DEF 14A 1 clorox3309141-def14a.htm DEFINITIVE PROXY STATEMENT

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.            )
 
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[   ]   Soliciting Material Pursuant to §240.14a-12

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

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To Our Stockholders


Dear Stockholders:

I am pleased to invite you to attend our 2017 Annual Meeting of Stockholders.

Clorox delivered strong results in fiscal year 2017 and we continue to be committed to good growth: growth that is profitable, sustainable, and responsible. We are focused on delivering products and brands that provide superior value, investing in product innovation and the consumer experience, and being an industry leader in using marketing and technology to enable real-time consumer engagement. We also view employee engagement as critical, as engagement has been shown to correlate to a company’s performance. Inclusion and diversity are top business priorities as we benefit from the diverse backgrounds and perspectives of our employees, which we also see reflected in our female and minority leaders on the management team and Board of Directors.

Our Board continues to provide excellent guidance and leadership and to set the right tone at the top. Whether it’s strategic oversight, risk management, or human capital management, the Board is focused on the long term. We are constantly thinking about how the Company must evolve as an industry leader in a rapidly changing world, and in a way that is responsible and sustainable to continue to generate financial returns for you, our stockholders.

We look forward to sharing our progress and results with you at our Annual Meeting. Thank you for your continued support and investment in Clorox.

Sincerely,

Benno Dorer
Chairman and Chief Executive Officer

Dear Stockholders:

As Lead Director of Clorox, it is my honor to serve with our other independent directors as an independent voice representing you, the stockholders, to help ensure that the Company continues to be managed with integrity, strong corporate governance, and appropriate oversight of strategy and risks.

In fiscal year 2017, we were pleased to add three new directors, each of whom brings a unique and valuable perspective to the Board. Once again this year I participated in outreach meetings with our stockholders to engage in two-way dialogue and understand the issues that are most important to our investors. As a Board, we regularly discuss and consider investor feedback on a wide variety of governance, compensation, and other topics as we strive to be responsible stewards of the Company.

I am also committed to diversity. As Clorox seeks to develop its diverse workforce and to foster a culture that is inclusive of different perspectives, experiences, and backgrounds, I encourage and engage with our employees directly. Talent management is crucial to the business and we must continue building and retaining our pipeline of high-potential employees to continue to grow profitably, in a values-led manner, and for the long term.

On behalf of the independent directors, thank you for your confidence and your support.

Sincerely,

Pamela Thomas-Graham
Lead Director



THE CLOROX COMPANY - 2017 Proxy Statement       i


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Notice of Annual Meeting of Stockholders

To be held on November 15, 2017

The 2017 Annual Meeting of Stockholders of The Clorox Company will be held at 8:00 a.m. Eastern time on Wednesday, November 15, 2017, at the Company’s Durham, NC, offices, 210 W. Pettigrew Street, Durham, NC 27701, for the following purposes:

      1.       To elect the twelve director nominees named in the proxy statement;
2. To hold an advisory vote to approve executive compensation;
3. To hold an advisory vote on the frequency of future advisory votes to approve executive compensation;
4. To ratify the selection of Ernst & Young LLP as the Company’s independent registered public accounting firm;
5. To approve the material terms of the performance goals under the Company’s 2005 Stock Incentive Plan;
6. To approve the Company’s equity award policy for non-employee directors; and
7. To consider and act upon one stockholder proposal, if properly presented at the Annual Meeting.

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

Stockholders of record at the close of business on September 18, 2017, are entitled to vote at the Annual Meeting and any adjournment or postponement.

Proof of share ownership as of the record date will be required to attend the Annual Meeting. Please see the “Attending the Annual Meeting” section of the proxy statement for more information.

On or about September 22, 2017, we began mailing a Notice of Internet Availability of Proxy Materials to our stockholders informing them that our Proxy Statement, Integrated Annual Report—Executive Summary, and voting instructions are available on the Internet as of the same date.

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

By Order of the Board of Directors,


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

The Clorox Company
1221 Broadway
Oakland, California 94612

September 22, 2017

Important Notice Regarding the Availability of Proxy Materials for The Clorox Company Stockholders Meeting to be Held on November 15, 2017: The Notice of Annual Meeting, Proxy Statement, and 2017 Integrated Annual Report—Executive Summary are available at www.edocumentview.com/CLX.

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YOUR VOTE IS IMPORTANT, NO MATTER HOW MANY OR HOW FEW SHARES YOU OWN

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

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

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

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


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Table of Contents

     Proxy Summary       1
BOARD OF DIRECTORS 4
  Proposal 1: Election of Directors 4
        Board of Directors’ Recommendation 4
Vote Required 4
Organization of the Board of Directors 14
Evaluation of Director Qualifications and Experience 14
Diversity 14
Stockholder Recommendations and Nominations of Director Candidates 15
Director Communications 15
Director Compensation 15
Stock Ownership Guidelines for Directors 17
Corporate Governance 18
Our Corporate Governance Philosophy 18
Our Commitment to Corporate Responsibility 18
Stockholder Engagement 18
The Clorox Company Governance Guidelines 19
Director Independence 19
Board of Directors Leadership Structure 19
Board Committees 20
Board and Director Evaluation Process 22
Board of Directors Meeting Attendance 22
Executive Sessions 22
Conflict of Interest and Related Person Transaction Policies and Procedures 23
Code of Conduct 23
Board of Directors’ Role in Risk Management Oversight 24
Stock Ownership Information 25
Beneficial Ownership of Voting Securities 25
Section 16(a) Beneficial Ownership Reporting Compliance 26
EXECUTIVE COMPENSATION 27
Proposal 2: Advisory Vote to Approve Executive Compensation 27
Board of Directors’ Recommendation 27
Vote Required 27
Proposal 3: Advisory Vote on the Frequency of Future Advisory Votes to Approve
                       Executive Compensation   28
Board of Directors’ Recommendation 28
Vote Required 28


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     Compensation Discussion and Analysis       29
        Executive Summary 29
How We Make Compensation Decisions 31
Fiscal Year 2017 Compensation of Our Named Executive Officers 33
What We Pay: Components of Our Compensation Program 34
The Management Development and Compensation Committee Report 43
Compensation Committee Interlocks and Insider Participation 43
Compensation Discussion and Analysis Tables 44
Equity Compensation Plan Information 59
AUDIT COMMITTEE MATTERS 60
Proposal 4: Ratification of Independent Registered Public Accounting Firm 60
Board of Directors’ Recommendation 60
Vote Required 60
Audit Committee Report 61
Fees of the Independent Registered Public Accounting Firm 62
EQUITY PLAN 63
Proposal 5: Approval of Material Terms of Performance Goals Under the
                     Company’s 2005 Stock Incentive Plan 63
Board of Directors’ Recommendation 66
Vote Required 67
Proposal 6: Approval of Non-Employee Directors Equity Award Policy 68
Board of Directors’ Recommendation 68
Vote Required 68
STOCKHOLDER PROPOSAL 69
Proposal 7: Stockholder Proposal Regarding Proxy Access Amendment 69
Board of Directors’ Statement in Opposition 70
Board of Directors’ Recommendation 71
Vote Required 71
INFORMATION ABOUT THE ANNUAL MEETING 72
Delivery of Proxy Materials 72
Voting Information 72
Form 10-K, Financial Statements, and Integrated Annual Report—Executive Summary 74
Solicitation of Proxies 74
Stockholder Proposals and Director Nominations for the 2018 Annual Meeting 75
Eliminating Duplicative Proxy Materials 75
Attending the Annual Meeting 77
Appendix A The Clorox Company 2005 Stock Incentive Plan A-1
Appendix B Management’s Discussion and Analysis of Financial Condition
                     and Results of Operations, Audited Financial Statements, and
                     Other Selected Financial Information B-1


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  Proxy Summary

This summary highlights information contained elsewhere in this proxy statement and does not contain all of the information that you should consider. For more complete information, please review the Company’s proxy statement before voting.



Proposals to be Voted on and Board Voting Recommendations

      More
information
Board’s voting
recommendation
PROPOSAL 1 Election of Directors Page 4 FOR EACH NOMINEE
PROPOSAL 2 Advisory Vote on Executive Compensation Page 27 FOR
PROPOSAL 3 Advisory Vote on Frequency of Future Advisory Votes on Page 28 ONE YEAR
  Executive Compensation
PROPOSAL 4 Ratification of Independent Registered Public Accounting Firm Page 60 FOR
PROPOSAL 5 Material Terms of Performance Goals Under 2005 Stock Incentive Plan Page 63 FOR
PROPOSAL 6 Equity Award Policy for Non-Employee Directors Page 68 FOR
PROPOSAL 7 Stockholder Proposal Regarding Proxy Access Amendment Page 69 AGAINST



Our Director Nominees

The following table provides summary information about each director nominee.

Name       Age       Director
Since
      Principal Occupation       Independent       Committee
Memberships
Amy Banse 58 2016 Managing Director and Head of Funds,
AC
Comcast Ventures
Richard H. Carmona 67 2007 Vice Chairman, Canyon Ranch
NGCRC (Chair)
MDCC
Benno Dorer 53 2014 Chairman and Chief Executive Officer, Clorox
Spencer C. Fleischer 63 2015 Managing Partner, FFL Partners, L.P.
MDCC
Esther Lee 58 2013 Executive Vice President – Global Chief Marketing
NGCRC
Officer, MetLife Inc.
A. D. David Mackay 62 2016 Former President and Chief Executive Officer,
MDCC
Kellogg Company
Robert W. Matschullat 69 1999 Former Vice Chairman and Chief Financial Officer,
NGCRC
The Seagram Company Ltd.
Jeffrey Noddle 71 2013 Former Chairman and Chief Executive Officer,
AC
SuperValu, Inc.
MDCC (Chair)
Pamela Thomas-Graham 54 2005 Former Chief Marketing and Talent Officer, Credit
NGCRC
Lead Director Suisse Group AG
Carolyn M. Ticknor 70 2005 Former President, Imaging and Printing Systems
AC (Chair)
group, Hewlett Packard Company
NGCRC
Russell Weiner 49 2017 President, Domino’s USA
AC
Christopher J. Williams 59 2015 Chairman and Chief Executive Officer, The
AC
Williams Capital Group, L.P. and Williams Capital
Management, LLC

AC            Audit Committee
NGCRC Nominating, Governance and Corporate Responsibility Committee
MDCC Management Development and Compensation Committee

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Corporate Governance Highlights

Our Corporate Governance Policies Reflect Best Practices

✓     11 of our 12 Director Nominees are Independent       ✓     Annual Election of All Directors
Majority Voting and Director Resignation Policy in Uncontested Director Elections Robust Annual Board, Committee, and Individual Director Evaluation Process
Strong Independent Lead Director with Ability to Call Special Meetings of the Board Standing Board Committees are 100% Independent
Diverse Board with Effective Mix of Skills, Experiences, and Perspectives 5 New Directors Elected Since 2015 and Average Board Tenure of 5.8 Years
Proactive Stockholder Engagement Rigorous Stock Ownership Guidelines for Executives and Directors
Proxy Access Right for Stockholders Adopted in 2015 Special Meeting Right for Stockholders
Robust Code of Conduct Regular Executive Sessions of Independent Directors



Business Performance and Executive Compensation Highlights

Fiscal Year 2017 Business Performance

Successes for the Company in fiscal year 2017 included:

net sales growth of 4%, with total Company sales growth in every quarter of the fiscal year;
achieving $112 million in cost savings, the Company’s 14th consecutive year of average cost savings in excess of $100 million;
achieving increased volume of 6%, reflecting gains in all four of the Company’s reportable segments;
increasing earnings from continuing operations to $703 million or $5.32 diluted earnings per share (EPS), versus $648 million or $4.92 diluted EPS in the prior year;
leveraging incremental demand-building investments, including product innovation to support category and market share growth;
launching new products in numerous categories, including the Brita® Stream™ pitcher, Burt’s Bees® gloss lip crayon and Burt’s Bees® flavor crystals® lip balm, Clorox Scentiva® line of sprays and wipes, Clorox® Healthcare Fuzion™ cleaner disinfectant, Clorox® Total 360™ electrostatic disinfection system, Fresh Step® Extreme with the power of Febreze® Hawaiian Aloha™ litter and Fresh Step® Extreme with the power of Febreze® lightweight litter, Glad Kitchen Pro™ trash bags, Hidden Valley® Simply Ranch® dressing, and Kingsford® BBQ sauces and Kingsford® long-burning charcoal, among others;
continuing to receive external recognition for our leadership in corporate responsibility and sustainability efforts; and

returning excess capital to stockholders through share repurchases, delivering $412 million in dividends to stockholders, and increasing the quarterly dividend by 5% in May 2017.

Fiscal Year 2017 Pay For Performance

Our fiscal year 2017 results and compensation decisions continue to illustrate that our pay-for-performance philosophy works as intended, with pay being driven by performance in the following ways:

Fiscal Year 2017 Annual Incentive Payout. In alignment with our pay-for-performance philosophy, the annual incentive payout for each of our named executive officers was close to target due to the Company’s solid operational results compared to the targets established at the beginning of the 2017 fiscal year. The Company’s sales performance exceeded the targets for the fiscal year, while economic profit (EP) performance fell slightly below the target.
Fiscal Year 2017 Long-Term Incentive Payout. Our three-year performance share results were well above the financial target for cumulative EP and yielded a 150% payout. These awards were granted in September 2014, and payment was determined in August 2017, based on performance over the period commencing July 1, 2014, and ending June 30, 2017. Fiscal years 2015 and 2016 had especially strong results. The cumulative EP results for the three-year period thus resulted in the maximum payout for the Company’s performance shares.

In 2017, the Management Development and Compensation Committee undertook a detailed assessment of the Company’s overall compensation program for alignment to our business strategy, our stockholders’ interests, our pay-for-performance philosophy, and market practices. This review resulted in various changes to the annual and long-term incentive programs, which are effective beginning with fiscal year 2018, as described in greater detail in the Compensation Discussion and Analysis section.


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PROXY SUMMARY

What We Pay: Components of Our
Compensation Program

A substantial portion of our targeted executive compensation is at-risk variable compensation, with 86% of compensation for our Chief Executive Officer (CEO) and 70% of compensation for all of our other named executive officers being at-risk.

Compensation Mix - CEO(1)

 Fixed compensation = 14%
 Variable compensation = 86%

Base salary is the only fixed compensation component, as outlined in the following charts, which reflect target compensation for fiscal year 2017.


Compensation Mix - Average of All Other NEOs(1)

 Fixed compensation = 30%
 Variable compensation = 70%



(1) Compensation mix represents the actual base salary, target annual incentive award, and actual long-term incentives granted in fiscal year 2017. Refer to the Summary Compensation Table on page 44 of this proxy statement for further details on actual compensation.

Best Pay Practices Highlights

What We Have

An executive compensation program designed to further the Company’s strategy and mitigate inappropriate risk;

Different performance horizons for the goals within our annual and long-term incentive plans;

Use of economic profit as a rigorous incentive metric;

Stringent stock ownership and retention guidelines for all of our executives;
A prohibition on speculative transactions involving the Company’s stock, including hedging and pledging;
Stock options that vest over a four-year period and have an exercise price equal to the fair market value of our Common Stock on the date of grant;
Clawback provisions in both our annual and long-term incentive plans;
Double-trigger change in control provisions for all equity awards;
Reasonable cash severance provisions to support talent retention and attraction objectives, promote orderly succession planning, and avoid individual negotiation with exiting executives, thus eliminating the need for individual employment agreements;

Modest perquisites supported by sound business rationale;

Annual review of our executive compensation program by the Management Development and Compensation Committee, which yielded changes to the annual and long-term incentive programs to be effective in fiscal year 2018; and

Use of an independent compensation consultant who does not provide any additional consulting services to the Company.

What We Don’t Have

Employment contracts for any executives;

Stock option re-pricing without stockholder approval;

Payment of dividends or dividend equivalents on unvested or unearned performance shares; and

Tax gross-ups for any employee, including executive officers.


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  Board of Directors

  Proposal 1:
Election of Directors

At the Annual Meeting, twelve people will be elected as members of the Board of Directors to serve until the 2018 Annual Meeting of Stockholders, and until their respective successors are duly elected and qualified. The Board, upon the recommendation of the Nominating, Governance and Corporate Responsibility Committee, has nominated the twelve people listed below for election at the Annual Meeting.

Each of the nominees for director has agreed to be named in this proxy statement and to serve as a director if elected. Each nominee is currently serving as a director of the Company. Russell Weiner was appointed to the Board during calendar year 2017 and is being nominated for election by the stockholders for the first time. Mr. Weiner was recommended to the Nominating, Governance and Corporate Responsibility Committee by a director recruitment firm retained by the Committee to identify potential director candidates.




Board of Directors’ Recommendation

The Board unanimously recommends a vote FOR each of the Board’s twelve nominees for director listed below. The Board believes that each of the nominees listed below is highly qualified and has the background, skills, experience, and attributes that qualify each of the nominees to serve as a director of the Company (see each nominee’s biographical information and the Evaluation of Director Qualifications and Experience section below for more information). The recommendation of the Board is based on its carefully considered judgment that the background, skills, experience, and attributes of the nominees make them the best candidates to serve on our Board.

Certain information with respect to each nominee appears on the following pages, including age, period served as a director, position (if any) with the Company, business experience, directorships of other publicly owned corporations, including other such directorships held during the past five years (if any), and other relevant experience and qualifications, including service on certain non-profit or non-public company boards, that contributed to the conclusion that each director is qualified to serve as a director of the Company.



Vote Required

Majority Voting for Directors. The Company’s Bylaws require each director to be elected by a majority of the votes cast with respect to such director in uncontested elections (the number of shares voted FOR a director must exceed the number of shares voted AGAINST that director). Under the Company’s Bylaws, any director who fails to be elected by a majority of the votes cast in an uncontested election must tender his or her resignation to the Board. The Nominating, Governance and Corporate Responsibility Committee would then make a recommendation to the Board whether to accept or reject the resignation, or whether other action should be taken. The Board would act on the Nominating, Governance and Corporate Responsibility Committee’s recommendation and publicly disclose its decision and

the rationale behind it within 90 days from the date the election results are certified. A director who tenders his or her resignation would not participate in the Board’s decision.

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


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Board of Directors

Message from Rich Carmona, Chair of the Nominating, Governance and Corporate Responsibility Committee


Dear Stockholders:

Our Nominating, Governance and Corporate Responsibility Committee, along with the full Board, is focused on having the right people in the board room for the Company and its stockholders. We regularly assess our Board composition for strong, independent leadership, skills and expertise tailored to our Company’s business strategy and needs, a mix of tenures so we have fresh perspectives as well as deep knowledge of the Company, and diverse voices and backgrounds to inform our decisions. You’ll see this independence and balanced mix in the biographies of our director nominees below.

We believe that regularly reviewing and refreshing the skill sets and perspectives on the Board is important. When we think about refreshing the Board, we consider the changing environment and industry in which the Company operates, both now and several years down the road. We use our individual, committee, and Board evaluations to identify specific needs and desired attributes for director candidates. These conversations and considerations led us to expand the size of the Board by one seat and add three new directors to the Board in fiscal year 2017: Amy Banse, who brings media and technology expertise and a unique venture capital perspective; Dave Mackay, whose consumer goods background and global and operational experience are directly relevant to the Company’s operations; and Russell Weiner, who has a track record of innovation and bringing digital technology to consumer goods companies.

As we continuously review and refine our processes and evaluate the Board’s leadership and structure, we remain committed and accountable to you, our stockholders.

Sincerely,


Rich Carmona
Chair, Nominating, Governance and Corporate Responsibility Committee

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Director Since       Name, Principal Occupation, and Other Information

2016

Amy Banse

Ms. Banse has served as Managing Director and Head of Funds of Comcast Ventures, the venture capital arm of Comcast Corporation (a global media and technology company) since August 2011. From 2005 to 2011, Ms. Banse was Senior Vice President, Comcast Corporation and President, Comcast Interactive Media, a division of Comcast responsible for developing online strategy and operating the company’s digital properties, including Fandango, Xfinity. com, and Xfinitytv.com. Since joining Comcast in 1991, Ms. Banse has held various positions at the company, including content development, programming investments, and overseeing the development and acquisition of Comcast’s cable network portfolio. Earlier in her career, Ms. Banse was an associate at Drinker, Biddle & Reath LLP.

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

Non-Profit/Other Boards:
Ms. Banse serves on the boards of a number of Comcast Ventures’ portfolio companies, including Quantifind and TuneIn, and on the board of Tipping Point Community.

Director Qualifications:
Ms. Banse’s expertise in media and technology enables her to contribute valuable insights into digital media and online business. Her experience in investing in, starting, and building businesses provides her with deep strategic and financial understanding, and her previous executive leadership roles contribute to her management and operational knowledge. Age: 58.

        

2007

Richard H. Carmona, M.D., M.P.H., F.A.C.S.

Dr. Carmona has been Vice Chairman of Canyon Ranch (a life-enhancement company) since October 2006. He also serves as Chief Executive Officer of the Canyon Ranch Health Division and President of the non-profit Canyon Ranch Institute. He is the first Distinguished Professor of Public Health at the Mel and Enid Zuckerman College of Public Health at the University of Arizona. Prior to joining Canyon Ranch, Dr. Carmona served as the 17th Surgeon General of the United States from 2002 through 2006, achieving the rank of Vice Admiral. Previously, he was Chairman of the State of Arizona Southern Regional Emergency Medical System, a professor of surgery, public health, and family and community medicine at the University of Arizona, and surgeon and deputy sheriff of the Pima County, Arizona, Sheriff’s Department. Dr. Carmona served in the United States Army and the Army’s Special Forces.

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

Non-Profit/Other Boards:
Dr. Carmona serves on the boards of Nuvox Pharma and Ross University.

Director Qualifications:
Dr. Carmona’s experience as the Surgeon General of the United States and extensive background in public health provide him with a valuable perspective on health and wellness matters, as well as insight into regulatory organizations and institutions, which are important to the Company’s business strategy. In addition, his executive leadership experience, including with a global lifestyle enhancement company, provides him with international experience and enables him to make valuable contributions to the Company’s international growth strategies. Dr. Carmona’s experience in the United States Army and in academia also strengthens the Board’s collective qualifications, skills, and experience. Age: 67.

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Board of Directors

Director Since       Name, Principal Occupation, and Other Information

2014

Benno Dorer

 

Mr. Dorer has served as Chief Executive Officer (CEO) of the Company since November 2014 and was appointed Chairman of the Board in August 2016. Prior to becoming CEO, Mr. Dorer was Executive Vice President and Chief Operating Officer – Cleaning, International and Corporate Strategy since January 2013, with responsibility for the Laundry, Home Care, and International businesses as well as Corporate Strategy and Growth. He previously served as Senior Vice President – Cleaning Division and Canada from March 2011 through December 2012, Senior Vice President – Cleaning Division from 2009 to 2011, and Vice President & General Manager – Cleaning Division from 2007 to 2009. Mr. Dorer joined Clorox in 2005 as Vice President & General Manager – Glad® Products. Prior to that role, he worked for The Procter & Gamble Company for 14 years, leading the marketing organization for the Glad® Products joint venture since its inception and holding marketing positions across a range of categories and countries.

Other Public Company Boards:
Mr. Dorer serves as a director of VF Corporation.

Non-Profit/Other Boards:
Mr. Dorer serves on the executive committee of the board of GMA (Grocery Manufacturers Association) and the executive committee of the board of the Bay Area Council. He previously served on the executive committee of the board of directors of the American Cleaning Institute and the board of directors of the Chabot Space & Science Center Foundation in Oakland, California.

Director Qualifications:
Mr. Dorer’s leadership experience and his in-depth knowledge of the consumer packaged goods industry, the Company’s businesses, and his leadership in developing the Company’s 2020 Strategy enable him to provide valuable contributions with respect to strategy, growth, and long-range plans. Additionally, his extensive international background provides him with a broad perspective on international customer and consumer dynamics and business strategy. Age: 53.

        

2015

Spencer C. Fleischer

 

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

Other Public Company Boards:
Mr. Fleischer was previously a director of Banner Corporation (October 2015 to December 2016).

Non-Profit/Other Boards:
Mr. Fleischer is a director of Levi Strauss & Co., Strategic Investment Management, LLC, and Eyemart Express Holdings LLC. He previously served on the board of WiltonRe Holdings Limited.

Director Qualifications:
Mr. Fleischer brings to the Board more than 35 years of financial and operational expertise as well as deep international experience. His significant experience in both private equity and investment banking enables him to contribute valuable insights into strategic planning, mergers and acquisitions, and operating expertise to the Company. His leadership role at FFL also allows him to provide significant experience in compensation matters. Age: 63.


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Director Since       Name, Principal Occupation, and Other Information

2013

Esther Lee

 

Ms. Lee has served as Executive Vice President – Global Chief Marketing Officer at MetLife Inc. (an insurance, annuities, and employee benefits company) since January 2015. Previously, Ms. Lee served as Senior Vice President – Brand Marketing, Advertising and Sponsorships for AT&T from 2009 to December 2014. From 2007 to 2008 she served as CEO of North America and President of Global Brands for Euro RSCG Worldwide. Prior to that, she served for five years as Global Chief Creative Officer for The Coca-Cola Company. Earlier in her career, as co-founder of DiNoto Lee advertising firm, Ms. Lee worked with several consumer packaged goods companies, including The Procter & Gamble Company, Unilever, and Nestle.

Non-Profit/Other Boards:
Ms. Lee serves on the boards of the MetLife Foundation and the Ad Council.

Director Qualifications:
Ms. Lee brings to the Company significant executive and brand-building expertise. Her current and prior executive leadership roles enable her to provide valuable contributions with respect to creativity and vision for long-term growth. In addition, Ms. Lee brings to the Company significant experience in the areas of marketing and digital media. Her prior experience with global brand marketing, advertising, media, and sponsorship, as well as developing operating models in these areas, enable her to provide valuable contributions to the Company’s business strategies. Age: 58.

        

2016

A. D. David Mackay

 

Mr. Mackay served as President and Chief Executive Officer of Kellogg Company (a food manufacturing company) from 2006 until his retirement in 2011. From 2003 to 2006, he served as the company’s President and Chief Operating Officer. Prior to that, Mr. Mackay held a number of other leadership positions at Kellogg, including roles at Kellogg Australia, United Kingdom, and Republic of Ireland. He also previously served as Managing Director of Sara Lee Corporation in Australia and held various positions at Mars, Inc.

Other Public Company Boards:
Mr. Mackay is a director of Fortune Brands Home and Security Inc. (September 2011 to present). Mr. Mackay previously served as a director of Keurig Green Mountain, Inc. (December 2012 to March 2016), Beam, Inc. (October 2011 to April 2014), Fortune Brands, Inc. (January 2006 to October 2011), and Kellogg Company (February 2005 to January 2011).

Non-Profit/Other Boards:
Mr. Mackay serves on the board of FSHD Global Research Foundation Ltd. He previously served on the boards of McGrath Ltd. and Woolworths Ltd., which are Australia-based companies.

Director Qualifications:
Mr. Mackay brings significant strategic leadership and operational experience to the Board. His extensive consumer products background and his international experience allow him to contribute valuable insights regarding the Company’s industry, operations, and international businesses. In addition, his previous leadership roles provide him with expertise in executive compensation and succession planning matters. Age: 62.

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Board of Directors

Director Since       Name, Principal Occupation, and Other Information

1999

Robert W. Matschullat

  

Mr. Matschullat served as independent lead director of the Board from November 2012 until July 2015. He was interim Chairman and interim Chief Executive Officer of the Company from March 2006 through October 2006, served as presiding director of the Board from January 2005 through March 2006, and served as Chairman of the Board from January 2004 through January 2005. Previously, he was the Vice Chairman and Chief Financial Officer of The Seagram Company Ltd. (a global company with entertainment and beverage operations). Prior to joining The Seagram Company Ltd., Mr. Matschullat served as head of worldwide investment banking for Morgan Stanley & Co. Incorporated, and was on the Morgan Stanley Group board of directors.

Other Public Company Boards:
Mr. Matschullat is a director of The Walt Disney Company, Inc. (December 2002 to present), and is Chairman of the Board of Visa, Inc. (April 2013 to present), having served as a director of Visa, Inc., since October 2007.

Director Qualifications:
Mr. Matschullat brings to the Company a wealth of public company leadership experience at the board and executive levels. Mr. Matschullat’s executive leadership experience includes service as the chief financial officer of a major global company and as the division head of a major financial institution, providing him with expertise in business and financial matters as well as broad international experience. In addition, Mr. Matschullat has an extensive understanding of the Company’s business, having served more than 15 years on the Board, including in the leadership roles of independent lead director, non-executive Chairman, and presiding director of the Board. Mr. Matschullat also served as the Company’s interim Chief Executive Officer. These experiences have provided him with a long-term perspective, as well as valuable management, governance, and leadership experience. Age: 69.


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Director Since       Name, Principal Occupation, and Other Information

2013

Jeffrey Noddle

   

Mr. Noddle was the Executive Chairman of SuperValu, Inc. (SuperValu) (a food retailer and provider of distribution and logistical support services) from 2009 until his retirement in 2010. He served as SuperValu’s Chairman and Chief Executive Officer from 2002 to 2009. During his career with SuperValu, which commenced in 1976, Mr. Noddle held a number of other leadership positions, including President and Chief Operating Officer, Vice President – Merchandising, and President of SuperValu’s Fargo and former Miami divisions.

Other Public Company Boards:
Mr. Noddle is Chairman of the Board of Donaldson Company, Inc. (April 2016 to present), having served as a director of Donaldson Company, Inc. since November 2000. He is a director of Ameriprise Financial, Inc. (September 2005 to present). Mr. Noddle previously served on the board of SuperValu, Inc. (May 2002 to June 2010).

Non-Profit/Other Boards:
Mr. Noddle previously served on the boards of the University of Minnesota Carlson School of Management, The Food Industry Center at the University of Minnesota, and the Greater Twin Cities United Way. Mr. Noddle was also a member of the executive committee of the Minnesota Business Partnership and past chairman of the board of The Food Marketing Institute.

Director Qualifications:
Mr. Noddle’s prior leadership roles enable him to provide valuable operational and supply chain insights as well as strategic leadership and human resources guidance to the Company. His over 30-year career with SuperValu provides him with valuable perspective on the Company’s retail environment, as well as experience in the areas of mergers and acquisitions, including integration planning and execution, stockholder relations and communications, corporate governance issues, executive succession planning, and director recruitment. Mr. Noddle’s expertise in leading one of the largest grocery retail companies in the United States and his extensive knowledge of the Company’s customers and consumers enable him to make valuable contributions to the Company. Age: 71.

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Board of Directors

Director Since       Name, Principal Occupation, and Other Information

2005

Pamela Thomas-Graham

 

Ms. Thomas-Graham served as Chair, New Markets, of Credit Suisse Group AG (a global financial services company) from October 2015 to June 2016. She served as Chief Marketing and Talent Officer, Head of Private Banking & Wealth Management New Markets, and member of the Executive Board, of Credit Suisse from January 2010 to October 2015. From 2008 to 2009, she served as a managing director in the private equity group at Angelo, Gordon & Co. From 2005 to 2007, Ms. Thomas-Graham held the position of Group President at Liz Claiborne, Inc. She served as Chairman, President, and Chief Executive Officer of CNBC from 2001 to 2005. Previously, Ms. Thomas-Graham served as an Executive Vice President of NBC and as President and Chief Executive Officer of CNBC.com. Prior to joining NBC, Ms. Thomas-Graham was a partner at McKinsey & Company.

Other Public Company Boards:
Ms. Thomas-Graham previously served as a director of Idenix Pharmaceuticals, Inc. (June 2005 to January 2010).

Non-Profit/Other Boards:
Ms. Thomas-Graham serves on the board of the New York Philharmonic, the Parsons School of Design, and the Education Committee of the Museum of Modern Art in New York City. She is a member of the Business Council of the Metropolitan Museum of Art in New York City. Additionally, she previously served on the Visiting Committee of Harvard Business School and on the board of the Harvard Alumni Association.

Director Qualifications:
Ms. Thomas-Graham brings to the Company significant executive expertise, including as a former CEO. Her current and prior executive leadership roles enable her to provide valuable contributions with respect to management, operations, growth, and long-range plans. In addition, Ms. Thomas-Graham brings to the Company significant experience in the area of branding. Her prior experience as a management consultant also enables her to provide valuable contributions to the Company’s business strategies and mergers and acquisitions activities. Additionally, her leadership experience in banking and private equity provides her with financial and accounting expertise, enabling her to contribute to the oversight of the Company. Age: 54.


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Director Since       Name, Principal Occupation, and Other Information

2005

Carolyn M. Ticknor

 

Ms. Ticknor was President of the Imaging and Printing Systems group of the Hewlett Packard Company (a global IT company) from 1999 until her retirement in 2001. Previously, she served as President and General Manager of the Hewlett Packard Company’s LaserJet Solutions.

Other Public Company Boards:
Ms. Ticknor previously served as a director of OfficeMax Incorporated (formerly Boise Cascade Corporation) (February 2000 to April 2006).

Non-Profit/Other Boards:
Ms. Ticknor is currently a director of The Center for the Advancement of Science in Space (CASIS). She previously served as a director of Lucile Packard Children’s Hospital, a private non-profit organization at the Stanford University Medical Center.

Director Qualifications:
Ms. Ticknor’s prior executive leadership roles enable her to provide valuable contributions with respect to management, operations, strategy, growth, and long-range plans. Her prior leadership at a global IT company enables her to provide valuable contributions with respect to the Company’s international operations, strategies, and growth plans. She also brings to the Company significant expertise in the areas of innovation and supply chain management. Ms. Ticknor’s service as a director of Lucile Packard Children’s Hospital at Stanford University Medical Center enhances her understanding of health and wellness issues, as well as the Company’s focus on community involvement. Age: 70.

        

2017

Russell Weiner

 

Russell Weiner is President of Domino’s USA (a restaurant chain), a role he assumed in September 2014. Before assuming this position, he served as the company’s Executive Vice President, Chief Marketing Officer, starting in 2008. Prior to joining Domino’s, he was Vice President of Marketing, Colas at Pepsi-Cola North America from 2005 to 2008. During his tenure at Pepsi-Cola North America, which commenced in 1998, Mr. Weiner held a number of leadership roles in marketing and brand management.

Director Qualifications:
Mr. Weiner’s experience in digital innovation enables him to help the Company maintain its leadership position in digital technology within the consumer packaged goods industry. In addition, his executive leadership experience in the food and consumer packaged goods industries enables him to contribute his deep knowledge of brand building, marketing, operations, and consumer insights. Age: 49.

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Board of Directors

Director Since       Name, Principal Occupation, and Other Information

2015

Christopher J. Williams

 

Mr. Williams has served as the Chairman and Chief Executive Officer of The Williams Capital Group, L.P. and Williams Capital Management, LLC (Williams Capital) (an investment banking and financial services firm) since the company’s formation in 1994. Prior to founding Williams Capital, Mr. Williams managed the derivatives and structured finance division of Jefferies & Company. He previously worked at Lehman Brothers, where his roles included managing groups in the corporate debt capital markets and derivatives structuring and trading.

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

Non-Profit/Other Boards:
Mr. Williams serves on the boards of Cox Enterprises Inc., Lincoln Center for the Performing Arts, and The Partnership for New York City. Mr. Williams is also Chairman of the Board of Overseers at the Tuck School of Business at Dartmouth.

Director Qualifications:
Mr. Williams brings a wealth of financial, accounting, and strategic knowledge to the Board with his years of experience in investment banking and finance, and as the former chair of the audit committee of a Fortune 100 company. He also contributes important executive management and leadership experience as the chairman and chief executive officer of an investment management firm. As a current and former director of several public and private companies, he brings a valuable perspective for the Company’s strategy and operations as well as extensive customer insights. Age: 59.


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  Organization of the Board of Directors

Evaluation of Director Qualifications and Experience

The Nominating, Governance and Corporate Responsibility Committee works closely with our Board in determining the skills, experiences, and characteristics desired for the Board as a whole and for its individual members, and screens and recommends candidates for nomination by the full Board. While the Board has not established any specific minimum qualifications that a potential nominee must possess, director candidates, including incumbent directors, are assessed based upon criteria established by the Nominating, Governance and Corporate Responsibility Committee in light of the Company’s long-term strategy, the skills and backgrounds currently represented on the Board, and any specific needs identified in the Committee’s evaluation of Board composition. Criteria include broad-based leadership and business skills and experience, prominence and reputation in their professions, global business and social perspective, ability to effectively represent the long-term interests of our stockholders, and personal integrity and judgment. The ability of incumbent directors to continue to contribute to the Board is also considered in connection with the renominating process.

The following experience and skills, among others, have been specifically identified by the Nominating, Governance and Corporate Responsibility Committee as being important in creating a diverse and well-rounded Board:

Significant Current or Prior Leadership Experience (such as service in a significant leadership role, including as a chief executive officer, or other executive officer or senior leadership position): This enables a director to contribute to the Company’s management expertise, operations, strategy, growth, and long-range plans.

Leadership Experience on Public Company, Private Company, Non-Profit, or Other Boards: This prepares a director to take an active leadership role in oversight and governance.

Knowledge of the Company’s Business, the Consumer Packaged Goods Industry, or Other Complementary Industry: This helps a director provide guidance on the Company’s strategy and position in our industry.

Experience in Emerging Technology, Innovation (including digital media and e-commerce), Brand Building, or Other Relevant Areas: This supports the Company’s strategy, innovation, marketing to consumers, and business operations.

Relevant Retail or Customer Experience: This allows a director to provide insights on customer relations and results with the Company’s customer and consumer base.

Significant Mergers and Acquisitions or Strategy Experience: This enables a director to provide perspective on the Company’s merger and acquisitions, partnership, and adjacency strategies.

International Experience: This supports the Company’s global business strategy.

Financial and Accounting Expertise: This contributes to analysis and oversight of the Company’s financial position, financial statements, and results of operations.

Regulatory Experience (including experience in the health and wellness sector): This supports the Company’s portfolio and provides insights on navigating the regulatory environment, including in health and wellness.

In addition, under the Company’s Corporate Governance Guidelines (Governance Guidelines), non-management directors whose primary job responsibilities change must offer their resignation for the Board’s consideration.




Diversity

As highlighted in our Governance Guidelines, the Board values diversity and recognizes the importance of having unique and complementary backgrounds and perspectives in the board room. The Board endeavors to bring together diverse skills, professional experience, perspectives, age, race, ethnicity, gender, and cultural backgrounds that reflect the Company’s consumer and investor base, and to guide the Company in a way that reflects the best interests

of all of our stockholders. The Nominating, Governance and Corporate Responsibility Committee assesses the effectiveness of these efforts by examining the overall composition of the Board, assessing how individual director candidates can contribute to the overall success of the Board, and reviewing individual, committee, and Board evaluation results.


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Organization of the Board of Directors


Stockholder Recommendations and Nominations of Director Candidates

The Nominating, Governance and Corporate Responsibility Committee considers recommendations from many sources, including stockholders, regarding possible candidates for director. Such recommendations, together with biographical and business experience information (similar to that required to be disclosed under applicable Securities and Exchange Commission (SEC) rules and regulations) regarding the candidate, should be submitted to The Clorox Company, c/o Corporate Secretary, 1221 Broadway, Oakland, CA 94612-1888. The Nominating, Governance and Corporate Responsibility Committee evaluates all candidates for the Board in the same manner, including those suggested by stockholders.

In addition, our Bylaws permit a stockholder or group of up to 20 stockholders who have owned at least 3% of the Company’s Common Stock for at least three years to submit director nominees (up to 20% of the Board) for inclusion in the Company’s proxy materials if the stockholder(s) provide(s) timely written notice of such nomination(s) and the stockholder(s) and the nominee(s) satisfy the requirements specified in the Company’s Bylaws. Stockholders who wish to nominate directors for inclusion in the Company’s proxy materials or directly at an annual meeting of stockholders in accordance with the procedures in our Bylaws should follow the instructions under the Stockholder Proposals and Director Nominations for the 2018 Annual Meeting section of this proxy statement.




Director Communications

Stockholders and interested parties may direct communications to individual directors, including the lead director, to a Board committee, to the independent directors as a group, or to the Board as a whole, by addressing the communications to the named individual, to the committee, to the independent directors as a group, or to the Board as a whole and sending them to The Clorox

Company, c/o Corporate Secretary, 1221 Broadway, Oakland, CA 94612-1888. The Corporate Secretary will review all communications so addressed and will forward to the addressee(s) all communications determined to bear substantively on the business, management, or governance of the Company.




Director Compensation

Only our non-employee directors receive compensation for their services as directors. The Company’s non-employee director compensation program is comprised of cash compensation and an annual grant of deferred stock units.

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

independent compensation consulting firm to assist it in the performance of its duties. During fiscal year 2017, the Management Development and Compensation Committee used the services of Frederic W. Cook & Co., Inc. (FW Cook). FW Cook’s work with the Management Development and Compensation Committee included data analysis and guidance and recommendations regarding compensation levels relative to our compensation peer group (see discussion regarding the peer group in the Compensation Discussion and Analysis section below) as well as trends and recent developments in the area of non-employee director compensation. Clorox generally aims to compensate non-employee directors at or near the median of the compensation peer group.


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The following table sets forth information regarding compensation for each of the Company’s non-employee directors during fiscal year 2017.

Name       Fees Earned
or Paid in Cash
($)
(2)
      Stock
Awards
($)(3)
      Total
($)
Amy Banse   79,076   108,750   187,826
Richard H. Carmona 114,375 141,250 255,625
Spencer C. Fleischer   100,000   141,250   241,250
George J. Harad(1) 56,250 32,500 88,750
Esther Lee   100,000   141,250   241,250
A. D. David Mackay 87,500 108,750 196,250
Robert W. Matschullat   100,000   141,250   241,250
Jeffrey Noddle 120,000 141,250 261,250
Rogelio Rebolledo(1)   37,500   32,500   70,000
Pamela Thomas-Graham 143,750 141,250 285,000
Carolyn M. Ticknor   120,000   141,250   261,250
Russell Weiner 39,722 36,250 75,972
Christopher J. Williams   100,000   141,250   241,250
(1) Messrs. Harad and Rebolledo retired from the Board effective November 16, 2016.
(2) The amounts reported in the Fees Earned or Paid in Cash column reflect the total annual cash retainer and other cash compensation earned by each director in fiscal year 2017 and include amounts deferred into cash or deferred stock units and/or amounts issued in Common Stock in lieu of cash, as elected by the director. The annual cash retainer is paid to each director in quarterly installments.
(3) The amounts reported reflect the grant-date fair value for financial statement reporting purposes of the annual grant of deferred stock units. Awards are granted on an annual basis at the end of each calendar year. Refer to Note 15 of the Consolidated Financial Statements contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2017, for a discussion of the relevant assumptions used in calculating the grant-date fair value under applicable accounting guidance. As of June 30, 2017, the following directors had the indicated aggregate number of deferred stock units accumulated in their deferred accounts for all years of service as a director, which includes deferrals of cash compensation, annual awards of deferred stock units, and additional deferred stock units credited as a result of dividend equivalents earned with respect to the deferred stock units: Ms. Banse – 311 units; Dr. Carmona – 17,375 units; Mr. Fleischer – 3,286 units; Ms. Lee – 3,891 units; Mr. Mackay – 311 units; Mr. Matschullat – 79,971 units; Mr. Noddle – 4,627 units; Ms. Thomas-Graham – 21,500 units; Ms. Ticknor – 28,277 units; Mr. Weiner – 297 units; and Mr. Williams – 3,286 units.

Stock Unit Awards

Each non-employee director receives an annual grant of deferred stock units, the value of which was increased from $130,000 to $145,000 effective October 1, 2016. The aggregate value of the deferred stock unit award amount earned by a non-employee director serving for the full fiscal year 2017 was $141,250. Awards are made as of the last business day in the calendar year and represent payment for services provided during such calendar year.

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


Fees Earned or Paid in Cash

In addition to the deferred stock units described above, directors receive cash compensation. Cash compensation consists of annual cash retainer amounts and any special assignment fees. The following table lists the various

retainers paid for Board service and service as the independent chair, lead director, or a committee chair during fiscal year 2017:



Annual director retainer       $100,000
Lead director retainer 50,000
Independent chair retainer 150,000
Committee chair retainers:
       Nominating, Governance and Corporate Responsibility Committee(1) 14,375
       Audit Committee 20,000
       Management Development and Compensation Committee 20,000
(1) The annual Nominating, Governance and Corporate Responsibility Committee chair retainer through September 30, 2016, was $12,500. This retainer was increased to $15,000 effective October 1, 2016. The aggregate amount of the annual retainer for service as chair of the Nominating, Governance and Corporate Responsibility Committee in fiscal year 2017 was $14,375.

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Organization of the Board of Directors

Directors who serve as a Board member, lead director, independent chair, or committee chair for less than the full fiscal year receive pro-rated retainer amounts based on the number of days they served in such position during the fiscal year. In addition to the retainer amounts, each non-employee director is entitled to receive a fee of $2,500 per day for any special assignment requested by the Board. No special assignment fees were paid in fiscal year 2017.

Payment Elections

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

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

Elective Deferral Program. For directors who elect deferred cash, the amount deferred is credited to an unfunded cash account that is credited with interest at an annual interest rate equal to Wells Fargo Bank, N.A.’s prime lending rate in effect on January 1 of each year. Upon termination of service as a director, the amounts credited to the director’s deferred cash account are paid out in five annual cash installments or in one lump-sum cash payment, as elected by the director. For directors who elect deferred stock units, the amount deferred is credited to an unfunded account in the form of units equivalent to the fair market value of the Common Stock on the date on which the fees are scheduled to be paid. When dividends are declared, additional deferred stock units are allocated to the director’s deferred stock unit account in amounts equivalent to the dollar amount of Common Stock dividends paid by the Company divided by the fair market value of the Common Stock on the date the dividends are paid. Upon termination of service as a director, the amounts credited to the deferred stock unit account, which include any elective deferrals and the annual deferred stock unit grants described above, are paid out in shares of Common Stock in five annual installments or in one lump sum, as elected by the director.



Stock Ownership Guidelines for Directors

The Board believes that the alignment of directors’ interests with those of stockholders is strengthened when Board members are also stockholders. The Board therefore requires that each non-employee director, within five years of first being elected, own Common Stock or deferred stock units having a market value of at least five times his or her annual cash retainer. This program is designed to ensure that directors acquire a meaningful and significant ownership

interest in the Company during their tenure on the Board. Furthermore, as directors must hold the deferred stock units until termination of their service on the Board, they have an incentive to promote long-term value for stockholders during their service as a director. As of June 30, 2017, each non-employee director was in compliance with the guidelines.


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  Corporate Governance

Our Corporate Governance Philosophy

Consistent with our focus on good growth, we are committed to strong corporate governance and corporate responsibility. We regularly review our policies and practices to further the interests of our stockholders, promote the long-term health of our business, provide effective oversight of management,

and encourage responsible and ethical behavior by our directors and employees. Our Governance Guidelines, Code of Conduct, and other company policies set forth a framework to further these goals and guide our decisions, as described in greater detail below.



Our Commitment to Corporate Responsibility

Corporate responsibility is the foundation of how Clorox operates, and we consider it integral to our business. As a signatory to the United Nations Global Compact, we are committed to its Ten Principles by driving our corporate responsibility strategy, a comprehensive set of commitments across our Company: from human rights, labor, and product safety to transparency, environmental sustainability, and contributions to communities where we operate. Our commitment to sustainability includes, among other goals, reducing our operational footprint while growing our business, making sustainability improvements to our products, and working to drive transparency and sustainability progress in our supply chain.

Clorox is also committed to helping communities by supporting causes that promote health and well-being and education. The Clorox Company Foundation provides grants to support youth, education, and cultural and civic organizations where our employees live and work; we encourage our employees to support causes of their choosing by volunteering and by participating in our corporate giving campaign; and we have a long history

of providing products and donations to assist with disaster relief globally, such as in the wake of recent hurricanes, including Harvey and Irma.

We also believe our financial performance and commitment to corporate responsibility go hand in hand. Each year, we publish an integrated report that highlights the intersection of our business and corporate responsibility commitments by reporting our financial, environmental, social, and governance performance. In furtherance of our focus on corporate responsibility, in fiscal year 2017, we changed the name of our Nominating and Governance Committee to the Nominating, Governance and Corporate Responsibility Committee and enhanced the Committee’s charter in the areas of corporate responsibility and sustainability. The revised charter expands the Committee’s responsibilities to include oversight of corporate responsibility and sustainability matters. While the Committee as well as the full Board has historically provided oversight in these areas, the Board felt it was important to formalize these responsibilities, reflecting our long-standing values and commitment to best practices in corporate responsibility and sustainability.


Stockholder Engagement

During the past fiscal year, members of the Board and management held meetings with a significant portion of investors to discuss a variety of key corporate governance, executive compensation, and corporate responsibility topics. These meetings provide an opportunity for two-way dialogue and for our management and Board to discuss and better understand the issues that matter most to our stockholders. For example, our directors considered the feedback from these meetings, along with best practices,

market standards, policies at other companies, and Clorox’s stockholder base and unique circumstances, in determining that the Company’s existing proxy access right continues to be most appropriate for the Company. Our Board also took into consideration stockholder input in reviewing the Company’s compensation plan design and metrics, as described in greater detail in the Compensation Discussion and Analysis section.


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Corporate Governance


The Clorox Company Governance Guidelines

The Board has adopted Governance Guidelines that can be found in the Corporate Governance section on the Company’s website at https://www.thecloroxcompany.com/who-we-are/corporate-governance/governance-guidelines/, and are available in print to any stockholder who requests them from The Clorox Company, c/o Corporate Secretary, 1221 Broadway, Oakland, CA 94612-1888. The Governance Guidelines present a framework for the governance of the Company. They

describe responsibilities, qualifications, and operational matters applicable to the Board and the Board committees and include provisions relating to the evaluation of the CEO and ordinary-course and emergency succession planning. The Governance Guidelines are reviewed at least annually by the Nominating, Governance and Corporate Responsibility Committee, which recommends changes to the Board as appropriate.



Director Independence

The Governance Guidelines provide that a substantial majority of the Board must consist of independent directors. The Board determines whether individual Board members are independent, as defined by the New York Stock Exchange (NYSE). The Board has adopted director independence standards, which are set forth in the Governance Guidelines, to assist it in assessing the independence of directors. The Board makes an affirmative determination regarding the independence of each director annually, based upon the recommendation of the Nominating, Governance and Corporate Responsibility Committee.

The Board has determined that each of the Company’s non-management directors is independent under the NYSE listing standards and the independence standards set forth in the Governance Guidelines: Messrs. Fleischer, Mackay, Matschullat, Noddle, Weiner, and Williams, Mmes. Banse, Lee, Thomas-Graham, and Ticknor, and Dr. Carmona. Mr. Dorer is not independent as a result of his service as the Company’s CEO. In addition, each of retired directors Messrs. Harad and Rebolledo was independent under the NYSE listing standards and the independence standards set forth in the Governance Guidelines during the period in fiscal 2017 during which such director served.



Board of Directors Leadership Structure

The Board believes it is in the best interests of the Company and its stockholders for the Board to have flexibility in determining the Board leadership structure of the Company. Over the years, the Board has had a variety of leadership structures, including an independent chair structure with a separate CEO; an executive chair structure, along with a separate independent lead director and separate CEO; and a combined chair and CEO structure with a separate independent lead director. The Company currently has a combined chair and CEO role with a strong independent lead director, as described in greater detail below. The Board believes that having flexibility to determine the optimal leadership structure based on the Company’s current circumstances and anticipated needs, including whether to separate or combine the roles of chair and CEO, is important and has served the Company and its stockholders well.

The Nominating, Governance and Corporate Responsibility Committee regularly reviews the leadership structure of the Board. In addition to the Company’s specific circumstances, it takes into account market practices,

investor feedback, and corporate governance studies and expert commentary, among other things. Since August 2016, the Board leadership structure has consisted of a combined Chairman and CEO role held by Mr. Dorer, a strong independent lead director position held by Ms. Thomas-Graham, and strong independent committee chairs. The Board believes that Mr. Dorer’s leadership in developing the Company’s 2020 Strategy, his in-depth knowledge of the Company’s operations, and his strong working relationship with the independent members of the Board make him best suited to chair the regular Board meetings as key business and strategic issues are discussed and to serve as Chairman of the Board at this time. This role allows him to drive execution of the Company’s strategic plans and facilitate effective communication between management and the Board, to bring key issues to the Board’s attention, and to see that the Board’s guidance and decisions are implemented effectively by management. At the same time, in selecting Ms. Thomas-Graham to serve as the independent lead director, the Board noted her strong leadership and qualifications, including her experience as a CEO and her tenure on the Board, among other factors,

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which contribute to her ability to fulfill the role of lead director effectively and independently. The Company’s Governance Guidelines require an independent director to serve as a lead director if the position of Chairman is held by a management director.

The lead director is elected annually by and from the independent directors with clearly delineated and comprehensive duties and responsibilities. To qualify as lead director, a director must have served as a member of the Board for a minimum of three years. The duties of the lead director, which are also included in the Governance Guidelines, include coordinating the activities of the independent directors and serving as a liaison between the Chairman and the independent directors. In addition, the lead director:

has the ability to call special meetings of the Board;

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

presides at Board meetings in the Chairman’s absence;

approves information sent to the Board;

approves meeting agendas and meeting schedules for the Board to ensure that there is sufficient time for discussion of all agenda items;


is available for consultation and direct communication with major stockholders if requested;

evaluates, along with the members of the Management Development and Compensation Committee and the other independent directors, the performance of the CEO; and

assists the Board and Company officers in promoting compliance with and implementation of the Governance Guidelines.

In addition to the duties and responsibilities listed above, Ms. Thomas-Graham has taken an active role in the Company’s diversity efforts and outreach to employees, including hosting small group meetings with high-potential, diverse employees and holding town hall meetings with all employees. She also actively participates in stockholder engagement and has met with a number of the Company’s major stockholders.

All of the Company’s directors, other than Mr. Dorer, are “independent” as defined by the NYSE rules. The Board believes that this structure promotes effective governance and that, under the present circumstances, the leadership structure described above is in the best interests of the Company and its stockholders.




Board Committees

The Board has established three standing committees: the Audit Committee, the Nominating, Governance and Corporate Responsibility Committee, and the Management Development and Compensation Committee. Each of these committees consists only of non-management directors whom the Board has determined are independent under the NYSE listing standards and the Board’s independence standards set forth in the Company’s Governance Guidelines. In addition, directors who serve on the Audit Committee and the Management Development and

Compensation Committee must meet additional, heightened independence and qualification criteria applicable to directors serving on these committees under the NYSE listing standards. The charters for these committees are available in the Corporate Governance section of the Company’s website at https://www.thecloroxcompany.com/who-we-are/corporate-governance/committee-charters, or in print by contacting The Clorox Company, c/o Corporate Secretary, 1221 Broadway, Oakland, CA 94612-1888.



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Corporate Governance

The table below indicates the current members of each standing Board committee:

Director       Audit       Nominating,
Governance and
Corporate Responsibility
      Management
Development and
Compensation
Amy Banse          
Richard H. Carmona Chair
Benno Dorer            
Spencer C. Fleischer
Esther Lee          
A.D. David Mackay
Robert W. Matschullat          
Jeffrey Noddle Chair
Pamela Thomas-Graham          
Carolyn M. Ticknor Chair
Russell Weiner          
Christopher J. Williams
Number of meetings in fiscal year 2017   9   7   4

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

the integrity of the Company’s financial statements;

the independent registered public accounting firm’s qualifications, independence, and performance;

the performance of the Company’s internal audit function;

the Company’s system of disclosure controls and procedures and system of internal control over financial reporting;

the Company’s compliance with legal and regulatory requirements relating to accounting and financial reporting matters;

the Company’s framework and guidelines with respect to risk assessment and risk management; and

the Company’s material financial policies and actions.

The Audit Committee’s duties also include preparing the report required by the SEC proxy rules to be included in the Company’s annual proxy statement. The Board has determined that directors Noddle, Ticknor, and Williams are audit committee financial experts, as defined by SEC rules, and each member of the Audit Committee is financially literate, as defined by NYSE rules.

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

identifying and recruiting individuals qualified to become Board members;


recommending to the Board individuals to be selected as director nominees for the annual meeting of stockholders;

reviewing and recommending to the Board changes in the Governance Guidelines and the Code of Conduct;

overseeing the Company’s ethics and compliance program and activities, including the Company’s compliance with legal and regulatory requirements relating to matters other than accounting and financial reporting matters;

performing a leadership role in shaping the Company’s corporate governance and overseeing the evaluation of the Board and its committees; and

assisting the Board in overseeing the Company’s corporate responsibility and sustainability program.

Management Development and Compensation Committee. The Management Development and Compensation Committee has the functions and duties set forth in its charter, including:

reviewing and approving the performance goals and objectives for the CEO and other executive officers and the extent to which such performance goals and objectives have been met;

assessing the CEO’s performance and determining and approving the CEO’s compensation based on a variety of factors;

reviewing periodically with the CEO the performance of each of the other executive officers and approving the compensation of each such executive officer;

determining the amount and other material terms of individual short- and long-term incentive awards to be made to executive officers;

reviewing and approving recommendations regarding retirement income and other deferred benefit plans applicable to executive officers;


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reviewing and approving employment-related arrangements with executive officers; and

evaluating the outcome of the advisory vote of the stockholders regarding “say on pay” and making recommendations or taking appropriate actions in response to such advisory vote.

In addition, the Management Development and Compensation Committee oversees, with involvement of the full Board, the Company’s management development and succession planning processes.


Board and Director Evaluation Process

The Nominating, Governance and Corporate Responsibility Committee is responsible for overseeing the Board, committee, and individual director evaluation process. Under the Governance Guidelines, the Board and each of the Audit, Nominating, Governance and Corporate Responsibility, and Management Development and Compensation Committees are required to conduct an annual self-evaluation. The evaluations include a range of issues designed to assess Board and committee performance, including Board and committee composition, structure, information received, accountability, and effectiveness, among other topics.

Additionally, the Board conducts individual director interviews as part of its evaluation process. Each director provides an individual assessment as well as any feedback

they may have on other Board members’ performance on an annual basis. The individual assessments are conducted by the chair of the Nominating, Governance and Corporate Responsibility Committee, who summarizes and reports the results and any related recommendations to the Nominating, Governance and Corporate Responsibility Committee and the full Board.

As a result of the evaluation process, the Board has made a number of changes, including, for example, adding regular cybersecurity updates to Audit Committee meeting agendas, adding new topics or devoting more time to particular topics and businesses of interest, incorporating external speakers on certain topics, revising the format and focus of Board materials, and identifying the skills and expertise desired for future director candidates.



Board of Directors Meeting Attendance

The Board held six meetings during fiscal year 2017. All incumbent directors attended at least 75% of the meetings of the Board and committees of which they were members during fiscal year 2017 during the period in which they served on the Board. All members of the Board are

expected to attend the Annual Meeting of Stockholders. Each of the eleven members of the Board at the time of the Company’s 2016 Annual Meeting of Stockholders held on November 16, 2016, attended the meeting.



Executive Sessions

The independent directors generally meet in executive session at each regularly scheduled Board meeting without the presence of management directors or employees of the Company to discuss various matters related to the oversight

of the Company, the management of the Board’s affairs, and the CEO’s performance. The lead director chairs the executive sessions.



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Corporate Governance


Conflict of Interest and Related Person Transaction Policies and Procedures

The Company has a long-standing policy of prohibiting its directors, officers, and employees from entering into transactions that are an actual or potential conflict of interest. The Company’s Code of Conduct has a detailed provision prohibiting conflicts of interests and is available on the Company’s website at https://www.thecloroxcompany.com/who-we-are/corporate-governance/codes-of-conduct.

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

A “Related Person” is (i) any person who is or was (since the beginning of the Company’s last fiscal year, even if they do not presently serve in that role) an executive officer, director, or nominee for election as a director, (ii) a beneficial owner of more than 5% of the Company’s Common Stock, or (iii) an immediate family member of any of the foregoing. For purposes of this definition, “immediate family member” includes a person’s spouse, parents, stepparents, children,

stepchildren, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, brothers- and sisters-in-law, and anyone residing in such person’s home (other than a tenant or employee).

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

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

In determining whether to approve or ratify an Interested Transaction, the Audit Committee will take into account, among other factors it deems appropriate, whether the Interested Transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the Related Person’s interest in the transaction.

No director participates in any discussion or approval of an Interested Transaction for which he or she is a Related Person, except that the director will provide all material information concerning the Interested Transaction to the Audit Committee. There were no transactions considered to be an Interested Transaction during the Company’s 2017 fiscal year.



Code of Conduct

The Company has adopted a Code of Conduct, which can be found in the Corporate Governance section of the Company’s website, https:// www.thecloroxcompany.com/who-we-are/corporate-governance/codes-of-conduct, or obtained in print by contacting The Clorox Company, c/o Corporate Secretary, 1221 Broadway, Oakland, CA 94612-1888.

The Code of Conduct applies to all of the Company’s employees, including executives, as well as directors. We also have established a separate Business Partner Code of Conduct outlining our standards and expectations of our suppliers and other business partners, which can also be found at https://www.thecloroxcompany.com/who-we-are/ corporate-governance/codes-of-conduct.



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Board of Directors’ Role in Risk Management Oversight

The Board has responsibility for the oversight of the Company’s risk management, while the Company’s management is responsible for the day-to-day risk management process. With the oversight of the Board, the Company has a comprehensive enterprise risk management program in place. The Company has an Enterprise Risk Management Steering Committee (ERM Committee), which consists of a cross-functional team of senior leaders and key executives. The ERM Committee oversees the annual key risk identification process, whereby it identifies the top risks that the Company faces with respect to its business, operations, strategy, and other factors, as well as the key mitigation strategies and the risk owner(s). At least annually, and generally in connection with the Board’s annual strategy meeting, management reports on and discusses the identified risks and risk mitigation and management efforts with the Board. The Board may allocate responsibility to a specific committee to examine a particular risk in detail if the committee is in the best position to review and assess the risk. For example, the Audit Committee reviews compliance and risk management programs and practices related to accounting and financial reporting matters and financial risk management, and the Management Development and Compensation Committee reviews the risks related to the executive compensation structure. The Audit Committee also receives regular updates relating to cybersecurity. In the event that a committee is allocated responsibility for examining and analyzing a specific risk, such committee reports on the relevant risk exposure during its regular reports to the full Board to facilitate proper risk oversight by the entire Board.

As part of its responsibilities, the Management Development and Compensation Committee periodically reviews the Company’s compensation policies and programs to ensure that the compensation program is able to provide incentives to employees, including executive officers, while mitigating

excessive risk-taking. The overall executive compensation program contains various provisions that mitigate against excessive risk-taking, including:

An appropriate balance between annual cash compensation and equity compensation that is earned over a period of three to four years;

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

Financial metrics under the Annual Incentive Plan that are equally weighted between net customer sales and economic profit (as defined in the Compensation Discussion and Analysis section), which discourage revenue generation at the expense of profitability and vice versa;

Clawback provisions applicable to current and former executives as set forth in the applicable plans that enable the recapture of previously paid compensation under certain circumstances, which serve as a deterrent to inappropriate risk-taking activities; and

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

Based on its review and the analysis provided by its independent compensation consultant, FW Cook, the Management Development and Compensation Committee has determined that the risks arising from the Company’s compensation policies and practices for its employees, including executive officers, are not reasonably likely to have a material adverse effect on the Company.



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  Stock Ownership Information

Beneficial Ownership of Voting Securities

The following table shows, as of July 31, 2017 (except as otherwise indicated below), the holdings of Common Stock by (i) any entity or person known to the Company to be the beneficial owner of more than 5% of the outstanding shares of Common Stock, (ii) each director and nominee for director and each of the six individuals named in the Summary Compensation Table (the named executive officers), and (iii) all current directors and executive officers

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


Name of Beneficial Owner       Amount and Nature
of Beneficial Ownership
(1)(2)
      Percent of Class(3)
The Vanguard Group, Inc.(4)
       100 Vanguard Blvd.
       Malvern, PA 19355 13,514,950 10.47
BlackRock, Inc.(5)
       55 East 52nd Street
       New York, NY 10055 10,203,264 7.91
State Street Corporation(6)
       One Lincoln Street
       Boston, MA 02111 7,482,585 5.80
Amy Banse(2) 0 *
Richard H. Carmona(2)   0   *
Benno Dorer 452,526 *
Spencer C. Fleischer(2)   0   *
James Foster 36,329 *
Esther Lee(2)   0   *
A. D. David Mackay(2) 5,000 *
Robert W. Matschullat(2)   1,324   *
Jeffrey Noddle(2) 1,150 *
Stephen M. Robb   185,966   *
Laura Stein 130,915 *
Pamela Thomas-Graham(2)   1,778   *
Carolyn M. Ticknor(2) 0 *
Russell Weiner(2)(7)   0   *
Christopher J. Williams(2) 0 *
Nikolaos Vlahos(8)   24,487   *
Dawn Willoughby 98,309 *
All current directors and executive officers as a group (25 persons)(9)   1,296,756   *
*

Does not exceed 1% of the outstanding shares.

(1) Unless otherwise indicated, each beneficial owner listed has sole voting and dispositive power concerning the shares indicated. These totals include the following numbers of shares of Common Stock that such persons have the right to acquire through stock options exercisable within 60 days of July 31, 2017, or with respect to which such persons have shared voting or dispositive power: Mr. Dorer – 444,472 options; Mr. Foster – 32,768 options; Mr. Robb – 172,199 options; Ms. Stein – 107,577 options; Mr. Vlahos – 22,815 options and shared voting and dispositive power with respect to 1,672 shares held in family trust; Ms. Willoughby – 87,632 options and shared voting and dispositive power with respect to 3,411 shares held in family trust; and all current directors and executive officers as a group – 1,186,008 options. The numbers in the table above do not include the following numbers of shares of Common Stock that the executive officers have the right to acquire upon the termination of their service as employees pursuant to vested performance units that were deferred at the executive officers’ election: Mr. Dorer – 11,098; Mr. Foster – 8,188; Mr. Robb – 10,239; Ms. Stein – 27,231; Mr. Vlahos – 4,700; Ms. Willoughby – 4,700; and all current executive officers as a group – 72,440.
(2) The numbers in the table above do not include the following numbers of shares of Common Stock that the non-management directors have the right to acquire upon the termination of their service as directors pursuant to deferred stock units granted under the Independent Directors’ Stock-Based Compensation Plan: Ms. Banse – 311; Dr. Carmona – 17,375; Mr. Fleischer – 3,286; Ms. Lee – 3,891; Mr. Mackay – 311; Mr. Matschullat – 79,971; Mr. Noddle – 4,627; Ms. Thomas-Graham – 21,500; Ms. Ticknor – 28,277; Mr. Weiner – 297; and Mr. Williams – 3,286.
(3) On July 31, 2017, there were 129,068,511 shares of Common Stock outstanding.

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(4) Based on information contained in a report on Schedule 13G/A filed with the SEC on February 10, 2017, The Vanguard Group reported, as of December 31, 2016, sole voting power with respect to 202,284 shares, sole dispositive power with respect to 13,286,632 shares, shared voting power with respect to 28,499 shares and shared dispositive power with respect to 228,318 shares.
(5) Based on information contained in a report on Schedule 13G/A filed with the SEC on January 23, 2017, BlackRock, Inc. reported, as of December 31, 2016, sole voting power with respect to 8,566,242 shares and sole dispositive power with respect to all shares reported.
(6) Based on information contained in a report on Schedule 13G filed with the SEC on February 9, 2017, State Street Corporation reported, as of December 31, 2016, shared voting and dispositive power with respect to all of these shares.
(7) Effective February 6, 2017, Mr. Weiner was appointed to the Board.
(8) Effective March 31, 2017, Mr. Vlahos retired from the Company.
(9) Pursuant to Rule 3b-7 of the Securities Exchange Act of 1934, as amended (Exchange Act), executive officers include the Company’s current CEO and all current executive vice presidents and senior vice presidents. Effective March 31, 2017, there were 25 current directors and executive officers as a group.


Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act and SEC regulations require the Company’s directors, certain officers, and holders of more than 10% of the Company’s Common Stock to file reports of ownership on Form 3 and changes in ownership on Form 4 or 5 with the SEC. The reporting directors, officers, and 10% stockholders are also required by SEC rules to furnish the Company with copies of all

Section 16(a) reports they file. Based solely on its review of copies of such reports received or written representations from its directors and such covered officers, the Company believes that its directors and officers complied with all applicable Section 16(a) filing requirements during fiscal year 2017.


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  Executive Compensation

  Proposal 2:
Advisory Vote to Approve Executive Compensation

We are seeking a non-binding, advisory vote from our stockholders to approve the compensation of our named executive officers. This proposal gives our stockholders the opportunity to express their views on the Company’s executive compensation, and is commonly referred to as a “say-on-pay” proposal. This vote is only advisory and will not be binding upon the Company or the Board. However, the Management Development and Compensation Committee, which is responsible for designing and administering the Company’s executive compensation program, values the opinions expressed by stockholders and encourages all stockholders to vote their shares on this matter.

As discussed in the Compensation Discussion and Analysis section of this proxy statement, which begins on page 29, the Company’s compensation programs are designed to align pay with short- and long-term financial and strategic objectives to build stockholder value, while providing

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

At our 2016 Annual Meeting of Stockholders held on November 16, 2016, our stockholders overwhelmingly approved our executive compensation policies, with approximately 93% of votes cast in favor of our proposal. We value this positive endorsement by our stockholders and believe that the outcome signals our stockholders’ support of our compensation program and continued our general approach to compensation for fiscal year 2017. We provide our stockholders the opportunity to vote on the compensation of our named executive officers every year. It is expected that the next vote on executive compensation will be at the 2018 Annual Meeting of Stockholders.




Board of Directors’ Recommendation

The Board recommends a vote FOR the advisory vote to approve executive compensation. The Company is asking its stockholders to support the compensation of the named executive officers as described in this proxy statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers in fiscal year 2017 and the philosophy, policies, and practices underlying that compensation, which are described in this proxy statement. The Board believes that the Company’s overall compensation process effectively implements its compensation philosophy and achieves its goals.

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

“RESOLVED, that the stockholders of The Clorox Company approve, on an advisory basis, the compensation of the named executive officers, as disclosed in The Clorox Company’s Proxy Statement for the 2017 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the Summary Compensation Table, and the other related tables and disclosure.”




Vote Required

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

This vote is advisory, and therefore not binding on the Company, the Board, or the Management Development and Compensation Committee. However, the Board and the


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Management Development and Compensation Committee value the opinions of the Company’s stockholders and, to the extent there is any significant vote against the named executive officers’ compensation as disclosed in the proxy statement, we will consider such stockholders’ concerns

and the Management Development and Compensation Committee will evaluate whether any actions are necessary to address those concerns.

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



  Proposal 3:
Advisory Vote on the Frequency of Future Advisory Votes to Approve Executive Compensation

In accordance with SEC rules, this proposal gives our stockholders the opportunity to indicate how frequently (every year, every two years, or every three years) they want to vote on an advisory basis to approve the compensation of our named executive officers, as disclosed pursuant to the SEC’s compensation disclosure rules, such as the one in Proposal 2 above, which are commonly referred to as “say-on-pay” votes. Stockholders last voted on the

frequency of say-on-pay votes at the 2011 Annual Meeting, at which time stockholders overwhelmingly voted for an annual say-on-pay vote.

By voting on this Proposal 3, stockholders may indicate whether they would prefer an advisory vote to approve named executive officer compensation once every one, two, or three years. Alternatively, you may abstain from voting.




Board of Directors’ Recommendation

The Board recommends a vote for the option of ONE YEAR for the frequency of future advisory votes to approve executive compensation. The Board continues to believe that stockholders should vote on named executive officer compensation every year so that they may provide the Company with their direct input annually. Setting a one-year period for holding this advisory stockholder vote will enhance stockholder communication by providing a clear, simple means for the Company to obtain information on investor sentiment about

our executive compensation philosophy, policies, and practices. In addition, an annual advisory vote to approve executive compensation is consistent with the Company’s policy of seeking input from, and engaging in discussions with, its stockholders on corporate governance matters and its executive compensation program.

Accordingly, the Board recommends a vote for the option of ONE YEAR as the frequency with which stockholders are provided a say-on-pay vote.




Vote Required

While the Board is making a recommendation with respect to this proposal, stockholders are being asked to vote on the choices specified above, and not whether they agree or disagree with the above recommendation. The option of one, two, or three years that receives the affirmative vote of a majority of the votes present in person or represented by proxy and entitled to vote at the Annual Meeting by the stockholders will be the frequency for say-on-pay votes that has been selected by the stockholders. In the event that no option receives a majority of the votes, the Company will consider the option that receives the most votes cast to be

the option selected by the stockholders. However, because this vote is advisory and not binding on the Board or the Company in any way, the Board may decide that it is in the best interests of the Company’s stockholders and the Company to hold a say-on-pay vote more or less frequently than the option selected by the stockholders.

The people designated in the proxy and voting instruction card will vote your shares represented by proxy for the option of ONE YEAR unless you include instructions to the contrary.



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  Compensation Discussion and Analysis

Executive Summary

This Compensation Discussion and Analysis (CD&A) describes our executive compensation philosophy and program, the compensation decisions made under this program and the specific factors we considered in making those decisions. This CD&A focuses on the compensation of our “named executive officers” for fiscal year 2017, who were:

Benno Dorer – Chairman and Chief Executive Officer (CEO);

Stephen M. Robb – Executive Vice President – Chief Financial Officer (CFO);

Dawn Willoughby – Executive Vice President – Chief Operating Officer (COO);

Laura Stein – Executive Vice President – General Counsel and Corporate Affairs;

James Foster – Executive Vice President – Product Supply, Enterprise Performance and IT; and

Nikolaos A. Vlahos – Former Executive Vice President and Chief Operating Officer – Household, Lifestyle and Core Global Functions (retired March 31, 2017).

Fiscal Year 2017 Performance Highlights

In fiscal year 2017, despite the increasingly competitive retail environment, Clorox delivered strong results with fiscal year sales growth of 4% and volume growth of 6%. This included sales growth in every quarter of the fiscal year and sales and volume improvement in all four of the Company’s reportable segments. The Company also grew diluted net earnings per share from continuing operations by 9%. In addition, the Company maintained its focus on operational efficiencies including lowering selling and administrative expenses and delivering cost savings, and continued to make progress toward its product sustainability improvement, energy, and waste reduction goals.

The Company’s 2020 Strategy aims to accelerate profitable growth by engaging employees as business owners, increasing brand investment behind superior products and technology that reaches consumers in a dynamic marketplace, expanding its brands into new categories and channels, and driving out waste in its work, processes, and products. Successes for the Company in fiscal year 2017 included:

achieving $112 million in cost savings, the Company’s 14th consecutive year of average cost savings in excess of $100 million;

achieving increased volume of 6%, reflecting gains in all four of the Company’s reportable segments;

increasing earnings from continuing operations to $703 million or $5.32 diluted earnings per share (EPS), versus $648 million or $4.92 diluted EPS in the prior year;

leveraging incremental demand-building investments, including product innovation to support category and market share growth;

launching new products in numerous categories, including the Brita® Stream pitcher, Burt’s Bees® gloss lip crayon and Burt’s Bees® flavor crystals® lip balm, Clorox Scentiva® line of sprays and wipes, Clorox® Healthcare Fuzion cleaner disinfectant, Clorox® Total 360 electrostatic disinfection system, Fresh Step® Extreme with the power of Febreze® Hawaiian Aloha litter and Fresh Step® Extreme with the power of Febreze® lightweight litter, Glad Kitchen Pro trash bags, Hidden Valley® Simply Ranch® dressing, and Kingsford® BBQ sauces and Kingsford® long-burning charcoal, among others;

continuing to receive external recognition for our leadership in corporate responsibility and sustainability efforts; and

returning excess capital to stockholders through share repurchases, delivering $412 million in dividends to stockholders, and increasing the quarterly dividend by 5% in May 2017.

How Pay Was Tied to the Company’s Performance in Fiscal Year 2017

Our fiscal year 2017 results and compensation decisions continue to illustrate that our pay-for-performance philosophy works as intended, with pay being driven by performance in the following ways:

Fiscal Year 2017 Annual Incentive Payout. In alignment with our pay-for-performance philosophy, the annual incentive payout for each of our named executive officers was close to target due to the Company’s solid operational results compared to the targets established at the beginning of the 2017 fiscal year. The Company’s sales performance exceeded the targets for the fiscal year, while economic profit (EP) performance fell slightly below the target.

Fiscal Year 2017 Long-Term Incentive Payout. Our three-year performance share results were well above the financial target for cumulative economic profit and yielded a 150% payout. These awards were granted in September 2014, and payment was determined in August 2017, based on performance over the period commencing July 1, 2014, and ending June 30, 2017. Fiscal years 2015 and 2016 had especially strong results. The cumulative EP results for the three-year period thus resulted in the maximum payout for the Company’s performance shares.


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Compensation Philosophy

The key principle of our compensation philosophy is to align pay with performance. We do so by delivering the majority of executive pay through “at-risk” variable incentive awards that help ensure that realized pay is tied to attainment of critical operational goals and sustainable

appreciation in stockholder value. In fiscal year 2017, approximately 86% of the targeted compensation for our CEO and approximately 70% of the targeted compensation for our other named executive officers was directly tied to the achievement of short- and long-term operating goals and total stockholder return. This approach is designed to accomplish the following:



Element       Objective
Pay for Performance Reward performance that drives achievement of the Company’s short- and long-term goals and, ultimately, stockholder value
Align Management and
Stockholder Interests
  Align the interests of our executive officers with our stockholders by using long-term, equity-based incentives, encourage a culture of ownership with stock retention guidelines, and reward executive officers for sustained Company performance as measured by operating results and total stockholder return
Attract, Retain, and Motivate
Talented Executives
Maintain market-based pay targets and program design that allow the Company to be a magnet for high-performing executives
Address Risk-Management
Considerations
Motivate our executives to create long-term stockholder value and discourage behavior that could lead to unnecessary or excessive risk-taking by providing a balance of fixed and at-risk pay, and short-term and long-term performance horizons, using a variety of metrics tied to key drivers of sustainable value creation
Support Financial Efficiency Help ensure that cash- and equity-based incentive payouts are appropriately supported by performance, and design awards in a way that is intended to be treated as performance-based compensation that is tax-deductible by the Company under Internal Revenue Code (IRC) Section 162(m), as appropriate

In 2017, the Management Development and Compensation Committee undertook a detailed assessment of the Company’s overall compensation program for alignment to our business strategy, our stockholders’ interests, our pay-for-performance philosophy, and market practices. This review resulted in various changes to the annual and long-term incentive programs, which are effective beginning with fiscal year 2018, as described in greater detail below.

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

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

What We Have

An executive compensation program designed to further the Company’s strategy and mitigate inappropriate risk;
Different performance horizons for the goals within our annual and long-term incentive plans;
Use of economic profit as a rigorous incentive metric;
Stringent stock ownership and retention guidelines for all of our executives;
A prohibition on speculative transactions involving the Company’s stock, including hedging and pledging;
Stock options that vest over a four-year period and have an exercise price equal to fair market value of our Common Stock on the date of grant;
Clawback provisions in both our annual and long-term incentive plans;
Double-trigger change in control provisions for all equity awards;
Reasonable cash severance provisions to support talent retention and attraction objectives, promote orderly succession planning, and avoid individual negotiation with exiting executives, thus eliminating the need for individual employment agreements;
Modest perquisites supported by sound business rationale;
Annual review of our executive compensation program by the Committee, which yielded changes to the annual and long-term incentive programs to be effective in fiscal year 2018; and
Use of an independent compensation consultant who does not provide any additional consulting services to the Company.

What We Don’t Have

Ø Employment contracts for any executives;
Ø

Stock option re-pricing without stockholder approval;

Ø Payment of dividends or dividend equivalents on unvested or unearned performance shares; and
Ø Tax gross-ups for any employee, including executive officers.


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Compensation Discussion and Analysis

Components of Our Executive Compensation Program

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

Component       Purpose       Characteristics
Base Salary Compensate named executive officers for their role and Fixed component.
level of responsibility, as well as individual performance.
Annual Incentives(1) Promote the achievement of the Company’s annual Performance-based cash bonus opportunity.
  corporate financial and strategic goals, as well as  
individual objectives.
Long-Term Incentives(1) Promote the achievement of the Company’s long-term Values of performance share grants and stock
corporate financial goals and stock price appreciation. option awards vary based on actual Company
  financial and stock price performance.
Retirement Plans   Provide replacement income upon retirement (a long-term Fixed component; however, Company
retention incentive). contributions vary based on pay and
employee contributions.
Post-Termination Provide contingent payments to attract and retain named Only payable if a named executive officer’s
Compensation executive officers and promote orderly succession for employment is terminated under specific
key roles. circumstances as described in the applicable
severance plan.
Perquisites Provide other benefits competitive with the compensation Financial planning, Company car or car
peer group and encourage executives to proactively allowance, paid parking, annual executive
manage their health and financial wellness. physical, and health club allowance.

(1) Payouts under the annual and long-term incentive plans are determined based on the achievement of objectives established by the Committee at the beginning of the performance period. The performance period is one year for the cash awarded under the Annual Incentive Plan, which is further described in What We Pay: Components of Our Compensation Program and three years for the performance shares awarded under the long-term incentive plan. Specific financial goals cannot be changed during the performance period, except in accordance with principles set by the Committee at the time the goals were established, which, in the case of our long-term incentive plan, provide for adjustments in limited circumstances, including acquisitions, restructuring charges, or significant changes to generally accepted accounting principles, and only if the adjustments exceed a specified minimum financial impact to the Company.

How We Make Compensation Decisions

Roles and Responsibilities in Setting Executive Compensation

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

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

In 2017, the Committee conducted a comprehensive examination of the Company’s compensation plan design, evaluating the program for alignment to the Company’s business strategy, the interests of our stockholders, our pay-for-performance philosophy, and market practices. After an extensive review, which included discussion with and support from the Committee’s independent compensation consultant, consideration of stockholder input, and review of compensation data from other companies (including our compensation peer group and other companies in our industry or comparable geographies and talent markets), the Committee approved various changes to both the annual and long-term incentive programs, as described in Changes to the Annual Incentive Program for Fiscal Year


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2018 and Changes to the Long-Term Incentive Program for Fiscal Year 2018 under What We Pay: Components of Our Compensation Program. These changes will be effective beginning fiscal year 2018.

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

In determining the compensation package for each of our named executive officers other than our CEO, the Committee receives input and recommendations from our CEO and our Senior Vice President – Chief People Officer. Named executive officers do not have a role in the determination of their own compensation, but named executive officers other than our CEO do discuss their individual performance objectives with our CEO. The Committee currently consists of Dr. Carmona and Messrs. Fleischer, Mackay and Noddle.

Board of Directors. The independent members of the Board undertake a thorough process during which they review our CEO’s annual performance, and each independent director provides candid feedback and observations that are shared in aggregate with our CEO. The Board considers a variety of substantive factors it has identified as being most important for effective CEO performance, with a focus on strategy, people, operations, and values. The full Board discusses the evaluations of our CEO’s performance against these factors and then provides its compensation recommendations to the Committee. The Committee, after evaluating the Board’s recommendations and receiving input from the independent compensation consultant, then makes a final determination on our CEO’s compensation. Our CEO does not have a role in his own compensation determination other than participating in a discussion with the Board regarding his performance relative to specific targets and strategic objectives set at the beginning of the fiscal year, which the Board considers in both its compensation determination and when setting performance targets for the upcoming fiscal year.

Independent Compensation Consultant. The Committee retains the services of an independent compensation consulting firm to assist it in the performance of its duties. During fiscal year 2017, the Committee used the services of Frederic W. Cook & Co., Inc. FW Cook’s work with the Committee included data analysis and guidance and recommendations on the following topics:

compensation levels relative to our peers, market trends in incentive plan design, risk and reward structure of executive compensation plans, and other policies and practices, including the policies and views of third-party proxy advisory firms. FW Cook also assisted in the evaluation and implementation of changes to the Company’s incentive plans, which are effective for fiscal year 2018 and are described in Changes to the Annual Incentive Program for Fiscal Year 2018 and Changes to the Long-Term Incentive Program for Fiscal Year 2018 under What We Pay: Components of Our Compensation Program. See the section entitled Independence of the Compensation Consultant for a discussion of FW Cook’s independence from management.

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

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

Independence of the Compensation Consultant

Pursuant to its charter, the Committee is authorized to retain, oversee, and terminate any consultants as it deems necessary, as well as to approve the fees and other retention terms of any such consultants. Prior to retaining a compensation consultant or any other external advisor, from time to time as the Committee deems appropriate but at least annually, the Committee assesses the independence of the advisor from management. In evaluating FW Cook, the Committee’s compensation consultant, the Committee took into consideration all factors relevant to FW Cook’s independence, including the following factors specified in the NYSE listing standards:

other services provided to the Company by FW Cook or any of its affiliates;

the fees paid by the Company to FW Cook as a percentage of FW Cook’s total revenue;

the policies and procedures of FW Cook that are designed to prevent a conflict of interest;



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any business or personal relationship between individuals at FW Cook performing consulting services for the Committee and a Committee member;

any ownership of Company stock by the individuals at FW Cook performing consulting services for the Committee; and

any business or personal relationship between individuals at FW Cook performing consulting services for the Committee and an executive officer of the Company.

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

individuals at FW Cook and the Committee, the Company’s executive officers, or the Company.

Our Peer Group

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

For fiscal year 2017, the compensation peer group was composed of the following 19 companies:



Avon Products, Inc.       General Mills, Inc.       Molson Coors Brewing Company
Campbell Soup Company The Hershey Company Newell Rubbermaid Inc.
Church & Dwight Co., Inc. Hormel Foods Corporation   Revlon, Inc.
Colgate-Palmolive Company   The J.M. Smucker Company S.C. Johnson & Son, Inc.
Dr. Pepper Snapple Group, Inc. Kellogg Company Tupperware Brands Corporation
Edgewell Personal Care McCormick & Company, Incorporated
The Estee Lauder Companies Inc. Mead Johnson Nutrition Company

To determine the compensation peer group for each year, the Committee considers companies that:

hold leadership positions in branded consumer products;

are of reasonably similar size based on market capitalization and revenue;

compete with the Company for executive talent; and

have executive positions similar in breadth, complexity, and scope of responsibility to those of the Company.

The Committee annually reviews and makes adjustments to the compensation peer group as appropriate to ensure that the peer group companies continue to meet the relevant criteria. There were no changes to the compensation peer group for this fiscal year.

The Company was at the 37th percentile for revenue, 52nd percentile for net income, and 49th percentile for market capitalization compared with the compensation peer group.




Fiscal Year 2017 Compensation of Our Named Executive Officers

For fiscal year 2017, management engaged Aon Hewitt to obtain and aggregate compensation data for the compensation peer group. This data was used to advise the Committee on setting target compensation for our named executive officers. FW Cook reviewed this information and performed an independent compensation analysis of the compensation peer group data to advise the Committee. Although each individual component of executive compensation is reviewed, particular emphasis is placed

on targeting total compensation within 15% of the median target dollar amounts of compensation of the compensation peer group. Other factors, such as an executive’s level of experience, may result in target total compensation for individual named executive officers being set above or below this median range. For fiscal year 2017, each named executive officer’s target total compensation is within 15% of the compensation peer group median.


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What We Pay: Components of Our Compensation Program

A substantial portion of our targeted executive compensation is at-risk variable compensation, with 86% of compensation for our CEO and 70% of compensation for all of our other named executive officers being at-risk. Base salary is the
only fixed compensation component, as outlined in the following charts, which reflect target compensation for fiscal year 2017.


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


(1) Compensation mix represents the actual base salary, target annual incentive award, and actual long-term incentives granted in fiscal year 2017. Refer to the Summary Compensation Table below for further details on actual compensation.

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

Base Salary. The Committee generally seeks to establish base salaries for our named executive officers within 15% of the median of the compensation peer group. The Committee considered factors such as the executive’s specific role, level of experience, and sustained performance, as well as the compensation peer group market data, in determining each named executive officer’s base salary for fiscal year 2017. Changes in base salary are approved by the Committee in September and become effective in October of each year. All base salaries that went into effect in October 2016 for the named executive officers, excluding our CEO, were within this target pay range with the exception of Mr. Foster, who was slightly below the range given his tenure as an Executive Vice President with the Company.

After conducting a review for Mr. Dorer and evaluating his individual performance and overall Company performance for fiscal year 2016, the Committee approved a base salary increase of 5.1% for fiscal year 2017, to $1,025,000,

which was within 15% of the compensation peer group median for CEOs. The annual base salary increases for our named executive officers, other than our CEO, ranged from 2.5% to 5.2%, with an average increase of 3.9%. Our CFO’s salary increase was at the high end of the range to bring his salary closer to market median, in recognition of his continued strong performance. The actual base salaries earned by our named executive officers in fiscal year 2017 are listed in the Salary column of the Summary Compensation Table.

Annual Incentives. The Company provides annual incentive awards to our named executive officers under the Company’s Executive Incentive Compensation Plan (Annual Incentive Plan). Payouts under the Annual Incentive Plan are based on the level of achievement of Company performance goals set annually by the Committee, not to exceed the stockholder-approved maximums. These performance goals are tied to Board-approved corporate financial and strategic performance goals and individual objectives, which are described below. The amounts actually paid under the Annual Incentive Plan are based on four factors: (1) a target award for each named executive officer, which is the base salary multiplied by the annual incentive target (Target Award), (2) the Company’s performance measured against



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pre-established corporate financial goals (Financial Performance Multiplier), (3) the Company’s level of achievement of various strategic metrics (Strategic Metrics Multiplier), and (4) the named executive officer’s individual performance (Individual Performance Multiplier), which is

based primarily on the performance of the operations or functions under the individual’s responsibility. The final individual Annual Incentive Plan payout is determined by the following formula:




The Financial Performance Multiplier can range from 0% to 200% based on an objective assessment of Company performance versus goals established by the Committee at the beginning of the year. The Strategic Metrics and Individual Performance Multipliers, which are also determined by the Committee, typically have a much narrower range, which makes the impact they have on the total payout significantly smaller than the Financial Performance Multiplier. Over the past three years, the range for the Strategic Metrics Multiplier was 100% to 110%, and the range for the Individual Performance Multipliers for the named executive officers was

90% to 115%. By comparison, the range for the Financial Performance Multiplier during this same time period was 96% to 171%.

Below is an illustration of the annual incentive calculation, using our CEO’s Annual Incentive Plan payout as an example. The Financial Performance Multiplier was 96% in fiscal year 2017, based on the Company’s performance compared to the targets for annual net sales and EP that were established by the Committee at the beginning of the year. With the CEO’s Individual Performance Multiplier of 110%, this resulted in a final payout that was slightly above target.




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

Base Salary. The named executive officer’s actual fiscal year 2017 base salary is the starting point for the annual incentive calculation.

Annual Incentive Target. Each year, the Committee sets an annual incentive target level for each named executive officer as a percentage of his or her base salary, based on an assessment of median bonus targets in the compensation peer group and other factors such as individual experience, as noted above. The annual incentive target level is generally set near the median of bonus targets for comparable positions in the compensation peer group. The table below sets forth the targets for the fiscal year 2017 annual incentive awards.


Named Executive Officer      Annual Incentive
Target (% of
Base Salary)
Benno Dorer – Chairman and Chief Executive Officer(1)   145%
Stephen M. Robb – Executive Vice President – Chief Financial Officer(2) 85%
Dawn Willoughby – Executive Vice President – Chief Operating Officer   80%
Laura Stein – Executive Vice President – General Counsel and Corporate Affairs 70%
James Foster – Executive Vice President – Product Supply, Enterprise Performance and IT   65%
Nikolaos A. Vlahos – Executive Vice President and Chief Operating Officer – Household, Lifestyle and
Core Global Functions (retired March 31, 2017) 80%

(1) Mr. Dorer’s target was increased from 130% in fiscal year 2016 to 145% in fiscal year 2017.
(2) Mr. Robb’s target was increased from 80% in fiscal year 2016 to 85% in fiscal year 2017.

Financial Performance Multiplier. At the beginning of each fiscal year, the Committee sets financial goals for the Annual Incentive Plan based on targets approved by the Board. At the end of the year, the Committee reviews the Company’s results against the goals set at the beginning of the year.

For fiscal year 2017, the Committee established financial goals with a focus on increasing net sales and increasing EP when compared to actual operating results for fiscal year 2016, as described in greater detail below, in order to drive sustainable, profitable growth and short- and long-term total stockholder returns. The net sales and EP metrics that determine the Financial Performance Multiplier are each weighted 50% as the Committee believed this

mix effectively balances a focus on both top-line and bottom-line performance. In selecting the metrics and setting the financial goals of the Annual Incentive Plan, the Committee carefully considered whether the goals appropriately align with the goals of the long-term incentive program so that the overall compensation design does not encourage participants to take unnecessary or excessive risk or actions that are inconsistent with the Company’s short- and long-term strategic and financial objectives.

For fiscal year 2017, the financial goals for the Annual Incentive Plan, the potential range of payouts for achieving those goals, and the actual results as determined by the Committee were as follows:


      Annual Incentive
Financial Goals (in millions)
Goal 0%
(Minimum)
      100%
(Target)
      200%
(Maximum)
      Actual(1)
Net Sales (weighted 50%)(2)        $ 5,777   $ 5,956        $ 6,135    $ 5,973
EP (weighted 50%)(3) $ 508 $ 548 $ 588 $ 541

(1) Results exclude the impact of the change in accounting for share-based payments (ASU 2016-09) from EP.
(2) Net sales are as reported in the Company’s consolidated financial statements.
(3) EP for purposes of the financial performance multiplier is defined by the Company as earnings from continuing operations before income taxes, non-cash restructuring, and interest expense, which is then tax affected and reduced by a capital charge.

Strategic Metrics Multiplier. At the beginning of each fiscal year, the Committee sets multiple strategic metrics for the Annual Incentive Plan based on what it believes will best drive the Company’s overall strategy of engaging employees, increasing brand investment behind superior value, keeping the core healthy and growing into new categories and channels, and reducing waste. For fiscal year 2017, the Committee set 11 metrics, each with one or more

associated targets that are objectively measurable, to be evaluated in determining the Strategic Metrics Multiplier used in the Annual Incentive Plan payout.

For example, to determine whether the results of the high-performing employee engagement metric were met, the Company measured its annual engagement survey results against a benchmark of other fast-moving


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consumer goods companies. To calculate the consumer value metric, the Company measured a brand’s value to consumers in terms of product, price, and brand equity, while the innovation and strategic product pipeline metric was measured against a target based on historical and

projected sales resulting from innovation. Goals related to reshaping the portfolio include mergers and acquisitions as well as organic growth. For fiscal year 2017, the 11 strategic metrics and the Company’s results were as follows:


Strategic Metric       FY 2017 Result       Strategic Metric       FY 2017 Result
High-performing employee engagement
Exceeded
Innovation and strategic product pipeline
Met
Diversity targets within the Company
Met
Targeted goals related to reshaping the portfolio
  Met
Consumer value measure
Exceeded  
Targeted level of cost savings
Exceeded
Domestic dollar share
Not Met
Gross margin improvement
Not Met
International volume
Not Met
Target selling and administrative expenses of 13.5% of net sales
Exceeded
Future net sales growth projections
Met

In fiscal year 2017, the Company updated its people strategy for further alignment with our business strategy and made strong progress on all elements, including culture, succession, development, and inclusion and diversity, which contributed to continued gains in employee engagement. Strong cost savings and administrative spending partially mitigated lower gross margin, and though the Company ended the fiscal year with market share slightly down, our consumer value measure and innovation results allowed the Company to reverse a share decline. While international volume growth was below target, this was exclusively due to the economic environment in Argentina; excluding Argentina, international volume exceeded targets. Based on the Company’s performance against these strategic metrics, the Committee determined that the level of payout for the Strategic Metrics Multiplier was 100% (down from 110% for fiscal year 2016). Over the past three years, the range for the Strategic Metrics Multiplier has been 100% to 110%.

Individual Performance Multiplier. Consistent with our pay-for-performance philosophy, the annual incentive payouts initially are determined by financial results and performance against strategic metrics, multiplied by an Individual Performance Multiplier. Based on its evaluation of individual performance, the Committee reviewed and approved the Individual Performance Multiplier for each named executive officer to reflect the officer’s individual contributions in fiscal year 2017. In determining the multiplier for individual performance, the Committee carefully evaluates several performance factors against objectives established at the beginning of the year. For our CEO, the Committee conducts a detailed evaluation covering the key categories of strategy, people, operations, values and relationships, and overall performance, with specific goals within each category. To set specific targets for our CEO, the Committee uses a balanced scorecard with annual strategic priorities of financial goals, people, customer and consumer, growth, and margin, with specific metrics and targets within each strategic priority. These targets are used to measure the CEO’s performance twice

a year, with a mid-year review and a year-end evaluation. This assessment is then used to determine the appropriate individual multiplier for the fiscal year performance.

The range of Individual Performance Multipliers in 2017 was 90% to 105% based on the contributions made in the fiscal year by our named executive officers. Our CFO and COO received Individual Performance Multipliers of 105%, primarily for their contributions in delivering above-target performance on financial and operational goals, including sales, EPS, cost savings, cash flow, and capital management while maintaining record-high employee engagement, meeting diversity goals, and reducing turnover. Our former Executive Vice President and Chief Operating Officer – Household, Lifestyle and Core Global Functions received an Individual Performance Multiplier of 90%, based on his contributions during fiscal year 2017 and the results of the businesses he oversaw. The remaining non-CEO named executive officers received Individual Performance Multipliers of 100%. The Committee reviewed the results for our CEO and determined his Individual Performance Multiplier was 110%, based on his continued strong performance, including progress on the Company’s 2020 Strategy, delivering solid financial results and overall operational results for fiscal year 2017 that exceeded expectations, and continuing to shape a highly successful senior management team.

Final Individual Annual Incentive Plan Payouts. In accordance with the formula described above, the final annual incentive payouts to our named executive officers in fiscal year 2017, excluding our CEO, ranged from $295,150 to $522,650, and from 96% to 101% of the named executive officers’ Target Awards (excluding Mr. Vlahos’ payout, which was pro-rated for his partial year of service). Mr. Dorer’s annual incentive payout was $1,569,480. This award was 106% of his Target Award and is composed of a Financial Performance Multiplier of 96%, a Strategic Metrics Multiplier of 100%, and an Individual Performance Multiplier of 110%. These payouts are also reflected in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table.



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Changes to the Annual Incentive Program for Fiscal Year 2018. As part of its 2017 review of the Company’s compensation plan design, the Committee approved new metrics for the Financial Performance Multiplier for the annual incentive plan. Beginning in fiscal

year 2018, the economic profit metric (in fiscal year 2017, weighted as 50% of the multiplier) is replaced by net earnings from continuing operations (weighted 30%) and gross margin (weighted 20%):


Fiscal Year 2017 Metrics Metrics Effective Fiscal Year 2018
net sales (50%) ➔    net sales (50%)
economic profit (50%) ➔    net earnings (30%)
gross margin (20%)

These revisions are intended to eliminate performance metric redundancy between our annual incentive and long-term incentive plans, where the economic profit metric remains the sole performance goal, enhance the line of sight between earned cash compensation and metrics that our broader management team can directly influence, and reinforce the importance of both net earnings and gross margin in driving sustainable value creation over time. Economic profit remains a key metric for the Company, but the Committee determined that the introduction of net earnings and gross margin was preferable in the annual incentive plan after considering investor feedback regarding a preference not to use the same metric in both short- and long-term plans, evaluating the metrics most commonly used by our peers in their short-term incentive plans, the suitability of various metrics in the short term versus the long term, and the focus on business fundamentals. In replacing the economic profit metric with net earnings and gross margin in the annual incentive, the Committee considered the attributes of these various metrics: economic profit is the after-tax profit the Company generates after paying for assets used to run the business (or capital charge), while net earnings from continuing operations is similar to economic profit but does not include a capital charge. Because the capital charge is more difficult to influence on an annual basis, the Committee determined that economic profit better aligns with long-term incentives, and net earnings to short-term incentives. Additionally, gross margin is a core element of profitable growth and a key metric for our investors, and the Committee believes that adding gross margin as a metric for the annual incentive will help ensure that employees are focused on improving the Company’s profitability and ability to fund investments for future growth.

The Committee also removed the Strategic Metrics Multiplier as a separate multiplier that applies equally to all executive officers. Commencing in fiscal year 2018, the relevant strategic metrics will be incorporated into the individual multipliers for each executive officer, thereby resulting in a simpler annual incentive calculation that continues to reflect performance measured against key strategic objectives and individual contributions. The overall balanced scorecard with annual strategic priorities of financial goals, and other targets related to people, customer and consumer, growth, and margin targets as described above will continue to be evaluated by the Committee and Board, and used to measure the CEO’s performance as part of the CEO’s

individual multiplier. Each of these changes will be effective beginning with the annual incentive payout in fiscal year 2018.

Long-Term Incentives. Each year, we provide long-term incentive compensation to our named executive officers. For the past several years, these awards have been made in the form of performance shares and stock options. We believe these forms of compensation align Company performance and executive officer compensation with the interests of our stockholders. These incentive awards also support the achievement of our long-term corporate financial goals.

We use time-based restricted stock for non-executive officer employees and occasionally for special purposes for executive officers, such as in connection with a promotion or as a replacement for compensation forfeited by an externally recruited executive at a prior employer.

The Committee annually reviews the costs of, and potential stockholder dilution attributable to, our long-term incentive program to ensure that the overall program is financially efficient and in line with that of our compensation peer group. The Committee also seeks to calibrate the long-term incentive program design to appropriately drive performance in line with that of the compensation peer group. In determining the total value of the long-term incentive opportunity for each named executive officer, the Committee reviews the compensation peer group data presented by both management and the independent compensation consultant on a role-by-role basis and considers recommendations by our CEO for the other named executive officers.

The Committee’s goal is to target long-term incentive awards in amounts that are generally competitive with the median of the compensation peer group. Actual long-term incentive award target levels for individual named executive officers may vary from the median based on a variety of factors, such as the named executive officer’s sustained performance, individual experience, critical nature of his or her role, and expected future contributions. Like the annual incentive awards, actual payouts under the long-term incentive awards will vary from the target based on how the Company performs against pre-established targets. The value of payouts will also vary based on changes in the market price of our Common Stock.


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The Committee determined that our named executive officers would receive 50% of the value of their total annual long-term incentive award granted in fiscal year 2017 in performance shares and 50% in stock options. The Committee believes this mix of equity awards supports several important objectives, including compensating named executive officers for achievement of long-term goals tied to our business strategy, rewarding named executive officers for sustained increases in the price of our Common Stock, enhancing retention by mitigating the impact of price fluctuations of our Common Stock in the overall long-term incentive value, and ensuring that the overall cost of the program is aligned with the compensation realized by the named executive officers and the performance delivered to stockholders. The Committee does not consider the amount of outstanding performance shares, stock options, and restricted stock currently held by a named executive officer when making annual awards of performance shares and stock options because such amounts represent compensation attributable to prior years.

Long-Term Incentive Award. The long-term incentive awards granted to our named executive officers for fiscal year 2017 were made in September 2016. The Committee considered factors such as the executive’s role, level of experience, and sustained performance, as well as the compensation peer group market data, in determining each named executive officer’s long-term incentive award. For fiscal year 2017, the annual long-term incentives for our named executive officers, excluding our CEO, ranged in value from $525,000 to $1,400,000. Mr. Dorer received a long-term incentive award valued at $4,750,000. The long-term incentives awarded to our named executive officers in fiscal year 2017 are listed in the Stock Awards and Option Awards columns of the Summary Compensation Table.

Performance Shares. Performance shares are grants of restricted stock units that pay out after a three-year performance period only if the Company meets pre-established financial performance goals, which are described below. We believe that performance shares align the interests of our named executive officers with the interests of our stockholders because the number of shares earned and the shares’ potential value are tied to the achievement of performance targets. The performance target for the awards granted in September 2016 is a cumulative EP target informed by our three-year financial long-range plan and the budget developed by management, which is reviewed and approved by the Board. In setting the performance targets for the performance shares, the Committee reviews the budget and long-range plan and seeks to appropriately align the performance goals with the objectives of the Annual Incentive Plan, so that the overall compensation design does not encourage participants to take unnecessary or excessive risk or actions that are inconsistent with the Company’s short- and long-term

strategic and financial objectives. The Committee believes its use of cumulative EP as a metric provides rigor and an ability to align performance with pay over the three-year performance period.

The payout of the performance share awards granted in September 2016 is subject solely to the Company’s achievement of a cumulative EP target during the performance period of July 2016 through June 2019. The percentage range for payouts is from 0%, if the minimum cumulative EP target is not met, to a maximum of 150% of the target number of shares, with a payout of 25% of the target number of shares when the minimum cumulative EP target is attained.

For the grant made in September 2014, which was based on a performance period of July 2014 through June 2017 and paid out in August 2017, the Committee established cumulative EP targets and set various payout levels tied to cumulative EP for the performance period. For the September 2014 grant, the cumulative EP target was set so a payout of 100% would be made if the Company achieved EP growth of approximately 4% per year during the performance period. The Committee believes this metric directly supports the Company’s corporate strategy and long-term financial goals and correlates to stock price performance.

In August 2017, the Committee certified the results of the September 2014 grant for the 2014-2017 performance period. The adjusted financial target for the grant was a cumulative EP of $1,342 million over the three-year performance period for a 100% payout. The cumulative EP target was adjusted in accordance with the grant agreements for the impact of the adoption of a change to the accounting standards for share-based payments under ASU 2016-09, as well as for the acquisition of RenewLife in May 2016. The Company’s actual cumulative EP was well above the payout maximum of $1,392 million, resulting in the Committee certifying a payout of 150%. This payout supports the Company’s belief in pay for performance over the long term.

Stock Options. Stock options align the interests of our named executive officers with those of our stockholders because the options only have value if the price of the Company’s stock increases after the stock options are granted. Stock options vest in 25% increments over a four-year period (beginning one year from the date of grant) and expire 10 years from the date of grant. In fiscal year 2017, the Committee awarded stock options to our named executive officers as part of our annual long-term incentive plan. The exercise price for the stock options was equal to the closing price of our Common Stock on the date of grant. Information on all stock option grants is shown in the Grants of Plan-Based Awards table.


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Changes to the Long-Term Incentive Program for Fiscal Year 2018. As part of its 2017 compensation plan design review, the Committee changed the measurement of EP performance from a three-year cumulative dollar amount to a three-year annual growth rate. In addition, the Committee changed the potential payout range from 0% to 150% of target with a 25% payout for threshold performance (with a zero payout below threshold) to a range of 0% to 200% of target with a 50% payout threshold. In making these changes, the Committee considered a number of factors, including practices at other comparable companies, the difficulty in setting a three-year cumulative dollar-denominated target in a rapidly evolving and volatile global economic environment, feedback from investors, and talent retention considerations. With regard to the change from a dollar-denominated cumulative EP target to a target growth rate over three years, the Committee specifically considered the volatility of year-over-year results and the potential for a single good or bad year to have a disproportionate impact on a three-year payout opportunity. These changes became effective beginning with the performance share awards granted in September 2017.

Retirement Plans

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

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

A brief description of each of our retirement programs is set forth below. Each of our named executive officers participates in these retirement programs with the exception of the Supplemental Executive Retirement Plan.

The Clorox Company Pension Plan. The Clorox Company Pension Plan (the Pension Plan) is a cash balance pension plan that was frozen effective July 1, 2011. This freeze did not affect the benefits previously accrued under the Pension Plan, which remain fully funded.

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

Nonqualified Deferred Compensation Plan. Under the Nonqualified Deferred Compensation Plan (the NQDC), eligible employees may voluntarily defer receipt of up to 50% of base salary and up to 100% of their annual incentive awards. In fiscal year 2017, deferred amounts could be invested in a manner that generally mirrored the funds available in the 401(k) Plan. The NQDC permits the Company to contribute amounts that exceed the IRC compensation limits in the tax-qualified plans through a 401(k) restoration provision.

Supplemental Executive Retirement Plan. The Supplemental Executive Retirement Plan (the SERP), a defined benefit plan, was closed to new participants effective April 2007 and, effective June 30, 2011, was frozen with regard to pay and offsets, while still accruing age and service credits. Benefits under the SERP have historically been calculated as an annuity based on a percentage of average compensation adjusted by age and years of service and offset by the annuity value of Company contributions to the tax-qualified retirement plans and by Social Security. Effective July 1, 2011, the SERP was replaced by the Executive Retirement Plan (the ERP) (described below). Moving from the SERP to the ERP created a defined contribution structure that is more closely aligned with the benefits provided by the Company’s compensation peer group. As of July 1, 2017, only three of our named executive officers are still eligible for the SERP.

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

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

Post-Termination Compensation

The Company has a severance plan (the Severance Plan) that provides our named executive officers with post-termination payments if the named executive officers’ employment is terminated by the Company other than for cause. These payments are intended to provide a measure of financial security following the loss of employment, which


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we believe is important to attract and retain executives. The severance benefits are designed to be competitive with the compensation peer group and external market practices.

The Company also has an Executive Change in Control Severance Plan (the CIC Plan), which provides severance benefits to certain eligible executives of the Company, including all of the Company’s named executive officers, if their employment with the Company is involuntarily terminated in connection with a change in control of the Company. In addition to helping mitigate the financial impact associated with termination after a change in control, these benefits further align the interests of our executive officers with the interests of our stockholders by providing incentives for retention, for business continuity purposes. Under the CIC Plan, a named executive officer is eligible for change in control severance benefits if his or her employment is terminated in connection with a change in control, either by the Company without cause or by the named executive officer for good reason. See the section entitled Potential Payments Upon Termination or Change in Control for additional information.

Mr. Vlahos retired from the Company as of March 31, 2017. With his retirement, he was eligible to receive accelerated vesting for stock options held over a year, a pro-rata share of performance units held over a year (subject to Company performance) and a pro-rata bonus payout related to his partial year of service. Equity granted in fiscal 2017 was forfeited by Mr. Vlahos upon retirement, and he was not eligible for subsidized retiree health care.

Perquisites

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

Other Executive Compensation Policies and Practices

Tally Sheets. To help ensure that our executive compensation design is aligned with our overall compensation philosophy of pay for performance and that total compensation levels are appropriate, the Committee annually reviews compensation tally sheets for each of our named executive officers. These tally sheets outline current

target total compensation (including the compensation elements described above), the potential wealth creation of long-term incentive awards granted to our officers under various potential stock prices, and the potential value of payouts under various termination scenarios. As such, these tally sheets help provide the Committee with a comprehensive understanding of all elements of the Company’s compensation program and enable the Committee to consider changes to the Company’s compensation program, arrangements, and plans in light of best practices and emerging trends. The Committee may consider the information presented in the tally sheets in determining future compensation.

Results of 2016 Advisory Vote on Executive Compensation. At our 2016 Annual Meeting of Stockholders held on November 16, 2016, we asked our stockholders to approve, on an advisory basis, our fiscal year 2016 compensation awarded to our named executive officers, commonly referred to as a “say-on-pay” vote. Our stockholders overwhelmingly approved the compensation to our named executive officers, with approximately 93% of votes cast in favor of our proposal. We value this positive endorsement by our stockholders of our 2016 executive compensation policies and believe that the outcome signals our stockholders’ support of our compensation program. We continued our general approach to compensation for fiscal year 2017, specifically our pay-for-performance philosophy and our efforts to attract, retain, and motivate our named executive officers, taking into account the say-on-pay results as well as specific feedback from our stockholders. We value the opinions of our stockholders and will continue to consider the results from this year’s and future advisory votes on executive compensation, as well as feedback received throughout the year, when making compensation decisions for our named executive officers.

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

The Committee may also make occasional grants of stock options and other equity-based awards at other times to recognize,retain,or recruit executive officers. The Committee approved one additional grant to a named executive officer in fiscal year 2017. Ms. Willoughby was granted $300,000 in restricted stock units upon the retirement of Mr. Vlahos from the Company and the consolidation of the two co-Chief Operating Officer roles into one role held by Ms. Willoughby effective April 3, 2017.


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

Chief Executive Officer       6x annual base salary
Executive Officers (other than the CEO) 3x annual base salary
Other Senior Executives 2x annual base salary

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

As of the date of this proxy statement, all of our named executive officers except our CEO have met the required ownership levels. Mr. Dorer became subject to a higher threshold with his promotion to CEO in fiscal year 2015, when his ownership threshold increased from 3 times annual base salary to 6 times annual base salary required for the CEO.

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

Securities Trading Policy; Prohibition on Hedging and Pledging. To ensure alignment of the interests of our stockholders and executive officers, including our named executive officers, the Company’s Insider Trading Policy does not permit executive officers to engage in short-term

or speculative transactions or derivative transactions involving the Company’s stock and includes prohibitions on options trading, hedging, or pledging the Company’s stock as collateral. Trading is permitted only during announced trading periods or in accordance with a previously established trading plan that meets SEC requirements. At all times, including during announced trading periods, executive officers are required to obtain preclearance from the Company’s General Counsel or Corporate Secretary prior to entering into any transactions in Company securities, unless those sales occur in accordance with a previously established trading plan that meets SEC requirements.

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

Tax Deductibility Limits on Executive Compensation. Section 162(m) limits the tax deductibility of compensation paid to our CEO and the three other most highly compensated named executive officers employed at the end of the year (other than the CFO) to $1 million per year, unless such amounts are determined to be performance-based compensation. Our policy with respect to Section 162(m) seeks to balance the interests of the Company in maintaining flexible incentive plans against the possible loss of a tax deduction when taxable compensation for any of the executive officers subject to Section 162(m) exceeds $1 million per year. The Annual Incentive Plan and long-term incentive plan are designed to provide the Committee with the ability to decide whether or not to make performance-based compensation awards that are intended to meet the requirements of Section 162(m). The Committee generally seeks to satisfy the requirements necessary to allow the compensation of its executives to be deductible under Section 162(m) of the IRC, but retains the discretion and may also approve compensation that is not deductible under Section 162(m). The rules and regulations promulgated under Section 162(m) are complex and subject to change from time to time, sometimes with retroactive effect. There can be no guarantee, therefore, that amounts potentially subject to the Section 162(m) limitations will be treated by the Internal Revenue Service as “qualified performance-based compensation” under Section 162(m) and/or deductible by the Company.


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The Management Development and Compensation Committee Report

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

THE MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE

Jeffrey Noddle, Chair
Richard H. Carmona
Spencer C. Fleischer
David Mackay


Compensation Committee Interlocks and Insider Participation

Each of Dr. Carmona and Messrs. Fleischer, Harad, Mackay, Noddle, and Rebolledo served as a member of the Management Development and Compensation Committee during part or all of fiscal year 2017. None of the members was an officer or employee of the Company or any of its subsidiaries during fiscal year 2017 or in any prior fiscal year. No executive officer of the Company served on the board of directors or compensation committee of any other entity that has or had one or more executive officers who served as a member of the Board or Management Development and Compensation Committee during fiscal year 2017.

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FISCAL YEAR 2017 SUMMARY COMPENSATION TABLE

The following table sets forth the compensation earned, paid, or awarded to our named executive officers for the fiscal years ended June 30, 2017, 2016, and 2015.

Name and Principal
Position
    Year     Salary
($)(1)
    Stock
Awards
($)(2)(3)
    Option
Awards
($)(2)
    Non-Equity
Incentive Plan
Compensation
($)(4)
    Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)(5)
    All Other
Compensation
($)(6)
    Total
($)
Benno Dorer 2017 $1,010,577 $2,374,406 $2,374,959 $1,569,480 $188,548 $550,919 $8,068,890
Chairman and Chief 2016 976,154 2,175,084 2,175,010 2,469,220 710,100 428,424 8,933,992
Executive Officer 2015 789,762 2,000,344 2,999,979 1,680,820 242,911 144,371 7,858,187
Stephen M. Robb 2017 601,346 700,382 700,053 522,650 262,971 2,787,402
Executive Vice President 2016 576,846 550,188 550,065 945,010 366,586 224,752 3,213,447
— Chief Financial Officer 2015 539,423 549,698 549,984 827,640 33,073 121,604 2,621,422
Dawn Willoughby 2017 537,692 750,534 449,985 463,680 2,208 223,421 2,427,520
Executive Vice President 2016 515,154 399,528 400,023 766,130 2,293 177,569 2,260,697
Chief Operating Officer
Laura Stein 2017 590,317 412,352 412,475 399,500 227,339 2,041,983
Executive Vice President 2016 582,050 399,528 400,023 754,980 862,607 226,861 3,226,049
— General Counsel and 2015 570,537 399,699 400,032 751,180 86,515 136,964 2,344,927
Corporate Affairs
James Foster 2017 462,334 262,182 262,434 295,150 3,362 194,842 1,480,304
Executive Vice President
— Product Supply,
Enterprise Performance
and IT
Nikolaos A. Vlahos 2017 405,769 450,509 449,985 277,600 5,693 221,613 1,811,170
Executive Vice President 2016 515,154 399,528 400,023 766,130 3,988 213,887 2,298,710
and Chief Operating
Officer — Household,
Lifestyle and Core
Global Functions (Retired
March 31, 2017)

(1) Reflects actual salary earned for fiscal years 2017, 2016, and 2015. Fiscal year 2016 had an extra day of earnings (versus 2017 and 2015) as a result of the leap year.
(2) The amounts reflected in these columns are the values determined under Financial Accounting Standards Board (FASB) ASC Topic 718 for the awards granted in the fiscal years ended June 30, 2017, 2016, and 2015, in accordance with the applicable accounting standard. The assumptions made in valuing stock awards and option awards reported in these columns are discussed in Note 1, Summary of Significant Accounting Policies under subsection Stock-Based Compensation, and in Note 15, Stock-Based Compensation Plans, to the Company’s consolidated financial statements for the three years in the period ended June 30, 2017, included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2017. Additional information regarding the stock awards and option awards granted to our named executive officers during fiscal year 2017 is set forth in the Grants of Plan-Based Awards Table.
(3) The grant-date fair value of the performance share awards reflected in this column is the target payout based on the probable outcome of the performance-based conditions, determined as of the grant date. The maximum potential payout of the stock awards would be 150% of the target shares awarded on the grant date. The maximum value of the performance share award for 2017 determined as of the date of grant would be as follows for each respective named executive officer: Mr. Dorer – $3,561,609; Mr. Robb – $1,050,573; Ms. Willoughby – $675,764; Ms. Stein – $618,527; Mr. Foster – $393,273; and Mr. Vlahos – $675,764. The performance share award and stock options granted to Mr. Vlahos in fiscal year 2017 were forfeited due to his retirement. See the Grants of Plan-Based Awards Table for more information about the performance shares granted under the 2005 Stock Incentive Plan.
(4) Reflects annual incentive awards earned for fiscal years 2017, 2016, and 2015 and paid out in September 2017, 2016, and 2015, respectively, under the Annual Incentive Plan. Information about the Annual Incentive Plan is set forth in the Compensation Discussion and Analysis under Annual Incentives. Mr. Vlahos’ award for fiscal year 2017 was pro-rated for his partial year of service.

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(5) The amounts reflect the aggregate change in the present value of accumulated benefits during fiscal years 2017, 2016, and 2015 under the SERP, the Pension Plan, and the cash balance restoration benefit of the NQDC (note that the SERP, the Pension Plan, and the cash balance restoration benefit of the NQDC are all frozen benefits; refer to the Pension Benefits Table for further information). Each plan amount in fiscal year 2017 is set forth in the following table:

     Benno
Dorer
     Stephen M.
Robb
     Dawn
Willoughby
     Laura
Stein
     James
Foster
     Nikolaos A.
Vlahos
The Pension Plan $ 1,354      $ 3,840        $ 2,109 $ 3,354 $ 3,101        $ 3,259
SERP 179,057 (62,890 )   (119,987 )  
Cash Balance Restoration Benefit 8,137   370 99 30,335 261 2,434
Total $ 188,548 $ (58,680 ) $ 2,208 $ (86,298 ) $ 3,362 $ 5,693

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

       Benno
Dorer
     Stephen M.
Robb
     Dawn
Willoughby
     Laura
Stein
     James
Foster
     Nikolaos A.
Vlahos
The Clorox Company 401(k) Plan $ 24,988 $ 27,724 $ 27,430 $ 24,568 $ 28,015 $ 22,830
Nonqualified Deferred
Compensation Contributions 491,733 203,212 166,357 174,211 126,691 166,288
Company Paid Perquisites 34,198 32,036 29,634 28,560 40,136 32,495
Total $ 550,919      $ 262,971      $ 223,421 $ 227,339 $ 194,842    $ 221,613

The following table sets forth the perquisites we make available to our named executive officers and the cost to the Company for providing these perquisites during fiscal year 2017. The amounts shown in the Other Perquisites row consist of paid parking at the Company’s headquarters, health club reimbursement, and an annual executive physical.

       Benno
Dorer
     Stephen M.
Robb
     Dawn
Willoughby
     Laura
Stein
     James
Foster
     Nikolaos A.
Vlahos
Executive Automobile Program $ 13,200 $ 13,200 $ 13,200 $ 13,200 $ 13,200 $ 9,900
Basic Financial Planning 15,037 15,356 12,354 12,000 22,151 17,323
Other Perquisites 5,961 3,480 4,080 3,360 4,785 5,272
Total $ 34,198       $ 32,036       $ 29,634 $ 28,560 $ 40,136       $ 32,495

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FISCAL YEAR 2017 GRANTS OF PLAN-BASED AWARDS

This table shows grants of plan-based awards to the named executive officers during fiscal year 2017.

Name    Grant
Date
   Threshold
($)
   Target
($)
   Maximum
($)
   Threshold
(#)
   Target
(#)
   Maximum
(#)
   All Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#)
   All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
   Exercise
or Base
Price of
Option
Awards
($/Sh)
  

Grant Date
Fair Value
of Stock
and Option
Awards
($)

Benno Dorer         
Annual Incentive Plan(1) $ 1,486,250 $ 10,330,000
Performance Shares(2) 9/13/2016 4,823 19,290 28,935 $2,374,406
Stock Options(3) 9/13/2016 172,850 $ 123.09 2,374,959
Stephen M. Robb
Annual Incentive Plan(1) 518,500 6,198,000
Performance Shares(2) 9/13/2016 1,423 5,690 8,535 700,382
Stock Options(3) 9/13/2016 50,950 $ 123.09 700,053
Dawn Willoughby
Annual Incentive Plan(1) 460,000 6,198,000
Performance Shares(2) 9/13/2016 915 3,660 5,490 450,509
Stock Options(3) 9/13/2016 32,750 $ 123.09 449,985
Restricted Stock Units(4) 4/3/2017 2,230 2,230 2,230 300,024
Laura Stein
Annual Incentive Plan(1) 416,150 6,198,000
Performance Shares(2) 9/13/2016 838 3,350 5,025 412,352
Stock Options(3) 9/13/2016 30,020 $ 123.09 412,475
James Foster
Annual Incentive Plan(1) 307,450 6,198,000
Performance Shares(2) 9/13/2016 533 2,130 3,195 262,182
Stock Options(3) 9/13/2016 19,100 $ 123.09 262,434
Nikolaos A. Vlahos
(Retired March 31, 2017)
Annual Incentive Plan(1) 428,000 6,198,000
Performance Shares(2)(5) 9/13/2016 915 3,660 5,490 450,509
Stock Options(3)(5) 9/13/2016 32,750 $ 123.09 449,985

(1) Represents estimated possible payouts of annual incentive awards for fiscal year 2017 under the Annual Incentive Plan for each of our named executive officers. The Annual Incentive Plan is an annual cash incentive opportunity and, therefore, awards are earned in the year of grant. The target amounts represent the potential payout if both Company performance, including financial and strategic metrics, and individual performance are at target levels. The maximum amount represents the stockholder-approved maximum payout in the Annual Incentive Plan of 1.0% of Company earnings before income taxes for Mr. Dorer and 0.6% of Company earnings before income taxes for all other named executive officers. The Annual Incentive Plan is designed to enable the Committee to make awards that meet the requirements of IRC Section 162(m), as appropriate, and the Maximum column reflects maximum awards possible under the Annual Incentive Plan. The Committee historically has paid annual incentive awards that are substantially lower than the maximum Annual Incentive Plan payouts. See the Summary Compensation Table for the actual payout amounts in fiscal year 2017 under the Annual Incentive Plan. See Annual Incentives in the Compensation Discussion and Analysis for additional information about the Annual Incentive Plan.
(2) Represents possible future payouts of Common Stock underlying performance shares awarded in fiscal year 2017 to each of our named executive officers as part of their participation in the 2005 Stock Incentive Plan. These awards will vest upon the achievement of performance measures based on cumulative economic profit growth over a three-year period, with the threshold, target, and maximum awards equal to 25%, 100%, and 150%, respectively, of the number of performance shares granted. If the minimum financial goals are not met at the end of the three-year period, no awards will be paid out under the 2005 Stock Incentive Plan. See Long-Term Incentives in the Compensation Discussion and Analysis for additional information.
(3) Represents stock options awarded to each of our named executive officers under the 2005 Stock Incentive Plan. All stock options vest in equal installments on the first, second, third, and fourth anniversaries of the grant date.
(4) Represents restricted stock units awarded under the 2005 Stock Incentive Plan to Ms. Willoughby when she became the sole Executive Vice President – Chief Operating Officer effective April 3, 2017. The award vests 100% on the third anniversary of the grant date.
(5) The option and performance share awards granted to Mr. Vlahos in fiscal year 2017 were forfeited at his retirement.

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OUTSTANDING EQUITY AWARDS AT FISCAL 2017 YEAR-END

The following equity awards granted to our named executive officers were outstanding as of the end of fiscal year 2017.

Stock Awards
Name       Number of
Securities
Underlying
Unexercised
Options -
Exercisable
(#)
      Number of
Securities
Underlying
Unexercised
Options -
Unexercisable
(#)
      Option
Exercise
Price
($)
      Option
Expiration
Date
      Number
of Shares
or Units
of Stock
That
Have Not
Vested
(#)
      Market
Value of
Shares
or
Units of
Stock
That
Have Not
Vested
($)
      Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units,
or Other
Rights That
Have Not
Vested
(#)
      Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units,
or Other Rights
That Have Not
Vested
($)(1)
Benno Dorer                                
Stock Options(2) 14,380      $ 63.95 9/16/2018
17,460 57.25 9/15/2019
19,826 66.48 9/14/2020
  19,809 68.15 9/13/2021
31,058 72.11 9/11/2022
26,559 74.09 1/2/2023
30,598 10,200 (3) 84.45 9/17/2023
25,390 25,390 (4) 89.82 9/17/2024
110,585 110,585 (5) 100.24 11/20/2024
41,350 124,050 (6) 111.60 9/15/2025
172,850 (7) 123.09 9/13/2026
Performance Shares(2) 8,145 (8) $1,085,240
15,090 (9) 2,010,592
19,490 (10) 2,596,848
19,290 (11) 2,570,200
Stephen M. Robb
Stock Options(2) 54,600 72.11 9/11/2022
30,735 10,245 (3) 84.45 9/17/2023
28,645 28,645 (4) 89.82 9/17/2024
10,457 31,373 (6) 111.60 9/15/2025
50,950 (7) 123.09 9/13/2026
Performance Shares(2) 9,180 (8) 1,223,143
4,930 (10) 656,873
5,690 (11) 758,136
Dawn Willoughby
Stock Options(2) 11,550 72.11 9/11/2022
6,830 74.09 1/2/2023
15,367 5,123 (3) 84.45 9/17/2023
11,720 11,720 (4) 89.82 9/17/2024
5,190 5,190 (12) 97.23 9/22/2024
7,605 22,815 (6) 111.60 9/15/2025
32,750 (7) 123.09 9/13/2026
Performance Shares(2) 3,765 (8) 501,649
1,935 (13) 257,819
3,580 (10) 476,999
3,660 (11) 487,658
Restricted Stock Units 2,230 (14) $297,125

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Stock Awards
Name       Number of
Securities
Underlying
Unexercised
Options -
Exercisable
(#)
      Number of
Securities
Underlying
Unexercised
Options -
Unexercisable
(#)
      Option
Exercise
Price
($)
      Option
Expiration
Date
      Number
of Shares
or Units
of Stock
That
Have Not
Vested
(#)
      Market
Value of
Shares
or
Units of
Stock
That
Have Not
Vested
($)
      Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units,
or Other
Rights That
Have Not
Vested
(#)
      Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units,
or Other Rights
That Have Not
Vested
($)(1)
Laura Stein
Stock Options(2) 13,650 72.11 9/11/2022
29,970 9,990 (3) 84.45 9/17/2023
20,835 20,835 (4) 89.82 9/17/2024
7,605 22,815 (6) 111.60 9/15/2025
30,020 (7) 123.09 9/13/2026
Performance Shares(2) 6,675 (8) 889,377
3,580 (10) 476,999
3,350 (11) 446,354
James Foster
Stock Options(2) 7,185 72.11 9/11/2022
5,443 (3) 84.45 9/17/2023
11,720 (4) 89.82 9/17/2024
4,400 (5) 100.24 11/20/2024
4,752 14,258 (6) 111.60 9/15/2025
  19,100 (7) 123.09 9/13/2026
Performance Shares(2) 3,765 (8) 501,649
2,240 (10) 298,458
2,130 (11) 283,801
Nikolaos A. Vlahos
(Retired March 31, 2017)
Stock Options(2) 22,815 (6) 111.60 4/1/2022
Performance Shares(2) 3,555 (9) 473,668
1,827 (13) 243,429
2,088 (10) 278,205

(1) Represents unvested target number of performance shares under the 2005 Stock Incentive Plan multiplied by the closing price of our Common Stock on June 30, 2017, except as noted below in footnote (8). The ultimate value will depend on whether performance criteria are met and the value of our Common Stock on the actual vesting date.
(2) Grants were made under the 2005 Stock Incentive Plan.
(3) Represents unvested portion of stock options that vest in four equal installments beginning one year from the grant date of September 17, 2013.
(4) Represents unvested portion of stock options that vest in four equal installments beginning one year from the grant date of September 17, 2014.
(5) Represents unvested portion of off-cycle stock options granted to Messrs. Dorer and Foster when they were promoted to Chief Executive Officer and Executive Vice President – Product Supply, Enterprise Performance and IT, respectively, effective November 20, 2014. Options vest in four equal installments beginning one year from the grant date of November 20, 2014.
(6) Represents unvested portion of stock options that vest in four equal installments beginning one year from the grant date of September 15, 2015.
(7) Represents unvested portion of stock options that vest in four equal installments beginning one year from the grant date of September 13, 2016.
(8) Represents the actual number of performance shares that were paid out under our 2005 Stock Incentive Plan. The grants from the plan have a three-year performance period (fiscal years 2015 through 2017). Performance is based on achievement of cumulative economic profit growth. After completion of fiscal year 2017, the Committee determined whether the performance measures had been achieved and based on the results, on August 17, 2017, the Committee approved the payout of this award at 150% of target.
(9) Represents the target number of performance shares that can be earned under our 2005 Stock Incentive Plan. The off-cycle grants from the plan, which were granted to Mr. Dorer when he was promoted to Chief Executive Officer effective November 20, 2014, have a three-year performance period (October 1, 2014 through September 30, 2017). Performance is based on achievement of cumulative EP growth. The Committee will determine whether the performance measures have been achieved after the completion of the performance period.
(10) Represents the target number of performance shares that can be earned under our 2005 Stock Incentive Plan. The grants from the plan have a three-year performance period (fiscal years 2016 through 2018). Performance is based on achievement of cumulative EP growth. The Committee will determine whether the performance measures have been achieved after the completion of fiscal year 2018.

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(11) Represents the target number of performance shares that can be earned under our 2005 Stock Incentive Plan. The grants from the plan have a three-year performance period (fiscal years 2017 through 2019). Performance is based on achievement of cumulative EP growth. The Committee will determine whether the performance measures have been achieved after the completion of fiscal year 2019.
(12) Represents unvested portion of off-cycle stock options granted to Ms. Willoughby when she was promoted to Executive Vice President, Chief Operating Officer – Cleaning and International effective September 22, 2014. Options vest in four equal installments beginning one year from the grant date of September 22, 2014.
(13) Represents the actual number of performance shares that were paid out under our 2005 Stock Incentive Plan. The off-cycle grants from the plan, which were granted to Mr. Vlahos and Ms. Willoughby when they were promoted to Executive Vice President, Chief Operating Officer – Household, Lifestyle and Core Functions and Executive Vice President, Chief Operating Officer – Cleaning and International, respectively, effective September 22, 2014, have a three-year performance period (fiscal years 2015 through 2017). Performance is based on achievement of cumulative EP growth. After completion of fiscal year 2017, the Committee determined whether the performance measures had been achieved and based on the results, on August 17, 2017, the Committee approved the payout of this award at 150% of target.
(14) Represents unvested one-time off-cycle restricted stock unit grant that was granted to Ms. Willoughby when she became the sole Executive Vice President – Chief Operating Officer effective April 3, 2017. Restricted stock units vest three years from the anniversary of the grant date.

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FISCAL YEAR 2017 OPTION EXERCISES AND STOCK VESTED

This table shows stock options exercised and stock vested for the named executive officers during fiscal year 2017.

Option Awards Stock Awards
Name         Number
of Shares
Acquired
on Exercise
(#)
        Value
Realized on
Exercise
($)(1)
        Number of
Shares
Acquired
on Vesting
(#)(2)
        Value
Realized on
Vesting
($)(2)
Benno Dorer   12,350 (3)   $ 892,411 $—
Stephen M. Robb
Dawn Willoughby 10,000 (3) 589,222
Laura Stein 40,950 (3) 2,440,391
James Foster 15,702 (3) 581,191
Nikolaos A. Vlahos (Retired March 31, 2017) 50,037 (3) 2,170,961

(1) The dollar value realized reflects the difference between the market price of the Common Stock upon exercise and the stock option exercise price.
(2) Stock awards represent performance shares granted under the Company’s 2005 Stock Incentive Plan. The grant from the plan had a three-year performance period (fiscal years 2014 through 2016). Performance was based on achievement of cumulative operating profit and EP growth. On August 8, 2016, the Committee approved the payout of this award at 0% of target; thus, no awards vested and no value was realized.
(3) The number represents the exercise of nonqualified stock options granted in previous years under the Company’s 2005 Stock Incentive Plan.

Overview of Pension Benefits

Historically, pension benefits have been paid to the named executive officers under the following plans: (i) the Pension Plan, (ii) the cash balance restoration provision in the NQDC, and (iii) the SERP. Effective July 1, 2011, the

Pension Plan and the cash balance restoration provision under the NQDC were frozen. The SERP was also frozen as of June 30, 2011, with regard to pay and offsets, while still allowing age and service credits, as described in the Retirement Plans section of the CD&A.


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FISCAL YEAR 2017 PENSION BENEFITS TABLE

The following table sets forth each named executive officer’s pension benefits under the Company’s pension plans for fiscal year 2017.

Name         Plan Name         Number of Years
of Credited
Service
(#)(1)
        Present Value
of Accumulated
Benefit
($)(2)
        Payments
During Last
Fiscal Year
($)
Benno Dorer The Clorox Company Pension Plan(3) 12         $ 53,573 $—
SERP(4) 12 2,501,902
Cash Balance Restoration(5) 12 143,782
Stephen M. Robb The Clorox Company Pension Plan(3) 28 152,000
SERP(4) 28 1,721,108
Cash Balance Restoration(5) 28 67,539
Dawn Willoughby The Clorox Company Pension Plan(3) 16 83,455
SERP(4) 16
  Cash Balance Restoration(5) 16 18,063
Laura Stein The Clorox Company Pension Plan(3) 20 132,759
SERP(4) 20 4,473,135
Cash Balance Restoration(5) 20 239,132
James Foster The Clorox Company Pension Plan(3) 20 122,748
  SERP(4) 20
Cash Balance Restoration(5) 20 47,601
Nikolaos A. Vlahos The Clorox Company Pension Plan(3) 21 128,982
(Retired March 31, 2017) SERP(4) 21
Cash Balance Restoration(5) 21 50,701

(1) Number of years of credited service is rounded down to the nearest whole number.
(2) Present value of the accumulated benefit was calculated using the following assumptions: mortality table: MILES-CGFD; discount rate: 3.70%; and age at June 30, 2017.
(3) The Pension Plan was frozen effective July 1, 2011. Participants keep their accumulated pay credits and receive only quarterly interest credits after that date.
(4) The SERP was frozen with regards to pay and offsets effective June 30, 2011. Age and service credits continue to accrue. Messrs. Dorer and Robb and Ms. Stein are the only named executive officers eligible for the SERP.
(5) The cash balance restoration provision in the NQDC was eliminated effective July 1, 2011, when the Pension Plan was frozen. Participants keep their accumulated pay credits but no contributions were made under this provision after July 1, 2011.

Overview of the Nonqualified Deferred Compensation Plans

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

Nonqualified Deferred Compensation Plan. Under the NQDC, participants, including each of our named executive officers, may voluntarily defer the receipt of up to 50% of their base salary and up to 100% of their annual incentive award. In addition, the NQDC offers a 401(k) restoration provision. All Company retirement contributions

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

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

The following table provides information regarding the accounts of the named executive officers under the NQDC and ERP in fiscal year 2017.


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FISCAL YEAR 2017 NONQUALIFIED DEFERRED COMPENSATION

Name         Executive
Contributions
in Last FY
($)(1)
        Registrant
Contributions
in Last FY
($)(2)
        Aggregate
Earnings
in Last FY
($)(3)
        Aggregate
Balance
at Last FYE
($)(4)(5)
Benno Dorer          $ 129,086          $ 491,733       $ 39,124   $ 2,647,798
Stephen M. Robb 55,841 203,212 164,319 1,832,707
Dawn Willoughby 44,159 166,357 214,341 1,432,878
Laura Stein 47,909 174,211 472,138 3,921,687
James Foster 546,684 126,691 (3,078 ) 2,285,200
Nikolaos A. Vlahos (Retired March 31, 2017) 38,761 166,288 12,023 877,055

(1) Amounts represent the annual base salary and incentive award that each executive deferred during fiscal year 2017. Deferred base salary is also reported in the Summary Compensation Table – Salary. Deferred annual incentive awards are also reported in the Summary Compensation Table – Non-Equity Incentive Plan Compensation.
(2) Represents that portion of the Company’s 401(k) match and Company contribution of up to 10% of eligible compensation that is in excess of IRC compensation limits pursuant to the 401(k) restoration provision of the NQDC and the Company’s contribution under the ERP. These contributions are also reported in the Summary Compensation Table – All Other Compensation and are included under the caption “Nonqualified Deferred Compensation Contributions” in footnote (6) to the Summary Compensation Table.
(3) Earnings are based on an array of investment options that generally mirror the 401(k) Plan. Earnings vary based on participant investment elections.
(4) Reflects aggregate balances under the restoration provision of the NQDC and any deferred base salary and annual incentive awards as of the end of fiscal year 2017.
(5) The executive and registrant contribution total amounts in the table below are also reported as compensation in the Summary Compensation Table in the years indicated:

Fiscal Year         Benno
Dorer
        Stephen M.
Robb
        Dawn
Willoughby
        Laura
Stein
        James
Foster
        Nikolaos A.
Vlahos
2017   $ 620,819     $ 259,053     $ 210,516 $ 222,120 $ 673,375     $ 205,049
2016 465,815 229,316 444,799 217,646 186,579
2015 111,795 82,161 104,967

Potential Payments Upon Termination or Change in Control

Payments Upon Termination

Severance Plan for Named Executive Officers. Under the terms of the Severance Plan, our named executive officers are eligible to receive benefits if their employment is terminated by the Company without cause (other than in connection with a change in control). No benefits are payable under the terms of the Severance Plan if the Company terminates the employment of the named executive officer for cause or if the named executive officer voluntarily resigns.

Regardless of the manner in which a named executive officer’s employment terminates, each named executive officer would retain the amounts he or she had earned over the course of his or her employment prior to the termination event, such as balances under the NQDC, vested and accrued retirement benefits, and previously vested stock options, except as outlined below under Termination for Misconduct. For further information about previously earned amounts, see the Summary Compensation Table, Outstanding Equity Awards at Fiscal 2017 Year-End Table,

Option Exercises and Stock Vested Table, Pension Benefits Table, and Nonqualified Deferred Compensation Table.

Under the Severance Plan, each named executive officer agrees to return and not to use or disclose proprietary information of the Company and, for two years following any such termination, the named executive officer is also prohibited from soliciting for employment any employee of the Company, or diverting or attempting to divert from the Company any business.

Termination benefits under the Severance Plan for our named executive officers are as follows:

Involuntary Termination Without Cause. If the Company terminates the employment of a named executive officer (other than the CEO) without cause, the Severance Plan entitles the named executive officer to receive a lump-sum severance payment after termination equal to two times the named executive officer’s then-current base salary. In the case of the CEO, the severance amount is equal to the sum of (i) two times the CEO’s base salary and (ii) two times the


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CEO’s three-year average annual bonus multiplied by 75%. Under the Severance Plan, a named executive officer (other than the CEO) is also entitled to an amount equal to 75% of his or her Annual Incentive Plan award for the fiscal year in which he or she was terminated. The CEO is entitled to an amount equal to 100% of his Annual Incentive Plan award for the fiscal year in which he was terminated.

The amount of severance paid is calculated using the actual Company Financial Performance Multiplier and Strategic Metrics Multiplier, and assumes an Individual Performance Multiplier of 100%, prorated to the date of termination. If the named executive officer is retirement-eligible under the terms of the Annual Incentive Plan, the executive would be eligible for either the treatment under the Severance Plan or retirement treatment for purposes of the Annual Incentive Plan award payout (retirement treatment would be 100%, versus 75%, of his or her Annual Incentive Plan award for the fiscal year in which he or she was terminated, prorated to the date of termination). It is the Committee’s decision as to which treatment to apply.

The Severance Plan provides that the named executive officer is entitled to continue to participate in the Company’s medical, vision, and dental insurance programs for up to two years following termination on the same terms as active employees. In addition, at the end of this coverage, a named executive officer will be eligible to participate in the Company’s medical, vision, and/or dental plans offered to former employees who retire at age 55 or older, provided the executive has completed at least 10 years of service, on the same terms as such other former employees. If eligible, this coverage will continue until the named executive officer turns age 65. Thereafter, the named executive officer may participate in the Company’s general retiree health plan as it may exist in the future, if otherwise eligible. If the named executive officer will be age 55 or older and will have completed at least 10 years of service at the end of, and including, the two-year period following termination, the named executive officer will be deemed to be age 55 and/or to have 10 years of service under any pre-65 retiree health plan as well as the SERP.

The above severance-related benefits are provided only if the named executive officer executes a general release prepared by the Company.

Termination Due to Retirement. Under the Company’s policy applicable to all employees, upon retirement the named executive officer is entitled to his or her salary through the last day of employment and is eligible for a pro-rata portion of the Annual Incentive Plan award for the fiscal year in which his or her retirement occurs. Based on the provisions of the respective plans, he or she will also be eligible to receive SERP, ERP, and other benefits under applicable

Company retirement plans. In addition to the amounts that the named executive officer has earned or accrued over the course of his or her employment under the Company’s qualified and nonqualified plans, a named executive officer who is at least age 55 with 10 years of service or who has 20 years of service regardless of age is eligible to receive retirement-related benefits under the long-term incentive program. Stock options held for longer than one year will vest in full and remain exercisable for five years following the named executive officer’s retirement, or until the expiration date, whichever is sooner, and performance shares held longer than one year will be paid out on a pro-rata basis at the end of the relevant performance period based on the actual level of performance achieved during that period.

Termination Due to Death or Disability. Under the Company’s policy applicable to all employees, if the named executive officer’s employment is terminated due to his or her death, the named executive officer’s beneficiary or estate is entitled to (i) the named executive officer’s salary through the date of his or her death, (ii) a pro-rata portion of the named executive officer’s actual Annual Incentive Plan award for the fiscal year of his or her death, and (iii) benefits pursuant to the Company’s life insurance plan. Stock options and restricted stock units will vest in full, and all vested options remain exercisable for an additional year following the named executive officer’s death or until the expiration date, whichever is earlier, and all performance shares will be paid out at the end of the relevant performance period based on the actual level of performance achieved during that period.

If the named executive officer begins to receive benefits under the Company’s long-term disability plan, the Company may terminate the named executive officer’s employment at any time, in which case the named executive officer will receive his or her salary through the date of his or her termination and will also be entitled to a pro-rata portion of his or her actual Annual Incentive Plan award for the fiscal year of his or her termination. Stock options will vest in full, and all vested options will remain exercisable for an additional year following the named executive officer’s disability or until the expiration date, whichever is earlier, and all performance shares will be paid out at the end of the relevant performance period based on the actual level of performance achieved during that period.


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Termination for Misconduct. The Company may terminate a named executive officer’s employment for misconduct at any time without notice. Upon the named executive officer’s termination for misconduct, the named executive officer is entitled to his or her salary through the date of his or her termination, but is not entitled to any Annual Incentive Plan award for the fiscal year in which his or her termination for misconduct occurs. “Misconduct” under the Severance Plan means: (i) the willful and continued neglect of significant duties or willful and continued violation of a material Company policy after having been warned in writing, (ii) a material act of dishonesty, fraud, misrepresentation, or other act of moral turpitude, (iii) gross negligence in the course of employment, (iv) the failure to obey a lawful direction of the Board or a corporate officer to whom the named executive officer reports, directly or indirectly, or (v) an action that is inconsistent with the Company’s best interests and values. All outstanding stock option and restricted stock units grants are forfeited upon a termination for misconduct. In addition, any retirement-related benefits a named executive officer would normally receive related to performance shares are also forfeited upon a termination for misconduct.

Voluntary Termination. A named executive officer may resign from his or her employment at any time. Upon the named executive officer’s voluntary resignation, the named executive officer is entitled to his or her salary through the date of termination, but is not entitled to any Annual Incentive Plan award for the fiscal year of termination. All unvested outstanding stock options, restricted stock units, and performance share grants are forfeited upon voluntary termination.

The Company also maintains the CIC Plan for the benefit of each of our named executive officers. Please see the Potential Payments Upon Termination or Change in Control section for further details on the CIC Plan.

Potential Payments Upon Change in Control

Change in Control Severance Plan for Named Executive Officers. Under the CIC Plan, executives are eligible for change in control severance benefits, subject to the execution of a waiver and release, if they are terminated without cause or resign for good reason (each as defined under the CIC Plan and as further described below) during (i) the two-year period following a change in control or (ii) a period of up to one year prior to the change in control in limited circumstances where the executive’s termination is directly related to or in anticipation of a change in control.

The severance benefits under the CIC Plan include (i) a lump-sum severance payment equal to two times (or, in the case of the CEO, three times) the sum of (a) the executive’s base salary and (b) average Annual Incentive Plan award for the three completed fiscal years prior to termination, (ii) a lump-sum amount equal to the difference between the actuarial equivalent of the benefit the named executive officer would have been entitled to receive if his or her employment had continued until the second anniversary of the date of termination and the actuarial equivalent of the aggregate benefits paid or payable as of the date of termination under the qualified and nonqualified retirement plans, (iii) continuation of healthcare benefits for a maximum of two (or, in the case of the CEO, three) years following a severance-qualifying termination, (iv) continued financial planning services for the year of termination, (v) vesting of all outstanding equity awards granted prior to the change in control, and (vi) an amount equal to the average Annual Incentive Plan award for the three completed fiscal years preceding termination prorated for the number of days employed in the fiscal year during which termination occurred. In addition, the CIC Plan provides for an excise tax cutback such that the excise tax under Sections 280G and 4999 of the IRC would not apply (unless the executive would receive a greater amount of severance benefits on an after-tax basis without a cutback, in which case the cutback would not apply). The CIC Plan permits the Committee to make changes to the CIC Plan that are adverse to covered executives with 12 months’ advance notice. If a change in control of the Company occurs during that 12-month period, then such changes would not become effective. Each participant under the CIC Plan is subject to certain restrictive covenants including confidentiality and non-disparagement provisions and a non-solicitation provision during the term of his or her employment and for two years thereafter.

“Cause” is generally defined as (i) willful and continued failure to substantially perform duties upon written demand or (ii) willfully engaging in illegal conduct or gross misconduct that is materially and demonstrably injurious to the Company. A termination for cause requires a vote of 75% of the Board at a meeting after notice to the executive has been given and the executive has had an opportunity to be heard.

“Good Reason” is generally defined as (i) an assignment of duties inconsistent with the executive officer’s position (including offices and reporting requirements), authority, duties, or responsibilities (other than reassignments with a substantially similar level and scope of authority, duties, responsibilities, and reporting relationships), (ii) any failure to substantially comply with any of the material provisions


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of compensation plans, programs, agreements, or arrangements as in effect immediately prior to the change in control, which material provisions consist of base salary, cash incentive compensation target bonus opportunity, equity compensation opportunity in the aggregate, savings and retirement benefits in the aggregate, and welfare benefits (including medical, dental, life, disability, and severance benefits) in the aggregate, (iii) relocation of principal place of employment that increases the executive officer’s commuting distance by more than 50 miles, (iv) termination of employment by the Company other than as expressly permitted by the CIC Plan, or (v) failure of a successor company to assume the CIC Plan.

Estimated Potential Payments Upon Termination or Change in Control

The following table reflects the estimated amount of compensation payable to each of the Company’s named executive officers upon termination of the named executive officer’s employment under various scenarios. The amounts exclude earned amounts such as vested or accrued benefits, other than benefits vested under the Company’s SERP. If a named executive officer is eligible for his or her SERP

benefit as of the assumed termination date, the respective SERP benefit amount reported under the Retirement column is also included in the scenarios for Involuntary Termination Without Cause and Involuntary Termination After Change in Control on the Retirement Plan Benefits line.

The amounts shown are calculated using an assumed termination date effective as of the last business day of fiscal year 2017 (June 30, 2017) and the closing trading price of our Common Stock of $133.24 on such date. Although the calculations are intended to provide reasonable estimates of the potential compensation payable upon termination, they are based on assumptions outlined in the footnotes of the table and may not represent the actual amount the named executive officer would receive if an eligible termination event were to occur.

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


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FISCAL YEAR 2017 TERMINATION TABLE

Name and Benefits         Involuntary
Termination
Without Cause
                Involuntary
Termination
After Change
In Control
        Retirement         Disability         Death
Benno Dorer
Cash Payment       $ 5,664,490 (1)    $ 8,750,307 (2) $ (3) $ (4) $ (4)
Stock Options 9,768,672 (5) 10,014,027 (6) 10,014,027 (6)
Restricted Stock
Performance Shares 8,218,071 (7) 8,218,071 (8) 8,218,071 (8)
Retirement Plan Benefits 3,500,059 (20) 4,423,676 (19) 3,191,224 (9) 1,687,102 (10)
Health & Welfare Benefits 21,975 (11) 32,962 (12)
Financial Planning 16,500 (13)
       Total Estimated Value $ 9,186,524 $ 31,210,189 $ $ 21,423,322 $ 19,919,200
Stephen M. Robb
Cash Payment $ 1,738,500 (14) $ 3,087,150 (15) $ (3) $ (4) $ (4)
Stock Options 2,209,490 (16) 3,140,219 (5) 2,209,490 (16) 3,140,219 (6) 3,140,219 (6)
Restricted Stock
Performance Shares 1,323,474 (17) 2,323,278 (7) 1,323,474 (17) 2,323,278 (8) 2,323,278 (8)
Retirement Plan Benefits 1,721,108 (9) 1,123,987 (10)
Health & Welfare Benefits 34,071 (11) 34,071 (12)
Financial Planning 16,500 (13)
       Total Estimated Value $ 5,305,534 $ 8,601,218 $ 3,532,964 $ 7,184,605 $ 6,587,484
Laura Stein
Cash Payment $ 1,603,800 (14) $ 2,813,120 (15) $ (3) $ (4) $ (4)
Stock Options 1,710,273 (16) 2,258,664 (5) 1,710,273 (16) 2,258,664 (6) 2,258,664 (6)
Restricted Stock
Performance Shares 961,893 (17) 1,581,862 (7) 961,893 (17) 1,581,862 (8) 1,581,862 (8)
Retirement Plan Benefits 5,831,383 (18) 6,263,081 (19) 5,831,383 (18) 4,473,135 (9) 2,517,335 (10)
Health & Welfare Benefits 21,836 (11) 21,836 (12)
Financial Planning 16,500 (13)
       Total Estimated Value $ 10,129,185 $ 12,955,062 $ 8,503,549 $ 8,313,661 $ 6,357,861
James E. Foster
Cash Payment $ 1,253,450 (14) $ 2,052,350 (15) $ (3) $ (4) $ (4)
Stock Options 1,120,046 (16) 1,468,955 (5) 1,120,046 (16) 1,468,955 (6) 1,468,955 (6)
Restricted Stock
Performance Shares 562,967 (17) 955,481 (7) 562,967 (17) 955,481 (8) 955,481 (8)
Retirement Plan Benefits
Health & Welfare Benefits 35,259 (11) 35,259 (12)
Financial Planning 16,500 (13)
       Total Estimated Value $ 2,971,722 $ 4,528,544 $ 1,683,014 $ 2,424,436 $ 2,424,436
Dawn Willoughby
Cash Payment $ 1,495,000 (14) $ 2,405,442 (15) $ (3) $ (4) $ (4)
Stock Options 1,771,855 (5) 1,822,303 (6) 1,822,303 (6)
Restricted Stock Units 297,125 (21) 297,125 (21) 297,125 (21)
Performance Shares 1,531,779 (7) 1,531,779 (8) 1,531,779 (8)
Retirement Plan Benefits
Health & Welfare Benefits 25,214 (11) 25,214 (12)
Financial Planning 16,500 (13)
       Total Estimated Value $ 1,520,214 $ 6,047,915 $ $ 3,651,208 $ 3,651,208

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Name and Benefits         Involuntary
Termination
Without Cause
        Involuntary
Termination
After Change
In Control
        Retirement         Disability         Death
Nikolaos A. Vlahos(22)
Cash Payment $ $    $ $ $
Stock Options
Restricted Stock
Performance Shares 874,649 (23)
Retirement Plan Benefits
Health & Welfare Benefits
Financial Planning
       Total Estimated Value $ $ $ 874,650 $ $

(1) This amount reflects two times Mr. Dorer’s current base salary plus two times 75% of his average Annual Incentive Plan awards from the preceding three years. In addition, the amount includes 100% of his current year target Annual Incentive Plan award, pro-rated to the date of termination.
(2) This amount represents three times Mr. Dorer’s current base salary, plus three times the average Annual Incentive Plan awards for the preceding three years, plus the average Annual Incentive Plan awards for the preceding three years, pro-rated to the date of termination, subject to the excise tax cut back provision in the CIC Plan.
(3) Messrs. Robb and Foster and Ms. Stein are retirement-eligible and thus are eligible for a pro-rata Annual Incentive Plan award upon retirement. However, all bonus-eligible employees active as of June 30, 2017, are eligible to receive an annual incentive award, so a pro-rata Annual Incentive Plan award would not be applicable as of this date as the assumed termination date is June 30, 2017. Mr. Dorer and Ms. Willoughby are not retirement-eligible and thus not eligible for an annual incentive award upon retirement.
(4) Named executive officers whose termination is the result of disability or death are eligible to receive a pro-rata Annual Incentive Plan award through the date of termination. However, all bonus-eligible employees active as of June 30, 2017, are eligible to receive an annual incentive award, so a pro-rata Annual Incentive Plan award would not be applicable since the assumed termination date is June 30, 2017.
(5) For Messrs. Robb and Foster and Ms. Stein, who are retirement-eligible, this amount represents the expected value of the accelerated vesting of all outstanding stock options, and assumes a five-year expected life, or the remaining original term, whichever is sooner. For Mr. Dorer and Ms. Willoughby, this amount represents the intrinsic value of the accelerated vesting of all outstanding stock options (based on the provision that non-retirement eligible executives exercise stock options within 90 days of termination), calculated as the difference between the June 30, 2017, closing Common Stock price of $133.24 and the exercise price for each option.
(6) For Messrs. Robb and Foster and Ms. Stein, who are retirement-eligible, this amount represents the expected value of the accelerated vesting of all outstanding stock options upon the named executive officer’s termination of employment due to disability or death, and assumes a five-year expected life, or the remaining original term, whichever is sooner. For Mr. Dorer and Ms. Willoughby, this amount represents the expected value of the accelerated vesting of all outstanding stock options (based on the provision that non-retirement eligible executives exercise stock options within one-year of death or disability), calculated as the difference between the June 30, 2017, closing Common Stock price of $133.24 and the exercise price for each option.
(7) This amount represents the value of the accelerated vesting of performance shares upon change of control, assuming a target payout and valued at the closing price of our Common Stock on June 30, 2017, of $133.24. Upon a termination of employment in connection with a change in control, the entire performance share grant will vest and become immediately exercisable.
(8) This amount represents the value of the accelerated vesting of performance shares upon a death or disability, assuming a target payout and valued at the closing price of our Common Stock on June 30, 2017, of $133.24. Upon a death or disability termination, the entire performance share grant will vest. The actual payout will not be determined until the end of the performance period.
(9) This amount represents the present value of the SERP benefit payable to the named executive officer at the time of termination due to disability.
(10) This amount represents the present value of the SERP benefit payable to the named executive officer’s beneficiary at the time of death.
(11) This amount represents the estimated Company cost of providing welfare benefits, including medical, dental, and vision, for the two-year period following termination.
(12) For Messrs. Robb and Foster and Mmes. Stein and Willoughby, this amount represents the estimated Company cost of providing welfare benefits, including medical, dental, and vision, for the two-year period following a qualifying termination after a change in control. For Mr. Dorer, this amount represents the estimated Company cost of providing welfare benefits, including medical, dental, and vision, for the three-year period following a qualifying termination after a change in control.
(13) This amount represents the cost of providing financial planning for the year of termination.
(14) This amount reflects two times the named executive officer’s current base salary. In addition, for Messrs. Robb and Foster and Ms. Stein who are retirement-eligible, this amount includes 100% of their current year target Annual Incentive Plan award pro-rated to the date of termination. For Ms. Willoughby, this amount includes 75% of her current year target Annual Incentive Plan award, pro-rated to the date of termination.
(15) This amount represents two times the named executive officer’s current base salary, plus two times the average Annual Incentive Plan awards for the preceding three years, subject to the excise tax cut back provision in the CIC Plan. For Messrs. Robb and Foster and Ms. Stein who are retirement-eligible, this amount also includes 100% of their current year target Annual Incentive Plan award, pro-rated to the date of termination. For Ms. Willoughby, this amount includes the average Annual Incentive Plan awards for the preceding three years, pro-rated to the date of termination.
(16) Messrs. Robb and Foster and Ms. Stein are retirement-eligible and, thus, all unvested stock options held greater than one year will automatically vest upon termination. This amount represents the expected value of the accelerated vesting of the stock options, and assumes a five-year expected life, or the remaining original term, whichever is sooner.

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(17) Messrs. Robb and Foster and Ms. Stein are retirement-eligible and, thus, are entitled to receive a pro-rata portion of all performance shares held at least one year at the date of termination. This value represents the full vesting of eligible shares from the September 2014 grant, as with the assumed termination date of June 30, 2017, they would have completed the entire performance period and the pro-rata vesting of the eligible shares from the September 2015 and September 2016 grants, assuming a target payout and valued at the closing price of our Common Stock on June 30, 2017, of $133.24. The actual payout of the shares will not be determined until the end of the performance period. Named executive officers who are not retirement-eligible forfeit shares upon termination under these scenarios.
(18) This amount represents the present value of the Company SERP per the provisions of the Severance Plan for Clorox Executive Committee Members.
(19) This amount represents the difference between the actuarial equivalent of the benefit Mr. Dorer and Ms. Stein would have been eligible to receive if their employment had continued until the second anniversary of the date of termination or the first day of the month following their 65th birthday, if earlier, under the qualified and nonqualified retirement plans and the actuarial equivalent of their actual aggregate benefits paid or payable, if any, as of the date of termination under the qualified and nonqualified retirement plans.
(20) This amount represents the present value of the Company SERP per the provisions of the Severance Plan for Clorox Executive Committee Members, assuming Mr. Dorer will be deemed age 55 and/or with 10 years of service at the date of termination.
(21) This amount represents value of the restricted stock units held by Ms. Willoughby that will vest upon change in control, death or disability.
(22) Mr. Vlahos retired from the Company on March 31, 2017.
(23) Mr. Vlahos was retirement-eligible and, thus, is entitled to receive a pro-rata portion of all performance shares held at least one year at the date of termination. This value represents the pro-rata vesting of the eligible shares from the September 2014 and September 2015 grants, assuming a target payout and valued at the closing price of our Common Stock on March 31, 2017, of $134.83. The actual payout of the shares will not be determined until the end of the performance period.

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  Equity Compensation Plan Information

The following table sets out the number of shares of Common Stock to be issued upon exercise of outstanding options, warrants, and rights, the weighted-average

exercise price of outstanding options, warrants, and rights, and the number of securities available for future issuance under equity compensation plans as of June 30, 2017.



[a] [b] [c]
Plan category Number of securities to
be issued upon exercise
of outstanding options,
warrants, and rights
(in thousands)
        Weighted-average
exercise price of
outstanding options,
warrants, and rights
        Number of securities
remaining for future
issuance under non-
qualified stock-based
compensation programs
(excluding securities
reflected in column [a])
(in thousands)
Equity compensation plans approved by
security holders 7,992 $93 7,003
Equity compensation plans not approved by
security holders
Total 7,992 $93 7,003

Column [a] includes the following outstanding equity-based awards (in thousands):

6,907 stock options

862 performance units and deferred shares

205 deferred stock units for non-employee directors

18 restricted stock units



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  Audit Committee Matters

  Proposal 4:
Ratification of Independent Registered Public
Accounting Firm

The Audit Committee has the authority to appoint (subject to ratification by the Company’s stockholders), retain, compensate, and oversee the Company’s independent registered public accounting firm. The Audit Committee

has selected Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2018. Ernst & Young LLP has been so engaged since February 15, 2003.




Board of Directors’ Recommendation

The Board unanimously recommends that stockholders vote FOR the ratification of the selection of Ernst & Young LLP. While ratification of the selection of Ernst & Young LLP by stockholders is not required by law, as a matter of policy, such selection is being submitted to the stockholders for ratification at the Annual Meeting (and it is the present intention of the Board to continue this policy). The Audit Committee and the Board believe that the continued retention of Ernst & Young LLP as the Company’s independent registered public

accounting firm is in the best interests of the Company and its stockholders, and recommend the ratification of the Audit Committee’s appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending June 30, 2018.

Representatives of Ernst & Young LLP are expected to be present at the Annual Meeting to respond to appropriate questions and to make a statement should they desire to do so.




Vote Required

The affirmative vote of a majority of the votes present in person or represented by proxy and entitled to vote at the Annual Meeting is required to ratify the appointment of Ernst & Young LLP. If stockholders fail to ratify the appointment of this firm, the Audit Committee will reconsider the appointment.

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



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  Audit Committee Report

The Audit Committee assists the Board in its oversight of corporate governance by fulfilling its responsibility for overseeing the quality and integrity of the accounting, auditing, and reporting practices of the Company. In addition, the Audit Committee oversees the Company’s framework and guidelines with respect to risk assessment and risk management and the Company’s internal audit functions. The Audit Committee operates in accordance with a written charter, which was adopted by the Board. A copy of that charter is available on the Company’s website at https://www.thecloroxcompany.com/who-we-are/corporate-governance/committee-charters, or in print by contacting The Clorox Company, c/o Corporate Secretary, 1221 Broadway, Oakland, CA 94612-1888. Each member of the Audit Committee is “independent,” as required by the applicable listing standards of the NYSE and the rules of the SEC.

The Audit Committee members are not professional accountants or auditors, and their functions are not intended to duplicate or to certify the activities of management or the Company’s independent registered public accounting firm. The Audit Committee oversees the Company’s financial reporting process on behalf of the Board. The Company’s management has primary responsibility for the financial statements and reporting process, including the Company’s internal control over financial reporting. The independent registered public accounting firm is responsible for performing an integrated audit of the Company’s financial statements and internal control over financial reporting in accordance with the auditing standards of the Public Company Accounting Oversight Board (the PCAOB).

The Audit Committee appointed Ernst & Young LLP (EY) to audit the Company’s financial statements as of and for the year ended June 30, 2017, and the effectiveness of the Company’s internal control over financial reporting as of June 30, 2017. EY has served as the Company’s independent registered public accounting firm since February 2003. The Audit Committee considered several factors in selecting EY as the Company’s independent registered public accounting firm, including the firm’s independence and internal quality controls, the overall depth of talent, their experience with the Company’s industry, and their familiarity with the Company’s business and internal control over financial reporting. In determining whether to reappoint EY as the Company’s independent registered public accounting firm for the year ending June 30, 2018, the Audit Committee again took those factors into consideration along with its evaluation of the past performance of EY. The Audit Committee is responsible for the appointment (subject to ratification by the Company’s stockholders), retention, compensation, and oversight of the Company’s independent registered public accounting firm, including the audit fee negotiations. Further, in conjunction with the mandated rotation of the auditing firm’s coordinating partner, the Audit Committee and its chairperson are directly involved in the selection of EY’s new coordinating partner.

EY has also issued reports on its review of certain corporate responsibility and sustainability metrics and information provided in the Company’s Annual Report.

In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed with management the audited financial statements included in the Annual Report on Form 10-K for the fiscal year ended June 30, 2017. This review included a discussion of the quality and the acceptability of the Company’s financial reporting and system of internal controls, including the clarity of disclosures in the financial statements, reasonableness of significant contingency accruals, reserves and allowances, critical accounting policies and estimates, and risk assessment. The Audit Committee also reviewed and discussed with the Company’s independent registered public accounting firm the audited financial statements of the Company for the fiscal year ended June 30, 2017, the independent registered public accounting firm’s judgments as to the quality and acceptability of the Company’s financial reporting, critical accounting policies and estimates, and such other matters as are required to be discussed by Auditing Standard No. 1301, as adopted by the PCAOB.

The Audit Committee obtained from the independent registered public accounting firm the written disclosures and the letter from the auditors required by the applicable requirements of the PCAOB regarding communications with the Audit Committee concerning independence of the auditors and discussed with the auditors their independence. The Audit Committee meets periodically with the independent registered public accounting firm, with and without management present, to discuss the results of the independent registered public accounting firm’s examinations and evaluations of the Company’s internal controls and the overall quality of the Company’s financial reporting. The Audit Committee also holds private sessions with each of the Company’s independent registered public accounting firm, the General Counsel, the Chief Financial Officer, and the Vice President of Internal Audit.

Based upon the review and discussions referred to above, the Audit Committee recommended to the Board that the Company’s audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2017, for filing with the SEC.

THE AUDIT COMMITTEE

Carolyn Ticknor, Chair
Amy Banse
Jeffrey Noddle
Russell Weiner
Christopher Williams


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Fees of the Independent Registered Public Accounting Firm

The table below includes fees related to fiscal years 2017 and 2016 of the Company’s independent registered public accounting firm, Ernst & Young LLP:

      2017       2016   
Audit Fees(1) $ 5,211,000 $ 4,772,000
Audit-Related Fees(2) 122,000 114,000
Tax Fees(3) 225,000 74,000
All Other Fees(4)
Total $ 5,558,000 $ 4,960,000

(1) Consists of fees for professional services rendered for the audit of the Company’s annual financial statements and internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act of 2002, included in the Company’s Annual Reports on Form 10-K for each of the fiscal years ended June 30, 2017 and 2016, and for review of the financial statements included in the Company