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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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Preliminary Proxy Statement

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Definitive Proxy Statement

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Soliciting Material under §240.14a-12

 

DOLLAR TREE, INC.

(Name of Registrant as Specified In Its Charter)

 

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

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LOGO

JOINT LETTER FROM
OUR EXECUTIVE CHAIRMAN AND
OUR LEAD INDEPENDENT DIRECTOR

Dear Fellow Shareholders,

              You are cordially invited to join us for our 2021 virtual annual meeting of shareholders, which will be held on Thursday, June 10, 2021, at 8:00 a.m. Eastern Time. As part of our precautions regarding the COVID-19 coronavirus pandemic, the 2021 annual meeting of shareholders of Dollar Tree, Inc. will be held exclusively online via webcast. You will be able to attend the 2021 annual meeting, vote your shares electronically, and submit questions during the meeting by visiting

www.virtualshareholdermeeting.com/DLTR2021

              You may also submit questions in advance of the meeting at www.proxyvote.com after logging in with your control number. The Notice of Annual Meeting of Shareholders and the Proxy Statement that follow describe the business to be conducted at the meeting.

              As we look forward to our 2021 annual meeting of shareholders, we wanted to write to you to share the Board's perspective on the year just completed.

COMPANY PERFORMANCE & BUSINESS STRATEGY

              The Dollar Tree and Family Dollar teams accomplished a great deal in 2020 and their health and safety, as well as the health and safety of the communities they serve, remains a top priority. Since the beginning of the COVID-19 pandemic in North America, the Company's frontline store and distribution center associates, along with support from the field leadership and Store Support Center teams, have continued to work diligently to help mitigate risks, while maintaining clean environments, keeping store shelves stocked, and providing vital products at great values in convenient, close-to-home locations. The Company incurred approximately $279.0 million in COVID-related costs throughout the year, which was mainly paid through wage premiums and bonuses in recognition of our frontline associates' extraordinary efforts, as well as cleaning supplies and personal protective equipment. The Company's management believes that it is important to support its frontline associates who have shown persistent commitment, dedication, and hard work in keeping stores open in order to provide essential products when customers need it most. These efforts contributed to the Company's successes in 2020.

              During times of uncertainty, the Company believes its more than 15,600 Dollar Tree and Family Dollar stores are "part of the solution" for millions of households seeking great values, in convenient and safe shopping locations. The Board continues to be engaged and is regularly briefed by management on the Company's ongoing proactive and precautionary actions to help mitigate the effects of the COVID-19 pandemic.

              The Company's annual sales exceeded $25 billion for the first time in 2020, and we believe there is a long runway for growth ahead. The strategic initiatives that have been refined and tested, along with a streamlined execution plan led by the Company's seasoned leadership team, built a


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strong foundation to produce record results in 2020—driving an enterprise same-store sales increase of 6.1%, on top of the prior year's increase of 1.8%; growing gross profit to more than $740.0 million, a 70 basis point improvement from the prior year; leveraging selling, general and administrative expenses by 140 basis points, despite the COVID-related costs; improving enterprise operating profit to 7.4%, a 210 basis point improvement from the prior year; and delivering annual diluted earnings per share of $5.65.

              At the end of fiscal 2020, the Company had more than $1.4 billion in cash on its balance sheet and now has $2.4 billion remaining on its share repurchase authorization, following the $2.0 billion increase to the plan that the Board authorized on March 2, 2021. The Company expects that capital expenditures for 2021 will total approximately $1.2 billion and the majority of the excess cash flow may be dedicated to share repurchases.

              Throughout 2020, the Dollar Tree brand continued to test, modify, and improve the Dollar Tree Plus! initiative. As announced in late 2020, the Company is expanding the multi-price assortment from the current base to a total of 500 stores by August 2021. Dollar Tree Plus! exceeded the Company's sales plan in the fourth quarter of 2020 and there was great sell-through on its seasonal products, toys, and household consumables. The Company also expects to see additional buying synergies as some of the $3 and $5 merchandise will be offered in both the Dollar Tree and Family Dollar stores. Also in 2020, the brand completed the expansion of its successful Crafter's Square® section to all U.S. Dollar Tree stores, which gives customers great solutions for the current "learn-from-home" and "work-from-home" environment. Customers love the values from both the Dollar Tree Plus! and Crafter's Square offerings.

              The Company is writing a bold new chapter in its business with two great stores coming together, growing across America like no other retailer can. Building on the success of the Family Dollar H2 store renovation program, which saw a same-store sales lift of greater than 10% at renovated stores, the Company recently announced its newest, tested, and proven concept, the Combination (or Combo) Stores. Combining the best of the Dollar Tree and Family Dollar brands, the Combo Stores serve small towns and rural communities across the U.S. and delivered a same-store sales lift of greater than 20% on average. Nearly 50 of these stores were open at the end of fiscal 2020 and the Company will begin rolling out the Combo Stores in 2021, with more than 3,000 markets identified for future growth. Both the H2 format and Combo Stores will be part of the Family Dollar new store and renovation strategy moving forward. The goal is to have various store formats that offer the best of the Dollar Tree and Family Dollar brands to serve customers in all types of geographic markets. The Company will continue to change, evolve, and improve to deliver long-term value to its shareholders.

              Since acquiring Family Dollar, the Company has opened nearly 3,250 new stores, renovated more than 2,800 Family Dollar stores, continually generated strong cash flow from operations, aggressively paid down debt, repurchased $600 million in shares, proactively mitigated the majority of impacts from tariffs, consolidated its two store support centers, and realigned its leadership under one executive team. These actions have enhanced the Company's ability and flexibility to better leverage the two powerful brands to drive improved productivity, efficiencies, and returns in 2021 and beyond.

ADDRESSING SUSTAINABILITY RISKS

              It is our strong belief, shared with the rest of the Board, that safeguarding shareholder value requires that Dollar Tree carefully assess and address the risks inherent in our business. In particular, our Board and management recognize the importance of planning for the potential impact of climate change and other sustainability risks, and we are taking action to evaluate how our long-term business strategy may be adapted to address these potential challenges.


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              Our vision has widened over the decades to encompass concerns in the communities where we work and live. Early on our attention was drawn to developing standards about the products we sell, what goes into making them, and how our vendors and supply chain can promote a safer, more equitable world. At the same time, our customers and our shareholders were asking for more details about our efforts across a range of sustainability topics. In 2019, we realized that stakeholders were seeking even more robust data and we committed to expanding our Corporate Sustainability Report. That document, updated annually, now covers climate change risks and provides significant additional information about Dollar Tree's response to the crisis. As management works to identify and disclose key environmental, social, and governance (ESG) risks, we have also added diversity, equity and inclusion (DEI) and other social metrics to our reporting. We were driven not only by a desire to calculate and mitigate, but also by the promise that our efforts could make a real difference and set us on a path to a brighter future.

CORPORATE GOVERNANCE & BOARD REFRESHMENT

              We believe that a "fit-for purpose" Board with diverse backgrounds, perspectives and experiences is critically important for ensuring the execution of good corporate governance and effective oversight of management and the business. In last year's letter, we announced our adoption of a waterfall strategy with the goal of reaching and thereafter maintaining a relatively balanced mix of short, medium and long-tenured directors. In carrying out this strategy, the Board, through its Nominating, Governance and Sustainability Committee, launched a formal search for a diverse candidate to replace Conrad Hall who retired in June 2020. As a result of this search, the Board appointed Winnie Park in December 2020. She is a retail Chief Executive Officer with substantial experience in brand-building, omni-channel, special and multi-brand retail and wholesale, and public board experience. Ms. Park brings a wealth of highly relevant and complimentary experience to our Board. Since 2016, the Board has made significant changes to its composition by adding six highly qualified independent directors, three of them women. Collectively, the newer directors provide skillsets that are important to our business, which includes retail, e-Commerce, brand-building, marketing, financial expertise, risk management, cybersecurity, strategic planning and public board experience, all of which aligns to our business strategy.

              As part of the Board's ongoing commitment to the waterfall strategy, Thomas A. Saunders III, who served on the board for 28 years, and Carl Zeithaml, who served on the Board for 14 years, have decided to retire at our annual meeting. Both Mr. Saunders and Dr. Zeithaml have been instrumental in Dollar Tree's many achievements over the years and we extend our thanks for their hard work and dedication. With the recent appointment of Ms. Park and the upcoming retirements, the average tenure of our Board will decrease from 9.2 years to 7.1 years and reflect a balanced mix of newer directors with fresh perspectives and seasoned directors with deep institutional knowledge of the Company. We believe that a well-balanced, skilled and diverse Board that is aligned to our business strategy will ensure the long-term success of our Company.

              Whether or not you plan to attend the virtual annual meeting, your vote is important, and we encourage you to vote your shares promptly.

              We also want to thank all of you for your confidence in the Board as we continue to execute our strategy for long-term value creation while reacting responsibly to the health concerns and economic challenges presented by the coronavirus pandemic. We wish you good health and look forward to engaging with you in the months and years ahead.

              Sincerely yours,

    SIG TO COME   GRAPHIC

 

 

Bob Sasser
Executive Chairman

 

Greg Bridgeford
Lead Independent Director

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QUICK INFORMATION

              The following charts provide quick information about Dollar Tree's 2021 annual meeting and our corporate governance and executive compensation practices. These charts do not contain all of the information provided elsewhere in the proxy statement; therefore, you should read the entire proxy statement carefully before voting.

  Annual Meeting Information
            

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DATE & TIME

 

VIRTUAL MEETING

 

RECORD DATE
            
     
Thursday, June 10, 2021 at 8:00 a.m., Eastern Time   The 2021 annual meeting will be held in a virtual meeting format. Shareholders can access the meeting online through   April 9, 2021
www.virtualshareholdermeeting.com/DLTR2021

 

 


 

 

Proposals That Require Your Vote
 
                
Proposal   Voting Options   Board Recommendations   More Information
                
                
Proposal No. 1
Election of Directors

 
FOR, AGAINST, or ABSTAIN for each Director Nominee   FOR each Nominee on the proxy card   Page 103
                
Proposal No. 2
Advisory Vote on NEO Compensation
  FOR, AGAINST, or ABSTAIN   FOR   Page 104
                
Proposal No. 3
Ratification of Appointment of Independent Auditors

 
FOR, AGAINST, or ABSTAIN   FOR   Page 105
                
Proposal No. 4
Approval of the Company's 2021
Omnibus Incentive Plan
  FOR, AGAINST, or ABSTAIN   FOR   Page 108
                

See "Information About the Annual Meeting and Voting" beginning on page 98 for the various ways available for submitting your vote.


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Corporate Governance & Compensation Quick Facts

     
    Governance or Compensation Item   Dollar Tree's Practice
     
            
Board Composition, Leadership and Operations

(excludes Mr. Saunders and Dr. Zeithaml who are retiring at the 2021 annual meeting)
            
            
    Number of directors   11
            
            
    Director independence   82%
            
            
    Standing Board committee independence   100%
            
            
    Separate Chairman of Board and Chief Executive Officer   Yes
            
            
    Robust Independent Lead Director Role   Yes
            
            
    Majority Voting standard in director elections   Yes
            
            
    Director resignation policy   Yes
            
            
    Board oversight of company strategy and risks   Yes
            
            
    Annually-elected Board   Yes
            
            
    Average director age   62
            
            
    Average director tenure   7.1
            
            
    Directors attending fewer than 75% of meetings   None
            
            
    Annual Board, committee and individual director self-evaluation process   Yes
            
            
    Independent directors meet without management present   Yes
            
            
    Number of Board meetings held in 2020   9
            
            
    Total number of Board and committee meetings held in 2020   32
            
            
Sustainability and Corporate Responsibility
            
            
    Expanded Board oversight of sustainability   Yes
            
            
    Environmental Policy   Yes
            
            
    Human Rights Policy   Yes
            
            
    Occupational Health and Safety Policy   Yes
            
            
    Political Contribution and Expenditure Policy Statement   Yes
            
            
    Corporate Sustainability Report   Yes
            
            
    Strategic report on impact of climate change (included in Corporate Sustainability Report)   Yes
            
            
    Vendor code of conduct   Yes
            

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    Governance or Compensation Item   Dollar Tree's Practice
     
            
Other Governance Practices
            
            
    Codes of conduct for directors, officers and associates   Yes
            
            
    Shareholder engagement policy   Yes
            
            
    Anti-hedging policy   Yes
            
            
    Robust stock ownership policies   Yes
            
            
    Shares pledged by officers and directors   None
            
            
    Material related party transactions with directors   None
            
            
    Family relationships   None
            
            
    Independent auditor   KPMG LLP
            
            
            
Compensation Practices
            
            
    Executive compensation programs designed to reward performance, incentivize growth and drive long-term shareholder value   Yes
            
            
    Robust Clawback policy   Yes
            
            
    Employment agreements for executive officers   No
            
            
    Incentive awards based on challenging performance targets   Yes
            
            
    Percentage of incentive compensation at risk   100%
            
            
    Annual risk assessment of compensation policies and practices   Yes
            
            
    Frequency of say on pay advisory vote   Annual
            
            
    Shareholder votes in favor of say on pay proposal in 2020   92%
            
            
    Independent compensation consultant   Korn Ferry
            
            
    Double-trigger change-in-control provisions   Yes
            
            
    Policy for timing of annual grant of incentive awards   Yes
            
            
    Repricing of underwater options   No
            
            
    Excessive perks   No
            

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LOGO

DOLLAR TREE, INC.
500 Volvo Parkway
Chesapeake, Virginia 23320

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held on
Thursday, June 10, 2021

To Our Shareholders:

              In light of the ongoing public health impact of the Coronavirus disease (COVID-19) pandemic, we have decided to hold our annual meeting this year in a virtual format to avoid the need for in-person shareholder attendance, as we are committed to the health and well-being of our employees and shareholders. As a result, the entire meeting will be held online and there will be no physical location for shareholders to attend. Shareholders may participate in the annual meeting on Thursday, June 10, 2021 at 8:00 a.m. Eastern Time by logging in at:

www.virtualshareholdermeeting.com/DLTR2021

Shareholders will be afforded the same rights and opportunities to participate as they would at an in-person meeting. During the meeting, shareholders will be able to listen, vote and submit questions from any location using any internet-connected device. You may submit questions in advance of the meeting at www.proxyvote.com after logging in with your control number. Questions may also be submitted during the annual meeting through www.virtualshareholdermeeting.com/DLTR2021. To be admitted to the annual meeting, you must enter the control number found on your proxy card, voting instruction form or notice.

              The following items of business are on the agenda for the annual meeting:

    To elect eleven director nominees to the Company's Board of Directors ("Board") as identified in the attached proxy statement, each to serve as a director for a one-year term;

    To approve, by a non-binding advisory vote, the compensation of the Company's named executive officers;

    To ratify the selection of KPMG LLP as the Company's independent registered public accounting firm for the fiscal year 2021;

    To approve the Company's 2021 Omnibus Incentive Plan; and

    To act upon any other business that may properly come before the meeting or any adjournments or postponements thereof.

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              Shareholders of record at the close of business on April 9, 2021 will receive notice of and be allowed to vote at the annual meeting.

              We have elected to distribute our proxy materials primarily over the Internet rather than mailing paper copies of those materials to each shareholder. We believe this will increase shareholder value by decreasing our printing and distribution costs, reducing the potential for environmental impact by conserving natural resources, and allowing for convenient access to and delivery of materials in an easily searchable format. If you would prefer to receive paper copies of our proxy materials, please follow the instructions included in the Notice of Internet Availability of Proxy Materials that is being mailed to our shareholders on or about April 30, 2021.

              Your vote is important to us. To ensure the presence of a quorum at the annual meeting, we encourage you to read the proxy statement and then vote your shares promptly by Internet, by phone or by signing, dating and returning your proxy card (if you request a paper copy). Sending in your proxy card will not prevent you from voting your shares at the annual meeting, as your proxy is revocable at your option.

       By Order of the Board of Directors

    

 

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WILLIAM A. OLD, JR.
Corporate Secretary

    

 

Chesapeake, Virginia
April 23, 2021

IMPORTANT NOTICE ABOUT THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 10, 2021

The Company's proxy statement and annual report to shareholders for the fiscal year ended January 30, 2021 are available at https://www.dollartreeinfo.com/investors/financial/annuals.



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OUR BOARD AND CORPORATE GOVERNANCE

  1

The Work of the Board

  1

Board Self-Assessment and Skills Matrix

  1

Director Refreshment and Tenure

  4

CORPORATE GOVERNANCE HIGHLIGHTS

  5

DIRECTOR BIOGRAPHIES

  7

THE BOARD AND ITS COMMITTEES

  20

Audit Committee

  21

Compensation Committee

  21

Nominating, Governance and Sustainability Committee

  22

Meetings of the Board of Directors

  24

BOARD GOVERNANCE

  25

Independence

  26

Board Leadership Structure

  26

Director Stock Holding Requirements

  27

Majority Voting in Uncontested Election of Directors

  28

Board's Role in Risk Oversight

  28

Information Security Risk Management

  29

Sustainability

  29

Code of Ethics

  33

Engagement with Shareholders

  34

COMMUNICATING WITH OUR BOARD MEMBERS

  36

DIRECTOR COMPENSATION

  37

HOW NOMINEES TO OUR BOARD ARE SELECTED

  40

Board Diversity

  40

Board Tenure

  41

Shareholder Nominations for Election of Directors

  41

Proxy Access

  42

EXECUTIVE OFFICERS

  43

Executive Officer Biographies

  43

COMPENSATION OF EXECUTIVE OFFICERS

  46

Compensation Committee Report on Executive Compensation

  46

Compensation Committee Interlocks and Insider Participation

  46

COMPENSATION DISCUSSION AND ANALYSIS

  47

Executive Summary

  47

Executive Compensation Setting Process

  58

Components of Executive Compensation

  62

Other Compensation Policies and Practices

  75

Annual Compensation of Executive Officers

  78

Potential Payments upon Termination or Change in Control

  86

PAY RATIO DISCLOSURE

  93

Pay Ratio Methodology

  93

Required Pay Ratio

  93

Supplemental Pay Ratio

  94

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

  94

Review of Transactions with Related Parties

  94

Related Party Transactions

  94

OWNERSHIP OF COMMON STOCK

  95

Delinquent Section 16(a) Reports

  97

INFORMATION ABOUT THE ANNUAL MEETING AND VOTING

  98

PROPOSAL NO. 1: ELECTION OF DIRECTORS

  103

Directors and Nominees

  103

Vote Required

  103


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OUR BOARD AND CORPORATE GOVERNANCE

The Work of the Board

              Our Board of Directors is highly engaged and focused on strategy and the best use of capital to maximize shareholder value. The Board is also committed to having highly qualified and diverse directors with varying experiences, skills and perspectives to accomplish that goal. In fiscal 2020, the Board met nine (9) times, the Nominating, Governance and Sustainability Committee met five (5) times, the Audit Committee met eight (8) times and the Compensation Committee met ten (10) times.

              Each year, strategy and capital allocation are a primary focus of the Board, which regularly reviews a wide array of strategic choices. The Board continues to have robust discussions regarding the Company's long-term strategic plans, most recently in 2021, and believes that the existing strategic plan provides the foundation for long term sustainable growth and shareholder value.

              Additionally, the Board plays a critical role in overseeing enterprise risk, primarily through the work of its committees, which report matters relating to their areas of responsibility back to the full Board. Our Board has been engaged with management and has overseen the Company's actions in response to the COVID-19 pandemic and its impact on the Company and its stakeholders.

              In March 2021, the Board's Nominating and Corporate Governance Committee changed its name to Nominating, Governance and Sustainability Committee to reflect its integral and enhanced role in the oversight of the Company's strategy and risks relating to ESG and sustainability. In carrying out its expanded role, the Committee is responsible for developing and recommending policies and procedures relating to the environment, human rights, labor, health and safety, workforce diversity, supply chain, governance and similar matters affecting Company stakeholders and increasing stakeholder transparency into such policies The Board, through its Compensation Committee, expanded its responsibilities to include the oversight of the Company's strategies and policies related to human capital management, including with respect to diversity, equity and inclusion, workplace environment and culture, and talent development and retention.

              More particularly, in March 2020, the Board determined that it would be in the best interest of the Company and its stakeholders to prepare a report evaluating the challenges posed by climate change to our continued ability to create sustainable shareholder value. The Company engaged with certain of its institutional shareholders on this topic over the past several months and hired a consultant to assist the Company with the expanded corporate sustainability report that was published in April 2021.

Board Self-Assessment and Skills Matrix

              The Board is committed to ensuring it has a relevant diversity of skills and experience to oversee the Company, its management, its strategic plan and the execution of that plan. Expertise in retail investments, retail operations, retail merchandising, retail supply chain, change and risk management, capital markets, finance, accounting, technology, e-Commerce, marketing, human resource and talent development are important to our Board oversight. This expertise can be gained in a variety of ways, such as being the chief executive officer of a public retailer, serving as a member of the board or in the "C" suite, or managing private equity investments. We regularly evaluate candidates that can provide new voices and additional perspectives which will be relevant to the Company as its strategic plan continues to evolve.

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              The Board's annual self-evaluation led by the Nominating, Governance and Sustainability Committee is the foundation of our skills assessment process. Through the evaluation, the Board assesses its composition, processes, committee structure and composition, meetings and overall effectiveness. The directors provide feedback on the Board and its committees through questionnaires, and the results are aggregated on an anonymous basis to encourage candor among the directors. The Nominating, Governance and Sustainability Committee presented a summary of the results to the Board and key insights from the assessment were discussed during the March 2021 Committee and Board meetings. As a result of its assessment, the Board determined that our director nominees, as a group, represent an effective mix of skills, experiences, diversity and fresh perspectives.

              The table below summarizes the key skills, experiences, diversity and other qualifications of our nominees for director. The director biographies beginning on page 7 describe each nominee's background and relevant experience in more detail.

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*
The information in the table above does not include Mr. Saunders or Dr. Zeithaml who plan to retire at the 2021 annual meeting.

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Director Refreshment and Tenure

              In 2019, the Board, in consultation with SpencerStuart, adopted a waterfall strategy where each year beginning in 2020, as our newer members continue to gain needed experience, we expect to engage thoughtfully in additional Board refreshment. Our goal is to reach and thereafter maintain a relatively balanced mix of short, medium and long-term tenured directors. The Board, through its Nominating, Governance and Sustainability Committee, launched a formal search to find a diverse candidate to replace Conrad Hall, who retired in June 2020. As a result of this search, the Board appointed Winnie Park in December 2020. Ms. Park is a Chief Executive Officer with deep experience in retail, brand-building, omni-channel and merchandising and she brings a diverse perspective to the Board. The Board continues to make progress on its waterfall strategy with the recent announcement of Mr. Saunders and Dr. Zeithaml's retirement at the 2021 annual meeting.

              Since 2016, Dollar Tree has added six highly qualified independent directors to its Board and plans to continue its multi-year effort to achieve a "fit-for-purpose" Board. Following the annual meeting, the tenure profile of our Board will reflect a balanced mix of short, medium and long-tenured directors with four (4) directors having two (2) years or less in tenure, three (3) between three (3) to five (5) years in tenure and four (4) with over ten years.

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CORPORATE GOVERNANCE HIGHLIGHTS

              As the Company grows and evolves, our Board of Directors is engaged in a multi-year effort to enhance its membership and refine its governance policies and practices. The Board seeks to further increase its effectiveness as well as its alignment with and transparency to shareholders. These changes include:

Board refreshment.    In 2020, the Board continued to execute on its waterfall strategy by launching a formal director search for a diverse candidate to replace Conrad Hall who retired from the Board at the 2020 annual meeting of shareholders. As a result this search, the Board appointed Winnie Park in December 2020. Ms. Park's experience as a retail CEO and her substantial experience in brand-building, omni—channel, specialty and multi-brand retail and wholesale helps us achieve a "fit for purpose" Board of Directors. Over several years, the Board has thoughtfully increased the diversity of perspectives and voices within the boardroom, ensuring the Board has the right skills and experience to guide Dollar Tree through its next phase of development. Since 2016:
    Six (6) independent directors have joined the Board,
      
    Six (6) directors have left the Board, four (4) of them non-independent, including the three Dollar Tree co-founders Macon F. Brock, Jr., H. Ray Compton and J. Douglas Perry,
    Three (3) women have joined the Board, and
      
    Thomas A. Saunders III and Carl Zeithaml plan to retire from the Board at the 2021 annual meeting of shareholders.
Board leadership.    Led by its independent members, the Board:
    In 2019, elected a new Lead Independent Director, Gregory M. Bridgeford, who has robust authority to oversee the Board's operations and relationship with management, and
    In 2019, appointed Gregory M. Bridgeford as Chair of our Compensation Committee and appointed Stephanie Stahl as Chair of our Nominating, Governance and Sustainability Committee.
    In March 2021, appointed Jeffrey G. Naylor as Chair of our Audit Committee.
Strengthened ESG oversight.    Over the last couple of years the Board has enhanced ESG oversight through the Nominating, Governance and Sustainability Committee and undertaken to increase transparency about the Company's sustainability and ESG risks. Among other things, the Board:
    Directed the Nominating, Governance and Sustainability Committee to evaluate, discuss, and, as appropriate, direct the disclosure of the Company's risks relating to corporate social responsibility and sustainability and ESG risks, at least twice a year,

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    Specified that coverage should include the environment, human rights, labor, health and safety, workforce diversity, supply chain, governance and similar matters affecting Company stakeholders,
    Directed the Compensation Committee to oversee the Company's strategies and policies related to human capital management, including matters related to diversity, equity and inclusion, workplace environment and culture, and talent development and retention,
    Reviewed and approved the Company's publication of an expanded corporate sustainability report evaluating the potential challenges posed by climate change to our business and our continued ability to create sustainable shareholder value.
Enhanced governance best practices.    The Board previously adopted best practices such as a declassified board, a majority voting standard for uncontested elections of directors and proxy access, which are intended to increase accountability to shareholders. Building on these actions, the Board:
    Formalized an enhanced Shareholder Engagement Policy with guidelines promoting direct interactions between independent directors and shareholders,
    Determined to set Board tenure goals with a waterfall approach annually to foster an on-going mix of directors with short-, medium- and longer-term tenures,
    Engaged independent outside consultants to evaluate the performance of the Board and make recommendations with respect to Board governance and composition,
    Enhanced already robust Corporate Governance Guidelines, and
    Strengthened our executive long-term incentive program to create further alignment between pay and performance.

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DIRECTOR BIOGRAPHIES

              Biographical and other information for our directors is provided below.

GRAPHIC
ARNOLD S. BARRON

                                                     

DIRECTOR SINCE MARCH 2008

AGE: 73

BOARD COMMITTEES:

Compensation Committee

Mr. Barron served as the Senior Executive Vice President, Group President of The TJX Companies, Inc. from 2004 until his retirement in January 2009. His employment with The TJX Companies began in 1979.

PREVIOUS WORK AND BOARD EXPERIENCE

2000 to 2004: Executive Vice President, Chief Operating Officer, The Marmaxx Group (the combined entity of T.J. Maxx and Marshalls)

1996 to 2000: Senior Vice President, Group Executive, The TJX Companies

1993 to 1996: Senior Vice President, General Merchandising Manager, T.J. Maxx

1979 to 1993: held several other executive positions within The TJX Companies, Inc.

2009 to 2013: served as a director on the Board of rue21 (Chair of the Compensation Committee, Chair of the Corporate Governance and Nominating Committee)

EDUCATION

Received a B.A. in Mathematics from Boston University.

EXPERTISE

With more than thirty years of retail experience in senior management, operations, merchandising, supply chain, strategic planning, human resources and systems in the United States, Canada, United Kingdom and Europe, Mr. Barron brings a combination of skills and experience spanning areas key to our business.

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GRAPHIC
GREGORY M. BRIDGEFORD

                                                     

DIRECTOR SINCE MAY 2016

AGE: 66

LEAD INDEPENDENT DIRECTOR

BOARD COMMITTEES:

Compensation Committee, Chair

Nominating, Governance and
Sustainability Committee

Mr. Bridgeford served as the Chief Customer Officer of Lowe's Companies, Inc. from 2012 to 2014 until his retirement. His employment with Lowe's began in 1982 where he held various senior level positions.

PREVIOUS WORK AND BOARD EXPERIENCE

2004 to 2012: Executive Vice President of Strategy and Business Development, Lowe's

1999 to 2004: Senior Vice President of Strategy and Business Development, Lowe's

1998 to 1999: Senior Vice President of Marketing, Lowe's

1994 to 1998: Senior Vice President and General Merchandising Manager, Lowe's

1989 to 1994: Vice President of Merchandising, Lowe's

1986 to 1989: Vice President of Corporate Development, Lowe's

1982 to 1986: Director of Corporate Development, Lowe's

EDUCATION

Graduated with a B.A. from the University of Virginia and received an MBA from Wake Forest University.

EXPERTISE

Mr. Bridgeford brings to our Board more than thirty years of retail experience in the areas of customer experience, merchandising, real estate, international, marketing, advertising and communications, strategic planning and business process improvement.

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GRAPHIC
THOMAS W. DICKSON

                                                     

DIRECTOR SINCE DECEMBER 2018

AGE: 65

BOARD COMMITTEES:

Compensation Committee

Mr. Dickson served as the Chief Executive Officer of Harris Teeter Supermarkets, Inc., a leading regional supermarket chain located primarily in the Southeastern and Mid-Atlantic United States, from February 1997 until his retirement in January 2014. He currently serves on the Board of Brixmor Property Group, Inc. where he is a member of the Compensation Committee.

PREVIOUS WORK AND BOARD EXPERIENCE

February 1996 to February 1997: Executive Vice President, Harris Teeter

February 1994 to February 1996: President of American & Efird, Inc., a wholly-owned subsidiary of Harris Teeter

February 1991 to February 1994: Executive Vice President, American & Efird, Inc.

1989 to 1991: Senior Vice President, Marketing and International, American & Efird, Inc.

1987 to 1989: Vice President, International Operations, American & Efird, Inc.

December 2016 to September 2018: Board of Directors of Conagra Brands, Inc. (Nominating, Governance and Public Affairs Committee)

March 2016 to June 2017: Board of Directors of CST Brands, Inc. (Nominating and Corporate Governance)

April 2014 to March 2015: Chair of the Board of The Pantry, Inc.

March 2006 to January 2014: Chair of the Board of Harris Teeter

EDUCATION

Mr. Dickson graduated with a B.A. from the University of Virginia and an MBA from the University of Virginia Darden School of Business.

EXPERTISE

Mr. Dickson brings to our Board more than thirty years of executive leadership with extensive experience in the retail and consumer products industries, a broad real estate knowledge, and substantial public board experience. He also brings extensive knowledge in strategic planning and international experience in managing foreign operations and sourcing.

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GRAPHIC
LEMUEL E. LEWIS

                                                     

DIRECTOR SINCE JULY 2007

AGE: 74

BOARD COMMITTEES:

Audit Committee

Mr. Lewis served as the Executive Vice President and Chief Financial Officer of Landmark Communications, Inc. from 2000 until his retirement in 2006. He currently serves on the Board of Directors of Markel Corporation (Audit Committee, Chair).

PREVIOUS WORK AND BOARD EXPERIENCE

1981 to 2000: held various senior level positions, including President of The News Channel 5 Network from 1992 to 1999, and President of KLAS TV from 1986 to 1990

2011 to 2019: Director, Owens & Minor, Inc. (Audit Committee Chair from 2014-2019)

2008 to 2010: Chair of the Board of the Federal Reserve Bank of Richmond

2005 to 2008: Chair of the Audit Committee for the Federal Reserve Bank of Richmond

2006 to 2008: Director, Board of Landmark Communications

2002 to 2006: Director, Board of The Weather Network

EDUCATION

Mr. Lewis graduated with a B.A. in Economics from the University of Virginia and an MBA from the University of Virginia Darden School of Business.

EXPERTISE

Mr. Lewis brings to the Board many years of experience in accounting, finance, human resources, marketing, mergers and acquisitions and business unit operations. The Board also benefits from his valuable financial experience as a former Chief Financial Officer and his service on the Board of the Federal Reserve Bank of Richmond. In addition, our Board has determined that Mr. Lewis qualifies as an Audit Committee financial expert.

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GRAPHIC
JEFFREY G. NAYLOR

                                                     

DIRECTOR SINCE MARCH 2018

AGE: 62

BOARD COMMITTEES:

Audit Committee, Chair

Nominating, Governance and
Sustainability Committee

Mr. Naylor is a former Chief Financial Officer and Senior Executive of The TJX Companies. He is the Managing Director of his consulting firm, Topaz Consulting LLC, where he advises private equity firms on potential transactions and provides services in the area of strategy and finance. In addition, he currently serves on the Board of Directors of Synchrony Financial (Lead Independent Director; Chair, Audit Committee; Compensation Committee), Emerald Expositions Events, Inc. (Chair, Nominating and Corporate Governance Committee; Compensation Committee), and Wayfair, Inc. (Audit Committee).

PREVIOUS WORK AND BOARD EXPERIENCE

February 2013 to April 2014: Senior Corporate Advisor, TJX Companies, Inc.

January 2012 to February 2013: Senior Executive Vice President and Chief Administrative Officer, TJX Companies, Inc.

February 2009 to January 2012: Senior Executive Vice President, Chief Financial and Administrative Officer, TJX Companies, Inc.

June 2007 to February 2009: Senior Executive Vice President, Chief Administrative and Business Development Officer, TJX Companies, Inc.

September 2006 to June 2007: Senior Executive Vice President, Chief Financial and Administrative Officer, TJX Companies, Inc.

February 2004 to September 2006: Chief Financial Officer, TJX Companies, Inc.

2001 to 2004: Chief Financial Officer, Big Lots, Inc.

Held senior level positions with Limited Brands, Sears, Roebuck and Co., and Kraft Foods, Inc.

Mr. Naylor began his career as a Certified Public Accountant with Deloitte Haskins & Sells.

2010 to 2016: Board Member (Audit Committee), Fresh Market,  Inc.

EDUCATION

Mr. Naylor graduated with a B.A. in Economics from Northwestern University and an MBA from J.L. Kellogg School of Management.

EXPERTISE

Mr. Naylor brings to our Board an extensive financial and accounting background as well as significant leadership and retail experience. In addition, our Board has determined that Mr. Naylor qualifies as an Audit Committee financial expert.

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GRAPHIC
WINNIE Y. PARK

                                                     

DIRECTOR SINCE DECEMBER 2020

AGE: 50

BOARD COMMITTEES:

Audit Committee

Ms. Park is the Chief Executive Officer of Paper Source, Inc., an omni-channel specialty retailer, a position she has held since September 2015. She currently serves on the Board of Directors of Express, Inc. (Audit Committee). Paper Source filed for Chapter 11 bankruptcy on March 2, 2021 following the adverse effects of the COVID-19 pandemic. Prior to the pandemic, Paper Source had achieved rapid expansion and sustained sales growth under Ms. Park's leadership.

PREVIOUS WORK AND BOARD EXPERIENCE

2012 to 2015: Executive Vice President, Global Marketing and eCommerce, DFS Group Ltd.

2006 to 2012: Global Vice President, Fashion, DFS Group Ltd.

2004 to 2006: Senior Director, Women's Merchandising for the Dockers brand, Levi Strauss & Co.

2003 to 2004: Director, Global Strategy for the Dockers brand, Levi Strauss & Co.

2001 to 2003: Engagement Manager, McKinsey & Company

EDUCATION

Ms. Park graduated with a B.A., Cum Laude, in Public and International Affairs from Princeton University and an MBA in Corporate Finance and Marketing from Northwestern University.

EXPERTISE

Ms. Park is a retail and marketing leader with deep experience in brand-building, e-Commerce, omni-channel specialty retail, merchandising and international expertise. In addition, the Board has determined that Ms. Park qualifies as an Audit Committee expert.

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GRAPHIC
BOB SASSER

Executive Chairman

                                                     

DIRECTOR SINCE JUNE 2004

AGE: 69

Mr. Sasser is the Executive Chairman of Dollar Tree Board of Directors. He previously served as the Chief Executive Officer of Dollar Tree from 2004 to September 2017.

PREVIOUS WORK AND BOARD EXPERIENCE

2004 to 2017: Chief Executive Officer, Dollar Tree

2004 to 2013: President and Chief Executive Officer, Dollar Tree

2001 to 2003: President and Chief Operating Officer, Dollar Tree

1999 to 2000: Chief Operating Officer, Dollar Tree

1997 to 1998: Senior Vice President, Merchandise and Marketing, Roses Stores, Inc.

1994 to 1996: Vice President, General Merchandise Manager, Michaels Stores, Inc.

Prior to 1994: Managed areas of increasing responsibility, primarily at Roses Stores, Inc. in field operations, corporate sales promotion and marketing, buying, global sourcing, merchandising and executive management.

2012 to 2016: Board Member (Audit Committee), Fresh Market, Inc.

EDUCATION

Mr. Sasser graduated with a BS in Marketing from Florida State University.

EXPERTISE

Mr. Sasser's demonstration of outstanding leadership skills, business acumen, commitment to excellence, and his major contributions to the Company's growth and success as the former Chief Executive Officer of Dollar Tree provides essential insight and guidance to our Board. During his thirteen year tenure as Chief Executive Officer, shareholder value increased 733%, as compared to the S&P 500 increase of 125% during the same timeframe. In addition, the Board benefits from Mr. Sasser's forty-eight years of discount retail leadership experience across all areas of corporate and field operations, including merchandising, marketing, sales promotion, advertising, branding, and customer engagement. He brings to the Board expertise in the areas of merchandising, global sourcing, supply chain, buying, allocation and replenishment, real estate and retail technology.

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GRAPHIC
THOMAS A.
SAUNDERS III*

                                                     

DIRECTOR SINCE 1993            

AGE: 84

BOARD COMMITTEES:

Nominating, Governance and
Sustainability Committee

*MR. SAUNDERS IS RETIRING AT
THE 2021 ANNUAL MEETING

Mr. Saunders is the CEO of Ivor & Co., LLC, a private investment firm. He is a founder of Saunders Karp & Megrue, a private equity firm that owned 50% of Dollar Tree at the time of its IPO and whose retail companies included Ollie's Bargain Outlet, Bob's Discount Furniture, Marie Callender's, Café Rio, Mimi's Café, Miller's Ale House, Children's Place, rue21, Charlotte Russe, Tommy Bahama, Hat World, Targus and Norcraft Companies. He is a Senior Advisor to numerous private equity firms and serves as a trustee of the Heritage Foundation, New York Historical Society, Marine Corps University Foundation, Cold Spring Harbor Laboratory, and the American Civil War Museum and the Norton Museum of Art.

PREVIOUS WORK AND BOARD EXPERIENCE

2013 to Present: Lead Director and Chairman of the Nominating and Corporate Governance Committee of VitalConnect

1996 to 2016: Director for Hibbett Sports serving on the Audit, Nominating and Corporate Governance, and Compensation Committees

2005 to 2018: Trustee and Chairman of the Heritage Foundation

2011 to 2012: Chairman of the Nominating and Corporate Governance Committee for Teavana Holdings

2001 to 2005: Member of the Board of Visitors of the University of Virginia; Chairman of the Finance Committee

1974 to 1989: Managing Director of Morgan Stanley & Co., leading its Capital Markets Group, managing its Syndicate Department and serving as Chairman of its Leveraged Equity Fund II ("MSLEF II")

2007 to 2019: Lead Independent Director, Dollar Tree

2001 to 2021: Nominating, Governance and Sustainability Committee, and Chair from 2001 to 2007 and 2009 to 2019, Dollar Tree

2001 to 2007: Chair of the Audit Committee, Dollar Tree

EDUCATION

Mr. Saunders holds a BSEE from Virginia Military Institute and an MBA from the University of Virginia Darden School of Business.

EXPERTISE

Mr. Saunders is a financial expert with preeminent experience in investment banking and domestic and global capital markets. He worked closely with Morgan Stanley clients managing IPOs, equity and debt financings and advising on capital structures. His innovation led to the implementation of new public offering techniques still used in today's equity markets. Mr. Saunders has extensive experience with retail company strategy, operations and corporate governance. He drove investment and valuation analysis to maximize equity value across a portfolio of over 50 retail, industrial and healthcare companies, and he has a deep understanding of the Dollar Tree business.

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GRAPHIC
STEPHANIE P. STAHL

                                                     

DIRECTOR SINCE JANUARY 2018

AGE: 54

BOARD COMMITTEES:

Nominating, Governance and
Sustainability Committee, Chair

Compensation Committee

Ms. Stahl is the Chief Executive Officer and Co-Founder of Ace of Air, a 100% zero waste and fully circular beauty and wellness brand, a position she has held since 2017. She currently serves on the Board of Directors of Knoll, Inc. (Chair, Nominating and Corporate Governance Committee; Audit Committee), and Founders Table Restaurant Group.

PREVIOUS WORK AND BOARD EXPERIENCE

2015 to current: Owns and operates Studio Pegasus, LLC, an investment and advisory company focused on onsumer sector digital start ups.

2012 to 2015: Executive Vice President, Global Marketing & Strategy, Coach, Inc.

2010 to 2011: Chief Executive Officer, Tracy Anderson Mind & Body, LLC

2003 to 2006: Executive Vice President, Chief Marketing Officer, Revlon, Inc.

1998 to 2003: Partner and Managing Director, The Boston Consulting Group, Inc.

1997: Vice President, Strategy & New Business Development, Toys "R" Us, Inc.

Ms. Stahl began her career as a Financial Analyst for Morgan Stanley & Co.

EDUCATION

Ms. Stahl graduated with a B.S. in Quantitative Economics from Stanford University and an MBA (with distinction) from Harvard University.

EXPERTISE

Ms. Stahl brings to our Board significant experience in marketing, digital, sustainability, brand building and strategic development. Ms. Stahl has spent her career focused on the retail/consumer sector with extensive experience in developing, executing and optimizing major change initiatives including mergers and acquisitions, post-merger integration and fundamental strategic redirection.

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GRAPHIC
CARRIE A. WHEELER

                                                     

DIRECTOR SINCE MARCH 2019

AGE: 49

BOARD COMMITTEES:

Audit Committee

Ms. Wheeler is the Chief Financial Officer of Opendoor Technologies, Inc., a leading digital platform for residential real estate, a position she has held since September 2020. She was previously a Partner and Head of Consumer and Retail Investing at TPG Global, a global private equity firm, for 21 years. She currently serves on the Board of Directors of APi Group Corporation (Audit Committee; Compensation Committee).

PREVIOUS WORK AND BOARD EXPERIENCE

1996 to 2017: Partner and Head of Consumer and Retail Investing, TPG Global

1993 to 1996: Analyst, Goldman, Sachs & Co.

2010 to 2018: Director, J. Crew Group (Audit Chair; Compensation Committee Chair)

2013 to 2017: Director, Board of Gelson's (Compensation Committee Chair)

2006 to 2015: Director, Board of PETCO Animal Supplies (Audit Committee Chair)

2005 to 2013: Director, Board of Neiman Marcus Group (Audit Committee)

EDUCATION

Ms. Wheeler graduated with a Bachelor of Commerce (Honors), from Queens University.

EXPERTISE

Ms. Wheeler is an accomplished Wall Street leader with significant investment and board experience. In addition, she is the CFO of a publicly-traded company. She brings to our Board broad experience evaluating, valuing and managing investments with a focus on retail and consumer sectors. She has substantial experience in business assessment, evaluating and executing major acquisitions, structuring debt financing, raising private capital and guiding IPO and public market transactions. In addition, our Board has determined that Ms. Wheeler qualifies as an Audit Committee financial expert.

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GRAPHIC
THOMAS E. WHIDDON

                                                     

DIRECTOR SINCE DECEMBER 2003

AGE: 68

BOARD COMMITTEES:

Audit Committee

Nominating, Governance and
Sustainability Committee

Mr. Whiddon retired from Berkshire Partners, LLC as an Advisory Director in 2013. He currently serves on the Board of Directors of Sonoco Products Company, Inc., (Audit Committee Chair, Corporate Governance and Nominating Committee, Executive Compensation Committee).

PREVIOUS WORK AND BOARD EXPERIENCE

2005 to 2013: Advisory Director, Berkshire Partners,  LLC

2004 to 2006: Interim Executive Operating Roles, Berkshire Partners, LLC

2000 to 2003: Executive Vice President of Logistics and Technology, Lowe's Companies, Inc.

1996 to 2000: Executive Vice President, and Chief Financial Officer, Lowe's Companies, Inc.

1994 to 1996: Chief Financial Officer and Treasurer, Zale Corporation

1986 to 1993: Treasurer, Eckerd Corporation

1984 to 1986: Tax Partner, KPMG

2003 to 2020: Board of Directors of Carter's, Inc. (Audit Committee)

EDUCATION

Mr. Whiddon graduated with a BS from the University of Alabama.

EXPERTISE

Having served as Chief Financial Officer and Treasurer of successful large public retail companies, coupled with his many years of experience in public accounting, Mr. Whiddon brings to our Board extensive financial expertise. In addition, our Board has determined that Mr. Whiddon qualifies as an Audit Committee financial expert. His service on the Board and a number of Committees of Sonoco Products Company, Inc. and his prior experience on the Board and Audit Committee of Carters, Inc. further enhances his contributions to our Board. He also brings a fresh perspective to Dollar Tree's logistics and technology focus.

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GRAPHIC
MICHAEL A. WITYNSKI

                                                     

DIRECTOR SINCE SEPTEMBER 2020

AGE: 58

Mr. Witynski is the President and Chief Executive Officer of Dollar Tree and has served in this role since July 2020.

PREVIOUS WORK AND BOARD EXPERIENCE

December 2019 to July 2020: Enterprise President, Dollar Tree

June 2017 to December 2019: President and Chief Operating Officer, Dollar Tree Stores

July 2015 to June 2017: Chief Operating Officer, Dollar Tree Stores

August 2010 to July 2015: Senior Vice President of Stores, Dollar Tree Stores

2009 to 2010: President, Shaws Supermarkets

2006 to 2009: Group Vice President, Private Brands at Supervalu, Inc.

2005 to 2006: Executive Vice President, Merchandising Marketing at Supervalu, Inc.

1999 to 2004: Vice President Merchandising, Marketing at Cub Foods

EDUCATION

Mr. Witynski graduated with a BA in Business Administration from Benedictine University.

EXPERTISE

Mr. Witynski has more than 39 years of retail experience, including 29 years in the grocery industry, and has lead the merchandising, store operations, and supply chain functions for Dollar Tree, Family Dollar, and Dollar Tree Canada. His business acumen has driven operational excellence in stores and he has been heavily involved in the transformation of the Family Dollar brand and the continued growth of Dollar Tree. Mr. Witynski's tenure at Dollar Tree, along with his grocery background, brings a broad knowledge base to the Board.

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GRAPHIC
CARL P. ZEITHAML*

                                                     

DIRECTOR SINCE JULY 2007

AGE: 71

BOARD COMMITTEES:

Compensation Committee

*DR. ZEITHAML IS RETIRING AT THE 2021 ANNUAL MEETING

Dr. Zeithaml is the Dean Emeritus of the McIntire School of Commerce at the University of Virginia. Over the past 23 years, Dean Zeithaml led the implementation of McIntire's strategy to achieve a position of global preeminence in business education. He is also a Professor in the Management Area specializing in strategic management and marketing.

PREVIOUS WORK AND BOARD EXPERIENCE

1986 to 1997: Faculty, Kenan-Flagler Business School at the University of North Carolina-Chapel Hill.

EDUCATION

Dr. Zeithaml graduated with a B.A. in Economics from University of Notre Dame, a MBA in Health and Hospital Management from University of Florida, and a Doctor of Business Administration in Strategic Management from University of Maryland.

EXPERTISE

Dr. Zeithaml provides the Board with expertise in strategic management, executive leadership, and marketing, with an emphasis on competitive strategy, corporate governance and global strategy. He brings to the Board extensive educational experience and a strong understanding of change management and risk management.

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THE BOARD AND ITS COMMITTEES

              The Board of Directors currently consists of 13 directors who are elected annually. The Board has re-nominated all current directors for appointment as directors to serve for a one-year term, except for Thomas A. Saunders III and Carl P. Zeithaml who are retiring from the Board when their terms expire at the 2021 annual meeting of shareholders. The size of the Board will be reduced from 13 directors to 11 directors effective as of the annual meeting.

              The Board of Directors has three standing committees, each comprised solely of independent directors: the Audit Committee, the Compensation Committee and the Nominating, Governance and Sustainability Committee. The charters of our Board committees are available on our corporate website, at www.dollartreeinfo.com/investors/corporate.

              Current committee assignments are as follows:

    Director

Independent
Director(1)


Audit
Committee(2)


Compensation
Committee


NGS
Committee


 

 

 

Arnold S. Barron

 


 


 


 


 

 

 

 

Gregory M. Bridgeford

 

LD

 

 

 

C

 


 

 


 

Thomas W. Dickson

 


 


 


 


 

 

 

 

Lemuel E. Lewis

 


 


 

 

 

 

 

 


 

Jeffrey G. Naylor

 


 

C

 


 


 

 

 

 

Winnie Y. Park

 


 


 

 

 

 

 

 


 

Bob Sasser

 


 


 


 


 

 

 

 

Thomas A. Saunders III*

 


 

 

 

 

 


 

 


 

Stephanie P. Stahl

 


 


 


 

C

 

 

 

 

Carrie A. Wheeler

 


 


 

 

 

 

 

 


 

Thomas E. Whiddon

 


 


 


 


 

 

 

 

Michael A. Witynski

 

 

 

 

 

 

 

 

 

 


 

Carl P. Zeithaml*

 


 


 


 


 

 
*
Retiring at the 2021 annual meeting of shareholders

LD
Lead Director

C
Committee chair

(1)
Our Board reviewed the composition of each committee and determined that the independence and other qualifications of its members meet the listing standards of the NASDAQ Stock Market and SEC regulations.

(2)
The Board, after review of each individual's employment experience and other relevant factors, has determined that Lemuel Lewis, Jeffrey Naylor, Winnie Park, Carrie Wheeler and Thomas Whiddon are qualified as audit committee financial experts within the meaning of SEC regulations.

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Audit Committee

              At each regular meeting, the Audit Committee meets in executive sessions with the Company's independent auditors, Chief Legal Officer, Vice President—Internal Audit, Chief Financial Officer and Senior Vice President—Principal Accounting Officer to discuss accounting principles, financial and accounting controls, the scope of the annual audit, internal controls, regulatory compliance and other matters. The independent auditors have complete access to the Audit Committee without management present to discuss the results of their audits and their opinions on the adequacy of internal controls, quality of financial reporting and other accounting and auditing matters.

              Key functions of this committee include:

    reviewing management's assessment of our internal control over the financial reporting process;

    reviewing results of internal control testing related to Section 404 of the Sarbanes-Oxley Act of 2002;

    reviewing and discussing the Company's practices with respect to risk assessment and risk management, including financial, operational, information security, data privacy, business continuity and legal and regulatory risks;

    reviewing our quarterly and annual financial statements;

    reviewing the audit efforts of our independent auditors and internal audit department;

    reviewing related party transactions; and

    selecting the independent auditors and any independent counsel or other advisers it deems necessary.

              The Audit Committee met eight (8) times in 2020. In addition, the Chair of the Committee conducted periodic updates with the independent auditors and/or financial management.

              All members of the Audit Committee during 2020 met the independence requirements and of the NASDAQ Stock Market and regulations of the Securities and Exchange Commission. The report of the Committee can be found beginning on page 106.

Compensation Committee

              The Compensation Committee sets all elements of compensation for our named executive officers based upon consideration of their contributions to the development and operating performance of the Company, and is primarily responsible for monitoring risks relating to the Company's compensation policies and practices to determine whether they create risks that are reasonably likely to have a material adverse effect on the Company.

              Key functions of this Committee include:

    overseeing our compensation and benefit practices;

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    establishing the compensation arrangements for our executive officers;

    overseeing the Company's strategies and policies related to human capital management, including with respect to matters such as diversity, equity and inclusion, workplace environment and culture, and talent development and retention;

    reviewing at least semi-annually the Company's initiatives related to human capital management, diversity, equity and inclusion programs and other workforce initiatives;

    reviewing and discussing with management key human capital metrics that may be used by the Company;

    administering our executive compensation plans and Employee Stock Purchase Plan;

    administering and considering awards under our equity-based compensation plans; and

    reviewing annually executives' stock ownership levels to ensure compliance with the Company's executive ownership policy.

              The Compensation Committee met ten (10) times in 2020. In addition, the Chair separately engaged in numerous in-depth discussions with members of management.

              All members of the Compensation Committee during 2020 met the independence requirements of the NASDAQ Stock Market and regulations of the Securities and Exchange Commission. The report of the Committee, together with our Compensation Discussion and Analysis and information regarding executive compensation, can be found beginning on page 46.

Nominating, Governance and Sustainability Committee

              The purpose of the Nominating, Governance and Sustainability Committee is to advise the Board of Directors on the composition, organization and effectiveness of the Board and its committees and on other issues relating to the corporate governance of the Company. The Committee is also responsible for monitoring and evaluating the Company's sustainability and ESG risks affecting its stakeholders. The Committee's primary duties and responsibilities include:

    recommending candidates to be nominated by the Board, including the re-nomination of any currently serving director, to be placed on the ballot for shareholders to consider at the annual shareholders' meeting;

    if the Chairman of the Board is not independent, recommending an independent director to be elected as Lead Director;

    recommending nominees to be appointed by the Board to fill interim director vacancies;

    reviewing periodically the membership and Chair of each committee of the Board and recommending committee assignments to the Board, including rotation or reassignment of any Chair or committee member;

    reviewing and resolving requests for waivers from directors of any provision of the Company's Code of Conduct;

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    monitoring current developments in regulations and best practices concerning corporate governance and the duties and responsibilities of each director;

    reviewing and assessing the adequacy of our Corporate Governance Guidelines and recommend changes to the Board;

    conducting an annual performance self-evaluation of the corporate governance and nominating functions of the Committee, establishing criteria and processes for, and leading the Board in, the Board's annual performance self-evaluation, and conducting an annual review of each of the directors on the Board;

    overseeing and reviewing the Shareholder Engagement Policy and reporting and recommending any proposed changes to such policy to the Board for approval, monitoring the process for shareholders to communicate with the Board, and assessing and recommending action on any matters raised in such communications relating to governance topics;

    at least semi-annually, evaluating, discussing, and, as appropriate, directing the disclosure of the Company's risks relating to corporate social responsibility and sustainability, including the environment, human rights, labor, health and safety, workforce diversity, supply chain, governance and similar matters affecting Company stakeholders ("Sustainability Risks");

    reviewing and overseeing our governance structure and other facets of the Company's corporate governance, including the structure of the Board, provisions of the Company's articles and bylaws, arrangements containing provisions that become operative in the event of a change in control of the Company and other documents, policies and procedures in the governance framework;

    recommending policies for compensation and equity ownership guidelines for Board members who are not executive officers, as well as expense reimbursement policies;

    reviewing annually the directors' stock ownership levels to ensure compliance with our director target ownership policy; and

    monitoring annually the education of Board members on matters related to their service on the Board.

              The Committee's primary duties and responsibilities in the area of sustainability and environmental, social and governance ("ESG") oversight are to:

    oversee the Company's strategy on ESG and sustainability and develop and recommend to the Board policies and procedures relating to the Company's ESG and sustainability activities;

    oversee the Company's systems for evaluating materials risks and opportunities related to ESG and sustainability matters;

    oversee the Company's approach to shareholder and stakeholder engagement on ESG and sustainability matters;

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    oversee external disclosures relating to material ESG and sustainability matters;

    receive periodic reports from management regarding the identification, evaluation, management and mitigation of Sustainability Risks;

    receive periodic reports from management regarding the Company's policies and procedures to prevent and mitigate Sustainability Risks, specifically to include the following Company communications:
    Environmental Policy;
    Human Rights Policy;
    Occupational Health and Safety Policy;
    Vendor Code of Conduct;
    Political Contribution and Expenditure Policy Statement; and
    Corporate Sustainability Report;
    receive periodic reports from management regarding the Company's efforts to increase transparency into the Company's policies on Sustainability Risks for all Company stakeholders;

    receive periodic reports from management regarding the Company's efforts to use as a resource in addressing Sustainability Risks relevant recommendations from national and international protocols including:
    Sustainability Accounting Standards Board;
    Task Force on Climate-related Financial Disclosures;
    United Nations Universal Declaration of Human Rights;
    United Nations Guiding Principles on Business and Human Rights; and
    OECD Guidelines for Multinational Enterprises.

              The Nominating, Governance and Sustainability Committee met on five (5) occasions in 2020. During 2020, the Committee continued to review potential candidates for Board seats in order to further enhance the Board's effectiveness, and one new director and one new Committee Chair were appointed during this period. For further information on the Committee, please see "How Nominees to our Board are Selected" beginning on page 40.

Meetings of the Board of Directors

              The Board of Directors has scheduled four regular meetings in 2021 and recently held one of these meetings in March 2021. The Board will hold special meetings when Company business requires. During 2020, the Board held nine (9) meetings. Informational update calls are periodically conducted during the year. Each member of the Board attended more than 75% of all Board meetings and meetings of committees of which he or she was a member.

              We expect each of our directors to attend the annual meeting of our shareholders. All of the then incumbent directors were in attendance at the 2020 virtual annual meeting of our shareholders.

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BOARD GOVERNANCE

              Our Board operates within a strong set of governance principles and practices, including:

    Governance Practice       Dollar Tree's Governance Policies and Actions    

 

 

All directors elected annually upon majority vote, except where contested

 

YES

 

Our Board is not classified, and in uncontested elections our directors are elected by the vote of a majority of the votes cast. See "Proposal No. 1-Election of Directors" on page 103.

 

 

 

 

Robust Independent Lead Director position

 

YES

 

When our Board Chairman is not independent, a Lead Director is elected from among the independent directors. Our Corporate Governance Guidelines enumerate the robust authority and responsibilities of the Lead Director in managing Board matters. See "Board Leadership Structure" on page 26.

 

 

 

 

Enhanced director stock ownership guidelines

 

YES

 

Increased the director stock ownership requirement so that each director must hold Dollar Tree stock worth no less than four times the annual cash retainer. See "Director Stock Holding Requirements" on page 27.

 

 

 

 

Enhanced shareholder engagement program

 

YES

 

We formalized our policy to facilitate shareholder access to senior management and independent directors. See "Engagement with Shareholders" on page 34.

 

 

 

 

A strong corporate commitment to environmental stewardship and sustainability

 

YES

 

We have made a commitment to environmental stewardship and are pursuing meaningful strategies and initiatives that address the sustainability risks associated with our business. We strongly support policies that benefit our customers, our associates, our communities and our environment. See "Sustainability" on page 29.

 

 

 

 

Thoughtful approach to director tenure and board diversity

 

YES

 

We endeavor to include women and minority candidates in the pool from which Board nominees are chosen and to consider diverse directors for leadership positions on the Board. While directors have no term limit, the Board finds benefit in having Board members represent an on-going mix of short-, medium- and longer-term tenures. See "Board Diversity" and "Board Tenure" on page 40 and page 41, respectively.

 

 

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Independence

              Dollar Tree is committed to principles of good corporate governance and the independence of a majority of our Board of Directors from the management of our Company. The following eleven directors have been determined by our Board to be independent directors within the applicable listing standards of the NASDAQ Stock Market throughout 2020: Arnold S. Barron, Gregory M. Bridgeford, Thomas W. Dickson, Lemuel E. Lewis, Jeffrey G. Naylor, Winnie Y. Park (since appointment in December 2020), Thomas A. Saunders III, Stephanie P. Stahl, Carrie A. Wheeler, Thomas E. Whiddon and Carl P. Zeithaml.

              All members of our Audit Committee, our Compensation Committee and our Nominating, Governance and Sustainability Committee are independent under NASDAQ listing standards. Our Board has reviewed the various relationships between members of our Board and the Company and has affirmatively determined that none of our directors or nominees has material relationships with Dollar Tree, other than Messrs. Witynski, Philbin and Sasser, who are or were members of management. See "Certain Relationships and Related Transactions" on page 94 for further information.

              If the slate of directors proposed to be elected at the 2021 annual meeting of shareholders is elected, all committees of our Board will continue to be comprised solely of independent directors. The basis for an independence determination by our Board is either that the director has no business relationship other than his or her service on our Board, or that while a director may have some involvement with a Company or firm with which we do business, our Board has determined that such involvement is not material and does not violate any part of the definition of "independent director" under NASDAQ listing standards. None of our current executives sit on any of our committees.

              At the regular meetings of our Board of Directors, a private session, without management present, is conducted by the non-management members of our Board.

Board Leadership Structure

              Our Executive Chairman is a former Chief Executive Officer of the Company. As we have successfully done in the past, our executive leadership succession plan calls for the former Chief Executive Officer to spend a period as Executive Chairman, supporting and guiding the new Chief Executive Officer. Because our Executive Chairman is thus not independent, our independent directors elect an independent Lead Director, as required under our Corporate Governance Guidelines. In March 2019, Gregory M. Bridgeford was elected as independent Lead Director by the independent directors. Under our guidelines, the Lead Director has clearly defined and robust leadership authority and responsibilities, including:

    conferring regularly with the Chief Executive Officer and Executive Chairman;

    supporting a strong Board culture and encouraging director participation by fostering an environment of open dialogue and constructive feedback among the directors and facilitating communication across Board committees and among the Executive Chairman, the Chief Executive Officer, the Board as a whole and Board committees;

    communicating feedback from the Board regarding the Chief Executive Officer's performance;

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    setting the agenda for and presiding over executive sessions of solely independent directors, and with the power to call meetings of the independent directors, with the expectation that the Lead Director will also coordinate feedback and follow-up as appropriate with the Executive Chairman and Chief Executive Officer, the chairpersons of relevant Board committees and other directors, as appropriate, concerning matters discussed among the independent directors;

    advising the Executive Chairman and Chief Executive Officer as to the Board's information needs and work with the Executive Chairman and Chief Executive Officer as needed to coordinate and provide direction, feedback, changes, input and approval regarding Board meeting agendas, schedules and materials in order to support Board deliberations and enable sufficient time for discussion of all agenda items;

    assisting the Chief Executive Officer and Executive Chairman with issues that concern the Board;

    remaining well-informed about senior management and succession plans;

    facilitating director input and discussion regarding the Company's strategy, performance and risks to the business;

    facilitating as appropriate the responsibilities of the Board, the committees of the Board and senior management, and

    being available, consistent with the Shareholder Engagement Policy described beginning on page 34, for consultation and direct communication with shareholders when appropriate.

              The Board has determined that its current leadership structure is the most appropriate for Dollar Tree and its shareholders. As part of the Company's ongoing commitment to corporate governance, the Board periodically considers its leadership structure and the role of the Lead Director.

Director Stock Holding Requirements

              In March 2019, the Board enhanced its stock ownership guidelines to require that each director should hold Dollar Tree stock worth no less than four (4) times the annual cash retainer paid to directors, valued on the date such director acquired the stock. Vested stock or stock units beneficially owned by the director, including stock or stock units held in the 2013 Director Deferred Compensation Plan, are counted in meeting the guidelines.

              As of April 2021, all of our directors owned shares in excess of the amount required by the new guidelines, with the exception of certain of our newer members: Thomas W. Dickson, Winnie Y. Park, Stephanie P. Stahl and Carrie A. Wheeler. Under our policy, each director has a grace period of five (5) years after he or she is first elected to the Board to meet the director stock holding requirements. Consistent with prior years, despite the directors owning shares in excess of this guideline, a majority of the directors have consistently chosen to defer a meaningful portion of their annual cash retainer as shares of common stock or as options, ranging from 60% to 100% of total compensation for participating directors during 2020.

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Majority Voting in Uncontested Election of Directors

              Our bylaws provide for majority voting in uncontested director elections. Consequently, a director-nominee will be elected by a majority of votes cast in uncontested director elections and by a plurality of votes in contested elections.

              In addition, our Corporate Governance Guidelines also set forth our procedure if a director-nominee does not receive a majority of the votes cast in an uncontested election. Prior to an election, each director-nominee submits a resignation letter, contingent upon such individual failing to receive more than 50% of the votes cast in an uncontested election. In such event, the resignation would be considered by the Nominating, Governance and Sustainability Committee, which would recommend to the Board what action to take with respect to the resignation.

Board's Role in Risk Oversight

              The Board of Directors is actively involved in overseeing enterprise risk, primarily through the assistance of its committees, which address the risks within their areas of responsibility as provided in the committee charters or otherwise delegated by the Board to those committees. Each committee reports matters relating to risk to the full Board. In addition, the Lead Director is responsible for facilitating director input and discussion regarding risks to the Company's business.

              The Audit Committee has a key role in the assessment of risks related to our business. At least semi-annually, the Audit Committee reviews and discusses with senior management the Company's major risk exposures, including financial, operational, information security, data privacy, business continuity and legal and regulatory risks, the steps the Company has taken to identify, monitor and control such exposures, and the Company's risk assessment and risk management policies, including mitigation strategies. This includes a review and discussion of the Company's annual risk assessment conducted by the Internal Audit Department, which conducts an annual investigation and evaluation of enterprise risk focusing on areas that are essential to the successful operation of the Company. The Audit Committee engages in dialogue and receives updates at or between its meetings from the Vice President of Internal Audit, the Chief Financial Officer, Chief Legal Officer and the Chief Executive Officer on matters related to risk. The Audit Committee shares appropriate information with the Board, either at its next meeting or by other more immediate communication.

              The Nominating, Governance and Sustainability Committee oversees the Company's risks relating to ESG and sustainability, including the environment, human rights, labor, health and safety, workforce diversity, supply chain, governance and similar matters affecting Company stakeholders. In carrying out its oversight role, the Committee is responsible for developing and recommending to the Board policies and procedures relating to sustainability risks. The Chief Executive Officer and other members of management are responsible for assessing on an ongoing basis the Company's sustainability risks and providing regular reports to the Nominating, Governance and Sustainability Committee and/or the Board on the identification, evaluation, management and mitigation of those sustainability risks.

              The Compensation Committee, in setting executive compensation, considers risks that may be implicated by our compensation programs and endeavors to set executive compensation at a level that creates incentives to achieve long-term shareholder value without encouraging excessive risk-taking to achieve short-term results. The Committee also oversees the Company's human capital management strategies and policies and considers related risks.

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Information Security Risk Management

              The Audit Committee oversees the Company's risks relating to information security and data privacy. Two members of the Audit Committee have cybersecurity experience obtained through their professional work experiences. At least semi-annually, the Audit Committee is responsible for reviewing and discussing with management the Company's risk exposures related to information security and data privacy. These management updates are designed to inform the Audit Committee of any potential risks relating to information security or data privacy as well as any relevant mitigation or remediation tactics being implemented.

              To more effectively prevent, detect and respond to information security threats, the Company has a dedicated Chief Information Security Officer (CISO) whose team is responsible for our overall information security, cyber risk, and business continuity programs. The CISO reports to the Chief Information Officer and serves as the designated executive leader for cyber or data-related incident response activities. The CISO regularly and routinely reviews our security model and its practices and future initiatives with external auditors to ensure alignment with industry best practices, changes in audit compliance requirements, and adherence to planned business objectives. The CISO provides an annual report directly to executive management and the Board on the State of Information Security, and meets annually with our Chief Executive Officer to review information security matters.

              We regularly conduct internal reviews and work with third-parties to identify and manage information security risks. We have an annual PCI-DSS assessment conducted by certified PCI-DSS Internal Security Assessors. External network review and penetration activities are conducted by an independent penetration examining firm. We also have an overall assessment and penetration evaluation led by external consulting firms each year.

              All associates receive information security training on protecting corporate data and digital assets. This training encompasses everything from password protection and social media expectations to physical asset protections. Targeted training is also provided on topics such as, but not limited to, phishing, secure application development, social media, and fraud.

              In addition to managing our internal information security risk programs, we maintain cyber risk insurance as part of our risk mitigation efforts. These policies are annually reviewed by industry underwriters at which time our security practices, programs, processes, and procedures are evaluated for purposes of determining our insurability.

              We have not experienced any computer data security breaches in the past three years as a result of a compromise of Dollar Tree or Family Dollar information systems. As a result, we did not incur any expenses, penalties or settlements relating to an information security breach of our systems during this period. In fiscal year 2020, there was a security incident suffered by a third-party service provider that affected the information of a small number of our associates. To resolve this issue, we worked with the third party and its forensics investigating firm, and appropriately notified affected associates and required state regulatory agencies. We incurred out-of-pocket expenses of approximately $23,000 in connection with the third-party incident.

Sustainability

              Dollar Tree is concerned about and committed to environmental sustainability, product safety, human rights and human capital management, and continues to enhance its efforts in these areas. From its beginning over thirty years ago, we have operated our business with integrity and

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concern for others. We are focused each day on promoting a welcoming and safe environment for our customers and associates. The principles that guide us are ingrained in our people and our operations. From the global impact of climate change to the safety of the products we sell to our concern for the individuals who make them, Dollar Tree strives to stay focused on these values.

Board and Management Oversight of Sustainability

              Our Board and management recognize the importance of assessing and planning for the potential impact of climate change and other sustainability risks on our business. This is an important part of the Board's enhanced ESG oversight that was implemented in 2020, including formalizing the responsibilities of the Nominating, Governance and Sustainability Committee in monitoring and evaluating the Company's sustainability and ESG risks affecting our stakeholders.

              Under its charter, the Nominating, Governance and Sustainability Committee has the lead role in overseeing the Company's risks and reporting related to ESG matters and sustainability. One of the Committee's primary duties and responsibilities is to at least semi-annually, evaluate, discuss, and, as appropriate, direct the disclosure of the Company's risks relating to corporate social responsibility and sustainability, including the environment, human rights, labor, health and safety, workforce diversity, supply chain, governance and similar matters affecting our stakeholders. The Committee also is responsible for developing and recommending to the Board policies and procedures relating to the Company's ESG and sustainability activities. This includes, among other things, directing senior management to assess on an ongoing basis the Company's sustainability risks, drafting or revising policies and procedures to prevent and mitigate sustainability risks, increasing transparency into the Company's policies on sustainability risks for all Company stakeholders, and providing regular reports to the Nominating, Governance and Sustainability Committee and/or the Board on the identification, evaluation, management and mitigation of sustainability risks including any which may arise in the future.

              In addition, as part of our commitment to sustainability, the Company formed an executive Sustainability Committee in 2020 that includes leaders from various key departments in the organization who will assist senior management and the Board in focusing our efforts on the sustainability issues that affect the Company.

Enhanced Sustainability and Climate Change Reporting

              We recognize that sustainability reporting is an area of interest for our stakeholders. The Board has included, as part of the 2021 Corporate Sustainability Report, disclosure regarding how we are aligning our long-term business strategy with the projected long-term constraints posed by climate change. For the first time, Dollar Tree has partnered with outside experts to define and measure its carbon emissions footprint, to set long-term greenhouse gas (GHG) emissions goals, and to prepare a formal climate disclosure report. Over the coming months and years, our goals and disclosures around environmental sustainability will continue to develop in response to our continued analysis and learning around climate change initiatives and renewable energy, anticipated governmental and regulatory requirements, and the demonstrated strong concerns of our customers and shareholders.

              Our initial climate-related goals include:

    Beginning in 2022, all new stores will meet our In-Store Energy Efficiency Standard.

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    By 2031, we will reduce Scope 1 and 2 greenhouse gas emissions by 25% per square foot across our retail stores, distribution centers and Store Support Center.

    We are committed to engaging with our top suppliers to understand their sustainability commitments. We target 75% of our supplier spend for merchandise to be with companies which have measurable greenhouse gas reduction or renewable energy targets by 2031.

              In developing our sustainability disclosures, we took into account shareholder input and prior voting results, including the passage of the shareholder proposal at our 2020 annual meeting requesting that the Company prepare a report "that describes how it is aligning its long-term business strategy with the projected long-term constraints posed by climate change" and "[t]he report should be prepared at reasonable expense and may exclude confidential information." The disclosure: (i) describes our long-term corporate strategy development process relative to climate change; (ii) summarizes the specific tasks performed by the Board and management in the course of this strategy development; and (iii) describes long-term goals for greenhouse gas reduction. The Board anticipates that this disclosure will continue to be valuable both for ongoing Board discussions of strategic matters and as a focal point for engaging with our stakeholders on matters of corporate sustainability and Board oversight.

Environmental Sustainability Initiatives

              Dollar Tree is focused on pursuing meaningful initiatives that minimize our environmental impact while reducing costs and driving efficiency, which we believe reduces risk and ultimately ensures the creation of sustainable shareholder value.

              While we have been focused on reducing our energy use and greenhouse gas (GHG) emissions for many years, 2020 marked the first year that we prepared a comprehensive GHG inventory to measure our carbon footprint to establish an initial baseline. We used the World Resources Institute's GHG Protocol Corporate Accounting and Reporting Standard to calculate metric tons of greenhouse gas emissions (Scope 1, 2 and select Scope 3) and energy. Our energy and GHG emissions come from the energy we consume across our stores and distribution centers, the emissions associated with the production of the goods we sell and the transportation of those goods from our suppliers to our stores.

              Having adopted our initial climate-related goals (see the prior section on page 30) in 2021, we are undertaking a variety of initiatives to achieve a reduction in our per-square-foot GHG emissions and to target our spend with merchandise suppliers with a similar commitment. These initiatives include the following:

    Because electricity consumption constitutes the largest component of our operational footprint, since 2012 we have installed LED lighting in new stores and distribution centers, implemented an energy management system across our stores, replaced or serviced aging freezers with EPA-compliant refrigerants, installed energy-efficient HVAC units, and optimized our electric forklift fleet.

    We have developed a Dollar Tree In-Store Energy Efficiency Standard for all new stores, relocations, or expansion projects. Beginning in 2022, all new stores will be equipped with LED lighting, have a cool roof system, which has a higher solar reflectance and higher thermal emittance than standard roofs, install low emissivity glass windows, utilize low energy hand dryers and motion detected occupancy sensors in restrooms, use high

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      efficiency HVAC units, have a cardboard baler or cardboard recycling container available, and implement water saving features.

    We are evaluating the use of renewable energy to lower our carbon footprint, including the possibility of utilizing renewable energy transactions, such as Virtual Power Purchase Agreements.

              Beyond these initiatives, we have taken other steps to reduce the environmental impact within our value chain, where emissions come from a variety of sources and suppliers. A large portion of our value chain emissions is from the transportation and distribution of our goods from our suppliers to our distribution centers and ultimately to our retail stores. To reduce the impact of trucking, we currently optimize full truckloads to reduce miles driven as measured on a per-store basis using state-of-the-art optimization software. This software maximizes the cargo utilization of each trailer shipped, thereby reducing total miles driven. Our Backhaul Miles Program works to reduce the number of trucks that go to and from the distribution centers. In addition, since 2013, we have participated in the U.S. Environmental Protection Agency's SmartWay Shipper Performance Program that seeks to reduce transportation-related carbon emissions by creating incentives for transportation providers to improve fuel efficiency. This program enhances our supply chain sustainability by measuring, benchmarking and improving freight transportation efficiency.

              Further reduction in Scope 3 emissions will rely on our engagement with our supply chain. In 2021, we set a goal to engage with our top suppliers on their carbon strategies, including GHG goals and renewable energy targets. We have also instituted a number of initiatives and programs to target reductions in waste-related emissions and waste generation, including battery recycling and cardboard and plastic recycling. In addition, we plan to reduce our impact by integrating recyclable materials into our packaging and reduce our overall use of packaging materials.

Product Safety and Sustainability

              We are dedicated to offering our customers products that are safe, reliable, and ethically sourced and manufactured. That means taking extra care to examine the practices of our vendors and manufacturers so that we can minimize our environmental impact while working to create a humane supply chain. We utilize independent and certified companies to test products that we import to assure that they meet or exceed all regulatory, legal or industry standards. We have one of the most robust testing programs for children's products, assuring that testing is done using random sample collection, often multiple times on each production run.

              We have also adopted a chemical policy to identify and reduce chemicals of high concern in our products, including lead, BPA and asbestos in children's products, cadmium and cadmium compounds, certain flame retardants, formaldehyde and various other chemicals we have identified as a priority concern. In 2019, Dollar Tree became the third retailer to join Clean Production Action's Chemical Footprint Project, in an effort to identify and further reduce our use of chemicals of high concern. In early 2021, we began re-evaluating our chemical priority list to incorporate new chemicals of concern so that we can continue evolving our requirements around high-priority chemicals as new information and recommendations become available.

              In addition, we are committed to providing environmentally and socially conscious products to our customers. For example, key clothing suppliers are part of the Sustainable Apparel Coalition, whose members are committed to measuring and improving social and environmental impacts within the apparel, footwear and textile industry.

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Human Rights

              We enlist independent third parties to conduct social compliance audits on all of our suppliers' overseas factories to assure compliance with labor, health and safety, human trafficking, discrimination and other legal requirements. We will not do business with factories that do not respect basic human rights.

Human Capital Management

              We continue to build a rewarding, engaging, diverse and inclusive work environment. In 2020, we formed the Diversity, Equity and Inclusion Executive Council comprised of diverse leaders from every department within the Company who are charged with creating a DEI strategy aligned with our business goals and helping to drive cultural change throughout the organization. In addition to helping to foster a culture of diversity and inclusion, the DEI Executive Council will help drive accountability at the senior management level for progress on key DEI initiatives. The Compensation Committee of the Board of Directors has committed to meeting at least twice a year to review DEI and human capital matters.

              In 2019, we established the "Women of One, Power of One" (now known as "Champions of Women"), an employee resource group whose mission is to help foster a more inclusive environment that supports the development and advancement of women across the enterprise and enhance the Company's competitive advantage. The DEI Executive Council will provide support to the Champions of Women to help embed diversity, equity and inclusion into our organizational culture.

              In 2020, we continued to focus on talent development of our associates which resulted in more than 35,600 promotions. We believe in the growth and development of our associates and provide professional and leadership development experiences, including online and instructor-led trainings to assist associates in their current role and help prepare them for future growth. We are committed to providing market-competitive pay for all positions and we are a pay for performance organization, and performance-based compensation opportunities exist at almost all levels of the organization, including hourly paid positions. Both Dollar Tree and Family Dollar have implemented a Store Manager Bonus Program, which rewards store managers for strong performance.

              We also offer benefits to eligible associates such as participation in our 401(k) plan and Employee Stock Purchase Plan in order to help our associates plan for their retirement. All full-time and part-time associates are eligible for competitive health and welfare benefits, including medical, dental, vision, disability, life insurance and other benefits.

Code of Ethics

              Our Board has adopted a Code of Ethics for all our employees, officers and directors, including our Chief Executive Officer and senior financial officers, which was recently reviewed and approved by the Board on December 3, 2020. A copy of this code may be viewed at www.dollartreeinfo.com/investors/corporate. In addition, a printed copy of our Code of Ethics will be provided to any shareholder upon request submitted to the Corporate Secretary at our corporate headquarters address, which is 500 Volvo Parkway, Chesapeake, VA 23320.

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Engagement with Shareholders

              Dollar Tree believes that effective corporate governance includes regular, constructive conversations with our shareholders. We strive for a collaborative approach to shareholder outreach and value the variety of investors' perspectives received, which helps deepen our understanding of their interests and priorities. Throughout the year, we seek opportunities to connect with our investors to gain and share valuable insights and receive feedback on the matters most important to them. The insights and feedback we receive is shared with the Board and its relevant committees.

              During 2020, we continued our outreach to shareholders to understand their views on issues important to them. The Vice President, Corporate Governance together with the office of the Corporate Secretary leads this shareholder engagement process on matters of corporate governance, incorporating other executives and members of the Board where appropriate or as requested by individual shareholders. We contacted holders of approximately 56% of outstanding shares to invite them into the process. We engaged with our shareholders on topics related to board refreshment, executive compensation, long-term business strategy, social issues that affect our business and environmental impact and sustainability matters, including climate change. A number of those we contacted indicated they did not feel an engagement call was necessary in 2020, given their comfort with the evidence of the Board's attentiveness and stewardship. Some shareholders indicated that while they appreciated our outreach and valued the opportunity to engage, they did not feel there were issues with the Company's governance or the Board's oversight which would necessitate their engagement annually.

              The Board reviewed feedback from these conversations to better understand our shareholders' priorities and perspectives. In response to feedback from shareholders, we took steps to increase our transparency and reporting on sustainability matters, including the preparation of an enhanced corporate sustainability report that evaluates how our long-term business strategy could be threatened by, and may be adapted to address, the potential challenges posed by climate change to our continued ability to create and build sustainable shareholder value. This report was published in April 2021. Consistent with feedback received from our large institutional shareholders, every director received shareholder support of at least 87% of votes cast at our 2020 annual meeting, and the advisory vote on our executive compensation program ("Say on Pay") received support from 92% of votes cast. In our 2020 shareholder outreach, no shareholders expressed significant concerns about executive compensation.

              To further our commitment to shareholder engagement, in March 2019 the Board of Directors adopted an enhanced Shareholder Engagement Policy. The Board believes that fostering long-term, open and institution-wide relationships with shareholders and maintaining their trust and goodwill is a core objective of our shareholder outreach program. Under the policy, our senior executive officers and the Investor Relations Department are primarily responsible for our communications and engagement with shareholders and the investment community. Management is responsible for promptly reporting to the Board all material shareholder comments and feedback it receives.

              Our Corporate Secretary and our Vice President, Corporate Governance serve as liaisons with our shareholders on governance matters. We authorized these positions to provide a more direct channel for communications with shareholders, to ensure an open dialogue on an ongoing basis and to promote increased understanding of industry standards for best practices in corporate governance as they evolve.

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              Although shareholder outreach is primarily a function of management, our Board also believes that in appropriate cases, Board-level participation in dialogue with shareholders on matters of significance can be an effective means of promoting mutual understanding and enabling the Board to be informed as to shareholder perspectives. In addition to the engagement that is expected to occur by the Chief Executive Officer and the Executive Chairman, the Board expects that the Lead Director will generally be the primary independent director who would participate in such discussions, with the understanding that on certain matters, the Chairs of relevant Board committees or in certain cases other directors may also be asked by the Executive Chairman, the Lead Director or the Board to participate. Accordingly, directors may also from time to time participate in an organized and coordinated manner with management in one-on-one meetings or investor events to elicit shareholder views.

              Shareholders may direct a request for a meeting with independent directors to the attention of the Lead Director who will consider such request, in consultation with the Corporate Secretary. The request should:

    Explain whether the person(s) making the request is (are) a shareholder or a representative of the Company's shareholders and the level of shareholdings held or represented;

    Identify the persons wishing to attend the meeting;

    Provide a description of the topics to be discussed; and

    Describe any intention or arrangements for communicating the nature and results of the meeting to other persons, recognizing that private, constructive dialogues are most conducive to productive discussion.

              The Board has the right to decline requests for any meetings requested by shareholders for any reason it deems appropriate, including where the proposed topics are not appropriate and in order to limit the number of such meeting requests to a reasonable level and prioritize acceptances based on the interests of all shareholders.

              Where a meeting request is granted, the Corporate Secretary will either directly contact the person(s) making the request to confirm arrangements for the meeting or be informed of the arrangements by the Lead Director of the Board. The Company's Chief Legal Officer or the Investor Relations Department may be asked to attend the meeting in order to confirm compliance with the Company's obligations respecting fair disclosure and the maintenance and assessment of disclosure controls and procedures. In certain cases, directors (and management) may adopt primarily a "listen-only" approach at meetings, and shareholders should recognize that in addition to Board input, the input of management will often be sought as to matters discussed with shareholders.

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COMMUNICATING WITH OUR BOARD MEMBERS

              Our shareholders may communicate directly with our Board of Directors. You may contact any member of our Board, any Board committee or any chair of any such committee by mail. To do so, correspondence may be addressed to any individual director, the non-management directors as a group, any Board committee or any committee chair by either name or title. Shareholders should direct a request for a meeting with independent directors to the attention of the Lead Director. All such mailings are to be sent in care of "Corporate Secretary" at our corporate headquarters address, which is 500 Volvo Parkway, Chesapeake, VA 23320. To communicate with our directors electronically, emails may be sent to CorpSecy@DollarTree.com.

              Mail received as set forth in the preceding paragraph may be examined by the Corporate Secretary for security purposes and for the purpose of determining whether the contents actually represent messages from shareholders to our directors. Depending upon the facts and circumstances outlined in the correspondence, the Corporate Secretary will forward the communication to the Board, or any director or directors, provided that the contents are not in the nature of advertising, promotions of a product or service, or patently offensive material.

              In addition, any person who desires to communicate financial reporting or accounting matters specifically to our Audit Committee may contact the Audit Committee by addressing a letter to the Chair of the Audit Committee at our corporate headquarters address, noted above, or electronically to AuditChair@DollarTree.com. Communications to our Audit Committee may be submitted anonymously, if sent by mail, addressed to the Audit Committee Chair. All correspondence will be examined by the Corporate Secretary and/or Internal Audit from the standpoint of security and depending upon the facts and circumstances outlined in the correspondence, the communications will be forwarded to our Audit Committee or Audit Committee Chair for review and follow-up action as deemed appropriate.

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DIRECTOR COMPENSATION

              Director compensation is established by the Board of Directors and periodically reviewed. The Board determined that each non-employee director (i.e., all directors except for Bob Sasser and Michael Witynski) will receive an annual cash retainer of $180,000. In addition, the Audit Committee chair will receive $30,000 and Audit Committee members will receive $20,000; the Compensation Committee chair will receive $30,000 and Compensation Committee members will receive $15,000; the Nominating, Governance and Sustainability Committee chair will receive $20,000 and the Nominating, Governance and Sustainability Committee members will receive $10,000. The Lead Director will receive an additional $35,000. The Board approved in fiscal 2016 an annual equity grant with a value of $75,000 to be paid annually to each non-employee director in the form of shares of Dollar Tree common stock. The Board may also authorize additional fees for ad hoc committees, if any. Fees are paid quarterly in advance. We do not offer non-equity incentives or pension plans to non-employee directors.

              Under our shareholder-approved 2013 Director Deferred Compensation Plan, directors may elect to defer receipt of all or a portion of their Board and committee fees to be paid at a future date in either cash or shares of common stock, or to defer all or a portion of their fees into non-statutory stock options. Deferral elections must be made by December 31 for the deferral of fees in the next calendar year and must state the amount or portion of fees to be deferred; whether and to what extent fees are to be deferred in cash or shares or paid in the form of options; in the case of deferral into cash or shares, whether the payout shall be in installments or lump sum; and the date on which such payout will commence. In the case of deferrals into options, the number of options to be credited is calculated by dividing the deferred fees by 33% of the closing price on the first day of each calendar quarter, which is the date of grant. The options bear an exercise price equal to the closing price on the date of grant and are immediately exercisable. Deferrals into cash or stock are recorded in unfunded and unsecured book-entry accounts. Deferred shares to be credited are calculated by dividing the deferred fees by the closing price on the first day of each calendar quarter. If cash dividends are declared, deferred share accounts are credited with a corresponding number of deferred shares, based on the market price on the dividend date. In the case of deferrals into a deferred cash account, interest is credited to the account at the beginning of each quarter based on the 30-year Treasury Bond rate then in effect. See the Director's Compensation Table below for a description of deferrals in the most recent fiscal year.

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              The following table shows compensation paid to each person who served as a director during fiscal year 2020 (compensation information for Bob Sasser, Michael Witynski and Gary Philbin can be found beginning on page 78).

Name






Fees Earned
or
Paid in Cash
($)(1)






Stock Awards
($)(2)





All Other
Compensation
($)





Total
($)
 

Arnold S. Barron

  $ 195,000   $ 75,000   $   $ 270,000  

Gregory M. Bridgeford

    255,000     75,000         330,000  

Thomas W. Dickson

  195,000   75,000     270,000  

Conrad M. Hall

    41,417             41,417  

Lemuel E. Lewis

  200,000   75,000     275,000  

Jeffrey G. Naylor

    210,000     75,000         285,000  

Winnie Y. Park

  58,808       58,808  

Thomas A. Saunders III

    190,000     75,000         265,000  

Stephanie P. Stahl

  215,000   75,000     290,000  

Carrie A. Wheeler

    200,000     75,000         275,000  

Thomas E. Whiddon

  220,000   75,000     295,000  

Carl P. Zeithaml

    195,000     75,000         270,000  

(1)
This column shows amounts earned for retainers and fees, including fees paid for service on standing and ad hoc committees, not reduced for deferrals.

(2)
This column includes the grant date fair value of shares granted to non-employee directors on July 1, 2020. The number of shares were determined by dividing the value of the equity award by the Company's closing share price of $93.39 on the date of grant, resulting in 803 shares of common stock for each of the non-employee directors.

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              The following table shows, for each of our non-employee directors, amounts deferred in fiscal year 2020 under our 2013 Director Deferred Compensation Plan, the number of shares underlying those deferrals and the aggregate number, as of January 30, 2021, of outstanding stock options, including options obtained through deferral of fees (all of which are fully vested), and deferred shares:

Name


Amounts
Deferred in
2020
($)(1)




Shares
Underlying
Amounts
Deferred in
2020
(#)(2)






Total
Deferred
Shares (#)



Options
Outstanding,
including
Options
acquired
through
Deferral of
Fees (#)








Total Shares
Underlying
Options
and Deferred
Amounts (#)

Arnold S. Barron

$ 192,000 2,106 23,836 23,836

Gregory M. Bridgeford

330,000 3,644 15,326 15,326

Thomas W. Dickson

270,000 2,975 4,175 4,175

Conrad M. Hall

41,417 568 31,638 31,638

Lemuel E. Lewis

275,000 3,031 59,450 59,450

Jeffrey G. Naylor

180,000 1,973 5,667 2,803 8,470

Winnie Y. Park

Thomas A. Saunders III

190,000 6,412 13,504 13,504

Stephanie P. Stahl

170,000 1,861 6,617 6,617

Carrie A. Wheeler

125,000 1,266 1,947 1,947

Thomas E. Whiddon

75,000 803 1,484 1,484

Carl P. Zeithaml

192,000 2,106 31,700 31,700

(1)
This column shows the dollar amount of retainers and fees deferred in 2020 under the 2013 Director Deferred Compensation Plan. Directors may choose to defer a portion or all of their fees into a deferred cash account, common stock equivalents (which we call "deferred shares") or options, as more fully described in the narrative in this section.

(2)
Shares in this column represent deferred shares and in the case of Mr. Saunders, deferral into options. Compensation expense related to these options, valued by the same method as that used for option grants to employees, is recorded upon grant; $275,178 was recorded in 2020 for Mr. Saunders.

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HOW NOMINEES TO OUR BOARD ARE SELECTED

              Candidates for election to our Board of Directors are recommended by our Nominating, Governance and Sustainability Committee and ratified by our full Board of Directors for consideration by the shareholders. The Nominating, Governance and Sustainability Committee operates under a charter, which is available on our corporate website at https://www.dollartreeinfo.com/investors/corporate. A copy of the charter is also available to all shareholders upon request, addressed to our Corporate Secretary at the address on page 36. All members of the Committee are independent under the standards established by the NASDAQ Stock Market.

              In addition, our bylaws enable eligible shareholders to have their own qualifying director nominee(s) included in the Company's proxy materials, along with candidates nominated by our Board of Directors, as described in further detail under "Proxy Access" on page 42.

              Our Nominating, Governance and Sustainability Committee also considers candidates recommended by shareholders. Shareholders may recommend candidates for Nominating, Governance and Sustainability Committee consideration by submitting such recommendation using the methods described under the "Shareholder Nominations for Election of Directors" section on page 41 and "Communicating with our Board Members" on page 36. In making recommendations, shareholders should be mindful of the discussion of minimum qualifications set forth in the following paragraph. Although a recommended individual may meet the minimum qualification standards, it does not imply that the Nominating, Governance and Sustainability Committee necessarily will nominate the person so recommended by a shareholder.

              In evaluating candidates for election to the Board, our Nominating, Governance and Sustainability Committee takes into account the qualifications of the individual candidate as well as the composition of the Board as a whole.

              Among other things, the Committee considers:

    the candidate's ability to help the Board create shareholder wealth,

    the candidate's ability to represent the interests of shareholders,

    the personal qualities of leadership, character and business judgment of the candidate,

    the need of the Board for directors having relevant knowledge, diversity of background and experience in areas including operations, finance, accounting, technology, marketing, merchandise, human capital management and talent development, and

    whether the candidate is free of conflicts and has the time required for preparation, participation and attendance at meetings.

Board Diversity

              The Board values diversity, in its broadest sense, reflecting, but not limited to, geography, gender, age, sexual orientation, race, ethnicity, national origin, and life experience and is committed to a policy of inclusiveness. The Nominating, Governance and Sustainability Committee seeks to include women and minority candidates in the qualified pool from which Board candidates are chosen, and has included such candidates in its formal search for a new director which resulted in the appointment of Winnie Park in December 2020 occasioned by the retirement of Conrad M. Hall

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at the 2020 annual meeting. If elected by our shareholders, the Committee will consider women and minority directors for leadership positions on the Board and its committees. Three of the last four directors added to our Board are women and one of them was appointed as Chair of the Nominating, Governance and Sustainability Committee in 2019.

Board Tenure

              The Board does not believe it should formally limit the number of terms for which an individual may serve as a director at the outset of a director appointment. Directors who have served on the Board for an extended period of time can provide valuable insight into the operations and future of the Company and matters of Board oversight based on their experience with and understanding of the Company's history, policies and objectives. Nevertheless, the Board strongly values fresh insight and novel approaches provided by new or recently appointed directors. The Board therefore believes that, as an alternative to term limits, it should endeavor to nominate Board candidates representing an on-going mix of short-, medium- and longer-term tenures.

              Upon the retirement of Mr. Saunders and Dr. Zeithaml, the tenure profile of our Board will consist of four (4) directors having two (2) years or less in tenure, three (3) directors between three (3) and five (5) years in tenure, and four (4) with over ten years. Each year as our newer members continue to gain needed experience, we expect to engage thoughtfully in additional Board refreshment and director departures. The Board's goal is to continue with the execution of its waterfall strategy to reach and thereafter maintain a relatively balanced mix of short, medium and long-term tenured directors. With the appointment of Ms. Park and the upcoming retirements of Mr. Saunders, who has been a director for 28 years, and Dr. Zeithaml, who has been a director for 14 years, the average tenure of the Board will decrease from 9.2 years to 7.1 years. The Nominating, Governance and Sustainability Committee from time to time engages search firms to assist the Committee in identifying potential Board nominees, and we pay such firms a fee for conducting such searches. With the assistance of independent third-party consultants, the Nominating, Governance and Sustainability Committee conducts significant amounts of due diligence to ensure that a nominee possesses the qualifications, qualities and skills outlined above.

Shareholder Nominations for Election of Directors

              Shareholders generally can nominate persons to be directors by following the procedures set forth in our bylaws. In short, these procedures require the shareholder to deliver a written notice containing certain required information in a timely manner to our Corporate Secretary at our corporate headquarters address, which is located at 500 Volvo Parkway, Chesapeake, VA 23320. To be timely, the notice must be sent either by personal delivery or by United States certified mail, postage prepaid, and received no later than 120 days and no sooner than 150 days in advance of the anniversary date of the proxy statement for the previous year's annual meeting. If no annual meeting was held in the previous year, or the date of the applicable annual meeting has been changed by more than 30 days from the date contemplated at the time of the previous year's proxy statement, notice must be sent not less than 90 days before the date of the applicable annual meeting. The notice must contain the information required by our bylaws about the shareholder proposing the nominee and about the nominee. A copy of our bylaws can be found online at https://www.dollartreeinfo.com/investors/corporate.

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              Each shareholder's notice to the Corporate Secretary must include, among other things:

    the name and address of record of the shareholder who intends to make the nomination;

    a representation that the shareholder is a shareholder of record of our Company's capital stock and intends to appear in person or by proxy at such meeting to nominate the person or persons specified in the notice;

    the class and number of shares of our capital stock beneficially owned by the shareholder; and

    a description of all arrangements or understandings between such shareholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by such shareholder.

              For each person nominated, the notice to the Corporate Secretary must also include, among other things:

    the name, age, business address and, if known, residence address, of the nominee;

    his or her principal occupation or employment;

    the class and number of shares of our capital stock beneficially owned by such person;

    any other information relating to such person that is required to be disclosed in solicitations of proxies for election of directors or is otherwise required by the rules and regulations of the Securities and Exchange Commission promulgated under the Securities Exchange Act of 1934, as amended; and

    the written consent of such person to be named in the proxy statement as a nominee and to serve as a director if elected.

Proxy Access

              Under the Company's proxy access bylaw, a shareholder, or a group of up to 20 shareholders, owning at least three percent (3%) of the Company's outstanding common stock continuously for at least three years, may nominate and include in our proxy materials director nominees not to exceed the greater of two (2) directors or twenty percent (20%) of the Board (rounded down), provided that the shareholders and nominees have complied with the requirements to be set forth in our bylaws and applicable law. Among other things, shareholders who wish to include director nominations in our proxy statement must follow the instructions in our bylaws as described in the "Shareholder Nominations for Election of Directors" section above.

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EXECUTIVE OFFICERS

              Our executive officers as of April 1, 2021 are as follows:

 
  NAME

AGE

POSITION
 
          
  Bob Sasser 69 Executive Chairman

 


Michael A. Witynski


58


President and Chief Executive Officer



Betty Click


58


Chief Human Resources Officer

 


David Jacobs


52


Chief Strategy Officer



Alasdair James


50


Executive Vice President—Merchandising & Supply Chain

 


Michael E. Lech


61


Chief Logistics Officer



Richard L. McNeely


62


Enterprise Chief Merchandising Officer

 


Thomas R. O'Boyle, Jr.


51


Enterprise Chief Operating Officer



William A. Old, Jr.


67


Chief Legal Officer, Corporate Secretary

 


James A. Paisley


53


Chief Information Officer



Kevin S. Wampler


58


Chief Financial Officer

              Our executive officers are appointed by the Board and serve at the discretion of the Board. Although we do not have employment agreements with our executive officers, we have entered into change in control Retention Agreements and Executive Agreements with certain of our executive officers by which, in consideration for certain restrictive covenants, including a covenant not to compete, the Company has agreed to provide payments and benefits under certain circumstances following termination of employment. See "Termination or Change in Control Arrangements" and "Potential Payments upon Termination or Change in Control" beginning on pages 78 and 86, respectively.

Executive Officer Biographies

              Biographical information for Mr. Sasser and Mr. Witynski, is provided in the "Director Biographies" section beginning on page 7. Biographical information for our other executive officers is provided below.

     
BETTY CLICK
Chief Human Resources
Officer
Dollar Tree, Inc.
  Ms. Click, age 58, has served as the Chief Human Resources Officer of Dollar Tree since June 2017. Ms. Click is responsible for all Human Resource departments for Dollar Tree, Family Dollar and Dollar Tree Canada. Prior to joining Dollar Tree, Ms. Click spent fifteen years (2002 to 2017) in Senior Management Positions (approximately nine of those years as the Senior Vice President of Human Resources for Payless ShoeSource Holdings and Collective Brands, a footwear retailer with multiple brands and thousands of stores). Prior to Collective Brands, Ms. Click served in multiple Human Resources leadership roles at Verizon and GTE from 1981 to 2002.
     

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DAVID JACOBS
Chief Strategy Officer
Dollar Tree, Inc.
  Mr. Jacobs, age 52, has been the Chief Strategy Officer of Dollar Tree since 2012. He has responsibility for helping to develop the strategic direction and key strategic initiatives for the enterprise as well as overseeing our digital business and Family Dollar's Merchandise Strategy and Analytics Group. He was the Senior Vice President of Strategic Planning from 2009 to 2012, and Vice President of Strategic Planning from 2006 to 2009. From 1996 to 2006, he held a number of positions with The Boston Consulting Group, a leading global strategic management consulting firm, including Partner from 2003 to 2006. From 1994 to 1996, he was an attorney at Weil, Gotshal & Manges, LLC.
     
     
ALASDAIR JAMES
Executive Vice President
Merchandise & Supply
Chain
Dollar Tree, Inc.
  Mr. James, age 50, has served as the Executive Vice President of Merchandising and Supply Chain of Dollar Tree since February 2021. Prior to joining Dollar Tree, Mr. James served as the Chief Executive Officer of Pier 1 Imports from 2017 to 2018. He previously served as the President of Kmart from 2014 to 2017. From 2007 to 2013, he worked for Tesco where he held various positions of increasing responsibility, including Chief Customer Officer, Global Brands for Tesco in the United Kingdom (from 2012 to 2013), a UK-based groceries and general merchandising retailer, and Executive Vice President and Chief Merchant in Shanghai, China from 2010 to 2012. Prior to that time, he held various senior management positions at GlaxoSmithKline from 2001 to 2007, including Global Brands Chief Marketing Officer from 2005 to 2007 and UK Chief Marketing Officer from 2002 to 2005.
     
     
MICHAEL LECH
Chief Logistics Officer
Dollar Tree, Inc.
  Mr. Lech, age 61, has been the Chief Logistics Officer of Dollar Tree since May 2020. Previously, he served as the Senior Vice President of Logistics of Dollar Tree from February 2020 to May 2020. From 2018 to 2020, he was the Chief Operating Officer for Eclipse Advantage. From 2006 to 2018, he held the position of Regional Vice President at Supervalu Inc. Prior to Supervalu, he spent 11 years of his career at Shaw's Supermarkets, a division of Albertsons, where he served in roles of increasing responsibility, including the Vice President of the Supply Chain from 2002 to 2006.
     
     
RICHARD McNEELY
Enterprise Chief
Merchandising Officer
Dollar Tree, Inc.
  Mr. McNeely, age 62, has been the Enterprise Chief Merchandising Officer of Dollar Tree since December 2019 and has responsibility for leading the merchandising, marketing and global sourcing functions for the Dollar Tree and Family Dollar business segments. From May 2017 to December 2019, he served as the Chief Merchandising Officer of Dollar Tree Stores. He previously served as Senior Vice President of Merchandising of Dollar Tree Stores from April 2008 to May 2017. Prior to joining Dollar Tree, Mr. McNeely spent the first 28 years of his retail career in roles of increasing responsibility within merchandising, marketing, global sourcing, and store operations with several retail companies, including Dollar General, Rose's Stores and Fred's, Inc.
     

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THOMAS R. O'BOYLE, JR.
Enterprise Chief
Operating Officer
Dollar Tree, Inc.
  Mr. O'Boyle, age 51, has been the Enterprise Chief Operating Officer of Dollar Tree since December 2019 and has responsibility for leading the store operations and real estate functions for the Dollar Tree and Family Dollar business segments. Previously, he served as the Chief Operating Officer of Family Dollar from October 2017 to December 2019. Mr. O'Boyle is a broad-based retail executive with substantial leadership experience, supplemented with functional experience in operations, merchandising, marketing, supply chain and logistics. Prior to joining Family Dollar, Mr. O'Boyle served as Chief Executive Officer of Marsh Supermarkets for five years and prior to that time served as President of the Food, Drug and Pharmacy business at Sears/Kmart. Mr. O'Boyle spent the first 22 years of his career in many executive leadership positions at Albertsons/American Stores (Jewel-Osco).
     
     
WILLIAM A. OLD, JR.
Chief Legal Officer
Dollar Tree, Inc.
  Mr. Old, age 67, joined Dollar Tree as the Chief Legal Officer in 2013. Prior to joining Dollar Tree, he was the Vice President and Director at Williams Mullen, P.C. from 2004 to 2013 representing public companies in mergers and acquisitions, corporate governance and securities matters. Prior to becoming a licensed attorney, Mr. Old practiced as a certified public accountant in the Commonwealth of Virginia.
     
     
JAMES A. PAISLEY
Chief Information Officer
Dollar Tree, Inc.
  Mr. Paisley, age 53, rejoined Dollar Tree as the Chief Information Officer in December 2020 and currently leads the Information Technology department with his more than 25 years of technology and business experience. From 2017 to 2020, he was the Vice President of Technology at Old Dominion Freight Line. From 2014 to 2017, he served as the Chief Information Officer for Advance Auto Parts. Prior to that time Mr. Paisley spent 19 years of his career at Dollar Tree where he served as the Chief Information Officer from 2012 to 2014.
     
     
KEVIN S. WAMPLER
Chief Financial Officer
Dollar Tree, Inc.
  Mr. Wampler, age 58, has been the Chief Financial Officer of Dollar Tree since December 2008. Prior to joining Dollar Tree, he served as Executive Vice President, Chief Financial Officer and Assistant Secretary for The Finish Line, Inc. from October 2003 to November 2008. Mr. Wampler held various other senior positions during his fifteen-year career at The Finish Line, including Senior Vice President, Chief Accounting Officer and Assistant Secretary from 2001 to 2003. Mr. Wampler, a Certified Public Accountant, was employed by Ernst and Young LLP from 1986 to 1993.
     

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COMPENSATION OF EXECUTIVE OFFICERS

Compensation Committee Report on Executive Compensation

              The Compensation Committee of our Board of Directors is responsible for developing, overseeing and implementing our pay-for-performance compensation program for executive officers. In carrying out its responsibilities, each year the Compensation Committee reviews, determines and recommends to the independent members of the Board the approval of the compensation of our Chief Executive Officer and Executive Chairman. The Committee also approves the compensation of our other executive officers.

              The Compensation Committee is committed to structuring compensation for our executives that rewards actions that support the Company's focus on annual and long-term growth and sustainable long-term shareholder value. To achieve this objective, we conducted a review of our compensation programs in 2020 with the assistance of Korn Ferry, our independent compensation consultant, to determine the appropriateness and competitiveness of our executive compensation programs and to ensure that those programs incentivize growth and drive long-term shareholder value. During this process, we listened to feedback from our executives and shareholders.

              Our review of the Company's executive compensation programs in 2020 focused on determining the appropriate level and mix of compensation to motivate and incentivize our executives to achieve our growth and performance goals and be accountable for the results. As a result of this process, we provided a mix of annual and long-term compensation that was designed to align the short and long-term interests of our executives with those of our shareholders. Specifically, the Compensation Committee reviewed and established base salaries, approved targets and awards under our annual cash incentive plan and made long-term incentive awards, the vesting of which are subject to our achieving a specified level of corporate performance.

              A further discussion of the principles, objectives, components and determinations of the Compensation Committee is included in the Compensation Discussion and Analysis that follows this Compensation Committee report. The specific decisions of the Compensation Committee regarding the compensation of named executive officers are reflected in the compensation tables and narrative that follow the Compensation Discussion and Analysis.

              The Compensation Committee has reviewed the Compensation Discussion and Analysis and discussed it with our management. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company's proxy statement for the 2021 annual meeting of shareholders.

SUBMITTED BY THE COMPENSATION COMMITTEE

Arnold S. Barron    Gregory M. Bridgeford    Thomas W. Dickson    Stephanie P. Stahl    Carl P. Zeithaml

Compensation Committee Interlocks and Insider Participation

              No member of the Compensation Committee was at any time during fiscal 2020 an officer or employee of the Company, and no member of the Compensation Committee was formerly an officer of the Company. In addition, none of the members of the Compensation Committee has or had any relationship with the Company during fiscal 2020 that requires disclosure in accordance with the applicable rules of the Securities and Exchange Commission relating to compensation committee interlocks and insider participation.

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COMPENSATION DISCUSSION AND ANALYSIS

              The following Compensation Discussion and Analysis ("CD&A") describes our executive compensation program and philosophy, our compensation-setting process, the elements of our executive compensation program, and the compensation decisions and certain changes we made to our compensation program in 2020. This CD&A should be read together with the compensation tables and related disclosures that immediately follow, which provide further historical compensation information for our Named Executive Officers ("NEOs") as identified below.


Named Executive Officers

Name



Title
  Michael Witynski President and Chief Executive Officer
  Gary Philbin   Former Chief Executive Officer
Kevin Wampler Chief Financial Officer
  Bob Sasser   Executive Chairman
Richard McNeely Chief Merchandising Officer
  Thomas O'Boyle, Jr.   Chief Operating Officer

Executive Summary

2020 Business Highlights

              We are North America's leading operator of discount variety stores, operating more than 15,200 discount variety retail stores under the names of Dollar Tree, Family Dollar and Dollar Tree Stores Canada. Highlights for fiscal 2020 include:

    Consolidated net sales for fiscal 2020 increased 8.0% to $25.51 billion from $23.61 billion in fiscal 2019. Enterprise same-store sales increased 6.1%. Same-store sales for the Family Dollar segment increased 10.5%. Dollar Tree same-store sales increased 2.2%.
    Adjusted operating income targets for fiscal 2020 were $1,778.6 million for the combined enterprise, $1,783.2 million for the Dollar Tree US banner and $323.8 million for the Family Dollar banner. In 2020, we achieved adjusted operating income of $2,186.8 million for the enterprise, $1,753.3 million for the Dollar Tree US banner and $783.9 million for the Family Dollar banner.
    In fiscal 2020, the management team continued to execute on our store optimization program for Family Dollar by rolling out the H2 concept to more stores, increasing the number of stores with adult beverages and developing a Combination Store. The H2 stores have significantly improved merchandise offerings, including Dollar Tree $1.00 merchandise sections and a minimum number of freezer and cooler doors throughout the stores. H2 stores have higher customer traffic and provide an average comparable store sales lift in excess of 10%, when compared to non-renovated stores, in the first year following renovation. As of January 30, 2021, we have approximately 2,385 H2 stores and plan to renovate at least 1,250 stores to this format in fiscal 2021 and plan to build new stores in this format.

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    The Combination Store builds on the success of the H2 format and leverages both the Dollar Tree and Family Dollar brands to serve small towns across the country. Compared to other Family Dollar Stores located in small markets, these Combination Stores are delivering a same-store sales lift of greater than 20% on average. H2 stores and Combination Stores will both be a part of the Family Dollar new store and renovation strategy moving forward.
    In fiscal 2020, the management team completed the roll-out of our Crafter's Square program to all of our Dollar Tree stores. The Crafter's Square assortment carries mark-ups which are higher than our average mark-up. Additionally, for more than a year, we have tested a multi-price initiative referred to as Dollar Tree Plus! Based on learning from our test, the management team made modifications to: the mix of products offered to include primarily discretionary items; the displays and signage to drive awareness and excitement to the stores; the price points to focus on the $1, $3 and $5 price points; and increase the number of offerings above the $1 price point. We plan to expand this initiative into a total of 500 stores in 2021.

Organizational Leadership Changes for Fiscal Year 2020

    Michael Witynski was promoted to President and Chief Executive Officer of Dollar Tree, Inc. in July 2020 and will continue to lead our initiatives at both the Dollar Tree and Family Dollar business segments to deliver great value to our customers and shareholders.
    Alasdair James joined Dollar Tree in February 2021 as the Executive Vice President of Merchandising and Supply Chain. He is responsible for leading Merchandising, Global Sourcing, Marketing, Inventory Management and Logistics. Mr. James reports to Mr. Witynski, our President and Chief Executive Officer.
    James Paisley rejoined Dollar Tree as the Chief Information Officer in December 2020 and leads the Information Technology department with his more than 25 years of technology and business experience.

              To continue our success going forward, it is critical that we motivate and retain our highly talented executive team to execute our corporate strategic vision, business plans and initiatives. To do so, our Compensation Committee has thoughtfully developed incentive programs to reward executives for superior performance versus goals that align the interests of executives with the interests of our long-term shareholders.

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Compensation Best Practices

              We seek to align our executives' interests with those of our long-term shareholders and to follow sound corporate governance practices.


 


Compensation Practice


 


Dollar Tree's Compensation Policies and Actions


 

 


Pay for Performance


YES


A significant portion of targeted direct compensation is linked to the financial performance of key metrics. Approximately 86% of our Chief Executive Officer's pay in 2020 was variable and at risk. One hundred percent (100%) of our annual bonus compensation and equity incentive compensation is based on corporate performance. See "Key Compensation Decisions for 2020" "Target Pay Mix" and "Alignment of Pay and Performance."


 

 


Clawback policy


YES


In 2018, the Board adopted a more robust clawback policy that requires mandatory reimbursement of excess incentive compensation from any executive officer if the Company's financial statements are restated due to material noncompliance with financial reporting requirements under the securities laws. This policy is in addition to our existing clawback policy covering the Company's Chief Executive Officer and Chief Financial Officer under the 2011 (and proposed 2021) Omnibus Incentive Plan. See "Recoupment ("Clawback") Policy."


 

 


Robust stock ownership guidelines


YES


Our executive stock ownership guidelines were revised in 2017 to increase the number of shares to be held by executives so as to create further alignment with shareholders' long-term interests. See "Executive Stock Ownership Guidelines."


 

 


 


 


 


 

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Compensation Practice


 


Dollar Tree's Compensation Policies and Actions


 

 


No hedging or pledging of Dollar Tree securities or holding Dollar Tree securities in margin accounts


YES


Our policy prohibits executive officers and Board members from hedging their ownership of our stock and holding our stock in a margin account. None of our executive officers and directors engaged in transactions involving the pledging of Company stock during fiscal 2020. See "Policy Against Hedging of Company Stock" and "No Pledges of Company Stock."


 

 


No excise tax gross-ups


YES


We do not provide excise tax gross-up payments.


 

 


Double-trigger provisions


YES


Equity awards under our equity incentive plan and all change in control Retention Agreements with executive officers include a "double-trigger" vesting provision upon a change in control. See "Termination or Change in Control Arrangements."


 

 


No repricing or cash buyout of underwater stock options without shareholder approval


YES


Our equity incentive plan prohibits modifications to stock options and stock appreciation rights to reduce the exercise price of the awards, or replacing awards with cash or another award type, without shareholder approval.


 

 


 


 


 


 

Executive Compensation Overview

              We are committed to an executive compensation program that ties pay to performance. The program is also designed to focus executives on the long-term growth and profitability of our business, without encouraging excessive risk-taking. A significant portion of pay is performance-based and therefore, variable and at risk. In determining the components of compensation, we seek to appropriately balance fixed and variable, short- and long-term and cash and equity components of the program, and to mitigate risks in the program with stock ownership guidelines that apply to our executive officers. Our compensation program is designed to reward our executive officers for achieving Company performance goals on metrics that we believe create sustainable shareholder value. When we do not achieve the performance goals, our executive officers' compensation reflects that performance.

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Executive Compensation Program

              Our executive compensation program consists of three principal components: base salary, annual cash bonus incentives payable under our Management Incentive Compensation Plan ("MICP"), and long-term equity incentives awarded under our 2011 Omnibus Incentive Plan. The long-term equity incentives consist of performance-based restricted stock unit ("RSU") awards under our Long-Term Performance Plan ("LTPP"), which we refer to as "LTPP awards," and performance stock unit ("PSU") awards. The Compensation Committee considers these components individually and reviews the overall distribution between them but does not target specific allocation percentages or amounts.

Element

Term

Strategic Role
Base Salary Short Term

Helps attract and retain executives through market-competitive base pay

Based on individual performance, experience and scope of responsibility

Annual Cash
Bonus Incentive
Short Term
(cash)

Encourages achievement of short-term strategic and financial performance metrics that create shareholder value

Cash bonus incentives are based 100% on adjusted operating income goals

Long-Term
Equity Incentive
Awards


Long Term
(equity)

Aligns executives' interests with those of shareholders

Motivates executives to deliver long-term sustained performance

Creates a retention incentive through multi-year vesting and robust stock ownership guidelines

Long-term awards consist of performance-based LTPP and PSU awards, which in 2020 were 100% based on adjusted EBITDA goals

              In addition, we also provide our executives with the benefits that are commonly available to our full-time associates, including participation in our retirement savings plan, employee stock purchase plan, health, dental and vision plans and various insurance plans, including disability and life insurance.

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2020 Changes to Compensation Program

              In March 2020, the Committee changed the performance metric for the PSU awards from adjusted operating income to adjusted EBITDA while continuing to utilize adjusted operating income as the performance metric for the annual cash bonus incentive. The Committee also adjusted the payout curve for the LTPP awards to raise the minimum performance threshold from 85% to 90% and changed the form of the award to consist solely of performance-based RSUs as opposed to 50% cash and 50% RSUs. This change better aligns the interests of executives with those of our long-term shareholders.

 
  2019 Performance Program
  Changes Implemented in 2020

 

 

 

 

 
Performance Stock Units (PSUs)  

PSUs vest after first year achievement of at least 85% of adjusted operating income target, with time-based vesting of one-third of the award on the first three anniversaries of the grant date

In order to increase the at-risk elements of the award, the award earned by an executive ranges from 75% of the target award for performance of 85% up to a cap of 150% of the target award for performance of 115% or greater

 

The performance metric for the PSUs changed from adjusted operating income to adjusted EBITDA. The purpose of this change was to differentiate the performance metric for the PSUs from the performance metric for the MICP awards while continuing to reflect a metric that represents the core operating performance of the business.

Long-Term Performance Plan Awards (LTPP)

 

Performance-based vesting on three-year cumulative achievement of at least 85% of target adjusted EBITDA

The percentage of a targeted award that may be earned by an executive ranges from 25% of the award for performance of 85% of target adjusted EBITDA up to a cap of 200% of the award for performance of 125% of target adjusted EBITDA

Award is paid 50% in cash and 50% in performance-based RSUs

 

The payout curve was adjusted to raise the threshold achievement level from 85% to 90% to align with best practices

The percentage of a targeted award that may be earned ranges from 50% of the target adjusted EBITDA up to a cap of 200% beginning with the 2020 LTPP awards

Based on our ongoing efforts to implement best practices, our LTPP awards will consist solely of performance-based RSUs rather than our historical practice of providing LTPP awards in the form of 50% RSUs and 50% cash


Note: To evaluate performance in a manner consistent with how management evaluates our operating results, the financial metrics in our annual and long-term incentive plans are measured on a non-GAAP basis.

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Key Compensation Decisions For 2020

 

Base Salaries

  The Compensation Committee made adjustments to base salaries based on various factors, including job performance and the salaries of executives in similar positions at peer companies.



 


Annual Cash Incentive Bonus Opportunity


 


The percentage of base salary that represented the target annual incentive opportunity for the President and Chief Executive Officer increased from 130% to 150% as a result of his promotion in July 2020. His annual cash incentive bonus was prorated based on his increased base salary and bonus target following his promotion. The target annual incentive opportunity for the Chief Financial Officer increased from 70% to 90%. There were no changes in the percentage of base salary that represented the target annual incentive opportunity for the other NEOs in 2020. The target percentages were set based on external and internal factors applicable to the positions held by these individuals.



 


Annual Cash Incentive Performance Goals


 


There was a rigorous process to set corporate performance goals for the combined enterprise, the Dollar Tree US banner and the Family Dollar banner. The corporate performance accounts for 100% of the annual incentive performance goals. The program has a threshold performance level of 85% of the applicable target level of adjusted operating income, which must be met or exceeded in order for any payout to be earned, with a maximum performance level of 115% of target.



 


Annual Cash Incentive Payout


 


In 2020, the Company achieved enterprise adjusted operating income of $2,186.8 million, which was 122.95% of the target amount. This resulted in a maximum payout of 212.5% to our executives. However, the Compensation Committee exercised discretion to reduce the cash payout to 146.8%. The Compensation Committee granted the difference in restricted stock units with a two year vesting period. For additional information on the Committee's decision regarding the 2020 performance bonuses, see "Approval of 2020 Bonuses."

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Long-Term—Performance Stock Units and LTPP Awards

  Performance Stock Units (PSUs) were granted, as well as grants of RSUs under the 2020-2022 LTPP. In 2020, the performance metric utilized for both the PSUs and LTPP awards was adjusted EBITDA. Based on the enterprise adjusted EBITDA goal for the 2020 PSUs, the Company achieved adjusted EBITDA of $2,872.7 million, which was 116.92% of the target amount. This resulted in a maximum payout of 150% of the target amount to our executive officers subject to the enterprise adjusted EBITDA goal.



 


Long-Term—LTPP Payout


 


Based on the Company's three-year adjusted operating income goal from 2018 to 2020, the Company achieved adjusted operating income of $5,294.8 million, which was 81.0% of the target amount. The three-year adjusted operating income goal established in 2018 did not anticipate or adjust for punitive tariffs under Section 301 or COVID-19 expenses. Because the performance level achieved was below the 83% threshold required for a payout, and the Compensation Committee did not adjust the performance goal retroactively to account for these unanticipated items (and has never exercised positive discretion), the 2018 LTPP awards were forfeited.

Key Compensation Decisions For 2021

              The Company continued to engage with its top institutional shareholders in 2020 and received feedback on various topics, including the Company's executive compensation program. Based on the Compensation Committee's consideration of our shareholders' input, the Committee decided to introduce a substantially different performance metric to its long term incentive plan. Beginning in 2021, total sales will replace the adjusted EBITDA performance metric for the LTPP awards. We believe the use of total sales for our LTPP awards, adjusted EBITDA for our PSU awards and adjusted operating income for our annual cash bonus incentive plan will properly incentivize our executive team and align with our business strategy to help drive profitability and top-line growth.

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Target Pay Mix

              Consistent with our desire to align pay and performance, our Compensation Committee takes our primary pay elements (base salary, annual incentives and long-term incentives) and develops a target pay package for each executive that is more heavily weighted towards variable or at-risk pay. Although our Compensation Committee does not target a specific allocation for each pay element, the Committee is nevertheless cognizant of delivering an appropriate balance between fixed and variable elements, as well as short- and long-term incentives, as evidenced here in the following 2020 target pay mix allocation charts:

GRAPHIC

Compensation Governance

              Our pay-for-performance philosophy and compensation practices provide an appropriate framework for our executives to achieve our financial and strategic goals without encouraging them to take excessive risks in their business decisions. Some of our core practices include:

GRAPHIC

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Alignment of Pay and Performance

 

              Our compensation program is grounded in a pay-for-performance philosophy. Performance goals in both our short- and long-term incentive plans are set at challenging levels, with the ultimate goal that achievement will drive long-term, sustainable shareholder value growth. When financial targets and performance goals are not met, pay outcomes for our executives should reflect this reality. For example, in 2019 and 2018 when our performance did not meet enterprise targets, the MICP payout was 54.5% and 36.4% of the target amount, respectively, and our LTPP payout was 48.2% and 71.0% of the target amount, respectively. In 2020, when our performance exceeded targets, our payouts also exceeded targets.

 

              Our analysis of the link between pay and performance indicates that when share price and performance go up, the value of outstanding pay rises. Conversely, when share price goes down or performance goals are not achieved, the value of pay declines. While there are certainly other factors to consider, including a lag effect due to the timing of award grants and the CEO transition that occurred during July 2020, the total realizable compensation of the Chief Executive Officers over the past three years, as shown in the following table, is indicative of this directional pay and performance alignment.

GRAPHIC

Note: Total realizable compensation for each fiscal year includes the sum of base salary, the cash bonus paid under the MICP, cash earned pursuant to vested LTPP awards, the value of unvested cash-based awards under the LTPP, and the value of all unvested equity incentive awards calculated using the closing market price of our stock as of the end of such fiscal year.

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Say on Pay Votes

              At our 2020 annual shareholders' meeting, our annual non-binding advisory vote on executive compensation was overwhelmingly approved by our shareholders, receiving approximately 92% support. The Compensation Committee reviewed these final vote results, which we believe reinforce shareholder support for our pay for performance philosophy and the appropriateness of our compensation structure. The Compensation Committee determined that the structure of our executive compensation program continues to be appropriately aligned to the achievement of Company goals and objectives and in the best interests of our shareholders.

              The Compensation Committee regularly reviews the executive compensation program to determine if adjustments are needed to remain competitive and aligned with our shareholders' interests. Further, the Compensation Committee and management recognize the value of engaging in a dialogue with our shareholders and receiving feedback on an ongoing basis to ensure alignment between our executive officers' compensation, our business objectives and the interests of our shareholders.

              In 2019, we contacted holders of approximately 64% of our outstanding shares to invite them into the process. While there were no concerns raised regarding our executive compensation program, the Compensation Committee in March 2020 found it appropriate to change the performance metric of the PSU awards from adjusted operating income to adjusted EBITDA beginning with the PSUs granted to our executives in 2020. The Company continued to use adjusted operating income as the performance metric for the annual cash bonus incentives and adjusted EBITDA for the LTPP awards in order to maintain at least two different performance metrics for our incentive plans. To further align the interests of our executives with those of our shareholders, we changed the form of the LTPP award to performance-based RSUs only as opposed to 50% RSUs and 50% cash.

              In 2020, we continued our engagement efforts by contacting holders of approximately 56% of our outstanding shares to seek input and to provide perspective on our pay for performance philosophy and other governance matters. Based on shareholder feedback, the Compensation Committee decided to make additional changes by introducing a third performance metric to its incentive awards that is substantially different from the existing performance metrics used by the Company.


 

 

              Beginning in 2021, total sales will replace the formerly used adjusted EBITDA performance metric for the LTPP awards. The Compensation Committee believes that growth in total sales is determined primarily by increases in comparable store sales, which is a key driver of profitability, and growth in the number of our stores, which is an additional source of sales growth and an important part of our long-term strategy. The Committee believes the use of total sales for the LTPP awards, adjusted EBITDA for the PSU awards and adjusted operating income for the annual cash bonus incentive plan properly incentivizes our executives and aligns their interests with our business strategy to help drive profitability and top-line growth.

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Executive Compensation Setting Process

Our Compensation Program Philosophy and Objectives

              The Compensation Committee has adopted a pay-for-performance policy for executive officers that balances each executive's total compensation between cash and non-cash, and current and long-term, components. The principal objectives of our compensation policies are to:

    align executive pay with shareholders' interests with a dominant pay-for-performance design;

    provide executive pay that is competitive among our peer group;

    recognize and reward achievement of corporate performance goals;

    attract, motivate and retain highly qualified executives; and

    unite the executive management team to a common objective.

              The Compensation Committee begins its work each year with the determination of the peer group. The goal is to select public retailers with revenues, market capitalization and qualitative factors similar to Dollar Tree. Although the Compensation Committee does not mandate a specific percentile of the peer group for total direct compensation of any executive, to ensure our compensation is competitive among our peer group, we use the 50th percentile as a point of reference in setting total direct compensation. To align pay with shareholder interests, we target the Chief Executive Officer's at-risk compensation to be more than 85% of his total compensation (86% in 2020). For other named executive officers, 84% of their total compensation was at-risk in 2020. To further align compensation with long-term shareholder value, we also believe that the Chief Executive Officer's long-term incentive compensation should be a substantial majority of his total at-risk pool (65% of total compensation in 2020).

              For 2020, we chose to use adjusted operating income and adjusted EBITDA as the performance metrics for at-risk compensation to unite the executive management team in pursuit of a common objective. Beginning in 2021, the Compensation Committee approved the use of total sales as the performance metric for the LTPP awards. We believe that adjusted operating income for MICP bonuses, adjusted EBITDA for PSU grants and total sales for LTPP awards are the best objective metrics to motivate our executive team and help drive profitability and top-line growth.

              We believe that the adjusted operating income goal for the cash bonus and adjusted EBITDA goal for the PSU grant should be challenging but not impossible to achieve. Targets were not fully achieved in 2018 or 2019 but were exceeded in 2020.

              Because it is much more difficult to forecast the performance of a retailer over three years because of factors beyond management's control (the economy, weather, trade wars, etc.), we try to set the three-year target (total sales beginning in 2021) for our LTPP awards at a realistic level. Even so, certain challenges such as tariffs and COVID-19 may not be foreseen when LTPP targets are set. The LTPP payout was 0% for 2020, 48.2% for 2019 and 71.0% for 2018. We also believe that the pay and performance curve for the annual cash bonus, PSU and LTPP awards should be relatively steep, giving the executives meaningful downside risk and upside benefit if performance falls short of or exceeds the target. This approach again aligns the executive's pay with shareholder return.

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Use of Peer Group

              The Compensation Committee, with the assistance of Korn Ferry, approved in December 2020 a new peer group of 18 companies that we believe are similarly situated to Dollar Tree and are representative of the markets in which we compete for executive talent.

              The peer group was developed based primarily upon Dollar Tree's industry and size. Revenue growth and market capitalization were selected as the appropriate size filters. The Committee also considered qualitative factors such as retail presence, price points, customer base and whether the company can be deemed an essential business. Korn Ferry assisted the Compensation Committee with identifying executive positions comparable to those of our named executive officers and providing the Committee with benchmarking data for both total direct compensation and each element of total direct compensation within the peer group. This analysis provided the Committee with a perspective on Dollar Tree's pay-for-performance relationship relative to its peers.

              Using these criteria, the Compensation Committee determined that 15 companies from the 2019 peer group would continue to be included in the new peer group established in December 2020. Four companies, Aramark Corporation, CarMax, Inc., L Brands, Inc. and Sysco Corporation, were removed from the peer group, and three companies, BJ's Wholesale Club, Inc., Home Depot, Inc. and Target Corporation, were added to the peer group. These changes reflected the higher weighting that was placed on essential businesses and companies with a similar customer base. Additionally, companies with revenue greater than three times Dollar Tree revenue were allowed to enter the peer group to help balance the number of companies clustered between $9 billion and $15 billion in revenue. As a result of these changes, the following 18 companies constituted our peer group beginning in December 2020 and are representative of the markets in which we compete for executive talent:


Bed Bath & Beyond, Inc.

 

Macy's Inc.
Best Buy Co. Inc.   McDonalds Corporation
BJ's Wholesale Club, Inc.   Nordstrom, Inc.
Dollar General Corporation   Rite Aid Corporation
Gap, Inc.   Ross Stores, Inc.
Genuine Parts Company   Starbucks Corporation
Home Depot, Inc.   Target Corporation
Kohl's Corporation   TJX Companies, Inc.
Lowe's Companies, Inc.   Tractor Supply Company

              The Committee does not target a specific market data percentile for total direct compensation or individual components of compensation but rather reviews data from the peer group companies as a point of reference to help ensure that our overall compensation remains competitive.

Executive Compensation Principles

              We selected the components of compensation to achieve our stated executive compensation objectives. Our executive compensation program consists of base salaries, annual cash incentives

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and long-term incentives generally in the form of RSU and PSU awards. These components of executive compensation are used together to strike an appropriate balance between cash and stock compensation and between short-term and long-term incentives. We expect a significant portion of an executive's total compensation to be at risk, tied both to our annual and long-term performance as well as to the creation of sustainable shareholder value. In particular, we believe that both short-term and long-term incentive compensation should be tied directly to the achievement of corporate performance goals. In addition, we believe that long-term incentive compensation should reward an executive for his or her contribution to our long-term corporate performance and shareholder value creation. Under our policy, performance above the targeted goal results in increased total compensation, and performance below the targeted goal results in decreased total compensation.

              We differentiate compensation to executives based on the principle that total compensation should be commensurate with an executive's position and responsibility, while at the same time, a greater percentage of total compensation should be tied to corporate performance, and therefore be at risk, as position and responsibility increases. Thus, executives with greater roles and responsibilities associated with achieving our performance targets should bear a greater proportion of the risk if those goals are not achieved and should receive a greater proportion of the reward if our performance targets are met or surpassed. In addition, as an executive's position and responsibility increase, the use of long-term incentive compensation should increase as a percentage of total compensation because our senior executives have the greatest influence on our strategic performance over time.

              The compensation of our named executive officers in 2020 was based on the application of the executive compensation principles described above in light of their respective roles and responsibilities in the Company. The compensation of our Chief Executive Officer, Mr. Witynski, is based on his primary responsibility as the principal executive officer overseeing the business, management and operations of the Company. Mr. Witynski is also responsible for assessing risks to the Company and ensuring they are monitored and mitigated. Mr. Witynski has a unique role as primary architect of the Company's strategic vision and is responsible for the planning and implementation of the Company's strategic and operational initiatives and goals, including the goal of identifying and delivering value to our shareholders.

              Mr. Sasser serves as our Executive Chairman with primary responsibilities for Board leadership and engagement with our management team. As the former Chief Executive Officer of the Company, Mr. Sasser is uniquely qualified to serve in these capacities. Mr. Sasser's Board leadership responsibilities include, among other things, mentoring the Chief Executive Officer, overseeing the general functioning of the Board and its committees, assessing the composition of the Board, recruiting potential candidates for the Board as necessary, consulting regularly with the Lead Director to discuss matters that concern the Board, leading the Board's annual review of the Company's business strategy, financial plans and capital resources, and leading the Board's role in succession planning for executive officers.

              Mr. Sasser's management responsibilities include providing advice and support to the President and Chief Executive Officer on critical Company initiatives and shareholder communications, the perpetuation of the Company's successful business culture and the maintenance of market and customer relevance through development of long-term strategic plans. In addition, Mr. Sasser is responsible for challenging and holding management accountable, as appropriate, and transferring his institutional knowledge and principles to the organization. As liaison between the Board and management, Mr. Sasser is responsible for providing opportunities for the Board and management to engage in open discussions of strategic initiatives, opportunities and

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industry outlook, for ensuring that management understands and carries out the Board's decisions and for helping the Board remain connected to the individual managers who are executing the Company's business plans.

              As Executive Chairman, Mr. Sasser does not receive director compensation for carrying out his duties under the Company's bylaws. Such duties include presiding at meetings of the shareholders and of the Board of Directors, managing the business and affairs of the Company as directed from time to time by the Board of Directors and seeing that all orders and resolutions of the Board are carried into effect.

              In 2020, in comparison to our other executive officers, our Chief Executive Officer and Executive Chairman received greater total compensation as a result of their greater authority, responsibility and oversight.

Role of the Compensation Committee

              The Compensation Committee consists entirely of non-employee, independent members of our Board of Directors and operates under a written charter approved by the Board. The Compensation Committee has the direct responsibility to review and determine the compensation of all named executive officers, including the determination of performance metrics and goals and the achievement of performance goals.

              The Compensation Committee considers shareholder feedback and other factors as it seeks to align the objectives and operation of our executive compensation program with the interests of our shareholders. The Compensation Committee has historically consulted, and expects to continue to consult, with the Chief Executive Officer and senior management, as well as an independent external compensation consultant retained by the Compensation Committee when deemed appropriate, in the exercise of its duties. Notwithstanding such consultation, the Compensation Committee retains absolute discretion over all compensation decisions with respect to the named executive officers.

              In determining the compensation of our executive officers, the Compensation Committee evaluates total overall compensation, as well as the mix of salary, cash bonus incentives and equity incentives, using a number of factors including:

    our financial and operating performance, measured by attainment of specific strategic objectives and operating results;

    the compensation practices of our peer group; and

    our historical cash and equity compensation levels.

Role of the Chief Executive Officer in Compensation Decision-Making

              In general, at the Compensation Committee's request, our Chief Executive Officer may review and recommend to the Compensation Committee or its consultants the compensation structure and awards for the other named executive officers. The Chief Executive Officer participates in the development of business plans and annual budgets, and corresponding performance metric goals. The Chief Executive Officer also provides information to the Compensation Committee and its consultants regarding the job performance and overall responsibilities of the other named executive officers. He makes no recommendations concerning his own compensation to the Compensation

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Committee or its consultants. The Chief Executive Officer does not vote on executive compensation matters nor is he present when his compensation is being discussed or approved.

Role of the Compensation Consultant

              Pursuant to its written Charter, the Compensation Committee has the authority to engage the services of outside independent advisers. Previously, the Committee engaged Aon Consulting to provide executive compensation services from 2010 through September 2019. In October 2019, the Compensation Committee retained Korn Ferry to assist the Committee in determining the appropriateness and competitiveness of our executive compensation program. Korn Ferry did not provide any other services to the Company in 2019 and 2020. No executive officer had the authority to direct the work of Korn Ferry with regards to its work with the Compensation Committee. The Compensation Committee bears ultimate responsibility for approving the compensation of all named executive officers. In connection with the Compensation Committee's engagement of Korn Ferry as a consultant, the Committee considered the six independence factors set forth in Rule 10C-1 under the Securities Exchange Act of 1934 and determined that Korn Ferry could provide objective advice to the Compensation Committee on executive compensation matters.

Assessment of Risk

              The Compensation Committee has responsibility for establishing our compensation philosophy and objectives, determining the structure, components and other elements of our programs and reviewing and approving the compensation of our NEOs. In addition, an important objective of our overall executive compensation program is to reduce any incentives that may influence executives to take imprudent risks that might harm the Company or our shareholders. At least annually, the Compensation Committee assesses the risk of our compensation program. The Compensation Committee has overseen the establishment of a number of controls that address compensation-related risk and serve to mitigate such risk, including stock ownership guidelines for executive officers and maintaining prohibitions on the hedging of Dollar Tree stock or holding Company stock in a margin account. As a result, we have reviewed our compensation policies and practices for all employees and concluded that such policies and practices are not reasonably likely to have a material adverse effect on our Company.

Components of Executive Compensation

              The executive compensation program for 2020 consisted of market-competitive base salary tied to the executive's individual performance, experience and scope of responsibility; an annual cash bonus opportunity under the MICP based on achievement of short-term adjusted operating income goals; and long-term equity incentives in the form of PSUs and LTPP awards based on adjusted EBITDA performance goals. A description of each of these components is provided in more detail in the following discussion.

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Base Salary

              Our base salary philosophy is to provide reasonable current income to our named executive officers in amounts that will attract and retain individuals with a broad, proven track record of performance. To accomplish this objective, we provide base salaries that are intended to be competitive relative to similar positions at comparable companies. Base salaries are reviewed annually and adjustments are made as required to recognize outstanding individual performance, expanded duties or changes in the competitive marketplace.

              The Compensation Committee, with the assistance of Korn Ferry, approved base salary amounts for the executive officers during its March 2020 meeting. The base salaries of Messrs. Witynski, McNeely and O'Boyle were increased in connection with their respective promotions while the salaries of all other named executive officers remained the same as their salaries approved in March 2019. In determining the base salaries for 2020, the Compensation Committee reviewed market data from its peer group, Korn Ferry's data on salary increases for executives and other relevant internal factors such as individual performance and internal pay equity.

Executive


2019
Base Salary


2020
Base Salary


Year over Year
Change

Michael Witynski(1)



$1,050,000




$1,300,000




23.8

%

Gary Philbin

$1,400,000 $1,400,000 0 %

Kevin Wampler

$800,000 $800,000 0 %

Bob Sasser

$1,000,000 $1,000,000 0 %

Richard McNeely(2)

$675,000 $800,000 18.5 %

Thomas O'Boyle, Jr.(2)

$600,000 $650,000 8.3 %

(1)
In connection with Mr. Witynski's promotion to President and Chief Executive Officer in July 2020, the Compensation Committee approved a 23.8% increase to his base salary.

(2)
In connection with Mr. McNeely's promotion to Enterprise Chief Merchandising Officer and Mr. O'Boyle's promotion to Enterprise Chief Operating Officer in December 2019, the Compensation Committee approved base salary increases of 18.5% and 8.3% to Messrs. McNeely and O'Boyle, respectively.

Annual Cash Bonus Incentives

              We provide our executive officers, including the named executive officers, with the opportunity to annually earn cash incentives under the MICP. These incentives are designed to encourage the achievement of corporate and individual objectives and to reward those individuals who significantly impact our corporate results.

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      2020 Bonus Opportunities

              Executive bonus opportunities are set as a percentage of salary. For 2020, the executive bonus opportunities were as follows:

Executive


Bonus Incentive
Opportunity
(as a % of base salary)

Michael Witynski(1)



140

%

Gary Philbin(2)

140 %

Kevin Wampler

90 %

Bob Sasser(3)

Richard McNeely

100 %

Thomas O'Boyle, Jr.

100 %

(1)
In July 2020, the Compensation Committee increased Mr. Witynski's executive bonus opportunity from 130% of his base salary to 150% in connection with his promotion to President and Chief Executive Officer. Mr. Witynski's bonus was calculated on a prorated basis using the bonus target in effect both before and after the effective date of his promotion. The prorated bonus targets resulted in a blended bonus incentive opportunity as a percent of base salary of 140%.

(2)
Mr. Philbin was not eligible for a bonus due to his retirement in September 2020, prior to the time the 2020 bonus was paid.

(3)
Beginning in 2019, Mr. Sasser no longer participates in our annual cash bonus incentive plan.

              Beginning in fiscal 2019, the Compensation Committee eliminated the individual performance component for purposes of calculating the annual cash bonus incentive and determined that bonuses would be weighted 100% on the achievement of the corporate performance target (adjusted operating income in 2020), thereby more closely aligning executives' interests with the interests of shareholders. The 2020 incentive targets, as in prior years, were set using the market data provided from the peer group and our assessment of appropriate targets within our management structure.

              The Company performance goals for the annual cash bonus incentive are generally derived from operating income targets defined by the annual budget as approved by the Board of Directors at the beginning of the fiscal year. Thus, these performance goals are consistent with the Board's overall outlook of the Company's potential performance over a one year horizon. For executive compensation purposes, the Compensation Committee approves adjusted operating income targets for the enterprise and the Dollar Tree and Family Dollar banners that adjust for various items that the Compensation Committee considers appropriate. The definition used the adjusted operating income metric that is provided on page 66.

              In March 2020, the Compensation Committee determined that the use of adjusted operating income as the performance metric in fiscal 2020 for the annual cash bonus incentive plan was appropriate because it encourages achievement of strategic and financial performance metrics that create sustainable shareholder value, it is something over which executive officers have control and it is an important metric for evaluating the performance of retail companies. The performance targets are intended to be challenging but achievable, and serve to focus our management team on a common goal while aligning efforts with shareholder interests.

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              In order for an executive to receive any bonus, however, we must achieve at least 85% of the adjusted operating income target. Annual incentive awards in 2020 were determined as follows:

GRAPHIC

      2020 Corporate Performance Metrics

              The Compensation Committee establishes the MICP corporate performance target, which is derived from the annual budget approved by the Board of Directors at the beginning of the fiscal year. For 2020, the corporate performance target was determined to be adjusted operating income, with a target set at $1,778.6 million for the combined enterprise, $1,783.2 million for the Dollar Tree US banner and $323.8 million for the Family Dollar banner. These targets reflect the adjusted operating income underlying the annual budget approved by the Board of Directors.

      Corporate Performance Goals for NEOs

              The corporate performance measure for the named executive officers relates to the adjusted operating income target for the combined corporate enterprise which was set at $1,778.6 million in 2020.

              The following table summarizes the potential payout percentages for MICP awards based on the percentage of the applicable corporate performance target attained.

% of Corporate
Performance Target
Attained



Potential MICP
Payout Percentage

Below 85.0%



0

%

85% 25 %
90% 50 %
95% 75 %
100% 100 %
105% 137.5 %
110% 175 %
115.0% or above 212.5 %

              The MICP bonuses relating to performance in a given fiscal year are paid in the following year when annual financial results are available, generally in March or April. The amount of the MICP awards must be determined and approved by the Compensation Committee which considers the Company's overall financial results and the level of performance achievement. The Compensation Committee may, in its sole discretion, decrease the amount of MICP awards that may otherwise be payable upon the attainment of the applicable performance goals. Although it has never done so, the Compensation Committee also has the discretion to adjust the MICP awards to

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mitigate or exclude the impact of unanticipated items that are determined to be unusual in nature or amount or infrequent in occurrence. Any modification would be carefully considered by the Committee, applied only in special circumstances that warrant the modification, and fully disclosed.

              The definition of adjusted operating income approved by the Compensation Committee for purposes of measuring the 2020 target performance under the MICP excluded the effects relating to or resulting from: (i) Canadian currency fluctuations; (ii) changes in accounting policies, practices and pronouncements; (iii) Summit Pointe expenses to the extent different than the estimates contained in the 2020 Fiscal Budget; (iv) non-cash goodwill and intangible impairment charges; (v) expenses incurred with respect to future mergers, acquisitions, or divestitures; (vi) any loss, cost or expense related to an uninsured disaster; (vii) lease costs, expenses, asset write-offs, incentive compensation, and severance related to closed stores or distribution centers; (viii) costs related to shareholder activism and corporate governance; (ix) any future changes in laws or regulations; (x) any unbudgeted loss as a result of the resolution of legal matters in excess of $5 million in the aggregate; (xi) the negative financial impact of COVID-19; and (xii) changes in the manner shared services are allocated based upon the methodology used in the 2020 Fiscal Budget approved by the Board of Directors ("Fiscal Budget").

      Approval of 2020 Bonuses

              Under the definition of adjusted operating income adopted in March 2020, the negative financial impact of COVID-19 and losses relating to uninsured disasters were to be added back to operating income for purposes of determining adjusted operating income under the MICP. The definition was intended to exclude the impact of circumstances outside of the executives' control. These adjustments totaled $297.2 million ("Adjustments") in 2020. If these Adjustments could have been estimated at the time the Committee set the target, the Committee would have reduced the target instead of adjusting the definition of operating income. At the outset of the pandemic, a reasonable estimate was not possible.

              During eight meetings, the Committee focused on this provision and how COVID-19 would financially impact the Company's performance and executive compensation. The Committee's independent consultant, Korn Ferry, participated in four (4) of those meetings to offer guidance. The Compensation Committee's deliberations and thought processes are summarized below:

    $248.4 million of the Adjustments were for "premium" pay or bonuses, sometimes referred to as "Hero Pay," to store and distribution associates and managers. This incremental pay was in recognition of their extraordinary efforts to ensure that our stores remained open safely while providing our customers and communities with continued availability of essential goods during the pandemic. A majority of the remaining Adjustments were for personal protective equipment and other COVID-19 expenses to protect our associates and customers. The payments reflected prudent management decisions to fairly compensate our front-line workers and protect our brand, delivering essential goods during an unforeseen time of national emergency. None of the payments were the result of poor or inadequate planning or execution.

    The Committee noted that the management team's performance produced MICP results at the maximum level under the plan originally adopted in March 2020, and at the 146.8% level without considering the Adjustments. The management team exceeded consensus earnings estimates in each quarter during 2020 despite a most challenging retail environment. Sources of supply were often challenged, requiring the management team to adapt. Customers visited the physical stores less frequently and at different

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      times, again requiring the management team to react to these new trends. The Company complied with new and costly Centers for Disease Control, state, and local mandates to protect its customers and associates. Moreover, the team successfully operated two different brands that faced different challenges during the pandemic. For example, Dollar Tree's critical offerings are discretionary goods such as Easter, party, and holiday goods, that were subject to a significant decrease in demand during much of 2020.

    For the reasons discussed above, the Committee determined it was necessary to follow the original target and the original definition of adjusted operating income, and compensate the management team for extraordinary performance under trying circumstances. However, it did so with a lower portion of cash and a higher portion of equity to balance the interests of all stakeholders. The Committee reduced the MICP cash awards for the executives by excluding the Adjustments from the adjusted operating income calculation before it determined MICP performance. The Committee determined that the portion of the potential MICP payout attributable to the excluded Adjustments would not be paid under the MICP, but that a grant of RSUs in a similar amount would be made to such executives, with such awards vesting 50% on each of the first and second anniversaries of the date of grant.

              During its March 2021 meeting, the Compensation Committee determined the following Company and banner performance for fiscal 2020:

Metric

2020 Target

2020 Achievement

% of Target

Payout %(1)
Enterprise adjusted operating income $1,778.6 million $2,186.8 million 122.95 % 212.5 %
Dollar Tree adjusted operating income $1,783.2 million $1,753.3 million 98.32 % 91.60 %
Family Dollar adjusted operating income $323.8 million $783.9 million 242.09 % 212.5 %

(1)
Represents the maximum potential payout percentage under the MICP based on the level of adjusted operating income achieved in fiscal 2020 prior to the Committee's exercise of discretion to reduce the amount of the MICP award for certain executives.

              As shown in the preceding table, the performance level achieved for the enterprise resulted in a potential maximum cash incentive payout at 212.5%. However, as a result of the Compensation Committee's decision to exclude the Adjustments from the achieved level of adjusted operating income, the MICP payout percentage was reduced from 212.5% to 146.8% for certain executives who were subject to the enterprise adjusted operating income metric, including Messrs. Witynski, Wampler, McNeely and O'Boyle.

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              Based upon the determinations described above, the Compensation Committee authorized 2020 performance bonuses (MICP cash awards and RSU awards) for the executives as follows:

Executive


Bonus
Target
as % of
Base
Salary





Amount of
Target
Bonus(1)



MICP Cash
Bonus
Awarded(2)



RSUs
Awarded
($)(3)



Total
Performance
Bonuses
Awarded(4)

Michael Witynski(5)

140 % $1,657,500 $2,433,210 $1,088,978 $3,522,188

Gary Philbin(6)

140 % $1,960,000

Kevin Wampler

90 % $720,000 $1,056,960 $473,040 $1,530,000

Bob Sasser(7)

Richard McNeely

100 % $800,000 $1,174,400 $525,600 $1,700,000

Thomas O'Boyle, Jr.

100 % $650,000 $954,200 $427,050 $1,381,250

(1)
Represents the base salary of the named executive officer multiplied by the target percentage of base salary.

(2)
Represents the amount paid to the named executive officer as a result of the Compensation Committee exercising its discretion to reduce the MICP payout percentage from 212.5% to 146.8% by excluding the Adjustments from the achieved level of adjusted operating income.

(3)
Represents the dollar amount approved by the Compensation Committee for RSU grants corresponding to the amount of the Adjustments excluded from the MICP calculation. The RSUs were granted under the Company's 2011 Omnibus Incentive Plan as of March 16, 2021, and will vest 50% on each of the first and second anniversaries of the date of grant, provided the executive remains employed with the Company through the vesting dates, unless vesting is accelerated due to death, disability or retirement. For additional information on the grant date present value of the RSU awards, see footnote 2 of the Grants of Plan-Based Awards Table.

(4)
Represents the total dollar amount of the MICP cash bonus and RSUs awarded to each executive. The amounts shown are equivalent to the amounts that the Compensation Committee could have paid in cash under the MICP to Messrs. Witynski, Wampler, McNeely and O'Boyle using an achieved 212.5% payout percentage for 2020.

(5)
In July 2020, Mr. Witynski was promoted to President and Chief Executive Officer at which time his base salary increased from $1,050,000 to $1,300,000 and his bonus target increased from 130% of his prior base salary to 150% of his new base salary. Mr. Witynski's bonus was calculated on a prorated basis using the bonus target in effect both before and after the effective date of his promotion. The prorated salary and bonus targets resulted in a blended bonus target as a percent of base salary of 140% and a total amount available for bonus of $1,657,500.

(6)
Mr. Philbin did not receive an annual bonus for 2020 because he retired in September 2020, prior to the date the bonus was paid.

(7)
Beginning in 2019, Mr. Sasser no longer participates in the annual cash bonus plan.

              In March 2019, the Compensation Committee determined that future annual incentive bonus awards would be based 100% on corporate performance beginning in fiscal 2019. The Compensation Committee in the past had determined that 85% of the annual incentive bonus would be based on corporate performance while 15% of the annual incentive bonus would be based on individual performance. The Compensation Committee believes that the change to providing annual incentive bonus awards based solely on corporate performance has enhanced corporate performance and better aligned the interests of executives with those of shareholders.

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Long-Term Incentives

              The largest component of our executive compensation program has been long-term incentive awards in the form of PSU awards and performance-based LTPP awards (solely in the form of performance-based RSUs beginning in 2020) pursuant to our 2011 Omnibus Incentive Plan. We believe that long-term performance-based equity and cash incentives provide our executives with a strong link to our long-term performance and create an ownership culture to help align the interests of our executives with those of our shareholders. The Committee structured the long-term performance-based equity and cash incentives portion of executive officer compensation to be "at risk" in order to directly align our executives with the interests of shareholders. The long-term incentive awards are set at levels generally at market based upon the peer data.

              The Compensation Committee's objective in granting long-term performance-based equity and cash incentives as part of the overall compensation for executives is to achieve alignment with shareholder interests through stock ownership while also focusing on retention. Restricted stock, RSUs and PSUs provide more immediate value to executives, even in advance of stock price appreciation, with the opportunity for increased value as the stock price increases. In addition, we believe that long-term performance-based equity awards that vest over multiple years focus executives on consistent long-term growth in shareholder value and promote executive retention because the executives will only realize the value of the equity if they remain in our employment during the vesting period. Multiple year performance goals also promote consistent growth in shareholder value across a longer time horizon.

              The Compensation Committee generally grants equity-based awards on an annual basis, and at other times as the Committee deems appropriate, including for newly hired or promoted executive officers or due to special retention needs. The Compensation Committee determines the aggregate monetary grant value of executive officers' equity-based awards taking into account, among other things, our pay mix targets, the desired mix of equity-based vehicles, the executive officer's contribution to Company performance, competitive compensation levels and dilution or pool limits. The target number of RSUs is determined by dividing the target RSU award value by the fair market value of a share of Dollar Tree stock on the date of grant.

              The Compensation Committee generally has approved two distinct types of long-term incentive awards. Prior to 2019, the first type of award was a performance-based RSU that vested after achievement of a percentage of a target performance metric in the first year after grant, with time-based vesting of one-third of the award on successive anniversaries of the grant date. Once the performance threshold had been met, the amount of the payout typically was not increased to correspond with increasing levels of corporate performance. These awards were settled in stock and there was no cash component. Prior to 2020, the second type of award was a combination of performance-based RSUs and a performance cash bonus award made under our three-year LTPP program. The program provided for vesting upon the achievement of a cumulative performance goal that was measured over a three-year performance period. Once the performance threshold was met, the LTPP award was settled in both stock and cash. Historically, the Committee used Company adjusted operating income as its performance metric for both types of awards because it encourages achievement of strategic and financial performance metrics that create sustainable shareholder value, it is something over which executive officers have control and it is an important metric for evaluating the performance of retail companies.

              In March 2019, the Compensation Committee approved changes to our long-term incentive compensation program for executive officers, including our NEOs. Beginning in 2019, LTPP awards vest based on the three-year cumulative achievement of at least 85% of target adjusted EBITDA (a

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change from the three-year cumulative achievement of at least 83% of target adjusted operating income). All non-LTPP awards beginning in 2019 were designated as performance stock units ("PSUs") that vest upon achievement of at least 85% of target adjusted operating income (an increase from 80%) during a one year performance period, coupled with time-based vesting of one-third of the award on each successive anniversary of the grant date. The Committee also changed the design of non-LTPP awards to incorporate a "payout curve" that determines the amount of the award from threshold achievement of target adjusted operating income (75% payout) to target goal (100% payout) to maximum award (150% payout). The payout curve was added to the non-LTPP awards to incentivize performance above the threshold level of performance. The prior design of the non-LTPP awards provided a payout upon reaching the threshold level of performance, but the payout amount did not vary based on increasing levels of performance exceeding the threshold. As a result of these changes in 2019 by the Committee, our long-term performance-based incentive program for executive officers featured increased vesting thresholds to 85% of the target corporate performance metric and different performance metrics (adjusted EBITDA for the LTPP and adjusted operating income for the 2019 non-LTPP awards).

              In March 2020, the Compensation Committee approved additional changes to our long-term incentive compensation program for executive officers. Beginning in 2020, the LTPP awards were awarded in the form of 100% performance-based RSUs rather than 50% RSUs and 50% cash. The Committee also raised the threshold achievement level from 85% to 90% and the payout range is between 50% and 200% beginning with the 2020 LTPP Grants. For fiscal 2020, the Committee determined that the relative weighting of long-term incentive awards for the then Chief Executive Officer would remain the same as 2019. However, the Committee changed the relative weightings of long-term incentive awards for our other executive officers, including the current Chief Executive Officer, to 75% in PSUs and 25% in LTPP awards because of the importance of improving the Company's performance in fiscal 2020.

      2020 Performance Stock Units

              In 2020, the Compensation Committee made awards of PSUs with vesting upon achievement of at least 85% of target adjusted EBITDA for fiscal 2020, coupled with time-based vesting of one-third of the award on each successive anniversary of the grant date. The target number of PSUs was determined by dividing the target PSU award value by the fair market value of a share of Dollar Tree stock on the date of grant.

Executive


Target PSUs ($)

Target PSUs (#)

Michael Witynski

$2,550,000 34,960

Michael Witynski(1)

$1,950,000 20,584

Gary Philbin

$7,000,000 95,969

Kevin Wampler

$1,763,000 24,170

Bob Sasser

$5,500,000 75,404

Richard McNeely

$1,275,000 17,480

Thomas O'Boyle, Jr.

$1,275,000 17,480

(1)
Mr. Witynski received an additional PSU award in connection with his promotion to President and Chief Executive Officer in July 2020.

              Performance Metric.    The Compensation Committee used adjusted EBITDA as the performance metric for 2020 because it is an objective measure of performance that properly

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incentivizes our executive team to drive growth and profitability and to achieve strategic and financial performance metrics that create sustainable shareholder value.

              For purposes of the 2020 PSU grants, adjusted EBITDA excludes the effects relating to or resulting from: (i) Canadian currency fluctuations; (ii) changes in accounting policies, practices and pronouncements; (iii) Summit Pointe expenses to the extent different than the estimates contained in the 2020 Fiscal Budget; (iv) non-cash goodwill and intangible impairment charges; (v) expenses incurred with respect to future mergers, acquisitions, or divestitures; (vi) any loss, cost or expense related to an uninsured disaster; (vii) lease costs, expenses, asset write-offs, incentive compensation, and severance related to closed stores or distribution centers; (viii) costs related to shareholder activism and corporate governance; (ix) any future changes in laws or regulations; (x) any unbudgeted loss as a result of the resolution of legal matters in excess of $5 million in the aggregate; (xi) the negative financial impact of COVID-19; and (xii) changes in the manner shared services are allocated based upon the methodology used in the 2020 Fiscal Budget approved by the Board of Directors ("Fiscal Budget").

              Performance Goal.    The Compensation Committee established the 2020 adjusted EBITDA target for the combined enterprise. The target level was intended to be challenging, based on a review of the 2020 business plan and taking into account the market environment, past and expected future performance of peer companies and various risks. The Compensation Committee also set the threshold level of performance at 85% of the applicable target. The actual payout will vary based on increasing levels of performance that exceed the threshold level.

              Under the definition of adjusted EBITDA originally adopted by the Compensation Committee for purposes of the 2020 PSU grants, the negative financial impact of COVID-19 and losses relating to uninsured disasters were required to be added back to adjusted EBITDA. The definition was intended to exclude the impact of circumstances outside of the executives' control. These adjustments totaled $297.2 million ("Adjustments") in 2020. If these Adjustments could have been estimated at the time the Committee set the target, the Committee would have reduced the target instead of adjusting the definition of EBITDA. At the outset of the pandemic, a reasonable estimate was not possible.

              The Compensation Committee's deliberations and thought processes are summarized below:

    $248.4 million of the Adjustments were for "premium" pay or bonuses, sometimes referred to as "Hero Pay," to store and distribution associates and managers. This incremental pay was in recognition of their extraordinary efforts to ensure that our stores remained open safely while providing our customers and communities with continued availability of essential goods during the pandemic. A majority of the remaining Adjustments were for personal protective equipment and other COVID-19 expenses to protect our associates and customers. The payments reflected prudent management decisions to fairly compensate our front-line workers and protect our brand, delivering essential goods during an unforeseen time of national emergency. None of the payments were the result of poor or inadequate planning or execution.

    The management team exceeded consensus earnings estimates in each quarter during 2020 despite a most challenging retail environment. Sources of supply were often challenged, requiring the management team to adapt. Customers visited the physical stores less frequently and at different times, again requiring the management team to react to these new trends. The Company complied with new and costly Centers for Disease Control, state, and local mandates to protect its customers and associates.

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      Moreover, the team successfully operated two different brands that faced different challenges during the pandemic. For example, Dollar Tree's critical offerings are discretionary goods such as Easter, party, and holiday goods, that were subject to a significant decrease in demand during much of 2020.

    For the reasons discussed above, the Committee determined it was necessary to follow the original target amount of adjusted EBITDA and the original definition of adjusted EBITDA, and compensate the management team for extraordinary performance under trying circumstances. The payout of the PSUs was at the maximum 150%.

Performance Metric


2020 Target
($ in millions)


Actual Results
($ in millions)


% of Target

Payout %

2020 Enterprise adjusted EBITDA



$2,456.9




$2,872.7




116.92

%



150

%

              Performance Stock Units Earned.    The Compensation Committee determined in March 2021 that the performance goal established for the PSUs granted to each of our named executive officers was met and the following PSUs had been earned for 2020:


Executive



PSUs Earned (#)

Michael Witynski

52,440

Michael Witynski(1)

30,876

Gary Philbin

143,953

Kevin Wampler

36,255

Bob Sasser

113,106

Richard McNeely

26,220

Thomas O'Boyle

26,220

(1)
Represents the additional award granted to Mr. Witynski upon his promotion to President and Chief Executive Officer in July 2020.

      2020 LTPP Performance-Based RSUs

              In addition, the Compensation Committee made grants of performance-based RSUs under the LTPP. The Compensation Committee established the target value of the LTPP opportunity for each of our named executive officers. The target number of RSUs was determined by dividing the total target award value by the fair market value of a share of Dollar Tree stock on the date of grant.

Executive


Target RSUs
($)


Target RSUs
(#)

Michael Witynski

$850,000 11,653

Michael Witynski(1)

$650,000 6,861

Gary Philbin

$1,500,000 20,564

Kevin Wampler

$587,000 8,047

Bob Sasser(2)

Richard McNeely

$425,000 5,826

Thomas O'Boyle

$425,000 5,826

(1)
Mr. Witynski received an additional LTPP award in connection with his promotion to President and Chief Executive Officer in July 2020.

(2)
Beginning in 2019, Mr. Sasser no longer participates in the Long-Term Performance Plan.

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              Target Opportunities.    The Compensation Committee defined a payout curve which determines the amount to be paid depending on actual performance. The Compensation Committee set the payout for achieving the threshold level of performance at 50%, with the payout increasing from 50% for threshold performance to 100% of the target opportunity for achieving target performance. Similarly, the payout for achieving between target and maximum performance ranges from 100% of the target opportunity to 200% of the target opportunity, also with the payout increasing in a straight-line manner.

              Performance Metric.    The Compensation Committee used three-year cumulative adjusted EBITDA (2020-2022) as the performance metric because it is a long-term goal and for the reasons set forth above. Beginning with the 2021 LTPP, the Compensation Committee changed the performance metric from adjusted EBITDA to total sales in order to focus our executive team on our top-line growth.

              Performance Goal.    The Compensation Committee set the three-year cumulative adjusted EBITDA target at a level requiring achievement of significant financial performance, based on the Company's annual budget and long-term plan. The Compensation Committee also set the threshold level at 90% of the target. This award will not vest, if at all, until the completion of the 2022 fiscal year.

      2018 LTPP Performance-Based RSUs and Cash

              In 2018, the Compensation Committee made grants of performance-based RSUs and cash opportunity awards under the LTPP. The target values of the awards were divided between a target number of RSUs and a potential cash amount. The target number of RSUs was determined by dividing the target RSU award value by the fair market value of a share of Dollar Tree stock on the date of grant.

Executive


Target RSUs
($)


Target RSUs
(#)


Target Long-Term
Cash Opportunity
($)



Total
($)

Michael Witynski

$375,000 3,951 $375,000 $750,000

Gary Philbin

$750,000 7,903 $750,000 $1,500,000

Kevin Wampler

$450,000 4,741 $450,000 $900,000

Bob Sasser

$750,000 7,903 $750,000 $1,500,000

Richard McNeely

$150,000 1,580 $150,000 $300,000

Thomas O'Boyle, Jr.

$150,000 1,580 $150,000 $300,000

              Performance Metric.    The Compensation Committee used three-year cumulative adjusted operating income as the performance metric. For purposes of the 2018 LTPP grants, adjusted operating income excludes the effects relating to or resulting from: (i) Canadian currency fluctuations; (ii) severance, relocation, retention and reduction in workforce expenses and other expenses incurred to consolidate workforces; (iii) changes in accounting policies, practices and pronouncements; (iv) unreimbursed costs for unwinding the arrangement with Sycamore Partners (Dollar Express) for the divested stores; (v) non-cash goodwill and intangible impairment charges; (vi) expenses incurred with respect to future mergers, acquisitions, or divestitures; (vii) any loss, cost or expense due to Family Dollar litigation filed prior to the merger date that is not included in the 2018 Fiscal Budget, and (viii) changes in the manner shared services are allocated based upon the methodology used in the 2018 Fiscal Budget previously approved by the Board of Directors.

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              When the adjusted operating income performance metric was established in 2018, the material effect of punitive tariffs under Section 301 and COVID-19 expenses was not foreseen. As a result, the performance metric used for the 2018 LTPP award did not contemplate an adjustment for these factors, which were responsible for the forfeiture of the 2018 award. The Committee did not, however, exercise discretion to adjust for these items retroactively.

              Performance-Based RSUs and Cash Earned.    In March 2021, the Compensation Committee determined the Company's actual performance and the corresponding performance achievement percentage relative to the 2018-2020 performance goal.

Performance Metric

Threshold

Target

Maximum

Actual
Results
  ($ in millions)
Three-Year adjusted operating income (2018-2020) $5,425.4 $6,536.6 $8,8170.8 $5,294.8
% of Target 83 % 100 % 125 % 81.0 %

              The performance achievement percentage was then converted to an earning percentage as set forth below. If the overall performance achievement percentage was below the threshold, then the earning percentage would be zero (and the individual would not receive any shares in respect of the RSUs granted or performance cash). If the overall performance achievement percentage was between the threshold and maximum, the earning percentage would vary based on the level of achievement. If the earning percentage was above the maximum, the maximum earning percentage would be applied.

Achievement
Level


Performance
Achievement %


Earning %
Threshold 83 % 25 %
Target 100 % 100 %
Maximum 125 % 200 %

              The Compensation Committee and the Board approved the performance achievement relative to target performance measures. The overall three-year performance achievement percentage of 81.0%% resulted in an achievement below the threshold level required for a payout and therefore the 2018 LTPP awards were forfeited.

Timing of Long-Term Incentive Awards

              Our grant policy for equity awards establishes April 1 as the date of the annual grant each year. Awards of equity incentives to new officers are made on the last business day of the Company's fiscal month which follows the month that includes the hire date. The Compensation Committee may, in its discretion, make grants that vary from these guidelines if there is a compelling business reason, but in every case the Committee is required to complete its approval of the equity awards prior to the date of the grant. Due to the expiration of the 2011 Omnibus Incentive Plan occurring after March 17, 2021, the Compensation Committee, in its discretion, approved March 16, 2021 (as opposed to April 1) as the date of the annual equity grants for fiscal 2021. This exception to the policy was made because after March 17, 2021, the Company is unable to grant new equity awards until the new 2021 Omnibus Incentive Plan has been approved by shareholders. See Proposal 4 for additional information regarding the new plan.

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              The Compensation Committee will not award equity incentives when in possession of potentially material non-public information. We believe that the beginning of April is an appropriate time during the year to make grants of equity awards and that a consistent application of our granting practices from year to year regardless of other events is also appropriate. The awards granted by the Compensation Committee are designed to create incentives for the creation of long-term shareholder value and contain delayed vesting provisions that prevent recipients from taking advantage of short-term fluctuations in the market price of our common stock. We have not planned in the past, nor do we plan in the future, to time the release of material non-public information for the purpose of affecting the value of executive compensation.

Other Compensation Policies and Practices

Recoupment ("Clawback") Policy

              In April 2018, the Compensation Committee recommended, and the Board adopted, a more robust clawback policy. Under the expanded policy, the Company will require mandatory reimbursement of excess incentive compensation from any executive officer if the Company's financial statements are restated due to material noncompliance with financial reporting requirements under the securities laws. The amount to be recovered will be the excess of incentive compensation paid to the executive based on the erroneous data over the incentive compensation that would have been paid to the executive had it been based on the restated results. Recoupment would cover any excess compensation received during the three completed fiscal years immediately preceding the date of which the Company is required to prepare the accounting restatement. This policy is in addition to our existing clawback policy covering the Company's Chief Executive Officer and Chief Financial Officer under the 2011 (and proposed 2021) Omnibus Incentive Plan.

Executive Stock Ownership Guidelines

              In March 2017, the Compensation Committee revised its executive stock ownership guidelines to make them more robust. The stock ownership guidelines were established for executive officers to encourage them to have a long-term equity stake in Dollar Tree, align their interests with shareholders and mitigate potential compensation-related risk. The executive stock ownership program encourages and expects our executive officers to attain designated stock ownership levels over a five-year period. The stock ownership guidelines for each of our named executive officers is as follows:

Current Position


No. of Shares

Chief Executive Officer

125,000

Executive Chairman

125,000

Chief Financial Officer

30,000

Chief Merchandising Officer

25,000

Chief Operating Officer

25,000

              The types of stock ownership that qualify toward the ownership guidelines under our policy include direct stock ownership, unvested PSUs, unvested RSUs and unvested restricted stock. As of March 15 2021, all of our named executive officers had stock ownership levels that exceeded the stock ownership guidelines. For additional information regarding the number of shares of stock beneficially owned by our named executive officers, see "Ownership of Common Stock" on page 95.

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Policy Against Hedging Company Stock

              To further the corporate governance objective of encouraging alignment of the interests of our associates and directors with shareholders' interests in the long-term performance of the Company, the Company's Insider Trading Policy prohibits all officers, directors and employees from entering into hedging transactions and from engaging in short sales related to the Company's stock. The Policy also prohibits engaging in or trading any publicly-traded puts, calls or other derivative instruments involving the Company's securities.

No Pledges of Company Stock

              Our Insider Trading Policy prohibits officers, directors and employees from holding Dollar Tree stock in a margin account. In addition, none of our executive officers and directors engaged in transactions involving the pledging of Company stock during fiscal 2020.

Impact of Accounting and Tax Treatments on Compensation Program Design

              The Compensation Committee considers the accounting and tax impact of its overall compensation programs in order to balance the cost to the Company with the potential benefits as compensation tools.

              Section 162(m) of the Internal Revenue Code imposes a limitation on the deductibility of compensation in excess of $1 million paid to "covered employees" in any fiscal year. Our "covered employees" include our Chief Executive Officer, our Chief Financial Officer, the three other most highly compensated named executive officers, and other individuals who were covered employees for fiscal 2017 or later years. For fiscal 2017 and prior fiscal years, an exception to Section 162(m) allowed certain compensation that qualified as "performance-based" to be deducted notwithstanding the $1 million limitation, and the covered employee group was more limited. As noted above, the Compensation Committee has adopted a policy of pay-for-performance, and the Compensation Committee took appropriate steps in the past to cause the performance-based compensation of covered executive officers to qualify for deductibility under Section 162(m) to the extent consistent with our best interests and the interests of our shareholders.

              The Tax Cuts and Jobs Act ("2017 Tax Reform Act"), enacted in December 2017, eliminated the performance-based compensation exception under Section 162(m) for fiscal 2018 and subsequent fiscal years, other than with respect to certain "grandfathered" compensation that is paid pursuant to a written binding contract which was in effect on November 2, 2017 and which was not materially modified after that date. Thus, performance-based awards outstanding on November 2, 2017 pursuant to a binding written agreement may be exempt from the deduction limit if applicable requirements are met. In addition, the 2017 Tax Reform Act expanded the group of "covered employees" under Section 162(m) to include our Chief Financial Officer (under prior law, the Chief Financial Officer was not a "covered employee") and mandated that once an individual is treated as a covered employee for a given year, that individual will be treated as a covered employee for all subsequent years. As a result of these changes in the tax laws, any compensation paid to our covered executive officers in excess of $1 million beginning with fiscal 2018 generally will not be deductible unless the qualified compensation arrangements were in place as of November 2, 2017. In March 2021, the American Rescue Plan Act ("ARPA") further amended Section 162(m) to enlarge the covered employee group for taxable years beginning after December 31, 2026.

              In fiscal 2020, the Committee considered the anticipated tax treatment to the Company and the covered executive officers in its review and establishment of compensation programs and

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payments. While the Compensation Committee considers the deductibility of awards as one factor in determining executive compensation, the Compensation Committee also looks at other factors in making its decisions, as noted above, and retains the flexibility to award compensation that it determines to be consistent with the goals of our executive compensation program even if the compensation is not deductible for tax purposes. Further, the Compensation Committee may determine to make changes or amendments to the Company's existing compensation programs, consistent with the Compensation Committee's overall compensation program philosophy, in order to revise aspects of our executive compensation programs that were initially designed to comply with Section 162(m) but that may no longer serve as an appropriate incentive measure for our executive officers.

              Finally, interpretations of and changes in applicable tax laws and regulations, as well as other factors beyond the control of the Compensation Committee, may affect deductibility of compensation, and there can be no assurance that compensation payable to our executive officers who are covered by Section 162(m) will be deductible in the future. The Compensation Committee will continue to monitor and assess the impact of the amendments to Section 162(m) included in the 2017 Tax Reform Act and ARPA to determine what adjustments to our executive compensation practices, if any, it considers appropriate.

              The Compensation Committee also reviews the accounting impact of the various forms of compensation, with the goal of ensuring that our compensation practices remain competitive while also being cost-effective.

Retirement, Deferred Compensation and Pension Plans

              We do not have any defined benefit or pension plans that provide for payments based on an executive's salary and/or years of service. In addition, we have not adopted a supplemental executive retirement plan or other "excess plan" that pays benefits to highly compensated executives. Instead, we offer the following two alternatives to allow executives to actively participate in funding their retirement plans.

              Executives are eligible to participate in the Dollar Tree Retirement Savings Plan. At the end of the year, the Board may approve a discretionary profit-sharing contribution to be made to all eligible employees, including executive officers. In addition, executives may elect to defer a portion of their cash compensation into 401(k) retirement accounts. As of January 1, 2019, the Board has authorized us to match 100% of 401(k) deferrals up to 5% of an individual's cash compensation.

              The Dollar Tree and Family Dollar Supplemental Deferred Compensation Plan allows certain officers and executives, including our named executive officers, the ability to defer receipt of up to 50% of their base salary and up to 100% of their bonus payments. The plan is a nonqualified plan and the Company does not fund, make any contributions to, or provide any interest rate subsidy for the plan. The plan allows executives to save for retirement in a tax-effective way at a minimal cost to us. Plan participants may invest their deferred compensation in any one or a combination of the plan's investment funds. The deferred amounts and earnings thereon are payable to participants, or designated beneficiaries, at either specified future dates, or upon separation of service or death. The future payment obligations under the plan are our general unsecured obligations. Although the amounts deferred are deposited into a trust, the trust belongs to us, rather than the executives, and is subject to the claims of our creditors.

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Termination or Change in Control Arrangements

              We have change in control Retention Agreements with our executive officers, except the Chief Merchandising Officer. The Compensation Committee's intent with these agreements is to take reasonable steps to retain key management personnel and to minimize disruption to the Company in the event of a potential change in control. Under these agreements, severance benefits are payable only upon the occurrence of both a change in control of the Company and the executive's termination without "cause" or resignation for "good reason," as defined in the agreements (commonly known as a "double trigger"). The Compensation Committee believes it is appropriate to provide double-trigger severance benefits because it aligns executives' interests with the interests of shareholders without providing an undue benefit to executives who continue to be employed following a change-in control transaction.

              We also have Executive Agreements with our executive officers, except the Executive Chairman and the Chief Merchandising Officer. The Executive Agreements provide for a release and restrictive covenants to protect the Company, including a covenant not to compete, in consideration for which the Company agreed to provide a base salary continuation benefit and reimbursement of monthly health insurance premiums for a period of up to twelve months (or until the executive becomes employed if less than the applicable salary continuation period) in the event the executive's employment is terminated without "cause" (as defined in the agreement) or on account of the executive's death or disability.

              In addition, we have equity compensation plans that contain provisions that may convey benefits to our executive officers and other plan participants upon termination or a change in control. Generally, the provisions address the treatment of awards upon separation from the Company due to death, disability or retirement (age 591/2 with seven years of service), or due to a change in control, as defined within the plans.

              The overall structure of our change in control arrangements and other post-termination benefits is consistent with our compensation objectives to attract, motivate and retain highly talented executives. We believe these arrangements preserve morale and productivity, provide a long-term commitment to job stability and financial security, and encourage retention in the face of the potential disruptive impact of an actual or potential change in control. For additional information on our termination and change in control arrangements, and the potential payments that may be made to our named executive officers upon termination or a change in control, see "Potential Payments Upon Termination or Change in Control" beginning on page 86.

Annual Compensation of Executive Officers

              In the following table, we summarize the compensation earned during fiscal years 2020, 2019 and 2018 by our Chief Executive Officer, our Chief Financial Officer, each of our three other most highly compensated executive officers who earned more than $100,000 in total compensation for services rendered in all capacities during 2020, 2019 and 2018, and our former Chief Executive Officer who retired from this position in July 2020. We refer to these six individuals in this proxy statement as the named executive officers or NEOs.

              The compensation that we pay to our named executive officers is determined as described above in our "Compensation Discussion and Analysis" section and in the tables that follow.

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Summary Compensation Table

              (For the Fiscal Years ended January 30, 2021, February 1, 2020 and February 2, 2019)

  Name and
Principal
Position



Year

Salary
($)(1)


Bonus
($)


Stock
Awards
($)(2)



Option
Awards
($)



Non-Equity
Incentive
Plan
Compensation
($)(1)(3)





All Other
Compensation
($)(4)



Total
($)


 

 


Michael Witynski


2020


$1,184,615




$7,088,690




$2,433,210


$61,372


$10,767,887


 
  President and Chief 2019 857,692 1,949,936 878,303 45,756 3,731,687  
  Executive Officer 2018 684,615 1,574,486 763,860 45,363 3,068,324  

 


Gary Philbin



2020


915,385




8,499,917






59,176


9,474,478


 
  Former Chief 2019 1,400,000 7,749,958 1,377,475 77,188 10,604,621  
  Executive Officer 2018 1,400,000 6,749,573 1,182,590 66,679 9,398,842  

 


Kevin Wampler



2020


800,000




2,822,924




1,056,960


40,064


4,719,948


 
  Chief Financial 2019 800,000 1,874,843 498,120 42,170 3,215,133  
  Officer 2018 792,308 1,749,576 491,674 45,492 3,079,050  



Bob Sasser



2020


1,000,000




5,499,968






71,434


6,571,402


 
  Executive Chairman 2019 1,107,692 5,499,960 361,725 161,125 7,130,502  
  2018 1,700,000 7,749,819 1,395,631 142,876 10,988,326  

 


Richard McNeely



2020


800,000




2,225,512




1,174,400


41,881


4,241,793


 
  Enterprise Chief 2019  
  Merchandising Officer 2018  



Thomas O'Boyle, Jr.



2020


650,000




2,126,940




954,200


42,087


3,773,227


 
  Enterprise Chief 2019  
  Operating Officer 2018  

Footnotes to the Summary Compensation Table:


Our annual bonus plan qualifies as a "non-equity incentive plan" for purposes of this table. Earnings under our deferred compensation plan result from the executives' investments in mutual funds commonly available to investors generally. The "Change in Pension Value and Non-Qualified Deferred Compensation Earnings" columns are omitted as all amounts are zero.

(1)
Executives may defer up to 50% of their salaries and up to 100% of their annual incentive bonus under the Dollar Tree and Family Dollar Supplemental Deferred Compensation Plan. Any such deferrals are included in the appropriate column of this table and shown in the Deferred Compensation table.

(2)
Pursuant to SEC rules, this column represents the aggregate grant date fair value during the last three fiscal years of restricted stock units, performance-based restricted stock units ("RSUs") and Performance Stock Units ("PSUs") computed in accordance with FASB ASC Topic 718 related to (i) the annual spring grant "RSU awards" (and PSU awards beginning in fiscal 2019), (ii) annual Long-Term Performance Plan ("LTPP") awards with a three-year cumulative performance cycle ("LTPP awards"), (iii) out-of-cycle grants made in connection with a promotion, and (iv) for fiscal 2020, RSU awards granted in March 2021 to Messrs. Witynski, Wampler, McNeely and O'Boyle in connection with the Compensation Committee's consideration of 2020 annual performance bonus awards for certain executives. For fiscal years prior to 2020, the LTPP awards were made 50% in cash and 50% in performance-based RSUs. Beginning in 2020, the LTPP awards were awarded 100% in the form of performance-based RSUs. We are required to report the equity portion of an LTPP award at the beginning of the LTPP cycle even though, should it be earned, it will not be paid until the end of the cycle. The cash portion of an LTPP award is not reported until earned at the end of the cycle. Both the cash and equity portions of the LTPP awards are earned only if performance conditions are met and the final payment amount, if any, will range from 25% to 200% of the stated target for pre-2020 awards and between 50% and 200% beginning with the 2020 LTPP awards. The amounts shown in this column assume performance at target, except that RSU awards granted in March 2021 in connection with the Compensation Committee's consideration of 2020 annual performance bonus awards are included at grant

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    date fair value since the awards are not subject to further performance conditions. The 2020 LTPP award is included in the table for Mr. Philbin although the award was subsequently forfeited due to his retirement during the first 12 months of the three-year performance period of this award. Fair value for the RSU and PSU awards is calculated using the closing price of our stock on the date of grant. In the event the highest level of performance is achieved, the aggregate grant date fair value for the fiscal year 2020 RSU and PSU awards would be as follows for Messrs. Witynski, Philbin, Wampler, Sasser, McNeely and O'Boyle: $9,749,682, $13,499,845, $3,818,336, $8,249,952, $2,762,383 and $2,762,383. Amounts shown in this column do not correspond to the actual value that will be realized by the named executives. Additional information regarding FASB ASC Topic 718 calculations related to these awards is included in footnote 11 of our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 30, 2021. See the Grants of Plan-Based Awards Table for information on awards made in 2020.

(3)
The amounts in this column represent the amount of cash that we pay under our Management Incentive Compensation Plan ("MICP"), our annual cash bonus plan, and the cash bonus that we pay under our pre-2020 LTPP awards, which are conditioned upon achieving a three-year performance goal. The amounts listed were earned in the years shown, but paid after the end of the fiscal year, upon approval by the Compensation Committee. For fiscal 2020, the Compensation Committee exercised discretion to reduce the MICP payout for certain executives, including Messrs. Witynski, Wampler, McNeely and O'Boyle, and awarded RSUs vesting 50% on each of the first and second anniversaries of the date of grant without further performance-based vesting since the original MICP performance measure for 2020 had been satisfied. The RSU awards are reported separately under the "Stock Awards" column of this table. The cash amounts paid under the 2020 MICP to Messrs. Witynski, Wampler, McNeely and O'Boyle are shown in the table. Mr. Philbin retired in September 2020 and therefore was not eligible for a bonus under the MICP. Mr. Sasser did not participate in the 2020 MICP. Cash bonuses were not paid under the 2018 LTPP awards to Messrs. Witynski, Philbin, Wampler, Sasser, McNeely and O'Boyle because the Compensation Committee determined that the minimum thres