Company: GWW
Filing Date: 2025-02-20
Form Type: PRE 14A
Source: 0001104659-25-015730
Chunk: 47

Company: W.W. GRAINGER, INC.
Filing Date: 2025-02-20
Form: PRE 14A
Chunk 47
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 Performance​ | ​ |

| ​ | 2024 NEO annual incentives paid out at 97% of target reflecting a year of solid growth | ​ |

Throughout 2024, the Compensation Committee evaluated our compensation programs against the following factors: • Company performance, including whether the programs remain aligned with near- and long-term objectives; • Appropriateness of the original targets to remain relevant and challenging under current conditions; • Alignment to the broader Grainger team and performance to peer companies; and • Ability for Company programs to attract, motivate and retain critical talent. The Committee did not alter the structure of existing incentive programs or adjust payouts for 2024 annual incentives as it believes the programs remained strongly aligned with the Company’s pay for performance objectives and consistent with shareholder interests. The discussion of the Company’s annual incentives within this CD&A refer to the Company Management Incentive Program (“MIP”), which is primarily tied to total Company financial performance (High-Touch Solutions segment and Endless Assortment segment). The 2024 MIP payout was defined as a percentage of the NEO’s annualized base salary as of December 31, 2024. The 2024 MIP was based on 2024 year-over-year total Company daily, organic constant currency sales and total Company adjusted ROIC, as well as on an ESG modifier, which can increase or decrease payouts determined by financial performance up to +/- 10 percentage points. Short-term financial results just fell short of expectations and therefore the payout for the 2024 MIP was slightly below target. Total Company daily, organic constant currency sales was 4.5%, resulting in a 45% daily, organic constant currency sales payout, and 2024 total Company adjusted ROIC was 41.4%, resulting in a 53% total Company adjusted ROIC payout. Total absolute scope 1 and scope 2 emissions and diverse leadership representation outcomes met expectations. Therefore, the ESG modifier was determined to be 0% and the 2024 MIP payout calculation was rounded to equal 97%. The Company’s average MIP payout for NEOs over the last five years (2019-2023) was 126%. Total Company daily, organic constant currency sales for the purpose of MIP, excludes the impact on Company’s sales due to foreign currency exchange rate fluctuations. The 2024 MIP financial metrics are modified for the Company’s current year planned foreign currency exchange rates used when setting initial targets. See Annual Incentives on page 48 and Appendix B