Company: GGG
Filing Date: 2025-03-12
Form Type: DEF 14A
Source: 0001193125-25-052581
Chunk: 34

Company: GRACO INC
Filing Date: 2025-03-12
Form: DEF 14A
Chunk 34
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 |                          |     |  $34,870 |     |               |     | 8%  |

The MOCC has the authority to award special bonuses outside of the Incentive Bonus Plan to individual executive officers, but no such special bonuses were awarded for 2024. 26 Graco Inc. 2025 Proxy Statement

Long-Term Incentives (LTI) The MOCC typically grants long-term incentive awards in the form of stock options to each executive officer at its regularly scheduled February meeting based on a review of the market data. The MOCC is guided by the 75 thpercentile of the market data for comparable groupings of positions to determine the economic value of such awards. The stock option awards are designed to promote the interests of the Company and its shareholders through the attraction and retention of experienced and capable leaders. The MOCC considers, except in the case of the award to our CEO, the recommendation of our CEO for such awards. The MOCC also considers the dilutive effect on our shareholders in determining the number of stock options granted to each executive officer. As part of its review of the market data and trends in executive compensation, the MOCC periodically considers whether to utilize other long-term incentive vehicles in addition to or in lieu of stock options. While the MOCC has on rare occasions granted restricted stock to certain executive officers, the MOCC has determined that the use of stock options as the sole long-term incentive vehicle for the executive officer compensation program has successfully motivated the executive officers to deliver long-term goals and operational growth for the Company by aligning the executive officers’ interests with our shareholders’ interests in creating long-term shareholder value. The MOCC has utilized stock options as the sole long-term incentive vehicle for the executive officer compensation program for over 30 years. Over the past 31 years, the Company’s cumulative total shareholder return has been 13,878% versus 1,180% for the S&P 500 and 1,045% for the Dow Jones Industrial Average. Assuming all dividends were reinvested, a $1,000 investment in the Company’s common stock at the beginning of the 31-yearperiod would have been worth $139,779 on December 27, 2024, while a $1,000 investment in each of the S&P 500 Index and the Dow Jones Industrial Average Index would have been worth $12,801 and $11,452, respectively, on December 27, 2024. The MOCC believes these results demonstrate that stock options