	21.6%	56%	50%	28%
Agriculture & Turf Operations OROA	21.4%	73%	25%	18%
Construction & Forestry Operations OROA	21.9%	0%	15%	0%
Financial Services ROE	10.7%	92%	10%	9%
Enterprise OROA/ROE Metric (1)				56%	67%	38%
Net Sales and Revenues	$39,258M	95%			33%	31%
Actual Performance as % of Target						69%

(1)	The Equipment Operations OROA calculation excludes the assets from our captive financial services and Wirtgen. ROE is based solely on the Financial Services segment. See Appendix B for details.

The amount of the STI award paid to a NEO is calculated as follows:

STI AWARD CALCULATIONS

Base salary for the fiscal year

✕

Target STI rate

✕

Actual performance as a percentage of target

=

STI award amount

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Actual STI awards paid to the NEOs are shown in the table to the right and detailed in the Fiscal 2019 Summary Compensation Table under footnote (4).

For fiscal 2019, STI awards paid to the NEOs consisted of approximately 1% of the total amount of STI awards paid to all eligible employees.

Officer	Fiscal 2019 STI Award Payout
Samuel R. Allen	$1,640,451
Ryan D. Campbell	$297,701
Rajesh Kalathur	$495,902
James M. Field	$546,845
John C. May	$651,466
Cory J. Reed	$460,356

Long-Term Incentive Cash (LTIC)

LTIC is a long-term cash award based on our performance against ambitious goals for Shareholder Value Added (SVA) over a three-year performance period.

SHAREHOLDER VALUE ADDED PERFORMANCE METRIC

SVA, which essentially measures earnings in excess of our cost of capital, was selected as the LTIC performance metric because the Committee believes we should:

—	earn, at a minimum, the weighted average cost of capital each year
—	ensure that investments earn their cost of capital

We believe we can realize sustainable improvement in SVA through a combination of revenue growth and high returns on invested capital. SVA incorporates both of these concepts and therefore serves as a barometer of long-term value.

We demonstrate how SVA is calculated in Appendix B, “Deere & Company Reconciliation of Variable Compensation Measures to Non-GAAP Measures.”

SETTING RIGOROUS SVA GOALS

Our SVA performance targets are intended to incentivize superior performance. Our goal for a maximum payout is calculated based on estimated enterprise SVA at mid-cycle sales levels for the first year of the performance period. We assume a compounded 7% annual growth rate for the remaining two years (our historical sales growth rate) to arrive at a cumulative three-year SVA goal, given limited visibility.

Once the maximum SVA goal is set, the target SVA goal is set at half of that amount. Our target goals are challenging to achieve. The threshold accumulated goal is set at $5 million.

Although the SVA goals have decreased, the same level of goal rigor exists due to the downturn in business conditions. The chart below details the threshold, target, and maximum accumulated SVA goals for each performance period that includes fiscal 2019. As the recent business downturn became part of the business cycle, mid-cycle volumes decreased, resulting in slightly lower mid-cycle SVA for the performance periods ending in 2019 through 2021. The SVA goals have increased at a compounded annual growth rate of 9% since the LTIC plan was introduced in 2004.

SVA Goals for LTIC	Fiscal 2017 through Fiscal 2019	Fiscal 2018 through Fiscal 2020	Fiscal 2019 through Fiscal 2021
Threshold SVA Required for Payout	$5 million	$5 million	$5 million
SVA Goal for Target Payout	$4,010 million	$3,900 million	$3,335 million
SVA Goal for Maximum Payout	$8,020 million	$7,800 million	$6,670 million

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MODIFICATION OF AWARDS BASED ON RELATIVE TSR

LTIC payouts may be modified based on relative TSR compared to a subset of the S&P 500 Industrial Sector. If our TSR is at or below the 25th percentile of the comparator group, which comprises around 40 companies, the final LTIC payout for our senior executives will be reduced by 25%. If our TSR is between the 25th and 50th percentiles, the final LTIC payout for our senior executives will be reduced by up to 25%, as shown in the graph below. When performance is between the 50th and 75th percentile the LTIC payout may be increased.

Beginning with the three-year performance period starting with fiscal 2018, which will pay out in 2020, the TSR modifier was amended to include an upside opportunity when performance is between the 50th and 75th percentile and also to create a steeper reduction when TSR performance is below the 50th percentile. In addition, in 2018 the performance peer group for TSR purposes was amended from the S&P Industrials peer group to a subset of the S&P Industrial Sector. This smaller group of around 40 peer companies is more closely aligned by industry or related to agricultural and construction business cycles. The same smaller peer group is used as the comparator group for PSU metrics. The payout factor based on SVA performance will be multiplied by the modifier to calculate a final payout factor. The charts below show how the different modifiers operate at different TSR rankings. In the original modifier, the reduction amount is subtracted from the SVA performance payout factor; the new modifier will apply a multiplicative percentage to the payout factor.

TSR MODIFIER FOR LTIC PAYMENTS

FOR PERFORMANCE PERIODS ENDING IN 2019		FOR PERFORMANCE PERIODS ENDING IN 2020 AND BEYOND
3-Year TSR Percentile vs. S&P Industrials		3-Year TSR Percentile vs. Subset of the S&P Industrials

APPROVAL OF LTIC AWARD RATES

At the beginning of each performance period, after considering data for our peer group, the Committee approves target LTIC payout rates as a percentage of the median salary for each NEO’s salary grade. For the performance period that begins in 2019, the target rates were increased to align closer to peers and market changes.

		Performance Periods Ending in 2019		Effective with Performance Period Ending with 2020
CEO		121%		135%
Chairman		n/a		121%
Other NEOs		93%		105%

Regardless of the amount calculated for each award using these payout rates, no employee can receive an award under the LTIC plan that exceeds $6 million or 200% of target.

FISCAL 2019 PERFORMANCE RESULTS FOR LTIC

The following table shows our accumulated SVA, calculated as described in Appendix B, for the three-year performance period ended in 2019, which resulted in a payout of 117%.

The payout percentage for fiscal 2019 was calculated as follows:

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Fiscal Year		SVA (in millions)
2017		$1,264
2018		$1,885
2019		$1,535
Accumulated SVA for 2017-2019 performance period		$4,684
SVA Goal for Target Payout		$4,010
TSR Modifier (if TSR ranking below the 50th percentile)		no modifier applied
Actual Performance as % of Target		117%

HISTORICAL ACCUMULATED SVA, LTIC GOALS, AND LTIC PAYOUTS

The following table shows historical LTIC information and how SVA for fiscal 2019 will affect LTIC awards for the performance periods ending in 2019, 2020, and 2021.

CALCULATION OF LTIC AWARDS

The amount of the LTIC award paid to a NEO is calculated as follows:

Median of actual salaries for the relevant salary grade (a)

×

Target LTIC rate

×

Actual performance as a percent of target

=

LTIC award amount

(a)	Median (or midpoint) is the basis of the LTIC calculation for all employees so that within a given salary structure and level, the employees receive the same LTIC payout.

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Actual LTIC awards paid to the NEOs are shown in the table to the right and detailed in the Fiscal 2019 Summary Compensation Table under footnote (4).

The results for the performance period ended in 2019 are also used to determine the LTIC awards for other eligible employees worldwide. LTIC awards paid to the NEOs for fiscal 2019 consisted of approximately 5% of the total amount of LTIC awards paid to all eligible employees.

Officer	Fiscal 2019 LTIC Award Payout
Samuel R. Allen	$2,119,920
Ryan D. Campbell (1)	$241,035
Rajesh Kalathur	$770,141
James M. Field	$770,141
John C. May	$770,141
Cory J. Reed	$770,141

(1)	Effective April 1, 2019, Mr. Campbell became Senior Vice President and Chief Financial Officer. His LTIC award was based upon the median of his position as of September 30, 2018.

Long-Term Incentive (LTI)

LTI is designed to reward the NEOs for creating sustained shareholder value, to encourage the ownership of Deere stock, to foster teamwork, and to retain and motivate high-caliber executives while aligning their interests with those of our shareholders. LTI awards consist of the following three components awarded annually under the John Deere Omnibus Equity and Incentive Plan (Omnibus Plan):

—	Performance Stock Units (PSUs)
—	Restricted Stock Units (RSUs)
—	Market-priced stock options

The Omnibus Plan is periodically approved by our shareholders and was last approved at the Annual Meeting in February 2015. Shareholders are voting on a new LTI plan with substantially the same terms as the Omnibus Plan at the February 2020 shareholder meeting. See Item 4 in this proxy statement for further details.

FISCAL 2019 LTI AWARD OVERVIEW FOR NEOS

	PSUs		RSUs		Stock Options
LTI Mix		40%		25%		35%
Performance measurements	Revenue growth*		Stock price appreciation		Stock price appreciation
Vesting period	Cliff vest on the third anniversary of the grant date		Cliff vest on the third anniversary of the grant date		Vest in approximately equal annual installments over three years
Conversion/ expiration	Converted to Deere common stock upon vesting		Converted to Deere common stock upon vesting		Expire 10 years from the grant date
Objective	Motivate and reward relative outperformance		Encourage ownership and retention while providing immediate alignment with shareholders		Reward for stock price appreciation

*Based on Deere’s compounded annual growth rate

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Table of Contents

Advisory Vote on Executive Compensation
Compensation Discussion and Analysis
Direct Compensation Elements

APPROVAL OF LTI AWARD VALUES

The Committee established LTI grants for the NEOs based on the following criteria:

—	level of responsibility
—	individual performance
—	current market practice
—	peer group data
—	the number of shares available under the Omnibus Plan

Awards granted in previous years are not a factor in determining the current year’s LTI award, nor is potential accumulated wealth.

At the first Committee meeting of each fiscal year, after consideration of peer group data on median values for long-term incentives, the Committee approves a dollar value for a base-level LTI award and the mix of awards to be delivered. The grant price is the closing price of Deere common stock on the NYSE on the grant date. The grant price is used to determine the number of PSUs, RSUs, and stock options to be awarded.

The Committee can increase (up to 20%) or decrease (down to $0) an individual NEO’s base-level award to distinguish that executive’s performance, deliver a particular LTI value, or reflect other adjustments as the Committee deems appropriate. For fiscal 2019, the Committee approved adjustments to base-level award values ranging up to 20% to recognize the accomplishments of the individual NEOs. LTI awards were approved for the NEOs as follows:

	Adjusted Award Values*
Samuel R. Allen	$9,120,000
Ryan D. Campbell (1)	$414,000
Rajesh Kalathur	$1,794,000

	Adjusted Award Values*
James M. Field	$1,794,000
John C. May	$1,872,000
Cory J. Reed	$1,794,000

*The amounts shown include PSUs valued at the grant price on the date of grant assuming a 100% payout. These amounts differ from the value of equity awards shown in the Fiscal Year 2019 Summary Compensation Table and Grants of Plan-Based Awards table because those tables reflect the probable outcome of the performance metrics for PSUs.

(1)	Effective April 1, 2019, Mr. Campbell became Senior Vice President and Chief Financial Officer. His LTI award was based upon the median of his position as of September 30, 2018.

See the Fiscal 2019 Grants of Plan-Based Awards table and footnotes for more information on LTI awards delivered, as well as the terms of the awards.

For fiscal 2019, the number of RSUs and PSUs granted to the NEOs represented 9% and 51%, respectively, of the total RSUs and PSUs granted to all eligible salaried employees; stock options granted to the NEOs represented 30% of the total stock options granted to eligible salaried employees.

CONVERSION OF PSUs TO DEERE STOCK
For the PSU performance periods ending in 2019, the actual number of shares to be issued will still be based equally on Deere’s revenue growth and TSR performance ranking, as compared to companies in the S&P Industrial Sector.

For PSUs granted in fiscal 2019 (December 2018), the actual number of shares to be issued upon conversion will be based solely on Deere’s revenue growth for the three-year performance period ending in 2021. Deere’s performance for PSU purposes will be measured relative to a subset of the companies in the S&P Industrial Sector as of the end of the performance period. The new performance peer group represents a more closely aligned industry comparison to our company.

PERFORMANCE TARGETS (PERFORMANCE PERIODS ENDING IN 2020 AND FORWARD)

Revenue Growth Payout %

×

100% of PSUs Awarded

=

Final Award

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Advisory Vote on Executive Compensation
Compensation Discussion and Analysis
Direct Compensation Elements

The number of PSUs that vest and convert to shares can range from 0% to 200% of the number of PSUs awarded, depending on Deere’s relative performance during the performance period, as illustrated in the following table:

Deere’s Revenue Growth Relative to a subset of the S&P Industrial Sector		% of Target Shares Earned (Payout %) *
Below 25th percentile		0%
At 25th percentile		25%
At 50th percentile		100%
At or above 75th percentile		200%

* Interim points are interpolated

These performance targets reflect the Committee’s belief that median levels of relative performance should lead to median levels of compensation.

PAYOUT CAP ON PSUs

In response to shareholder concerns, for PSUs that vest at the end of fiscal 2019, the payout for the PSU portion will be capped at target if Deere’s TSR is negative, regardless of how Deere compares to its peers. PSUs that vest after 2019 will no longer be measured on TSR and therefore the cap on this metric is eliminated. Relative TSR will remain a metric for the modifier on the LTIC payout.

PERFORMANCE PERIOD 2017-2019 PSUs

The performance period for PSUs granted in fiscal 2017 ended on October 31, 2019. The final number of shares earned was based on Deere’s revenue growth and TSR relative to the S&P Industrial Sector over the three-year performance period. The Committee made its final payout determination in December 2019 following a review of the relative performances of Deere and the S&P Industrial Sector. Deere’s revenue growth and TSR were comparable to the 89th and 88th percentiles, respectively. This resulted in an overall payout of 200% of target. This compared to an overall payout of PSUs relative to target for each of the five prior three-year performance periods ending in fiscal 2014 through fiscal 2018 of 48.5%, 0%, 33.5%, 100%, and 200%, respectively.

Deere’s Revenue Growth and TSR Relative to the S&P Industrial Sector	3rd Year Results	Performance Results for Performance Period Relative to S&P Industrial Sector	% of Target Shares Earned	Award Weighting	Weighted Payout %
Revenue Growth	13.8%	89th percentile	200%	50%	100%
TSR	27.8%	88th percentile	200%	50%	100%

LTI REPORTED VERSUS REALIZABLE VALUE

The values for Stock and Option Awards included on the Summary Compensation Table are presented in accordance with SEC requirements. Although this allows for comparison across companies, the Committee feels the prescribed calculation does not fully represent the Committee’s annual decision and does not support a valid CEO pay-for-performance assessment. To calculate the realizable value, the stock units from the LTI awards granted in 2017, 2018, and 2019 are valued using the fiscal year end stock price. The value of PSUs also takes into consideration the current year payout and the current performance for the performance cycles in-process (2018-2020 and 2019-2021). The value of options is calculated using the Black-Scholes value as of fiscal year end. The following chart compares the LTI values reported on the Summary Compensation Table to Mr. Allen’s realizable LTI value for each of the grants in 2017, 2018, and 2019. The three-year TSR as of October 31, 2019 is 27.8%.

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Table of Contents

Advisory Vote on Executive Compensation
Compensation Discussion and Analysis
Direct Compensation Elements

REPORTED VS. REALIZABLE LTI VALUE

(a)	See footnotes (2) and (3) to the Summary Compensation Table for an explanation of these valuations.
(b)	Realizable LTI is calculated as:

–	The value of stock options that were granted in 2017, 2018, and 2019 using the Black-Scholes value as of November 3, 2019.
–	The value of RSUs that were granted in 2017, 2018, and 2019 using the stock price as of November 3, 2019 of $176.11.
–	The value of PSUs granted in 2017, 2018, and 2019 using the stock price as of November 3, 2019, of $176.11 and reflecting actual payout for the 2017-2019 performance and projected payouts for the in-process performance cycles of 200% for 2018-2020 and of 176% for 2019-2021.

Summary of Direct Compensation
The Committee believes each pay element included in Direct Compensation is consistent with our compensation philosophy. The Committee reviews Direct Compensation for the NEOs in the aggregate (excluding the CEO) as well as for each NEO individually and compares this compensation to the market position data of our peer group. This market position data takes into account the level of responsibility (including the level of sales volume) for each NEO’s respective operations.

A key element of these individual performance evaluations is a careful analysis of each NEO’s collaboration and contribution to the success of a high-performing team. Thus, while the market data for each position is a factor in reviewing Direct Compensation, the Committee also considers individual fulfillment of duties, teamwork, development, time in position, experience, and internal equity among NEOs other than the CEO. The Committee recognizes individual performance through adjustments to base salary and LTI.

Direct Compensation for the CEO is higher than for the other NEOs due to the CEO’s breadth of executive and operating responsibilities for the entire global enterprise. The Committee does not target CEO compensation as a certain multiple of the compensation of the other NEOs. The relationship between the CEO’s compensation and that of the other NEOs is influenced by our organizational structure, which does not usually include a chief operating officer. The ratio of Mr. Allen’s Direct Compensation to that of the other NEOs is generally comparable to that found among the companies in our peer group.