Company: COST
Filing Date: 2025-12-04
Form Type: DEF 14A
Source: 0000909832-25-000159
Chunk: 23

Company: COSTCO WHOLESALE CORP /NEW
Filing Date: 2025-12-04
Form: DEF 14A
Chunk 23
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 incentives come primarily from the RSU award vesting of up to five years, and, to a lesser extent, share ownership requirements for executive officers and vesting elements in certain benefit plans (such as the deferred compensation and 401(k) plan matches).

The Committee believes that these elements do not promote unreasonable risk-taking behavior. The value of shorter-term incentives (including cash bonus awards and performance conditions for awards of RSUs) is substantially exceeded by longer-term incentives (including equity awards that vest over up to five years) and share ownership requirements, which the Committee believes reward sustained performance that is aligned with shareholder interests. In addition, the Company’s Corporate Governance Guidelines and Rule 10D-1 Policy on Recovery of Incentive Compensation (described more fully below) require or enable the Committee to seek the return of incentive compensation improperly earned, depending on the circumstances.

#### Peer Companies
For fiscal 2025, the Committee primarily considered executive compensation data obtained from proxy statements for the following peer companies: Walmart Inc., The Home Depot, Inc., Lowe’s Companies, Inc., The TJX Companies, Inc., Target Corporation, The Kroger Company, Best Buy Inc., BJ's Wholesale Club Holdings, Inc., CVS Health Corporation, Ross Stores Inc., and Wesfarmers Ltd. The peer companies were selected because they are recognized as successful retailers and two of them operate membership warehouse clubs. The Committee took into account that the current market capitalization of one of the companies is substantially larger than the Company. The Committee did not use the comparable company data to set mid-points or other specific quantitative comparisons of executive compensation; it used them only for general reference.

#### Equity Compensation
If fully earned based upon the achievement of performance targets and fully vested, equity compensation is the largest component of compensation for executive officers. RSU grants to executive officers are generally performance-based, with performance-vesting over a one-year period, time-vesting over

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up to five years, and vesting for long service. Following satisfaction of performance targets, RSUs become time-vested RSUs that, subject to accelerated vesting for long service (described below) vest 20% upon the first anniversary of the grant date (following the determination by the Committee that the performance criteria have been satisfied) and 20% vest over each of the ensuing four years. (Vesting of RSUs awarded to non-executive officers and employees is not performance-based.) To the extent accelerated or time-vesting requirements are met,