DEF 14A 1 de3653751-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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Filed by a Party other than the Registrant [   ] 
 
Check the appropriate box:
 
[   ]        Preliminary Proxy Statement
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[X]   Definitive Proxy Statement
[   ]   Definitive Additional Materials
[   ]   Soliciting Material Pursuant to §240.14a-12

  DEERE & COMPANY  
  (Name of Registrant as Specified In Its Charter)  
 
       
 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
 

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Who we are

John Deere is a world leader in providing advanced products and services and is committed to the success of customers whose work is linked to the land — those who cultivate, harvest, transform, enrich, and build upon the land to meet the world’s dramatically increasing need for food, fuel, shelter, and infrastructure.


OUR COMMITMENT OUR CORE VALUES OUR SUSTAINABILITY EFFORTS
         

We are committed to those linked to the land. We believe that by serving them we support improving the quality of life for people around the world. Through the excellence of our products and services, we help our customers meet two of the biggest challenges in the world: feeding a population growing in size and affluence and developing the infrastructure required to support growing urbanization.

John Deere, with major agricultural and construction equipment businesses, is uniquely positioned to help our customers meet those challenges.

     

In conducting our business, we are guided by four core values that company founder John Deere was known for — integrity, quality, commitment, and innovation.

We apply those values in creating our products and services, maintaining our relationships, and operating our factories.

      John Deere is in a unique position to improve the quality of life and land for people all around the world. Sustainability is deeply rooted in John Deere’s higher purpose. That’s why, after more than 182 years, we have demonstrated our dedication to feeding a growing population, empowering global prosperity, protecting natural resources, and more.



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January 10, 2020
 

DEAR FELLOW SHAREHOLDERS,

On behalf of the Board of Directors and the senior management team, we cordially invite you to attend Deere & Company’s Annual Meeting of Shareholders, which will be held on Wednesday, February 26, 2020, at 10 a.m. Central Standard Time at Deere & Company World Headquarters, One John Deere Place, Moline, Illinois, 61265.

At this meeting, you will have a chance to vote on the matters set forth in the accompanying Notice of Annual Meeting and Proxy Statement, and we will share a report on our operations.

Your vote is important. Even if you plan to attend the Annual Meeting, please vote by internet, telephone, or mail as soon as possible to ensure your vote is recorded promptly. The instructions set forth in the Proxy Statement and on the proxy card explain how to vote your shares.

On behalf of the Board of Directors, thank you for your ongoing support of Deere & Company.

Sincerely,

Samuel R. Allen Vance D. Coffman
Chairman of the Board Presiding Director
   



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Notice of 2020 Annual Meeting of Shareholders













DATE
Wednesday, February 26, 2020
 
TIME
10 a.m. Central Standard Time
 
PLACE
Deere & Company
World Headquarters
One John Deere Place
Moline, Illinois 61265
 
 
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON FEBRUARY 26, 2020:
The Proxy Statement and Annual Report are available on our website at www.JohnDeere.com/stock.

Your opinion is very important. Please vote on the matters described in the accompanying Proxy Statement as soon as possible, even if you plan to attend the 2020 Annual Meeting of Shareholders (the “Annual Meeting”). You can find voting instructions on page 86.

In addition to the Proxy Statement, we are sending you our Annual Report, which includes our fiscal 2019 financial statements. If you wish to receive future proxy statements and annual reports electronically rather than receiving paper copies in the mail, please turn to the section entitled “Electronic Delivery of Proxy Statement and Annual Report” on page 90 for instructions.

At the Annual Meeting, shareholders will be asked to:
1. Elect the 11 director nominees named in the Proxy Statement (see page 6).       4. Approve the John Deere 2020 Equity and Incentive Plan (see page 72).
2. Approve an amendment to Deere’s Bylaws to provide that courts located in Delaware will be the exclusive forum for certain legal disputes (see page 25). 5. Ratify the appointment of Deloitte & Touche LLP as Deere’s independent registered public accounting firm for fiscal 2020 (see page 80).
3. Approve the compensation of Deere’s named executives on an advisory basis (“say-on-pay”) (see page 27). 6. Vote on the shareholder proposal, if properly presented at the meeting (see page 83).
7. Consider any other business properly brought before the meeting.

PLEASE VOTE YOUR SHARES
If you were a Deere shareholder of record at the close of business on December 31, 2019, we encourage you to vote promptly in one of the following ways:
BY TELEPHONE
In the U.S. or Canada, you can vote your shares by calling 1-800-690-6903.
BY MAIL
You can vote by mail by marking, dating, and signing your proxy card or voting instruction form and returning it in the postage-paid envelope.
     
BY INTERNET
You can vote your shares online at www.proxyvote.com. You will need the 16-digit control number on the Notice of Internet Availability or proxy card.
IN PERSON
You can vote in person at the Annual Meeting. See page 88 for information on how to pre-register.

On behalf of the Board of Directors, I thank you for exercising your right to vote your shares.

For the Board of Directors,

Todd E. Davies, Corporate Secretary
Moline, Illinois, January 10, 2020



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This Proxy Statement is issued in connection with the solicitation of proxies by the Board of Directors of Deere & Company for use at the Annual Meeting and at any adjournment or postponement thereof. On or about January 10, 2020, we will begin distributing print or electronic materials regarding the Annual Meeting to each shareholder entitled to vote at the meeting. Shares represented by a properly executed proxy will be voted in accordance with instructions provided by the shareholder.

Proxy Summary
2 Proxy Summary
   
Election of Directors
6 Item 1 – Election of Directors
14 Corporate Governance
20 Compensation of Directors
22 Security Ownership of Certain Beneficial Owners and Management
24 Review and Approval of Related Person Transactions
   
Bylaw Amendment Proposal
25 Item 2 – Approval of Bylaw Amendment to Provide that the Courts Located in Delaware Will Be the Exclusive Forum for Certain Legal Disputes
   
Advisory Vote on Executive Compensation
27 Item 3 – Advisory Vote on Executive Compensation
28 Compensation Discussion and Analysis
30 Executive Summary
32 2019 Compensation Overview
34 Direct Compensation Elements
48 Indirect Compensation Elements
50 Compensation Methodology and Process
54 Risk Assessment of Compensation Policies and Practices
55 Compensation Committee Report
56 Executive Compensation Tables
71 Pay Ratio Disclosure
71 Equity Compensation Plan Information
 
Approval of the John Deere 2020 Equity and Incentive Plan
72 Item 4 – Approval of the John Deere 2020 Equity and Incentive Plan
72 Summary of Proposal
74 Principal Features of the Plan
78 U.S. Federal Income Tax Consequences of Stock Options
79 New Plan Benefits
   
Ratification of Independent Registered Public Accounting Firm
80 Item 5 – Ratification of Independent Registered Public Accounting Firm
82 Audit Review Committee Report
 
Shareholder Proposal
83 Item 6 – Shareholder Proposal
 
Additional Information
86 Voting and Meeting Information
89 Annual Report
89 Householding Information
90 Electronic Delivery of Proxy Statement and Annual Report
90 Information not Incorporated into This Proxy Statement
90 Other Matters
90 2021 Shareholder Proposals and Nominations
91 Cost of Solicitation
 
Appendices
92 Appendix A – Director Independence Categorical Standards of Deere & Company Corporate Governance Policies
94 Appendix B – Deere & Company Reconciliation of Variable Compensation Measures to Non-GAAP Measures
96 Appendix C – John Deere 2020 Equity and Incentive Plan


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Proxy Summary
Meeting Agenda and Voting Recommendations

Proxy Summary

This summary highlights selected information contained in this Proxy Statement, but it does not contain all the information you should consider. We urge you to read the whole Proxy Statement before you vote. You also may wish to review Deere’s Annual Report on Form 10-K for the fiscal year ended November 3, 2019. Deere uses a 52/53 week fiscal year ending on the last Sunday in the reporting period. Deere’s 2019, 2018, and 2017 fiscal years ended on November 3, 2019, October 28, 2018, and October 29, 2017, respectively. Unless otherwise stated, all information presented in this Proxy Statement is based on Deere’s fiscal calendar.

Meeting Agenda and Voting Recommendations

Item       Voting Standard       Vote
Recommendation
      Page Reference
1.    Annual election of directors Majority of votes cast

FOR
each nominee

6
2. Approval of Bylaw Amendment regarding exclusive forum Majority of votes present in person or by proxy FOR 25
3. Advisory vote on executive compensation Majority of votes present in person or by proxy FOR 27
4. Approval of John Deere 2020 Equity and Incentive Plan Majority of votes present in person or by proxy FOR 72
5. Ratification of independent registered public accounting firm Majority of votes present in person or by proxy FOR 80
6. Shareholder proposal Majority of votes present in person or by proxy AGAINST
the proposal
83

Director Nominees
Every member of our Board of Directors is elected annually. You are being asked to vote on the election of these 11 nominees, all of whom currently serve as directors.

All directors other than Samuel R. Allen and John C. May are INDEPENDENT.

Committee Memberships
Name    Age    Director Since    Executive Audit Review Compensation Corporate
Governance
Finance

Samuel R. Allen
Chairman, Deere & Company

66 2009 CHAIR

Alan C. Heuberger
Senior Manager, BMGI

46 2016

Charles O. Holliday, Jr.
Chairman of Royal Dutch Shell plc

71 2007-2016;
since 2018

Dipak C. Jain
President (Europe), China Europe International Business School

62 2002

Michael O. Johanns
Retired United States Senator from Nebraska

69 2015

Clayton M. Jones
Retired Chairman, Rockwell Collins

70 2007 CHAIR

John C. May
Chief Executive Officer, Deere & Company

50 2019

Gregory R. Page
Chairman, Corteva, Inc.

68 2013 CHAIR

Sherry M. Smith
Former Executive VP and CFO, SuperValu

58 2011 CHAIR

Dmitri L. Stockton
Retired Special Advisor to Chairman and Senior VP, GE and Former Chairman, President, and CEO, GE Asset Management

55 2015

Sheila G. Talton
President and CEO, Gray Matter Analytics

67 2015

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Proxy Summary
Annual Meeting of Shareholders

Annual Meeting of Shareholders
You are entitled to vote at the meeting if you were a holder of record of our common stock at the close of business on December 31, 2019. Please see “Additional Information – Voting and Meeting Information – How Do I Vote?” for instructions on how to vote your shares and other important Annual Meeting information. If you wish to attend the meeting in person, we encourage you to register on or prior to Tuesday, February 25, 2020, to obtain an admission ticket. See “Additional Information – Voting and Meeting Information – Attendance at the Annual Meeting” for additional instructions.

Governance and Compensation Changes
Over our more than 180-year history, one of the things we have learned is the inevitability of change. As a result, we regularly assess what we do to determine how we can adapt and improve. This approach applies to our corporate governance and compensation plans as much as it does to our manufacturing processes and product innovation. Here is a summary of the changes we have made in recent years.

CORPORATE GOVERNANCE

We adopted a bylaw in 2016 allowing shareholders meeting certain requirements to nominate directors and have such nominees included in the proxy statement, commonly referred to as “proxy access.”
In 2017, we increased the retirement age for board members to 75 to reflect recent industry trends and to provide stability in the composition of our board.
     

COMPENSATION

The performance goals for our short-term incentive plan were significantly increased in 2018 to align more appropriately to our current enterprise strategy.
A downward TSR Modifier for LTIC was implemented for the performance periods ending in FY2017, FY2018, and FY2019. If TSR performance was below the 50th percentile, the payout would be reduced by the modifier. For the performance period ending in FY2020, the TSR modifier will be multiplicative and could adjust upward or downward based upon TSR performance as compared to the peer group.
Performance Stock Units (PSUs) will now be based solely on a revenue growth metric. TSR as a standalone metric will apply only to the cash portion of the long-term award.
The consolidated financials of the Wirtgen acquisition are excluded from the Equipment Operations Operating Return on Operating Assets (OROA) and Shareholder Value Added (SVA) for calculating variable compensation for fiscal 2018 and 2019 to allow for integration and to determine appropriate incentive metrics. Wirtgen is included in the revenue component of the variable pay metrics to incent executive leadership to drive for successful integration and continued growth of the business.

Fiscal 2019 Performance Highlights

Deere & Company (Deere or the Company) achieved net sales and revenues of $39.258 billion in fiscal 2019 — a record — compared with $37.358 billion in fiscal 2018. Performance was bolstered by a record year for the Construction & Forestry Division, which included a full year of Wirtgen sales. (Fiscal 2018 included only 10 months of Wirtgen results.)

Fiscal 2019 net income attributable to Deere & Company was $3.253 billion, or $10.15 per share, compared with $2.368 billion, or $7.24 per share, in fiscal 2018. Common stock closed at $176.11 on November 3, 2019. The company boosted dividends to $3.04 per share for the year, up nearly 18 percent from 2018.

In 2019, Deere continued to invest heavily in the future, devoting nearly $1.8 billion to research and development.

The results included a new generation of tractors, Deere’s largest-ever combine, and several other industry leading products and services. Development investments also strengthened the company’s precision ag capabilities, which we believe will continue to be a key differentiator of our products.

Other financial highlights for the year include:

Generating $1.515 billion in economic profit, or Shareholder Value Added

Returning nearly $2.196 billion to stockholders in the form of dividends and share repurchases

For more information regarding our fiscal 2019 financial performance, please see our Annual Report, which is available at www.JohnDeere.com/stock.

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Proxy Summary
Fiscal 2019 Performance Highlights

NET SALES
AND REVENUES
(Millions)

     

NET INCOME (1)
(Millions)

     

ADJUSTED NET INCOME (2)
(Millions)

     

SHAREHOLDER
VALUE ADDED (3)

(Millions)

 

Net sales and revenues rose 5% over fiscal 2018 due in part to strong Construction & Forestry equipment sales, plus two additional months of Wirtgen sales. Agriculture & Turf sales rose modestly.

 

Net income increased 37% to $3.253 billion, from $2.368 billion in 2018. Earnings per share rose 40% to $10.15, from $7.24 in 2018. See adjusted Net Income for effects of tax reform in 2018 and 2019. Net income in 2019 was increased by $68 million and net income in 2018 was reduced by $705 million from discrete income tax adjustments related to tax reform. Adjusted earnings per share were $9.94 and $9.39 for the same respective periods. Shareholder Value Added (SVA) slid 19% for the year, though all businesses delivered positive SVA. SVA represents operating profit less an implied charge for capital.
 

DEERE SHARE PRICE
(at fiscal year-end)

CASH FLOW FROM OPERATING ACTIVITIES
(Millions)

 

Deere share price closed the year at $176.11, up 32% from 2018. The company also declared $3.04 in dividends per share for the year, up from $2.58 in 2018.

Consolidated cash flow from operations totaled $3.4 billion. Cash flow funded important strategic projects and paid roughly $2.2 billion to investors in 2019 in the form of dividends and share repurchases.


(1) Net income attributable to Deere & Company.
(2) Adjusted net income is a non-GAAP measure that excludes discrete adjustments to the provision for income taxes related to the tax law enacted by the U.S. Government on December 22, 2017 (tax reform).
(3) SVA is a non-GAAP measure and excludes Wirtgen. See Appendix B for details.

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Proxy Summary
Fiscal 2019 Executive Compensation Highlights

Fiscal 2019 Executive Compensation Highlights

Our compensation programs and practices are designed to create incentive opportunities for advancing our shareholders’ long-term interests. We use metrics that align with our business strategy and motivate our executives to create value for shareholders at all points in the business cycle. For fiscal 2019, we had three separate variable pay components (described below) — Short-Term Incentive (STI), Long-Term Incentive Cash (LTIC), and Long-Term Incentive (LTI) — which stimulate complementary behaviors.

This Metric       For this type of compensation       Contributes to this goal
Operating return on operating assets (OROA) (1)(2) Annual cash bonus
(known within Deere as STI)
exceptional operating performance for Equipment Operations
Return on equity (ROE) (1) exceptional operating performance for Financial Services
Net Sales and Revenues importance of sustainable growth in near-term decisions
Shareholder Value Added (SVA) (2) Long-term cash
(known within Deere as LTIC)

sustainable, profitable growth
Total Shareholder Return (TSR) exceptional equity appreciation
Revenue growth Long-term equity
(known within Deere as LTI)
sustainable growth

(1)

OROA is a non-GAAP measure. The Equipment Operations OROA calculation excludes the assets from our Financial Services segment and certain corporate assets. Corporate assets are primarily the Equipment Operations’ retirement benefits, deferred income tax assets, marketable securities, and cash and cash equivalents. ROE is based solely on the Financial Services segment. See Appendix B for details.

(2)

Wirtgen is excluded from both the Equipment Operations OROA and SVA calculations for FY19 variable pay to allow time for integration and assimilation. See Appendix B for details.

For information about the metrics we use to measure compensation and the resulting payouts, see the Executive Summary of the Compensation Discussion and Analysis (CD&A).

The table below highlights the 2019 compensation for the Chairman and CEO and, on average, for all the other named executive officers (NEOs) as disclosed in the Fiscal 2019 Summary Compensation Table. The table also shows how much compensation was delivered in cash (versus equity) and the significant portion that is performance-based and therefore at risk.

Summary Compensation
Table Elements
Salary STI LTIC Performance
Stock Units
Restricted
Stock Units and
Stock Options
Retirement
and Other
Compensation
Total
Chairman and CEO
Compensation $1,591,667 $1,640,451 $2,119,920 $6,863,973 $5,471,866 $4,010,008 $21,697,885
% of Total 7% 8% 10% 32% 25% 18% 100%
Cash vs. Equity Total Cash 25% Total Equity 57% Other 18% 100%
Short-Term vs. Long-Term Short-Term 15% Long-Term 85% 100%
Fixed vs. Performance-Based Fixed 7% Performance-Based 75% Other 18% 100%
 
Average Other NEO
Compensation $712,858 $490,454 $664,320 $1,354,141 $1,520,024 $966,842 $5,708,639
% of Total 12% 9% 12% 24% 27% 16% 100%
Cash vs. Equity Total Cash 33% Total Equity 51% Other 16% 100%
Short-Term vs. Long-Term Short-Term 21% Long-Term 79% 100%
Fixed vs. Performance-Based Fixed 12% Performance-Based 72% Other 16% 100%

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Item 1 – Election of Directors

How We Identify and Evaluate Director Nominees
The Corporate Governance Committee of the Board is responsible for screening candidates and recommending director nominees to the full Board. The Board nominates the slate of directors for election at each Annual Meeting of Shareholders and elects directors to fill vacancies or newly created Board seats.

The Corporate Governance Committee considers candidates recommended by shareholders, directors, officers, and third-party search firms. If you wish to nominate a director, please review the procedures described under “Additional Information – 2021 Shareholder Proposals and Nominations” in this Proxy Statement. The Corporate Governance Committee evaluates all candidates in the same manner, regardless of the source of the recommendation.

Deere’s Corporate Governance Policies, which are described in the “Corporate Governance” section of this Proxy Statement, establish the general criteria and framework for assessing director candidates. In particular, the Corporate Governance Committee considers each nominee’s skills, experience, international versus domestic background, and age, as well as legal and regulatory requirements and the particular needs of the Board at the time. In addition, the Board assesses the diversity of its members and nominees as part of an annual performance evaluation by considering, among other factors, diversity in expertise, experience, background, ethnicity, and gender. We believe a Board composed of members with complementary skills, qualifications, experiences, and attributes is best equipped to meet its responsibilities effectively.

Any director who experiences a material change in occupation, career, or principal business activity, including retirement, must tender a resignation to the Board. Upon recommendation from the Corporate Governance Committee, the Board may decline to accept any such resignation. Directors must retire from the Board upon the first Annual Meeting of Shareholders after reaching the age of 75, except as approved by the Board.

Director Nominees
The Corporate Governance Committee has recommended and the Board has nominated each of Samuel R. Allen, Alan C. Heuberger, Charles O. Holliday, Jr., Dipak C. Jain, Michael O. Johanns, Clayton M. Jones, John C. May, Gregory R. Page,

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Election of Directors
Item 1 – Election of Directors

Sherry M. Smith, Dmitri L. Stockton, and Sheila G. Talton to be elected for terms expiring at the Annual Meeting in 2021. Mr. Coffman has reached the mandatory retirement age and is not standing for re-election. The Board intends to reduce the size of the Board from 12 to 11 directors following the Annual Meeting. All of the nominees are current members of the Board, but Deere’s Certificate of Incorporation and good governance practices require all members of the Board to be elected annually.

We have confidence that this talented slate of nominees will lead Deere capably in the year ahead. We discuss the nominees’ professional backgrounds and qualifications in the short biographies that follow.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR ALL 11 NOMINEES.

Board Diversity
The Corporate Governance Committee believes that our Board is most effective when it embodies a diverse set of viewpoints and practical experiences. To maintain an effective Board, the Corporate Governance Committee considers how each nominee’s particular background, experience, qualifications, attributes, and skills will contribute to Deere’s success. As shown below, the independent members of our Board have a range of viewpoints, backgrounds, and expertise.


BOARD MEMBER SKILLS

Executive Manufacturing International Academic Government Agriculture Finance Risk
Management
Corporate
Governance
Samuel R. Allen
Alan C. Heuberger
Charles O. Holliday, Jr.
Dipak C. Jain
Michael O. Johanns
Clayton M. Jones
John C. May
Gregory R. Page
Sherry M. Smith
Dmitri L. Stockton
Sheila G. Talton
Audit committee financial expert under Securities and Exchange Commission (SEC) rules

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Election of Directors
Item 1 – Election of Directors


Age: 66

Director since: 2009

Committees:
Executive (Chair)

     

SAMUEL R. ALLEN

Chairman of Deere & Company (since 2019)

Past Positions at Deere & Company

Chairman and Chief Executive Officer — 2010 to 2019
President and Chief Executive Officer — 2009 to 2010
President and Chief Operating Officer — 2009
     

Other Current Directorships

Whirlpool Corporation
Dow Inc.
Key Qualifications, Experiences, and Attributes
In addition to his professional background and prior Deere Board experience, the following qualifications led the Board to conclude that Mr. Allen should serve on Deere’s Board of Directors: his leadership experience as Chairman of Deere since 2010 and as an officer of Deere since 2001; the breadth of his management experiences within, and knowledge of, each of Deere’s major global operations; and his subject matter knowledge in the areas of engineering, manufacturing, and industrial management.


Age: 46

Director since: 2016

Committees:
Audit Review, Finance

     

ALAN C. HEUBERGER

Senior Manager, BMGI (since 2004)

Past Positions at BMGI (private investment management)

Investment Analyst — 1996 to 2004
Key Qualifications, Experiences, and Attributes
In addition to his professional background and prior Deere Board experience, the following qualifications led the Board to conclude that Mr. Heuberger should serve on Deere’s Board of Directors: his leadership qualities developed from his service as Senior Manager of BMGI; the breadth of his experience in governance, strategy, and other areas of oversight while serving as a member of the boards of directors and advisors of various asset management entities and privately-held corporations; and his subject matter knowledge in the areas of agriculture industry investments, asset management, finance, and economics.

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Election of Directors
Item 1 – Election of Directors


Age: 71

Director since:
2007 to 2016; 2018

Committees:
Compensation,
Corporate Governance

     

CHARLES O. HOLLIDAY, JR.

Chairman of Royal Dutch Shell plc
(oil and natural gas exploration, refining, and product sales) (since 2015)

Past Positions

Chairman of the National Academy of Engineering (nonprofit engineering institution) — 2012 to 2016
Chairman of Bank of America Corporation (banking, investing, and asset management) — 2010 to 2014
Chairman from 1999 to 2009 and Chief Executive Officer from 1998 through 2008 of DuPont (agricultural, electronics, material science, safety and security, and biotechnology)
     

Other Current Directorships

HCA Healthcare, Inc.
Royal Dutch Shell plc

Previous Directorships

CH2M HILL Companies, Ltd.
Key Qualifications, Experiences, and Attributes
In addition to his professional background and prior Deere Board experience, the following qualifications led the Board to conclude that Mr. Holliday should serve on Deere’s Board of Directors: his leadership qualities developed from his experiences while serving as Chairman of Royal Dutch Shell, Chairman of the National Academy of Engineering, Chairman of Bank of America Corporation, and Chairman and Chief Executive Officer of DuPont; the breadth of his experiences in auditing, compensation, and other areas of oversight while serving as a member of the boards of directors of other global corporations; and his subject matter knowledge in the areas of engineering, finance, business development, and corporate responsibility.


Age: 62

Director since: 2002

Committees:
Audit Review, Finance

     

DIPAK C. JAIN

President (European), China Europe International Business School (since 2018)

Past Positions

Co-President/Global Advisor, China Europe International Business School – 2017 to 2018
Director, Sasin Graduate Institute of Business Administration (international graduate business school) — 2014 to 2017
Chaired Professor of Marketing, INSEAD (international graduate business school) — 2013 to 2014
Dean, INSEAD — 2011 to 2013
Dean and Associate Dean for Academic Affairs, Kellogg School of Management, Northwestern University — 1996 to 2009
Sandy and Morton Goldman Professor of Entrepreneurial Studies and Professor of Marketing, Kellogg School of Management, Northwestern University — 1994 to 2001 and since 2009
     

Other Current Directorships

Reliance Industries Limited, India

Previous Directorships

Global Logistics Properties Limited, Singapore
Northern Trust Corporation
Key Qualifications, Experiences, and Attributes
In addition to his professional background and prior Deere Board experience, the following qualifications led the Board to conclude that Mr. Jain should serve on Deere’s Board of Directors: his leadership qualities developed from his experiences while serving as Director or Dean at several prominent graduate business schools and as a foreign affairs advisor for the Prime Minister of Thailand; the breadth of his experiences in compensation, corporate governance, and other areas of oversight while serving as a member of the boards of directors of other global corporations; and his subject matter knowledge in the areas of marketing, global product diffusion, and new product forecasting and development.

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Election of Directors
Item 1 – Election of Directors


Age: 69

Director since: 2015

Committees:
Audit Review,
Corporate Governance

     

MICHAEL O. JOHANNS

Retired U.S. Senator from Nebraska and former U.S. Secretary of Agriculture

Past Positions

United States Senator from Nebraska — 2009 to 2015
United States Secretary of Agriculture — 2005 to 2007
Governor of Nebraska — 1999 to 2005
     

Other Current Directorships

Corteva, Inc.
Key Qualifications, Experiences, and Attributes
In addition to his professional background and prior Deere Board experience, the following qualifications led the Board to conclude that Mr. Johanns should serve on Deere’s Board of Directors: his leadership qualities developed from his service in state and federal government, including serving as Governor of Nebraska; the breadth of his experiences in law, governance, and other areas of oversight while serving as a partner of a law firm and a member of the U.S. Senate and various Senate committees; and his subject matter knowledge in the areas of agriculture, banking, commerce, and foreign trade.


Age: 70

Director since: 2007

Committees:
Corporate
Governance (Chair),
Compensation,
Executive

     

CLAYTON M. JONES

Retired Chairman and Chief Executive Officer of Rockwell Collins, Inc.

Past Positions at Rockwell Collins, Inc.
(aviation electronics and communications)

Chairman — 2013 to 2014
Chairman and Chief Executive Officer — 2012 to 2013
Chairman, President, and Chief Executive Officer — 2002 to 2012
     

Other Current Directorships

Motorola Solutions, Inc.

Previous Directorships

Cardinal Health, Inc.
Key Qualifications, Experiences, and Attributes
In addition to his professional background and prior Deere Board experience, the following qualifications led the Board to conclude that Mr. Jones should serve on Deere’s Board of Directors: his leadership qualities developed from his service as Chairman and Chief Executive Officer of Rockwell Collins; the breadth of his experiences in finance, compensation, and other areas of oversight while serving as a member of the boards of directors of other global corporations; and his subject matter knowledge in the areas of government affairs and marketing.

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Election of Directors
Item 1 – Election of Directors


Age: 50

Director since: 2019

     

JOHN C. MAY

Chief Executive Officer and President of Deere & Company (since 2019)

Past Positions at Deere & Company

President and Chief Operating Officer — April 2019 to November 2019
President, Worldwide Agriculture & Turf Division, Global Harvesting and Turf Platforms, Ag Solutions (Americas and Australia) — 2018 to 2019
President, Agricultural Solutions & Chief Information Officer — 2012 to 2018
Vice President, Agriculture & Turf Global Platform, Turf & Utility — 2009 to 2012
Factory Manager, John Deere Dubuque Works — 2007 to 2009
Director, China Operations — 2004 to 2007
Key Qualifications, Experiences, and Attributes
In addition to his professional background and prior Deere Board experience, the following qualifications led the Board to conclude that Mr. May should serve on Deere’s Board of Directors: his leadership experience as an officer of Deere since 2009; the breadth of his management experiences within, and knowledge of, Deere’s global operations, precision agriculture, and information technology; and his subject matter knowledge in the areas of leadership, manufacturing, and information technology.


Age: 68

Director since: 2013

Committees:
Finance (Chair),
Audit Review, Executive

     

GREGORY R. PAGE

Chairman of Corteva, Inc. (agricultural seeds, crop protection products, and digital solutions) (since 2019)

Past Positions at Cargill, Incorporated (agricultural, food, financial, and industrial products and services)

Executive Director — 2015 to 2016
Executive Chairman — 2013 to 2015
Chairman and Chief Executive Officer — 2011 to 2013
Chairman, Chief Executive Officer, and President — 2007 to 2011
     

Other Current Directorships

Eaton Corporation plc
3M Company
Corteva, Inc.

Previous Directorships

Carlson, Inc.
Cargill, Incorporated
Key Qualifications, Experiences, and Attributes
In addition to his professional background and prior Deere Board experience, the following qualifications led the Board to conclude that Mr. Page should serve on Deere’s Board of Directors: his leadership qualities developed from his experiences while serving as Chairman of Corteva, Inc. and Chairman and Chief Executive Officer of Cargill; the breadth of his experiences in auditing, corporate governance, and other areas of oversight while serving as a member of the boards of directors of other global corporations; and his subject matter knowledge in the areas of commodities, agriculture, operating processes, finance, and economics.

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Age: 58

Director since: 2011

Committees:
Audit Review (Chair),
Finance, Executive

     

SHERRY M. SMITH

Former Executive Vice President and Chief Financial Officer of SuperValu Inc.

Past Positions at SuperValu Inc. (retail and wholesale grocery and retail general merchandise products)

Executive Vice President and Chief Financial Officer — 2010 to 2013
Senior Vice President, Finance — 2005 to 2010
Senior Vice President, Finance and Treasurer — 2002 to 2005
     

Other Current Directorships

Piper Jaffray Companies
Realogy Holdings Corp.
Tuesday Morning Corporation
Key Qualifications, Experiences, and Attributes
In addition to her professional background and prior Deere Board experience, the following qualifications led the Board to conclude that Ms. Smith should serve on Deere’s Board of Directors: her leadership qualities developed from her experience while serving as a senior executive and as Chief Financial Officer of SuperValu; the breadth of her experiences in auditing, finance, accounting, compensation, strategic planning, and other areas of oversight while serving as a member of the boards of directors of other public corporations; her family farming background; and her subject matter knowledge in the areas of finance, accounting, and food and supply chain management.


Age: 55

Director since: 2015

Committees:
Compensation, Finance

     

DMITRI L. STOCKTON

Retired Special Advisor to Chairman and Senior Vice President of General Electric Company and Former Chairman, President, and Chief Executive Officer of GE Asset Management Incorporated

Past Positions

Special Advisor to the Chairman and Senior Vice President of GE (power and water, aviation, oil and gas, healthcare, appliances and lighting, energy management, transportation and financial services) — 2016 to 2017
Chairman, President, and Chief Executive Officer of GE Asset Management Incorporated (global investments) and Senior Vice President of General Electric Company — 2011 to 2016
President and Chief Executive Officer of GE Capital Global Banking and Senior Vice President of GE London — 2008 to 2011
     

Other Current Directorships

Ryder System, Inc.
Stanley Black & Decker, Inc.
Target Corporation

Previous Directorships

GE Asset Management Incorporated
GE RSP U.S. Equity Fund and GE RSP Income Fund
Elfun Funds (six directorships)
Synchrony Financial
Key Qualifications, Experiences, and Attributes
In addition to his professional background and prior Deere Board experience, the following qualifications led the Board to conclude that Mr. Stockton should serve on Deere’s Board of Directors: his leadership qualities developed from his service as Chairman, President, and Chief Executive Officer of GE Asset Management and as a senior officer of other global operations; the breadth of his experiences in risk management, governance, regulatory compliance, and other areas of oversight while serving as a member of the boards of directors and trustees of global asset management, investment, and employee benefit entities; and his subject matter knowledge in the areas of finance, banking, and asset management.

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Election of Directors
Item 1 – Election of Directors


Age: 67

Director since: 2015

Committees:
Audit Review, Finance

     

SHEILA G. TALTON

President and Chief Executive Officer of Gray Matter Analytics
(healthcare analytics for healthcare providers, payers, and pharma companies) (since 2013)

Past Positions

President and Chief Executive Officer of SGT Ltd. (strategy and technology consulting services) — 2011 to 2013
Vice President of Cisco Systems, Inc. (information technology and solutions) — 2008 to 2011
     

Other Current Directorships

OGE Energy Corp.
Sysco Corporation

Previous Directorships

Acco Brands Corporation
Wintrust Financial Corporation
Key Qualifications, Experiences, and Attributes
In addition to her professional background and prior Deere Board experience, the following qualifications led the Board to conclude that Ms. Talton should serve on Deere’s Board of Directors: her leadership qualities developed from her service as President and Chief Executive Officer of Gray Matter Analytics and as an officer of other global technology and consulting firms; the breadth of her experiences in compensation, governance, risk management, and other areas of oversight while serving as a member of the boards of directors of other global public corporations; and her subject matter knowledge in the areas of technology, data analytics, and global strategies.

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Election of Directors
Corporate Governance

Corporate Governance

Corporate Governance Highlights
At Deere, we recognize that strong corporate governance contributes to long-term shareholder value. We are committed to sound governance practices, including those described below:

INDEPENDENCE

All of our director nominees, except our CEO and our Chairman, are independent
The independent Presiding Director has a role with significant governance responsibilities
All standing Board committees other than the Executive Committee are composed wholly of independent directors
Independent directors meet regularly in executive session without management present
     

BEST PRACTICES

Directors may not stand for re-election after their 75th birthday, absent Board approval under rare circumstances
Our recoupment policy requires an executive to return any incentive compensation found to have been awarded erroneously due to accounting misconduct
Directors and executives are subject to stock ownership requirements
Directors and executives are prohibited from hedging or pledging their Deere stock
 

ACCOUNTABILITY

All directors are elected annually
In uncontested elections, directors are elected by majority vote
The Board and each Board committee conducts an annual performance self-evaluation
Shareholders have the ability to include nominees in our proxy statement (so-called proxy access rights)

RISK OVERSIGHT

The Board oversees Deere’s overall risk-management structure
Individual Board committees oversee certain risks related to their specific areas of responsibility
We have robust risk management processes throughout the company

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

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

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Corporate Governance

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

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

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

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

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

Preside at all meetings of the Board at which the Chairman is not present, including executive sessions of the independent directors;
 
Serve as liaison between the Chairman and the independent directors;
 
In consultation with the Chairman, review and approve the schedule of meetings of the Board, the proposed agendas, and the materials to be sent to the Board;
 
Call meetings of the independent directors when necessary; and
 
Remain available for consultation and direct communication with Deere’s shareholders.

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

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

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

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

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Election of Directors
Corporate Governance

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

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

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

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

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

EXECUTIVE COMMITTEE

2019 meetings: 0
Members:
Samuel R. Allen (Chair)
Vance D. Coffman
Clayton M. Jones
Gregory R. Page
Sherry M. Smith

     
Acts on matters requiring Board action between meetings of the full Board
Has authority to act on certain significant matters, limited by our bylaws and applicable law
All members, other than Mr. Allen, are independent

AUDIT REVIEW COMMITTEE

2019 meetings: 5
Members:
Sherry M. Smith (Chair)
Alan C. Heuberger
Dipak C. Jain
Michael O. Johanns
Gregory R. Page
Sheila G. Talton

     
Oversees the independent registered public accounting firm’s qualifications, independence, and performance
Assists the Board in overseeing the integrity of our financial statements, compliance with legal requirements, and the performance of our internal auditors
Pre-approves all audit and allowable non-audit services by the independent registered public accounting firm
With the assistance of management, approves the selection of the independent registered public accounting firm’s lead engagement partner
All members have been determined to be independent and financially literate under current NYSE listing standards, including those standards applicable specifically to audit committee members
The Board has determined that Ms. Smith, Mr. Heuberger, and Mr. Page are “audit committee financial experts” as defined by the SEC and that each has accounting or related financial management expertise as required by NYSE listing standards

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Corporate Governance

COMPENSATION COMMITTEE

2019 meetings: 5
Members:
Vance D. Coffman (Chair)
Charles O. Holliday, Jr.
Clayton M. Jones
Dimitri L. Stockton

     
Makes recommendations to the Board regarding incentive and equity-based compensation plans
Evaluates and approves the compensation of our executive officers (except for the compensation of our CEO, which is approved by the full Board), including reviewing and approving the performance goals and objectives that will affect that compensation
Evaluates and approves compensation granted pursuant to Deere’s equity-based and incentive compensation plans, policies, and programs
Retains, oversees, and assesses the independence of compensation consultants and other advisors
Oversees our policies on structuring compensation programs for executive officers relative to tax deductibility
Reviews and discusses the CD&A with management and determines whether to recommend to the Board that the CD&A be included in our filings with the SEC
All members have been determined to be independent under current NYSE listing standards, including those standards applicable specifically to compensation committee members

CORPORATE GOVERNANCE
COMMITTEE

2019 meetings: 4
Members:
Clayton M. Jones (Chair)
Vance D. Coffman
Charles O. Holliday, Jr.
Michael O. Johanns

     
Monitors corporate governance policies and oversees our Center for Global Business Conduct
Reviews senior management succession plans and identifies and recommends to the Board individuals to be nominated as directors
Makes recommendations concerning the size, composition, committee structure, and fees for the Board
Reviews and reports to the Board on the performance and effectiveness of the Board
Oversees the evaluation of our management
Monitors and oversees corporate sustainability risks and matters
All members have been determined to be independent under current NYSE listing standards

FINANCE COMMITTEE

2019 meetings: 4
Members:
Gregory R. Page (Chair)
Alan C. Heuberger
Dipak C. Jain
Sherry M. Smith
Dmitri L. Stockton
Sheila G. Talton

     
Reviews the policies, practices, strategies, and risks relating to Deere’s financial affairs
Exercises oversight of the business of Deere’s Financial Services segment
Formulates our pension funding policies
Oversees our pension plans
All members have been determined to be independent under current NYSE listing standards

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

RISK MANAGEMENT APPROACH

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

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

BOARD AND COMMITTEE RISK OVERSIGHT RESPONSIBILITIES

Each Board committee is responsible for oversight of risk categories related to its specific area of focus, while the full Board exercises ultimate responsibility for overseeing the risk management function as a whole and has direct oversight responsibility for many risk categories, including cyber security risks.

The areas of risk oversight exercised by the Board and its committees are:

Who is responsible?       Primary areas of risk oversight
Full Board Oversees overall risk management function and regularly receives and evaluates reports and presentations from the chairs of the individual Board committees on risk-related matters falling within each committee’s oversight responsibilities.
Audit Review Committee
Monitors operational, strategic, and legal and regulatory risks by regularly reviewing reports and presentations given by management, including our Senior Vice President and General Counsel, Senior Vice President and Chief Financial Officer, and Vice President, Internal Audit, as well as other operational personnel.
 
Regularly reviews our risk management practices and risk-related policies (for example, Deere’s risk management and insurance portfolio, and legal and regulatory reviews, evaluates potential risks related to internal control over financial reporting and information system risks, and shares with the full Board oversight responsibility for cyber security risks).
Compensation Committee Monitors potential risks related to the design and administration of our compensation plans, policies, and programs, including our performance-based compensation programs, to promote appropriate incentives that do not encourage executive officers or employees to take unnecessary and/or excessive risks.
Corporate Governance Committee
Monitors potential risks related to our governance practices by, among other things, reviewing succession plans and performance evaluations of the Board and CEO, monitoring legal developments and trends regarding corporate governance practices, monitoring the Code of Business Conduct, and evaluating potential related person transactions.
 
Monitors risks relating to environmental factors, as well as product safety and other compliance matters.
Finance Committee
Monitors operational and strategic risks related to Deere’s financial affairs, including capital structure and liquidity risks, and reviews the policies and strategies for managing financial exposure and contingent liabilities.
 
Monitors potential risks related to funding our U.S. qualified pension plans (other than the defined contribution savings and investment plans) and monitors compliance with applicable laws and internal policies and objectives.

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

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

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

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

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

Leadership Biographies
Core Values
Code of Ethics
Corporate Governance Policies
Charters for our Board Committee
Guiding Principles
Code of Business Conduct
Supplier Code of Conduct
Support of Human Rights in Our Business Practices
Conflict Minerals Policy

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

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

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Election of Directors
Compensation of Directors

Compensation of Directors

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

Recognize the substantial investment of time and expertise necessary for the directors to discharge their duties to oversee Deere’s global affairs
Align the directors’ interests with the long-term interests of our shareholders
Ensure that compensation is easy to understand and is regarded positively by our shareholders and employees

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

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

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

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

Date Approved by Corporate Governance Committee:
Effective Date of Annual Amounts:
      December 2016
January & March 2017
      December 2018
January & March 2019
Retainer                       $ 125,000                       $ 135,000
Equity Award $ 145,000 $ 160,000
Presiding Director Fee $ 25,000 $ 30,000
Audit Review Committee Chair Fee $ 25,000 $ 25,000
Compensation Committee Chair Fee $ 20,000 $ 20,000
Corporate Governance Committee Chair Fee $ 15,000 $ 15,000
Finance Committee Chair Fee $ 15,000 $ 15,000

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

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

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Compensation of Directors

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

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

Name       Fees Earned or
Paid in Cash (1)
      Stock Awards (2)       Non-Qualified
Deferred Compensation
Earnings (3)
      Total
Vance D. Coffman             $ 182,500              $ 159,869            $ $ 342,369
Alan C. Heuberger $ 133,333 $ 159,869 $ $ 293,202
Charles O. Holliday, Jr. $ 133,333 $ 159,869 $ $ 293,202
Dipak C. Jain $ 133,333 $ 159,869 $ 46,952 $ 340,154
Michael O. Johanns $ 133,333 $ 159,869 $ $ 293,202
Clayton M. Jones $ 148,333 $ 159,869 $ $ 308,202
Gregory R. Page $ 148,333 $ 159,869 $ 516 $ 308,718
Sherry M. Smith $ 158,333 $ 159,869 $ 1,436 $ 319,638
Dmitri L. Stockton $ 133,333 $ 159,869 $ $ 293,202
Sheila G. Talton $ 133,333 $ 159,869 $ $ 293,202

(1) All fees earned in fiscal 2019 for services as a director, including committee chairperson and Presiding Director fees, whether paid in cash or deferred under the Non-employee Director Deferred Compensation Plan, are included in this column.
(2) Represents the aggregate grant date fair value of RSUs computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation – Stock Compensation and does not correspond to the actual value that will be realized by the non-employee directors. The values in this column exclude the effect of estimated forfeitures. All grants are fully expensed in the fiscal year granted based on the grant price (the average of the high and low price for Deere common stock on the grant date). For fiscal 2019, the grant date was March 6, 2019, and the grant price was $159.55.
The non-employee director grant date is seven calendar days after the Annual Meeting. The assumptions made in valuing the RSUs reported in this column are discussed in Note 25, “Stock Option and Restricted Stock Awards,” of our consolidated financial statements filed with the SEC as part of our annual report on Form 10-K for the fiscal year 2019. The following table lists the cumulative restricted shares and RSUs held by the non-employee directors as of November 3, 2019:

         Director Name       Restricted Stock         RSUs            Director Name       Restricted Stock         RSUs
Vance D. Coffman 6,532 17,954 Clayton M. Jones 824 17,954
Alan C. Heuberger - 3,489 Gregory R. Page - 8,406
Charles O. Holliday, Jr. - 2,134 Sherry M. Smith - 10,556
Dipak C. Jain 13,234 17,954 Dmitri L. Stockton - 5,700
Michael O. Johanns - 6,216 Sheila G. Talton - 5,700

(3) Directors are eligible to participate in the Non-employee Director Deferred Compensation Plan. Under this plan, participants may defer part or all of their annual cash compensation. Through December 2016, two investment choices were available for these deferrals:
an interest-bearing alternative that pays interest at the end of each calendar quarter (i) for amounts deferred between fiscal 2010 through December 2016, at a rate based on the Moody’s “A”-rated Corporate Bond Rate and (ii) for amounts deferred prior to fiscal 2010, at a rate based on the prime rate as determined by the Federal Reserve Statistical Release plus 2%
an equity alternative denominated in units of Deere common stock that earns additional shares each quarter at the quarterly dividend rate on Deere common stock
Amounts included in this column represent the above-market earnings on any amounts deferred under the Non-employee Director Deferred Compensation Plan. Above-market earnings represent the difference between the interest rate used to calculate earnings under the applicable investment choice and 120% of the applicable federal long-term rate.

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Election of Directors
Security Ownership of Certain Beneficial Owners and Management

Security Ownership of Certain Beneficial Owners and Management

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

each person who, to our knowledge, beneficially owns more than 5% of our common stock
each individual who was serving as a non-employee director as of December 31, 2019
each of the named executive officers listed in the Summary Compensation Table of this Proxy Statement
all individuals who served as directors or executive officers on December 31, 2019, as a group

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

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

    Shares Beneficially
Owned and Held
(a)
    Exercisable Options
(b)
    Options,
Restricted Shares,
and RSUs Available
Within 60 Days
(c)
    Total     Percent of Shares
Outstanding

Greater Than 5% Owners
Cascade Investment, L.L.C. (1)
2365 Carillon Point
Kirkland, WA 98033

31,510,573 31,510,573 10.0%
 
The Vanguard Group, Inc. (2)
100 Vanguard Blvd.
Malvern, PA 19355
23,289,155 23,289,155 7.4%
 
BlackRock, Inc.(3)
55 East 52nd Street
New York, NY 10055
18,444,703 18,444,703 5.9%
 
Non-Employee Directors (4)
Vance D. Coffman 24,486 24,486 *
Alan C. Heuberger 100 3,489 3,589 *
Charles O. Holliday, Jr. 11,905 2,134 14,039 *
Dipak C. Jain 31,188 31,188 *
Michael O. Johanns 6,216 6,216 *
Clayton M. Jones 18,778 18,778 *
Gregory R. Page 1,100 8,406 9,506 *
Sherry M. Smith 10,556 10,556 *
Dmitri L. Stockton 5,700 5,700 *
Sheila G. Talton 5,700 5,700 *

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Election of Directors
Security Ownership of Certain Beneficial Owners and Management

  Shares Beneficially
Owned and Held
(a)
  Exercisable Options
(b)
  Options, Restricted Shares,
and RSUs Available
Within 60 Days
(c)
  Total   Percent of Shares
Outstanding
Named Executive Officers (5)
Samuel R. Allen 283,751 894,678 71,836 1,250,265 *
Ryan D. Campbell 2,661 17,946 - 20,607 *
Rajesh Kalathur 45,246 159,163 - 204,409 *
James M. Field 59,645 84,924 14,131 158,700 *
John C. May 43,817 9,818 - 53,635 *
Cory J. Reed 11,321 23,525 - 34,846 *
All directors and executive officers as a group
(19 persons) (6)
553,953 1,425,328 216,751 2,196,032 *

* Less than 1% of the outstanding shares of Deere common stock.

(1) The ownership information for Cascade Investment, L.L.C. is based on information supplied by Cascade in an initial statement of beneficial ownership on Form 3 filed with the SEC on September 6, 2019. All shares of common stock held by Cascade may be deemed beneficially owned by William H. Gates III as the sole member of Cascade. Cascade has sole voting power and sole dispositive power over 31,510,573 shares owned.
(2) The ownership information for The Vanguard Group, Inc. is based on information supplied by Vanguard in a statement on Amendment No. 4 to Schedule 13G filed with the SEC on February 11, 2019. Vanguard holds the shares in its capacity as a registered investment advisor on behalf of numerous investment advisory clients, none of which is known to own more than 5 percent of Deere’s shares. Vanguard has sole voting power over 394,411 shares owned and sole dispositive power over 22,837,088 shares owned.
(3) The ownership information for BlackRock, Inc. (“BlackRock”) is based on information supplied by BlackRock in a statement on Amendment No. 2 to Schedule 13G filed with the SEC on February 4, 2019. BlackRock holds the shares in its capacity as a registered investment advisor on behalf of numerous investment advisory clients, none of which is known to own more than five percent of Deere’s shares. BlackRock has sole voting power over 15,909,517 shares owned and sole dispositive power over 18,444,703 shares owned.
(4) The table includes restricted shares and RSUs awarded to directors under the Deere & Company Non-employee Director Stock Ownership Plan (see footnote (2) to the Fiscal 2019 Director Compensation Table). Restricted shares and RSUs may not be transferred prior to retirement as a director. RSUs are payable only in Deere common stock following retirement and have no voting rights until they are settled in shares of stock. In addition, directors own the following number of deferred stock units, which are payable solely in cash under the terms of the Non-employee Director Deferred Compensation Plan:
Director       Deferred Units
Vance D. Coffman 27,634
Dipak C. Jain 8,979
Michael O. Johanns 3,095
Gregory R. Page 4,038
Dmitri L. Stockton 2,487
(5) See the Outstanding Equity Awards table for additional information regarding equity ownership for NEOs.
(6) The number of shares shown for all directors and executive officers as a group includes 121,104 shares owned jointly with family members over which the directors and executive officers share voting and investment power.

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Election of Directors
Review and Approval of Related Person Transactions

Review and Approval of Related Person Transactions

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

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

1. executive officers and directors of Deere
2. any holder of 5% or more of Deere’s voting securities
3. immediate family members of anyone in category (1) or (2)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Item 3 – Advisory Vote on Executive Compensation

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

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

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

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

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Advisory Vote on Executive Compensation
Compensation Discussion and Analysis

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

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

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

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

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

Compensation Discussion and Analysis

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

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

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

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Advisory Vote on Executive Compensation
Compensation Discussion and Analysis

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

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

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

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

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

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

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Executive Summary

Advisory Vote on Executive Compensation
Compensation Discussion and Analysis
Executive Summary

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

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

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

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

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

DRIVERS OF ONE-YEAR OROA, ROE, AND REVENUE GROWTH (STI)

Operating cost management
Disciplined asset management
Efficient use of equity
Near-term business execution
     

DRIVERS OF THREE-YEAR SVA (LTIC)

Cost management decisions with a long-term focus
Efficient use of long-term assets
Long-term investment decisions for capital and research and development
World-class distribution systems
Technology innovation
     

DRIVERS OF REVENUE GROWTH AND TSR (LTI)

Market conditions
Market share
Successful execution of business strategy
Stock price appreciation over the long term

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Advisory Vote on Executive Compensation
Compensation Discussion and Analysis
Executive Summary

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

(1)

Wirtgen financials were excluded from the OROA and SVA compensation metrics for fiscal 2018 and 2019.

(2)

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

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

Our learnings included:

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

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

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Advisory Vote on Executive Compensation
Compensation Discussion and Analysis
2019 Compensation Overview

2019 Compensation Overview

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

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

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

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Advisory Vote on Executive Compensation
Compensation Discussion and Analysis
2019 Compensation Overview

Snapshot of Compensation Elements
The components of our 2019 compensation program are:

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

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

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

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Advisory Vote on Executive Compensation
Compensation Discussion and Analysis
2019 Compensation Overview

2019 Target Direct Compensation Mix
Pay for performance is an essential element of our compensation philosophy. We believe compensation should motivate our executives to substantially contribute — both individually and collaboratively — to Deere’s long-term, sustainable growth. To that end, our performance-based compensation program consists of three components (STI, LTIC, and LTI), all driven by metrics that align with Deere’s business strategy and reflect the cyclical nature of the industries in which Deere operates.

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

CEO TARGET COMPENSATION MIX      NEO TARGET COMPENSATION MIX

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

Direct Compensation Elements

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

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

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

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

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

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

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

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

In 2019, Cory J. Reed became President, Worldwide Agriculture & Turf Division: Americas and Australia; Global Harvesting and Turf Platforms; and Ag Solutions and as a result received an increase to his salary. Mr. Reed joined the company in 1998 and, prior to this, he had roles as the President, John Deere Financial and also led our Intelligent Solutions Group.
Officer Base Salary as of
Dec. 1, 2017
Salary
Increase %
Base Salary as of
Apr. 1, 2019 (1)
Samuel R. Allen (2) $1,500,000 7% $1,600,000
Ryan D. Campbell n/a n/a $567,768
Rajesh Kalathur $658,608 10% $724,476
James M. Field $726,264 10% $798,900
John C. May (3) $647,004 55% $1,000,764
Cory J. Reed $579,660 21% $701,400

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

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

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

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

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

Company Performance Factor Weighting:
Enterprise OROA/ROE Metric* 67%
Net Sales and Revenues Metric 33%
Enterprise OROA/ROE Metric Weighting:
Equipment Operations OROA 50%
Agriculture & Turf Operations OROA 25%
Construction & Forestry Operations OROA 15%
Financial Services ROE 10%

*

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

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

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

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

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

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To maintain the rigor of the program, the specific goals for any year are determined based on where we are in the business cycle. This ensures that our employees are not unduly rewarded when the economy is strong and penalized for poor economic conditions. The Committee fixes threshold, target, and maximum OROA goals that are more ambitious at the peak of a business cycle, when it is easier to cover fixed costs and achieve a higher asset turnover (and thus a better OROA), and less ambitious at the trough.
Our position in the business cycle is calculated by comparing current sales to projected mid-cycle sales. Performance targets are adjusted accordingly based upon position to the mid-cycle.
Equipment Operations sales are at 101% of mid-cycle
Construction & Forestry sales are at 121% of mid-cycle
Agriculture & Turf sales are at 95% of mid-cycle

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

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

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OROA GOAL


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

* Current goals established in 2018.

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

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

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

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

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

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

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

APPROVAL OF STI AWARD RATES

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

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

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

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FISCAL 2019 PERFORMANCE RESULTS AND PAYOUT AMOUNTS

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

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

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

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

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

STI AWARD CALCULATIONS

Base salary for
the fiscal year

Target STI rate

Actual performance
as a percentage
of target

=

STI award amount


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

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

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

Long-Term Incentive Cash (LTIC)

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

SHAREHOLDER VALUE ADDED PERFORMANCE METRIC

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

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

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

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

SETTING RIGOROUS SVA GOALS

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

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

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

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

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

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

TSR MODIFIER FOR LTIC PAYMENTS

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

APPROVAL OF LTIC AWARD RATES
At the beginning of each performance period, after considering data for our peer group, the Committee approves target LTIC payout rates as a percentage of the median salary for each NEO’s salary grade. For the performance period that begins in 2019, the target rates were increased to align closer to peers and market changes.
      Performance
Periods Ending
in 2019
      Effective with
Performance Period
Ending with 2020
CEO 121% 135%
Chairman n/a 121%
Other NEOs 93% 105%

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

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

The payout percentage for fiscal 2019 was calculated as follows:

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

HISTORICAL ACCUMULATED SVA, LTIC GOALS, AND LTIC PAYOUTS

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

CALCULATION OF LTIC AWARDS

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

Median of actual
salaries for the
relevant salary grade (a)
× Target LTIC rate × Actual performance as a percent of target = LTIC award amount

(a)

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


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

The results for the performance period ended in 2019 are also used to determine the LTIC awards for other eligible employees worldwide. LTIC awards paid to the NEOs for fiscal 2019 consisted of approximately 5% of the total amount of LTIC awards paid to all eligible employees.
Officer Fiscal 2019 LTIC Award Payout
Samuel R. Allen $2,119,920
Ryan D. Campbell (1) $241,035
Rajesh Kalathur $770,141
James M. Field $770,141
John C. May $770,141
Cory J. Reed $770,141

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

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

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

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

FISCAL 2019 LTI AWARD OVERVIEW FOR NEOS

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

*Based on Deere’s compounded annual growth rate

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APPROVAL OF LTI AWARD VALUES
The Committee established LTI grants for the NEOs based on the following criteria:

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

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

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

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

Adjusted Award Values*
Samuel R. Allen $9,120,000
Ryan D. Campbell (1) $414,000
Rajesh Kalathur $1,794,000
Adjusted Award Values*
James M. Field $1,794,000
John C. May $1,872,000
Cory J. Reed $1,794,000

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

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

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

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

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

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

PERFORMANCE TARGETS (PERFORMANCE PERIODS ENDING IN 2020 AND FORWARD)

Revenue Growth Payout %

×

100% of PSUs Awarded

=

Final Award


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

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

* Interim points are interpolated

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

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

PERFORMANCE PERIOD 2017-2019 PSUs

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

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

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

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REPORTED VS. REALIZABLE LTI VALUE





(a) See footnotes (2) and (3) to the Summary Compensation Table for an explanation of these valuations.
(b) Realizable LTI is calculated as:
The value of stock options that were granted in 2017, 2018, and 2019 using the Black-Scholes value as of November 3, 2019.
The value of RSUs that were granted in 2017, 2018, and 2019 using the stock price as of November 3, 2019 of $176.11.
The value of PSUs granted in 2017, 2018, and 2019 using the stock price as of November 3, 2019, of $176.11 and reflecting actual payout for the 2017-2019 performance and projected payouts for the in-process performance cycles of 200% for 2018-2020 and of 176% for 2019-2021.

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

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

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

Other Compensation Matters
RULES RELATED TO STOCK OWNERSHIP, HOLDING REQUIREMENTS, AND ANTI-HEDGING AND ANTI-PLEDGING POLICIES
NEOs are required to hold a certain amount of Deere stock. The CEO is expected to hold stock equivalent to 6.0 times base salary, the COO is expected to hold stock equivalent to 4.5 times base salary, and the other NEOs are expected to hold stock equivalent to 3.5 times base salary. These ownership levels must be achieved within five years of the date the NEO is first appointed as CEO or as an executive officer. NEOs who have not achieved the requisite ownership level may not transfer any of the stock they acquire through our equity incentive plan. Only vested RSUs and any common stock held personally by an NEO are included in determining whether the applicable ownership requirement has been met. Once an NEO achieves the appropriate ownership level, the number of shares held at that time becomes that individual’s fixed stock ownership requirement for three years, even if base salary increases or Deere’s stock price decreases.

Our Insider Trading Policy precludes all directors and employees, including our NEOs, and their related persons from engaging in short sales of Deere’s stock or trading in instruments designed to hedge against or offset price declines by any Deere securities. Our Insider Trading Policy also prohibits our directors and officers from holding Deere stock in margin accounts or pledging Deere stock as collateral for loans or other obligations.

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Table of Contents

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

LIMITATIONS ON DEDUCTIBILITY OF COMPENSATION
Prior to the Tax Cuts and Jobs Act (“Tax Reform”) that was signed into law December 22, 2017, Section 162(m) of the Internal Revenue Code generally limited to $1 million the U.S. federal income tax deductibility of compensation paid in one year to a company’s CEO or any of its three next-highest-paid executive officers (other than its Chief Financial Officer). Performance-based compensation was not subject to this limit on deductibility so long as such compensation met certain requirements, including shareholder approval of material terms. The Committee strived to provide the NEOs with incentive compensation programs that preserved the tax deductibility of compensation paid by Deere, to the extent reasonably practicable and consistent with Deere’s other compensation objectives.

The Tax Reform includes a major overhaul of Section 162(m), which took effect for tax years beginning after December 31, 2017. Amongst other provisions, it retained the $1 million deduction limit, but repealed the performance-based compensation exemption. The Tax Reform also expanded the definition of “covered employees” to include the Chief Financial Officer and any executive who is subject to the limitation in tax years beginning after 2016. As a result, beginning with Deere’s fiscal 2019, compensation paid to our named executive officers in excess of $1 million will not be deductible for tax purposes unless it qualifies for transition relief applicable to certain binding written performance-based compensation arrangements in place as of November 2, 2017. No assurance can be given that any future compensation will qualify for the transition relief. While the Committee will continue to consider the tax deductibility of compensation as one of many factors, the Committee believes shareholder interests are best served by not restricting the Committee’s discretion and flexibility in structuring compensation programs to attract, retain, and motivate key executives, even though such programs may result in non-deductible compensation expense.

RECOUPMENT OF PREVIOUSLY PAID INCENTIVE COMPENSATION
Deere’s Executive Incentive Compensation Recoupment Policy authorizes the Committee to determine whether to require recoupment of cash and equity incentive compensation paid to or deferred by certain executives under certain conditions. Under the policy, the Committee may require recoupment if the Committee determines an executive received incentive compensation that was artificially inflated because the executive engaged in misconduct that:

contributed to the need for a restatement of all or a portion of Deere’s financial statements filed with the SEC; or
contributed to an incorrect calculation of operating metrics that are used to determine incentive plan payouts.

The Committee is closely monitoring proposed rules and rule amendments issued by the SEC to implement provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act relating to recoupment of incentive-based compensation and will amend the Recoupment Policy if necessary when the final rules are adopted.

Indirect Compensation Elements

Perquisites
We offer our NEOs various perquisites that the Committee believes are reasonable in order to remain competitive. These perquisites, which are described in footnote (6) to the Fiscal 2019 Summary Compensation Table, constitute a small percentage of the NEOs’ total compensation. The Committee conducts an annual review of the perquisites offered to the NEOs. In addition to the items listed in footnote (6), NEOs, as well as other selected employees, are provided indoor parking at no incremental cost to Deere.

The Board requires the CEO to use company-owned aircraft for all business and personal travel because the ability to travel safely and efficiently provides substantial benefits that justify the cost. The geographic location of Deere’s headquarters in the Midwest, more than 150 miles from a major metropolitan airport, makes personal and business travel challenging. Moreover, traveling by company aircraft allows the CEO to conduct business confidentially while in transit. Personal use of company aircraft by other NEOs is minimal and must be approved by the CEO. The Committee has limited the CEO’s annual personal usage of company aircraft to approximately 100 hours.

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

Retirement Benefits
All NEOs are covered by the same defined benefit pension plans, which include the same plan terms that apply to most qualifying U.S. salaried employees. We also maintain two additional defined benefit pension plans in which NEOs may participate: the Senior Supplementary Pension Benefit Plan (the “Senior Supplementary Plan”) and the John Deere Supplemental Pension Benefit Plan (the “Deere Supplemental Plan”).

The tax-qualified defined benefit pension plans have compensation limits imposed by the Internal Revenue Code. The Senior Supplementary Plan provides participants with the same benefit they would have received without those limits. This avoids the relative disadvantage that participants would experience compared to other qualified plan participants. The Deere Supplemental Plan is designed to reward career service at Deere above a specified grade level by utilizing a formula that takes into account only years of service above that grade level. We believe the defined benefit plans serve as important retention tools, provide a level of competitive income upon retirement, and reward long-term employment and service as an officer of Deere. In addition, the fact that the Senior Supplementary and Deere Supplemental Plans are unfunded (with benefit payments under these plans being made out of the general assets of Deere) and therefore at-risk (if Deere were to seek bankruptcy protection), creates a strong incentive for the NEOs to minimize risks that could jeopardize Deere’s long-term financial health. For additional information, see the Fiscal 2019 Pension Benefits Table, along with the accompanying narrative and footnotes.

We also maintain a tax-qualified defined contribution plan, the John Deere Savings and Investment Plan (SIP), which is available to most of our U.S. employees, including the NEOs. We make matching contributions to participating SIP accounts on up to six percent of an employee’s pay. The actual amount of the company match varies based on two factors: the STI results for the most recently completed fiscal year (see the “Fiscal 2019 Performance Results and Payout Amounts” in the STI section) and the pension option in which the employee participates (see the narrative preceding the Fiscal 2019 Pension Benefits Table). The following table illustrates Deere’s match for calendar 2019, which is reported for our NEOs under the “All Other Compensation” column of the Fiscal 2019 Summary Compensation Table:

Contemporary Option match on first 2% of eligible earnings: 300 %
     
Contemporary Option match on next 4% of eligible earnings:      100 %

Deferred Compensation Benefits
We also maintain certain deferred compensation plans that provide the NEOs with longer-term savings opportunities on a tax-efficient basis. Similar deferred compensation benefits are commonly offered by companies with which we compete for talent.

As of November 1, 2015, for the Defined Contribution Restoration Plan and as of November 1, 2016, for the John Deere Voluntary Deferred Compensation Plan, the investment options now parallel the investment options offered under our 401(k) plan, with certain limited exceptions. Funds deferred prior to these effective dates may remain invested under the previous options, although participants also may move these funds into the new options. Additionally, participants may change investment options at any time. These changes effectively ensure that participants cannot earn above-market interest on new deferrals.

See the “Nonqualified Deferred Compensation” section for additional details.

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Table of Contents

Advisory Vote on Executive Compensation
Compensation Discussion and Analysis
Compensation Methodology and Process

Potential Payments upon Change in Control
Deere’s Change in Control Severance Program (the “CIC Program”) covers certain executives, including each of the NEOs, and is intended to facilitate continuity of management in the event of a change in control. The Committee believes the CIC Program:

encourages executives to act in the best interests of shareholders when evaluating transactions that, without a change in control arrangement, could be personally detrimental
keeps executives focused on running the business in the face of real or rumored transactions
protects Deere’s value by retaining key talent despite potential corporate changes
protects Deere’s value after a change in control by including restrictive covenants (such as non-compete provisions) and a general release of claims in favor of Deere
helps Deere attract and retain executives as a competitive practice

For more information, see “Fiscal 2019 Potential Payments upon Change in Control” and the corresponding table.

Other Potential Post-Employment Payments
Deere’s various plans and policies provide payments to NEOs upon certain types of employment terminations that are not related to a change in control. These events and amounts are explained in the section under Executive Compensation Tables entitled “Fiscal 2019 Potential Payments upon Termination of Employment Other than Following a Change in Control.”

Compensation Methodology and Process

Independent Review and Approval of Executive Compensation
The Committee is responsible for reviewing and approving goals and objectives related to incentive compensation for the majority of salaried employees. In particular, the Committee evaluates the NEOs’ performance in relation to established goals and ultimately approves compensation for the NEOs (except for the CEO). All substantive responsibilities related to the determination of compensation of the NEOs are undertaken exclusively by the members of the Committee, all of whom are independent under current NYSE listing standards.

The Committee periodically reviews the components of our compensation program to ensure the program is aligned with our business strategy, Deere’s performance, and the interests of our employees and shareholders. In addition, the Committee regularly reviews market practices for all significant elements of executive compensation and approves necessary adjustments to ensure Deere’s compensation remains competitive.

Generally, at the Board meeting in August, the full Board (in executive session without the CEO present) evaluates the CEO’s performance. The Committee considers the results of that evaluation when providing recommendations to the independent members of the Board for the CEO’s compensation, which they then approve. The CEO does not play a role in and is not present during discussions regarding his own compensation.

The CEO plays a significant role in setting the compensation for the other NEOs. In advance of the Committee meeting in December, the CEO evaluates each NEO’s individual performance and recommends changes to the NEOs’ base salaries and LTI awards. The CEO is not involved in setting the STI and LTIC awards because they are calculated using predetermined factors. The Committee has the discretion to accept, reject, or modify the CEO’s recommendations. No other executive officers play a substantive role in setting a NEO’s compensation.

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Table of Contents

Advisory Vote on Executive Compensation
Compensation Discussion and Analysis
Compensation Methodology and Process

The Role of the Compensation Consultant
The Committee has retained Pearl Meyer, LLC (Pearl Meyer) as its compensation consultant. Pearl Meyer reviews our executive compensation program design and assesses our compensation approach relative to our performance and the market. The Committee has sole responsibility for setting and modifying the fees paid to Pearl Meyer, determining the nature and scope of its services, and evaluating its performance and can terminate Pearl Meyer’s engagement or hire another compensation consultant at any time.

Pearl Meyer periodically meets independently with the Chair of the Committee and regularly participates in executive sessions with the Committee (without any executives or other Deere personnel present) to review compensation data and discuss compensation matters. While the Committee values this expert advice, ultimately the Committee’s decisions reflect many factors and considerations. Management works with Pearl Meyer at the Committee’s direction to develop materials and analysis, such as competitive market assessments and summaries of current legal and regulatory developments, which are essential to the Committee’s compensation determinations.

During fiscal 2019, Pearl Meyer performed the following specific services:

Provided information on executive compensation trends and external developments, including regulatory changes
Provided a competitive evaluation of total compensation for the NEOs, as well as overall compensation program share usage, dilution, and LTI expense
Reviewed the peer group used for market analyses
Reviewed the competitiveness of actual pay delivered in relation to performance as compared to the peer group, as further discussed in the following section
Provided recommendations on CEO total compensation
Reviewed recommendations for our CEO’s compensation in relation to the other NEOs
Reviewed Committee agendas and supporting materials in advance of each meeting and raised questions or issues with management and the Committee Chair, as appropriate
Provided guidance and recommendations on incentive plan design, including rigor of metrics and goals
Reviewed drafts and commented on this CD&A and the related compensation tables

Pearl Meyer does not provide other significant services to Deere and has no other direct or indirect business relationships with Deere or any of its affiliates. Taking these and other factors into account, the Committee has determined that the work performed by Pearl Meyer does not raise any conflicts of interest. Additionally, based on its analysis of the factors identified in the Committee’s charter as being relevant to compensation consultant independence, the Committee has concluded that Pearl Meyer is independent of Deere’s management.

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Table of Contents

Advisory Vote on Executive Compensation
Compensation Discussion and Analysis
Compensation Methodology and Process

Market Analysis
PEER GROUP

The companies in the peer group for our fiscal 2019 market analysis process, listed in the chart below, are similar to Deere in terms of sales volume, products, services, market capitalization, and global presence.

Company       Fiscal year       Employees*       Revenue*
(MM)
      Market Value 10/31/19
(MM)
3M Company Dec ‘18 93,516  $ 32,765                $ 94,878
Arconic Dec ‘18 43,000 $ 14,022 $ 12,092
Boeing Company Dec ‘18 153,000 $ 101,127 $ 191,298
Caterpillar Inc. Dec ‘18 104,000 $ 54,722 $ 76,156
Cummins Inc. Dec ‘18 62,610 $ 23,771 $ 26,425
DuPont de Nemours, Inc. Dec ‘18 98,000 $ 85,977 $ 48,827
Eaton Corp. plc Dec ‘18 99,000 $ 21,609 $ 36,011
Emerson Electric Co. Sep ‘19 88,000 $ 18,372 $ 43,149
General Dynamics Corporation Dec ‘18 105,600 $ 36,193 $ 51,149
Honeywell International Inc. Dec ‘18 114,000 $ 41,811 $ 123,421
Illinois Tool Works Inc. Dec ‘18 48,000 $ 14,768 $ 54,183
Johnson Controls International plc Sep ‘19 104,000 $ 23,968 $ 33,693
Lockheed Martin Corporation Dec ‘18 105,000 $ 53,762 $ 106,251
PACCAR Inc. Dec ‘18 28,000 $ 23,501 $ 26,307
United Technologies Corporation Dec ‘18 240,000 $ 66,485 $ 123,924
Whirlpool Corporation Dec ‘18 92,000 $ 21,037 $ 9,614
75th Percentile 105,150 $ 54,002 $ 97,721
Median 98,500 $ 28,367 $ 49,988
25th Percentile 81,653 $ 21,466 $ 31,876
Deere & Company Oct ‘19 73,500 $ 39,258 $ 54,832
Deere Percentile 23rd 64th 60th

Source: Factset Research Systems, Inc.
* Reflects employees and revenues for most recent reported fiscal year

Compensation paid by our peer group is representative of the compensation we believe is required to attract, retain, and motivate executive talent. The Committee, in consultation with Pearl Meyer, periodically reviews the peer group to confirm that it remains an appropriate point of reference for NEO compensation.

REVIEW OF PAY FOR PERFORMANCE RELATIVE TO PEER GROUP
To ensure that total compensation for our NEOs aligns with the market, we compared our compensation and performance against the companies in our peer group. As part of this comparison, we evaluate our peers’ mix of cash versus equity and short-term versus long-term components.

In addition, we reviewed the relationship between total realizable compensation and our performance for the three fiscal years ended with fiscal year 2018 — the most recent fiscal year-end for which we can obtain corresponding compensation information for our peer companies. This review helps the Committee understand whether total compensation delivered to our NEOs aligns with our performance relative to our peer group. For purposes of this review, we use TSR to measure performance.

The analysis, as shown in the following graphs, reveals that realizable pay for Deere’s CEO and other NEOs was reasonably aligned with Deere’s relative TSR over the relevant time period. Based on these results and the results of similar past comparisons of pay and performance alignment, we believe our pay programs ensure that compensation for our executives is aligned with performance and market norms.

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Table of Contents

Advisory Vote on Executive Compensation
Compensation Discussion and Analysis
Compensation Methodology and Process

DEERE 3-YEAR PAY FOR PERFORMANCE
REALIZABLE PAY VS. TOTAL SHAREHOLDER RETURN

CEO       OTHER NEOS
 

“Total realizable pay” for Deere’s NEOs is defined as the sum of the following components:

1. Actual base salaries paid over the three-year period from 2016-2018
2. Actual STI awards paid over the three-year period
3. Actual LTIC awards paid over the three-year period
4. The Black-Scholes value as of October 28, 2018, of any stock options granted over the three-year period
5. The value as of October 28, 2018, of RSUs granted over the three-year period
6. The value as of October 28, 2018, of PSUs (reflecting actual performance for the 2016-2018 performance cycle and the in-process 2017-2019 and 2018-2020 performance cycles)

For peer companies, total realizable pay includes cash- and equity-based long-term incentive plan and performance share plan payouts for performance cycles that are completed within the three-year period. Award values are then multiplied by a factor that reflects grant frequency and long-term incentive pay mix.

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Table of Contents

Advisory Vote on Executive Compensation
Compensation Discussion and Analysis
Risk Assessment of Compensation Policies and Practices

Risk Assessment of Compensation Policies and Practices

As shown in the adjacent diagram, management conducted a comprehensive risk assessment of Deere’s compensation policies and practices, as we have done each year since 2010.

The inquiries in the risk assessment questionnaire focus on: pay-for-performance comparison against our peer group, balance of compensation components, program design and pay leverage, program governance, and factors that mitigate program risks.

Based on its most recent review, the Risk Assessment Team concluded that Deere’s compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the company. The Committee, along with its independent compensation consultant, reviewed the risk assessment and concurred with that conclusion. The Committee believes the following key factors support the Risk Assessment Team’s conclusion:

the performance metrics for our STI and LTIC incentive plans are based on enterprise publicly reported metrics with only minor adjustments and, therefore, are not easily susceptible to manipulation

the metrics for our STI and LTIC compensation and the related potential payouts are capped to reduce the risk that executives might be motivated to attain excessively high “stretch” goals to maximize payouts

In addition, Deere maintains stock ownership requirements that are designed to motivate our management team to focus on Deere’s long-term sustainable growth and a Recoupment Policy designed to prevent misconduct relating to financial reporting.

Convened a Risk Assessment Team comprised of management personnel representing relevant areas of oversight.
Completed an inventory of Deere’s compensation programs globally for both executive and non-executive employees.
Updated our existing detailed risk assessment questionnaire to take into account any relevant changes in our compensation structure or philosophy.
Applied the updated questionnaire to the compensation programs that, due to their size, potential payout, or structure, could have a material adverse effect on Deere.

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Table of Contents

Advisory Vote on Executive Compensation
Compensation Discussion and Analysis
Compensation Committee Report

The reports of the Compensation Committee and the Audit Review Committee that follow do not constitute soliciting material and will not be deemed filed or incorporated by reference by any general statement incorporating by reference this Proxy Statement or future filings into any filing under the Securities Act of 1933 or under the Securities Exchange Act of 1934, except to the extent that Deere specifically incorporates the information by reference, and will not otherwise be deemed filed under these statutes.

Compensation Committee Report

The Compensation Committee of the Board of Directors has reviewed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K and discussed it with Deere’s management. Based on the Compensation Committee’s review and discussions with management, the Compensation Committee recommends to the Board of Directors that the Compensation Discussion and Analysis be included in Deere’s Proxy Statement.

Vance D. Coffman, Chair
Charles O. Holliday, Jr.
Clayton M. Jones
Dmitri L. Stockton

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Advisory Vote on Executive Compensation
Executive Compensation Tables

Executive Compensation Tables

In this section, we provide tabular and narrative information regarding the compensation of our NEOs for fiscal 2019. Fiscal year 2019 is the first year Ryan D. Campbell and Cory J. Reed met the criteria for inclusion. Therefore, data for only fiscal year 2019 is included for Mr. Campbell and Mr. Reed.

FISCAL 2019 SUMMARY COMPENSATION TABLE

Name and Position       Fiscal
Year
      Salary (1)       Stock Awards(2)       Option Awards(3)       Non-Equity
Incentive Plan
Compensation(4)
      Change in
Pension Value
and Nonqualified
Deferred
Compensation
Earnings(5)
      All Other
Compensation(6)
      Total
Samuel R. Allen
Chairman and
Chief Executive Officer (7)
2019 $ 1,591,667      $ 9,143,848       $ 3,191,991       $ 3,760,371       $ 3,385,326        $ 624,682 $ 21,697,885
2018 $ 1,500,000 $ 9,247,170 $ 3,191,963 $ 3,722,861 $ 286,516 $ 577,157 $ 18,525,667
2017 $ 1,500,000 $ 5,479,540 $ 2,929,134 $ 4,404,082 $ 1,270,046 $ 469,390 $ 16,052,192
Ryan D. Campbell
Senior Vice President and
Chief Financial Officer (7)
2019 $ 486,928 $ 414,755 $ 144,873 $ 538,736 $ 266,736 $ 68,954 $ 1,920,982
Rajesh Kalathur
President, John Deere Financial and
Chief Information Officer (7)
2019 $ 721,732 $ 1,798,637 $ 627,860 $ 1,266,043 $ 872,056 $ 151,131 $ 5,437,459
2018 $ 656,497 $ 1,739,879 $ 600,568 $ 1,130,603 $ 36,918 $ 172,386 $ 4,336,851
2017 $ 632,241 $ 1,124,684 $ 601,227 $ 1,292,041 $ 271,898 $ 141,307 $ 4,063,398
James M. Field
President, Worldwide Construction &
Forestry and Power Systems (7)
2019 $ 795,874 $ 5,798,425 $ 627,860 $ 1,316,986 $ 1,382,119 $ 165,877 $ 10,087,141
2018 $ 724,217 $ 1,818,823 $ 627,864 $ 1,197,219 $ 24,692 $ 186,782 $ 4,579,597
2017 $ 700,553 $ 1,124,684 $ 601,227 $ 1,398,643 $ 418,443 $ 165,166 $ 4,408,716
John C. May
President and Chief Operating Officer (7)
2019 $ 889,760 $ 1,876,726 $ 655,191 $ 1,421,607 $ 970,162 $ 192,246 $ 6,005,692
2018 $ 644,930 $ 1,739,879 $ 600,568 $ 1,119,225 $ 1,606 $ 167,788 $ 4,273,996
2017 $ 620,606 $ 1,124,684 $ 601,227 $ 1,273,884 $ 275,458 $ 149,905 $ 4,045,764
Cory J. Reed
President, Worldwide Agriculture & Turf

Division: Americas and Australia;
Global Harvesting and Turf Platforms;
and Ag Solutions (7)
2019 $ 669,999 $ 1,798,637 $ 627,860 $ 1,230,497 $ 640,851 $ 124,079 $ 5,091,923

(1) Includes amounts deferred by the NEO under the John Deere Voluntary Deferred Compensation Plan. Salary amounts deferred in fiscal 2019 are included in the first column of the Fiscal 2019 Nonqualified Deferred Compensation Table.
(2) Represents the aggregate grant date fair value of PSUs and RSUs computed in accordance with FASB ASC Topic 718. The values in this column exclude the effect of estimated forfeitures. Assumptions made in the calculation of these amounts are included in Note 24, “Stock Option and Restricted Stock Awards,” of our consolidated financial statements filed with the SEC on Form 10-K for the fiscal year ended November 3, 2019 (“2019 Form 10-K”). For PSUs, the value at the grant date is based on the probable outcome of the performance metric over the three-year performance period. If the highest level of payout were achieved, the value of the PSU awards as of the grant date would be as follows: $6,863,973 (Allen); $311,353 (Campbell); $1,350,217 (Kalathur); $1,350,217 (Field); $1,408,752 (May); $1,350,217 (Reed). RSUs will vest three years after the grant date, at which time they may be settled in Deere common stock. Refer to the Fiscal 2019 Grants of Plan-Based Awards table and footnote (7) thereto for a detailed description of the grant date fair value of stock awards. Mr. Field was granted a special equity award with a grant date fair value of $4 million in March 2019. For more information on this award, reference the introduction to the CD&A.
(3) Represents the aggregate grant date fair value of stock options computed in accordance with FASB ASC Topic 718. The values in this column exclude the effect of estimated forfeitures. The assumptions made in valuing option awards reported in this column and a more detailed discussion of the binomial lattice option pricing model appear in Note 25, “Stock Option and Restricted Stock Awards,” of our consolidated financial statements filed with the SEC in the 2019 Form 10-K. Refer to the Fiscal 2019 Grants of Plan-Based Awards table and footnote (7) for a detailed description of the grant date fair value of option awards.

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Advisory Vote on Executive Compensation
Executive Compensation Tables

(4)

Non-equity incentive plan compensation includes cash awards under the STI and LTIC plans. Cash awards earned under the STI and LTIC plans for the performance period ended in fiscal 2019 were paid to the NEOs on December 13, 2019, unless deferred under the Voluntary Deferred Compensation Plan. Deferred STI and LTIC amounts are included in the first column of the Fiscal 2019 Nonqualified Deferred Compensation Table.

The following table shows the awards earned under the STI and LTIC plans:


       STI (a) LTIC (b)
Name Fiscal Year     Target Award
as % of Salary
    Actual
Performance
as % of Target
    Award Amount Target Award as % of
Median Salary
    Actual Performance
as % of Target
    Award Amount Total Non-Equity
Incentive Plan
Compensation
Samuel R. Allen 2019 150% 69% $1,640,451 121% 117% $2,119,920 $3,760,371
Ryan D. Campbell (c) 2019 61%/66%/100% 69% $297,701 56% 117% $241,035 $538,736
Rajesh Kalathur 2019 100% 69% $495,902 93% 117% $770,141 $1,266,043
James M. Field 2019 100% 69% $546,845 93% 117% $770,141 $1,316,986
John C. May (d) 2019 100%/110% 69% $651,466 93% 117% $770,141 $1,421,607
Cory J. Reed 2019 100% 69% $460,356 93% 117% $770,141 $1,230,497

       (a)

Based on actual performance, as discussed in the CD&A under “Fiscal 2019 Performance Results and Payout Amounts” in the STI section, the NEOs earned an STI award equal to 69% of the target opportunity.

(b)

Based on actual performance, as discussed in the CD&A under “Fiscal 2019 Performance Results for LTIC,” the NEOs earned an LTIC award equal to 117% of the target opportunity.

(c)

STI prorated during fiscal 2019 due to position level (61% beginning of fiscal year through November 15, 2018; 66% November 16, 2018 through March 31, 2019; 100% April 1, 2019 through fiscal year end). LTIC target based on Mr. Campbell’s position as of September 30, 2018.

(d)

STI prorated at 100% from November 2018 - March 2019 due to position level.


(5)

The following table shows the change in pension value and above-market earnings on nonqualified deferred compensation during fiscal 2019.


       Name       Fiscal Year       Change in
Pension Value
(a)
      Nonqualified Deferred
Compensation Earnings (b)
      Total
Samuel R. Allen 2019 $3,385,326 $0 $3,385,326
Ryan D. Campbell 2019 $265,965 $771 $266,736
Rajesh Kalathur 2019 $872,056 $0 $872,056
James M. Field 2019 $1,382,119 $0 $1,382,119
John C. May 2019 $970,162 $0 $970,162
Cory J. Reed 2019 $630,578 $10,273 $640,851

       (a)

Represents the change in the actuarial present value of each NEO’s accumulated benefit under all defined benefit plans year over year. The pension value calculations include the same assumptions as used in the pension plan valuations for financial reporting purposes. For more information on the assumptions, see footnote (4) under the Fiscal 2019 Pension Benefits Table.

(b)

Represents above-market earnings on compensation that is deferred by the NEOs under our nonqualified deferred compensation plans. Above-market earnings represent the difference between the interest rate used to calculate earnings under the applicable plan and 120% of the applicable federal long-term rate prescribed by the Internal Revenue Code. See the Fiscal 2019 Nonqualified Deferred Compensation Table for additional information.

Previously, modifications have been made for the investment options available under the Nonemployee Director Deferred Compensation Plan and the Voluntary Deferred Compensation Plan for employees to ensure that participants cannot earn above-market returns on new deferrals. During Fiscal 2019 all senior officers have divested of these investments. There will be no senior officers in fiscal 2020 receiving above market interest.

(6)

The following table provides details about each component of the “All Other Compensation” column in the Fiscal 2019 Summary Compensation Table:


       Name     Personal
Use of
Company
Aircraft (a)
    Financial
Planning (b)
    Medical
Exams (c)
    Misc
Perquisites (d)
    Company
Contributions
to Defined
Contribution Plans (e)
    Total All
Other
Compensation
Samuel R. Allen   $ 236,668        $ 0      $ 4,338              $ 3,177                     $ 380,499           $ 624,682
Ryan D. Campbell $ 0 $ 0 $ 242 $ 0 $ 68,712 $ 68,954
Rajesh Kalathur $ 0 $ 10,000 $ 3,736 $ 642 $ 136,753 $ 151,131
James M. Field $ 0 $ 7,001 $ 3,752 $ 4,295 $ 150,829 $ 165,877
John C. May $ 29,400 $ 0 $ 4,152 $ 6,276 $ 152,418 $ 192,246
Cory J. Reed $ 0 $ 0 $ 0 $ 642 $ 123,437 $ 124,079

       (a)

Per IRS regulations, the NEOs recognize imputed income on the personal use of Deere’s aircraft. For SEC disclosure purposes, the cost of personal use of Deere’s aircraft is calculated based on the incremental cost to Deere. To determine the incremental cost, we calculate the variable costs for fuel on a per-mile basis, plus any direct trip expenses such as on-board catering, landing/ramp fees, and crew expenses. Fixed costs that do not change based on usage, such as pilot salaries, depreciation of aircraft, and maintenance costs, are excluded. Mr. Allen’s personal usage of company aircraft in fiscal 2019 amounted to approximately 92 hours of travel, which represents less than 1.3% of the total hours flown by company aircraft. Mr. May was required to use the company aircraft after the August 2019 announcement of his promotion to CEO effective November 4, 2019.

(b)

This column contains amounts Deere paid for financial planning assistance to the NEOs. Each year, the CEO may receive up to $15,000 of assistance and the other NEOs may receive up to $10,000.

(c)

This column contains the amounts Deere paid for annual medical exams for the NEOs.


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(d)

Miscellaneous perquisites include spousal attendance at company events.

       (e)

Deere makes contributions to the John Deere Savings and Investment Plan for all eligible employees. Deere also credits contributions to the John Deere Defined Contribution Restoration Plan for all employees covered by the Contemporary Option under our tax-qualified pension plan whose earnings exceed relevant IRS limits. All of our current NEOs are covered by the Contemporary Option.

(7)

See Compensation Discussion & Analysis footnotes on page 29 for title changes effective in fiscal 2019 and fiscal 2020.

The following table provides additional information regarding fiscal 2019 grants of RSU, PSU, and stock option awards under the Omnibus Plan and the potential range of awards that were approved in fiscal 2019 under the STI and LTIC plans for payout in future years. These awards are further described in the CD&A under “Direct Compensation Elements.”

FISCAL 2019 GRANTS OF PLAN-BASED AWARDS

Name    Grant Date (1)   

Estimated Future Payouts Under
Non-Equity Incentive Plan Awards (2)

  
Estimated Future Payouts Under
Equity Incentive Plan Awards (3)

  

All Other
Stock
Awards:
Number of
Shares of
Stock or
Units (4)

  

All Other
Option
Awards:
Number of
Securities
Underlying
Options (5)
  
Exercise
or Base
Price of
Option
Awards
($/Sh) (6)
  
Grant Date Fair
Value of Stock
and Option
Awards (7)
Threshold    Target    Maximum   Threshold     Target    Maximum
Samuel R. Allen 12/4/18-STI    $ $ 2,387,500 $ 4,775,000 $
12/4/18-LTIC $ 1,100 $ 2,060,106 $ 4,120,212 $
12/12/18 $ $ $ 15,390 $ 2,279,875
12/12/18 $ $ $ 6,156 24,625 49,250 $ 6,863,973
12/12/18 $ $ $ 67,972 $ 148.14 $ 3,191,991
$ 1,100 $ 4,447,606 $ 8,895,212 6,156 24,625 49,250 15,390 67,972 $ 12,335,839
Ryan D. Campbell 12/4/18-STI $ $ 433,272 $ 866,544 $
12/4/18-LTIC $ 200 $ 855,755 $ 1,711,510 $
12/12/18 $ $ $ 698 $ 103,402
12/12/18 $ $ $ 279 1,117 2,234 $ 311,353
12/12/18 $ $ $ —­ 3,085 $ 148.14 $ 144,873
$ 200 $ 1,289,027 $ 2,578,054 279 1,117 2,234 698 3,085 $ 559,628
Rajesh Kalathur 12/4/18-STI $ $ 721,732 $ 1,443,464 $
12/4/18-LTIC $ 400 $ 855,755 $ 1,711,510 $
12/12/18 $ $ $ 3,027 $ 448,420
12/12/18 $ $ $ 1,211 4,844 9,688 $ 1,350,217
12/12/18 $ $ $ 13,370 $ 148.14 $ 627,860
$ 400 $ 1,577,487 $ 3,154,974 1,211 4,844 9,688 3,027 13,370 $ 2,426,497
James M. Field 12/4/18-STI $ $ 795,874 $ 1,591,748 $
12/4/18-LTIC $ 400 $ 855,755 $ 1,711,510 $
12/12/18 $ $ $ 3,027 $ 448,420
12/12/18 $ $ $ 1,211 4,844 9,688 $ 1,350,217
12/12/18 $ $ $ 13,370 $ 148.14 $ 627,860
$ 400 $ 1,651,629 $ 3,303,258 1,211 4,844 9,688 3,027 13,370 $ 2,426,497
John C. May 12/4/18-STI $ $ 948,138 $ 1,896,276 $
12/4/18-LTIC $ 400 $ 978,605 $ 1,957,210 $
12/12/18 $ $ $ 3,159 $ 467,974
12/12/18 $ $ $ 1,263 5,054 10,108 $ 1,408,752
12/12/18 $ $ $ 13,952 $ 148.14 $ 655,191
$ 400 $ 1,926,743 $ 3,853,486 1,263 5,054 10,108 3,159 13,952 $ 2,531,917
Cory J. Reed 12/4/18-STI $ $ 669,999 $ 1,339,998 $
12/4/18-LTIC $ 400 $ 855,755 $ 1,711,510 $
12/12/18 $ $ $ 3,027 $ 448,420
12/12/18 $ $ $ 1,211 4,844 9,688 $ 1,350,217
12/12/18 $ $ $ 13,370 $ 148.14 $ 627,860
$ 400 $ 1,525,754 $ 3,051,508 1,211 4,844 9,688 3,027 13,370 $ 2,426,497

(1)

For the non-equity incentive plan awards, the grant date is the date the Committee approved the range of estimated potential future payouts for the performance periods noted under footnote (2) below. For equity awards, the grant date is seven calendar days after the first regularly scheduled Board meeting of the fiscal year.


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(2)

These columns show the range of potential payouts under the STI and LTIC plans. The performance period for STI in this table covers fiscal 2019. For actual performance between threshold, target, and maximum, the earned STI award will be prorated.

The range of the LTIC award covers the three-year performance period beginning in fiscal 2019 and ending in fiscal 2021. Awards will not be paid unless Deere generates at least $5 million of SVA for the performance period. The target LTIC award will be earned if $3,900 million or more of SVA is accumulated and the maximum LTIC award will be earned if $7,800 million or more of SVA is accumulated during the performance period. The LTIC award will be adjusted based on Deere’s TSR for the performance period relative to to the companies in a subset of the S&P Industrial Sector: (i) a reduction up to 25% will be applied if the ranking is below the 50th percentile or (ii) an increase up to 25% will be applied if the ranking is above the 50th percentile. The amounts shown in the table represent potential LTIC awards based on the median salary of the NEOs’ respective salary grades as of September 30, 2019. The actual LTIC award payout will depend on Deere’s actual SVA performance, Deere’s relative TSR performance, and the median salary of the NEOs’ respective salary grades as of September 30, 2020.

(3)

Represents the potential payout range of PSUs granted in December 2018. The number of shares that vest is based solely on revenue growth performance relative to a subset of companies in the S&P Industrial Sector. At the end of the three-year performance period, the actual award, delivered as Deere common stock, can range from 0% to 200% of the original grant.

(4)

Represents the number of RSUs granted in December 2018. RSUs will vest three years after the grant date, at which time they will be settled in Deere common stock. Prior to settlement, RSUs earn dividend equivalents in cash at the same time as dividends are paid on Deere’s common stock.

(5)

Represents the number of options granted in December 2018. These options vest in three approximately equal annual installments on the first, second, and third anniversaries of the grant date.

(6)

The exercise price is the closing price of Deere common stock on the NYSE on the grant date.

(7)

Amounts shown represent the grant date fair value of equity awards granted to the NEOs in fiscal 2019 calculated in accordance with FASB ASC Topic 718. The values in this column exclude the effect of estimated forfeitures. For RSUs, fair value is the market value of the underlying stock on the grant date (which is the same as the exercise price in footnote (6) for stock options). For options, the fair value on the grant date was $46.96, which was calculated using the binomial lattice option pricing model. The grant date fair value of the PSUs based on the probable outcome of the revenue growth metric was $139.37 based on the market price of a share of underlying common stock, excluding dividends.

For additional information on the valuation assumptions, refer to Note 25, “Stock Option and Restricted Stock Awards,” of Deere’s consolidated financial statements filed with the SEC in the 2019 Form 10-K.

OUTSTANDING EQUITY AWARDS AT FISCAL 2019 YEAR-END

The following table itemizes outstanding options, RSUs, and PSUs held by the NEOs:

Option Awards Stock Awards
Name    Grant Date    Number of
Securities
Underlying
Unexercised
Options
Exercisable
(1)
   Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(1)
   Option
Exercise
Price
   Intrinsic Value
of Unexercised
Options (2)
   Option
Expiration
Date (3)
   Number
of Shares
or Units
of Stock
That
Have Not
Vested (4)
   Market
Value of
Shares or
Units of
Stock That
Have Not
Vested (5)
   Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units, or Other
Rights That Have
Not Vested (6)
   Equity Incentive
Plan Awards:
Market or Payout
Value Unearned
Shares, Units, or
Other Rights That
Have Not Vested (7)
Samuel R. Allen 12/8/10 114,253 - $ 80.61 $ 10,911,162 12/8/20 - $ 0       $ 0
12/14/11 135,897 - $ 74.24 $ 13,843,827 12/14/21 - $ 0 $ 0
12/12/12 128,899 - $ 86.36 $ 11,568,685 12/12/22 - $ 0 $ 0
12/11/13 123,633 - $ 87.46 $ 10,960,065 12/11/23 - $ 0 - $ 0
12/10/14 135,263 - $ 88.19 $ 11,892,999 12/10/24 - $ 0 - $ 0
12/9/15 173,360 - $ 79.24 $ 16,793,383 12/9/25 - $ 0 - $ 0
12/14/16 80,233 39,519 $ 100.55 $ 9,048,461 12/14/26 19,888 $ 3,502,476 66,512 $ 11,713,428
12/13/17 27,790 53,948 $ 151.95 $ 1,974,790 12/13/27 14,386 $ 2,533,518 48,014 $ 8,455,746
12/12/18 - 67,972 $ 148.14 $ 1,901,177 12/12/28 15,390 $ 2,710,333 43,340 $ 7,632,607
919,328 161,439 $ 88,894,549 49,664 $ 8,746,327 157,866 $ 27,801,781
Ryan D. Campbell 12/10/14 2,625 - $ 88.19 $ 230,803 12/10/24 - $ 0 - $ 0
12/9/15 6,116 - $ 79.24 $ 592,457 12/9/25 - $ 0 - $ 0
12/14/16 3,800 1,872 $ 100.55 $ 428,576 12/14/26 984 $ 173,292 3,148 $ 554,394
12/13/17 1,261 2,449 $ 151.95 $ 89,634 12/13/27 681 $ 119,931 2,178 $ 383,568
12/12/18 - 3,085 $ 148.14 $ 86,287 12/12/28 698 $ 122,925 1,965 $ 346,056
13,802 7,406 $ 1,427,757 2,363 $ 416,148 7,291 $ 1,284,018

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Executive Compensation Tables

Option Awards Stock Awards
Name    Grant Date    Number of
Securities
Underlying
Unexercised
Options
Exercisable
(1)
   Number of
Securities
Underlying
Unexercised
Options
Unexercisable (1)
   Option
Exercise
Price
   Intrinsic Value
of Unexercised
Options (2)
   Option
Expiration
Date (3)
   Number
of Shares
or Units
of Stock
That
Have Not
Vested (4)
   Market
Value of
Shares or
Units of
Stock That
Have Not
Vested (5)
   Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units, or Other
Rights That Have
Not Vested (6)
   Equity Incentive
Plan Awards:
Market or Payout
Value Unearned
Shares, Units, or
Other Rights That
Have Not Vested (7)
Rajesh Kalathur 12/9/09 12,151 - $ 52.25   $ 1,505,023 12/9/19 - $ 0 -        $ 0
12/8/10 7,379 - $ 80.61 $ 704,695 12/8/20 - $ 0 - $ 0
12/14/11 7,996 - $ 74.24 $ 814,553 12/14/21 - $ 0 - $ 0
12/12/12 24,083 - $ 86.36   $ 2,161,449 12/12/22 - $ 0 - $ 0
12/11/13 20,086 - $ 87.46   $ 1,780,624 12/11/23 - $ 0 - $ 0
12/10/14 27,800 - $ 88.19   $ 2,444,315 12/10/24 - $ 0 - $ 0
12/9/15 32,391 - $ 79.24   $ 3,137,716 12/9/25 - $ 0 - $ 0
12/14/16 16,468 8,112 $ 100.55   $ 1,857,265 12/14/26 4,266 $ 751,285 13,652 $ 2,404,254
12/13/17 5,228 10,151 $ 151.95 $ 371,557 12/13/27 2,823 $ 497,159 9,034 $ 1,590,978
12/12/18 - 13,370 $ 148.14 $ 373,959 12/12/28 3,027 $ 533,085 8,525 $ 1,501,338
153,582 31,633 $ 15,151,156 10,116 $ 1,781,529 31,211 $ 5,496,570
James M. Field (8) 12/10/14 25,273 - $ 88.19   $ 2,222,129 12/10/24 - $ 0 - $ 0
12/9/15 32,391 - $ 79.24    $ 3,137,716 12/09/25 - $ 0 - $ 0
12/14/16 16,468 8,112 $ 100.55   $ 1,857,265 12/14/26 4,091 $ 720,466 13,652 $ 2,404,254
12/13/17 5,466 10,612 $ 151.95 $ 388,444 12/13/27 2,830 $ 498,391 9,444 $ 1,663,183
12/12/18 - 13,370