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.  )
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

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)
Payment of Filing Fee (Check all boxes that apply):

No fee required.

Fee paid previously with preliminary materials.

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

 
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LETTER TO OUR SHAREHOLDERS
Dear Fellow Shareholders,
You are cordially invited to join us for our 2024 virtual annual meeting of shareholders, which will be held online via webcast on Thursday, June 20, 2024, at 9:00 a.m. Eastern Time. The Notice of Annual Meeting of Shareholders and the Proxy Statement that follow describe the business to be conducted at the meeting. 2023 was a monumental year for Dollar Tree. While we have shared our progress with shareholders along the way, it is appropriate that we take a moment to highlight the work that has been accomplished by our Board and management team during this past year.
Board Oversight of Transformational Change
Starting in 2022 our Board has undergone a period of Board refreshment resulting in the addition of eight new directors with the unique skills and experience needed to transform the Dollar Tree business. One of the first activities of the Board was to identify and hire a new executive management team with the skills needed to drive change. The transition to the new executive leadership team was successfully completed in 2023. Under the leadership of the Chairman and Chief Executive Officer, our new management team is aligned with the Board’s objectives and focused on making improvements in our operations, our stores and the products offered to our customers.
Store Portfolio Optimization
Our stores serve communities across the United States and Canada providing the products that our customers need and want. To ensure that we are operating stores that meet our expectations and the expectations of our customers, we undertook a store portfolio optimization review in 2023. As part of that review, our Board and management team took a hard look at the performance of our stores under the Dollar Tree and Family Dollar brands and announced plans to close 970 underperforming Family Dollar stores and 30 underperforming Dollar Tree stores. We believe that this store portfolio optimization will better position the Company to move forward with stores that align with our brand and business expectations.
Robust Shareholder Engagement
Our Board is constantly focused on actions that are aligned with the best interests of our shareholders. The interests of shareholders are represented on our Board through the Lead Independent Director, the Vice Chairman (who is also an independent director and major shareholder), and overall by the ten out of eleven independent directors that make up our Board. In addition to the shareholder representation on our Board, our Board actively engages in collecting feedback from our shareholders. In 2023 we met with shareholders representing more than 48% of our outstanding shares to discuss subjects ranging from incentive compensation to environmental and social programs. A detailed description of the shareholder feedback received in 2023 and the Board’s response is included on page 32 of the Proxy Statement.
Finally, we want to thank all of you for your support and confidence in the Board. Whether or not you plan to attend the virtual annual meeting, your vote is important, and we encourage you to vote your shares.
Sincerely,
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Richard W. Dreiling
Chairman and Chief Executive Officer
Edward J. Kelly, III
Lead Independent Director
 

 
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Our Shareholders:
You are invited to attend the annual meeting of shareholders of Dollar Tree, Inc. which will be held as follows:
Annual Meeting Information
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DATE & TIME
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VIRTUAL MEETING
(LIVE INTERACTIVE WEBCAST)
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RECORD DATE
Thursday, June 20, 2024
at 9:00 a.m., Eastern Time
www.virtualshareholdermeeting.com/DLTR2024
April 12, 2024
Proposals That Require Your Vote
Proposal
Voting Options
Board
Recommendation
More
Information
Proposal No. 1
Election of Directors
FOR, AGAINST, or ABSTAIN for each Director Nominee FOR each Nominee on the proxy card Page 80
Proposal No. 2
Advisory Vote on NEO Compensation
FOR, AGAINST, or ABSTAIN
FOR
Page 81
Proposal No. 3
Ratification of Appointment of Independent Auditors
FOR, AGAINST, or ABSTAIN
FOR
Page 82
Proposal No. 4
Regarding an Independent Board Chairman
FOR, AGAINST, or ABSTAIN
AGAINST
Page 85
Voting and Participation
The annual meeting will be held exclusively online via a live interactive webcast. 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/DLTR2024. To be admitted to the annual meeting, you must enter the control number found on your proxy card, voting instruction form or notice.
Shareholders of record at the close of business on April 12, 2024 will receive notice of and be allowed to vote at the annual meeting. See “Information About the Annual Meeting and Voting” beginning on page 76 for the various ways available for submitting your vote.
We are making the Proxy Statement and the form of proxy first available to shareholders on or about May 7, 2024. 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
 
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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 May 7, 2024.
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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Jonathan B. Leiken
Corporate Secretary
Chesapeake, Virginia
May 7, 2024
IMPORTANT NOTICE ABOUT THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 20, 2024
The Company’s proxy statement and annual report to shareholders for the fiscal year ended
February 3, 2024 are available at

https://corporate.dollartree.com/investors/financial-information/annual-reports-proxies.
 
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TABLE OF CONTENTS
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Page
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A-1
 
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Corporate Governance & Compensation Highlights
Governance or Compensation Item
Dollar Tree’s Practice
Board Composition, Leadership and Operations
Number of directors
11
Director independence
91%
Standing Board committee independence
100%
Robust Lead Independent Director Role
Yes
Majority voting standard in uncontested director elections
Yes
Director resignation policy
Yes
Board oversight of Company strategy and risks
Yes
Annually-elected Board
Yes
Average director age
65
Average director tenure
2.9 years
Directors attending fewer than 75% of meetings
None
Annual Board, committee and individual director evaluation process
Yes
Independent directors meet without management present
Yes
Number of Board meetings held in fiscal 2023
5
Total number of Board and committee meetings held in fiscal 2023
31
Sustainability and Corporate Responsibility
Dedicated Board Committee provides oversight of sustainability, corporate responsibility and human capital management Yes
Environmental Policy
Yes
Human Rights Policy
Yes
Occupational Health and Safety Policy
Yes
Political Contribution and Expenditure Policy Statement
Yes
Corporate Sustainability Report (and Updates)
Yes
Climate related disclosures aligned with Taskforce on Climate-Related Financial Disclosures (TCFD) (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
Code 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
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
Only Chairman & CEO
Incentive awards based on challenging performance targets
Yes
Significant portion of compensation at risk
Yes
Annual risk assessment of compensation policies and practices
Yes
Frequency of say on pay advisory vote
Annual
Independent compensation consultant
Yes
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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Our Board
Our Board currently consists of 11 directors with the relevant diversity of skills and experience to oversee the Company, its management, its strategic plan and the execution of that plan. The Board believes that our director nominees, as a group, represent an effective mix of skills, experiences, diversity and fresh perspectives. The Board has re-nominated all current directors for election at the 2024 annual meeting of shareholders to serve as directors for a one-year term.
Director Name
Current or Former Principal Occupation
Director
Since
Independent
Public
Boards
(including
Dollar
Tree)
Richard W. Dreiling
Chairman and Chief Executive Officer of Dollar
Tree, Inc.
2022 No 2
Cheryl W. Grisé Former Executive Vice President of Northeast Utilities and Chief Executive Officer of its principal operating companies. 2022 Yes 4
Daniel J. Heinrich Former Chief Financial Officer of The Clorox Company 2022 Yes 1
Paul C. Hilal Founder and Chief Executive Officer of Mantle
Ridge LP
2022 Yes 2
Edward J. Kelly, III Retired Chairman of the Institutional Clients Group of Citigroup, Inc. 2022 Yes 3
Mary A. Laschinger
Former Chairman of the Board of Directors and Chief Executive Officer of Veritiv Corporation 2022 Yes 3
Jeffrey G. Naylor Former Chief Financial Officer of the TJX Companies 2018 Yes 3
Winnie Y. Park Chief Executive Officer of Forever 21
   
2020 Yes 1
Diane E. Randolph
Former Chief Information Officer of Ulta Beauty 2023 Yes 2
Bertram L. Scott Former President and Chief Executive Officer of Affinity Health Plan 2022 Yes 4
Stephanie P. Stahl Founder of Studio Pegasus LLC and former Global Marketing and Strategy Officer of Coach, Inc. 2018 Yes 3
Strong Independent Board Leadership
Our Board is led by our Chairman & CEO, our Vice Chairman and our Lead Independent Director. As set forth in our Corporate Governance Guidelines, a Lead Independent Director is selected by our independent directors when our Chairman is not independent. In June 2023, Edward J. Kelly, III was re-elected as Lead Independent Director by the independent directors. To ensure the independence of the Board from management, our Corporate Governance Guidelines and By-Laws outline the many significant powers and duties held by the Lead Independent Director. For more details, see “Board Leadership Structure” on page 16.
The independence of our Board is also supported by the strong leadership roles held by the chairs of our standing committees. The chairs and members of our standing committees are all independent members of our Board. The charters of each of our standing committees (namely, the Audit Committee, the Compensation Committee, the Nominating and Governance Committee, the Finance Committee and the Sustainability and Corporate Social Responsibility Committee) outline duties and responsibilities of each committee to oversee critical and strategically important functions of our business. For more details, see “Board Committees” on page 17.
 
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DIRECTOR NOMINEES
Director Skills Matrix
The tables below describe the key skills and experiences that we believe are essential to oversight of our business and the skills, experience and qualifications of each of our nominees for director. The director biographies beginning on page 8 describe each nominee’s background and relevant experience in more detail.
Director Skills and Experience
Key Qualifications for Dollar Tree
Executive Leadership
Dollar Tree is a large international company. Our directors with executive leadership experience have served as an executive officer of a large public or private company.
Financial Management
Dollar Tree is a publicly traded company that manages its resources responsibly and has an obligation to make accurate financial disclosures. We identified the directors with chief financial officer, chief accounting officer or similar experience or experience on a board overseeing finance, accounting or financial reporting functions, including those directors who qualify as an “audit committee financial expert” under applicable SEC rules.
Consumer/Retail Industry
Dollar Tree operates over 16,000 stores that provide retail products to customers in communities across North America. We identified the directors with executive level experience with companies in the consumer or retail industries or experience on the board of directors of a company in the consumer or retail industry.
Marketing/Advertising/ Communications
Our Dollar Tree and Family Dollar brands and the branded products sold in our stores are trusted and valued by our customers. We identified the directors with executive level experience in marketing consumer products or experience on the board of directors of a marketing or consumer products company.
Strategic Planning
Our strategic vision and our ability to execute on the vision is important to our ability to grow and deliver long-term value to our shareholders. We identified the directors with experience in developing and executing long-term strategic plans.
Operations
Dollar Tree operates over 16,000 retail stores across North America. We identified the directors with experience on the board of directors of a company with large retail operations.
Human Capital Management
Dollar Tree has over 200,000 associates who are a vital resource in the operation of our company. We identified the directors with executive level experience in human resources management or managing a large workforce or experience on a board of directors overseeing those functions.
Information Technology/ Cybersecurity
Dollar Tree leverages information technology tools to operate our business and enhance our customer’s experience and we continue to invest in tools to improve our performance and the security of our information technology systems. We identified the directors with executive level experience in the fields of information technology and cybersecurity or experience on the board of directors of a company that provides information technology or cybersecurity products or services.
Risk Management
Dollar Tree is subject to a variety of risks that we work to manage and mitigate through diligent action and thoughtful leadership. We identified the directors with executive level experience in enterprise risk management or on a board of directors overseeing risk management functions.
Global Sourcing/Supply Chain
Dollar Tree merchandise is sourced from domestic and international vendors around the world using a network of distribution centers to deliver a high volume of products to our stores. We identify the directors with experience on the board of directors of a company with global supply chain operations.
 
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Dreiling
(Chair)
Grise´
Heinrich
Hilal
Kelly
Laschinger
Naylor
Park
Randolph
Scott
Stahl
Director Skills and Experience
Executive Leadership
Financial Management
Consumer/Retail Industry
Marketing/Advertising/Communications
Strategic Planning
Operations
Human Capital Management
Information Technology/Cybersecurity
Risk Management
Global Sourcing/Supply Chain
Director Qualifications
Dollar Tree Independent Director
Dollar Tree Board Tenure (years)
2
2
2
2
2
2
6
3
<1
2
6
Other Public Board Experience
Demographic Background
Age
70
71
68
57
71
64
65
53
69
73
57
Gender Identity
Male
Female
Ethnicity
White/Caucasian
Black or African American
Asian
 
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BIOGRAPHIES OF DIRECTOR NOMINEES
RICHARD W. DREILING
Chairman and Chief Executive Officer of Dollar Tree, Inc. | Age 70
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Director since 2022
Chair of the Board
Board Committees:

None
Other Public Company Board Experience

Lowe’s Companies (since 2012)

Kellanova (formerly known as Kellogg Company) (2016 to 2023)

Aramark (2016 to 2022)

Pulte Group, Inc. (2015 to 2022)
Key Skills, Experience and Expertise:
Mr. Dreiling brings to our Board over 40 years of retail experience at all operating levels. He has strong business development expertise in expanding the footprint and offerings of several retailers. Mr. Dreiling also brings unique experience in the value retail sector gained from his role as the former Chairman and CEO of Dollar General Corporation.
Biography
Mr. Dreiling has served as the Chairman and Chief Executive Officer of Dollar Tree, Inc. since February 2023 and as Executive Chairman from March 2022 to February 2023. Prior to joining Dollar Tree, Inc., Mr. Dreiling served as the Chairman of Dollar General Corporation from 2015 to 2016 and the Chief Executive Officer of Dollar General Corporation from 2008 to 2015. He also served as President, Chief Executive Officer and Chairman of the Board of Directors of Duane Reade Holdings, Inc. from 2005 to 2008; Executive Vice President and Chief Operating Officer of Longs Drug Stores Corp. from 2003 to 2005; Executive Vice President of Marketing at Safeway, Inc. from 2000 to 2003; and President of Vons Co. Inc. from 1998 to 2000. Mr. Dreiling currently serves on the Board of Directors of Lowe’s Companies.
CHERYL W. GRISÉ
Former Executive Vice President of Northeast Utilities and CEO of its principal operating companies | Age 71
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Director since 2022
Independent
Board Committees:

Compensation, Chair

Nominating & Governance
Other Public Company Board Experience

ICF International, Inc. (since 2012)

PulteGroup, Inc. (since 2008)

Metlife, Inc. (since 2004)

Pall Corporation (2007 to 2015)

Dana Holding Corporation (2002 to 2008)
Key Skills, Experience and Expertise:
Ms. Grisé brings to our Board substantial executive leadership experience with a large consumer facing business, a strong governance and legal background and an unusually solid and strong record of leadership in public company boardrooms in many different sectors. She was named by the National Association of Corporate Directors (NACD) to their Top 100, a list of the top 100 most influential directors in the U.S.
Biography
Ms. Grisé is the former Executive Vice President of Northeast Utilities (now known as Eversource Energy) and Chief Executive Officer of its principal operating companies. She held those positions and other senior leadership positions at Northeast Utilities from 1998 to 2007. She currently serves on the Board of Directors of ICF International, Inc., Pulte Group, Inc. and Metlife, Inc.
 
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DANIEL J. HEINRICH
Former Chief Financial Officer of The Clorox Company | Age 68
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Director since 2022
Independent
Board Committees:

Audit

Finance, Chair
Other Public Company Board Experience

Lowe’s Companies, Inc. (2021 to 2023)

Aramark (2013 to 2023)

Ball Corporation (2016 to 2022)

Edgewell Personal Care Company
(2012 to 2022)

Advanced Medical Optics (2007 to 2009)
Key Skills, Experience and Expertise:
Mr. Heinrich brings to our Board his substantial experience as a director and executive at consumer-packaged goods companies and consumer-facing businesses. He has extensive executive-level financial knowledge and experience and has developed strong expertise in the areas of strategic business development, risk management, mergers and acquisitions, accounting and information technology. In addition, our Board has determined that Mr. Heinrich qualifies as an Audit Committee financial expert.
Biography
Mr. Heinrich is the former Chief Financial Officer of The Clorox Company. He held that position and other senior leadership positions at The Clorox Company from 2001 to 2011. Prior to that, he served as the Senior Vice President and Treasurer of Transamerica Finance Company from 1996 to 2001; Senior Vice President, Treasurer and Controller of Granite Management Company from 1994 to 1996; Senior Vice President, Controller and Chief Accounting Officer of First Nationwide Bank from 1986 to 1994; and Senior Audit Manager at Ernst & Young from 1978 to 1986.
PAUL C. HILAL
Founder and Chief Executive Officer of Mantle Ridge LP | Age 57
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Director since 2022
Independent
Vice Chair of the Board
Board Committees:

Compensation

Finance

Nominating & Governance
Other Public Company Board Experience

CSX Corporation (since 2017)

Aramark (2019 to 2023)

Canadian Pacific Railway Limited
(2012 to 2016)
Key Skills, Experience and Expertise:
Mr. Hilal brings to our Board substantial experience enabling companies to successfully effect value-creating change. His experience as a value investor, capital allocator and engaged steward during corporate transformations, in addition to his knowledge of the Company, enables him to contribute to the Board and its mission in unique and extremely valuable ways. Additionally, Mr. Hilal’s experience serving on the boards of multiple public companies will allow him to provide key strategic perspectives to the Board.
Biography
Mr. Hilal is the Founder and Chief Executive Officer of Mantle Ridge LP, an investment fund. Prior to launching Mantle Ridge LP, Mr. Hilal served as a Partner and Senior Investment Professional at Pershing Square Capital Management from 2006 to 2016; Managing Partner at Caliber Capital Management from 2002 to 2005, Partner at Hilal Capital Management from 1998 to 2001, Acting Chief Executive Officer of WorldTalk Communications Corporation from 1999 to 2000. Mr. Hilal currently serves on the Board of Directors of CSX Corporation.
 
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EDWARD J. KELLY, III
Retired Chairman of the Institutional Clients Group of Citigroup, Inc. | Age 71
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Director since 2022
Independent
Lead Independent Director
Board Committees:

Audit

Nominating & Governance, Chair
Other Public Company Board Experience

Citizens Financial Group, Inc. (since 2019)

Metlife (since 2015)

CSX Corporation (2002 to 2019)

XL Group (2014 to 2018)
Key Skills, Experience and Expertise:
Mr. Kelly brings to our Board business, strategic, financial and legal acumen and extensive leadership expertise. His experience includes key roles in building a client-centric model and managing the global operations of a major financial institution. In addition, he provides a local perspective as a long-time Virginia resident and lecturer at the University of Virginia School of Law.
Biography
Mr. Kelly is the Former Chairman of the Institutional Clients Group of Citigroup, Inc. He served in that role and other senior leadership positions at Citigroup, Inc. from 2008 to 2014, including Chairman of Global Banking, Vice Chairman, Chief Financial Officer and Head of Global Banking, and President and Chief Executive Officer of Citi Alternative Investments. Prior to Citigroup, Mr. Kelly served as Managing Director of The Carlyle Group from 2007 to 2008, Chairman and Chief Executive Officer of Mercantile Bankshares Corporation from 2001 to 2007, Managing Director of J.P. Morgan from 1995 to 2001, General Counsel of J.P. Morgan from 1994 to 1995 and Partner at Davis Polk & Wardwell, LLP from 1988 to 1994.
MARY A. LASCHINGER
Former Chairman and Chief Executive Officer of Veritiv Corporation | Age 64
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Director since 2022
Independent
Board Committees:

Compensation

Sustainability and CSR
Other Public Company Board Experience

Newmont Corporation (since 2021)

Kellanova (formerly known as Kellogg Company) (since 2012)
Key Skills, Experience and Expertise:
Ms. Laschinger brings to our Board substantial experience as a senior executive at some of the largest companies in the United States. In addition, she has led and served on the board of directors of several major U.S. and foreign companies and institutions, including the Federal Reserve Bank of Atlanta. Through these roles she has gained deep knowledge of risk management, leadership development, compensation and human capital management.
Biography
Ms. Laschinger is the former Chairman and Chief Executive Officer of Veritiv Corporation. She held that position from 2014 to 2020. Prior to Veritiv Corporation, Ms. Laschinger held senior leadership positions at International Paper Company from 2007 to 2014, including Senior Vice President of International Paper Company and President of xpedx distribution company. Ms. Laschinger currently serves on the Board of Directors of Newmont Corporation and Kellanova (formerly known as Kellogg Company). In addition to her service on public company boards, Ms. Laschinger has served on the Board of Directors of the Federal Reserve Bank of Atlanta.
 
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JEFFREY G. NAYLOR
Former Chief Financial Officer of The TJX Companies | Age 65
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Director since 2018
Independent
Board Committees:

Audit, Chair

Finance
Other Public Company Board Experience

Synchrony Financial (since 2014)

Wayfair (since 2018)

Emerald Holding, Inc. (2013 to 2021)

Fresh Market, Inc. (2010 to 2016)
Key Skills, Experience and Expertise:
Mr. Naylor brings to our Board extensive financial and accounting experience gained through his roles as the chief financial officer, director and audit committee chair of multiple large public companies. Mr. Naylor’s experience working as an executive at multiple discount retailers allows him to contribute valuable insight and perspectives in the areas of strategic business development, risk management, accounting and information technology. In addition, our Board has determined that Mr. Naylor qualifies as an Audit Committee financial expert.
Biography
Mr. Naylor is the former Chief Financial Officer of The TJX Companies. He held that position and other executive leadership positions at The TJX Companies from 2004 to 2014, including Senior Executive Vice President, Chief Financial and Administrative Officer, and Senior Executive Vice President, Chief Administrative and Business Development Officer. Prior to that, he served as the Chief Financial Officer of Big Lots, Inc. from 2001 to 2004 and earlier in his career he 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. Mr. Naylor is also the Managing Director of his consulting firm, Topaz Consulting LLC. He currently serves on the Board of Directors of Synchrony Financial and Wayfair, Inc.
WINNIE Y. PARK
Chief Executive Officer of Forever 21 | Age 53
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Director since 2020
Independent
Board Committees:

Compensation

Sustainability and CSR
Other Public Company Board Experience

Sound Point Acquisition Corp. I, Ltd. (2022 to May 2023)

Express, Inc. (2017 to 2022)
Key Skills, Experience and Expertise:
Ms. Park is a retail and marketing leader with deep experience in brand-building, e-commerce, omnichannel specialty retail, merchandising and international expertise. Ms. Park’s experience as a chief executive officer and director of multiple large multi-national retail companies allows her to contribute expert knowledge and strategic insight on the development of our business.
Biography
Ms. Park is the Chief Executive Officer of Forever 21, a role she has held since January 2022. Prior to joining Forever 21, Ms. Park was the Chief Executive Officer of Paper Source, Inc. from 2015 to 2021. In March 2021, Paper Source, Inc. filed a voluntary petition for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code. Under Ms. Park’s leadership Paper Source was acquired by an affiliate of Barnes and Nobles in connection with the completion of the bankruptcy proceedings. Prior to Paper Source Ms. Park was the Executive Vice President, Global Marketing and eCommerce at DFS Group Ltd. Earlier in her career, Ms. Park worked in various senior leadership positions at Levi Strauss & Co. and McKinsey & Company.
 
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DIANE E. RANDOLPH
Former Chief Information Officer of Ulta Beauty | Age 69
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Director since 2023
Independent
Board Committees:

Audit

Finance
Other Public Company Board Experience

Shoe Carnival, Inc. (since 2021)

Core Mark Holding Company (2020 to 2021)
Key Skills, Experience and Expertise:
Ms. Randolph brings to our Board substantial experience in the areas of information technology and business transformation, in addition to her experience serving as a director on boards of several public and private companies. Ms. Randolph will provide valuable insight and perspective as the Company develops and implements new technologies and systems.
Biography
Ms. Randolph is the Former Chief Information Officer of Ulta Beauty. She held that position from 2014 to 2020. Prior to that, she served as the Chief Information Officer of Reitmans Canada Limited from 2008 to 2014 and Director of Merchandise Business Process from 2005 to 2008. Earlier in her career she served as Vice President of Software Development at Aptos, LLC (formerly known as STS Systems). Ms. Randolph currently serves on the Board of Directors of the Shoe Carnival, Inc.
BERTRAM L. SCOTT
Former President and Chief Executive Officer of Affinity Health Plan | Age 73
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Director since 2022
Independent
Board Committees:

Audit

Sustainability and CSR
Other Public Company Board Experience

Equitable (since 2019)

Lowe’s Companies, Inc. (since 2015)

Becton, Dickinson and Company (since 2002)

AllianceBernstein (2020 to 2022)
Key Skills, Experience and Expertise:
Mr. Scott brings to our Board his substantial corporate governance and business expertise, in addition to extensive experience serving as a director on the boards of several large, complex, publicly-traded companies, as well as serving as chair of several board committees. Mr. Scott draws on his professional experiences to provide perspective to the boards on which he serves with respect to development and the implementation of strategy, mergers and acquisitions, merger integration, and sales and marketing. In addition, the Board has determined that Mr. Scott qualifies as an Audit Committee financial expert.
Biography
Mr. Scott is a retired health care executive who formerly served as the President and Chief Executive Officer of Affinity Health Plan from 2012 to 2014. Prior to that, Mr. Scott served as the President, US Commercial at CIGNA Corporation from 2010 to 2011; and held multiple executive leadership roles at TIAA-CREF from 2000 to 2010, including President and Chief Executive Officer. Mr. Scott currently serves on the Board of Directors of Equitable, Lowe’s Companies, Inc. and Becton, Dickinson and Company.
 
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STEPHANIE P. STAHL
Former Global Marketing & Strategy Officer of Coach, Inc. | Age 57
[MISSING IMAGE: ph_stephaniestahl-4c.jpg]
Director since 2018
Independent
Board Committees:

Nominating & Governance

Sustainability and CSR, Chair
Other Public Company Board Experience

Carter’s Inc. (since 2022)

Newell Brands, Inc. (since 2022)

Knoll, Inc. (2013 to 2021)
Key Skills, Experience and Expertise:
Ms. Stahl brings to our Board significant experience in marketing, data analytics, digital strategy, sustainability and brand 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 fundamental business transformation, mergers and acquisitions, and post-merger integrations. She also brings to our Board significant experience in corporate governance, investor engagement and ESG.
Biography
Ms. Stahl is the former Global Marketing and Strategy Officer of Coach, Inc. She held that position from 2012 to 2015. Prior to that, she served as the Chief Executive Officer of Tracy Anderson Mind & Body, LLC from 2010 to 2011, Executive Vice President, Chief Marketing Officer of Revlon, Inc. from 2003 to 2006, Partner and Managing Director of The Boston Consulting Group, Inc. from 1998 to 2003. Ms. Stahl is also the Founder of her investment and advisory company, Studio Pegasus LLC. Ms. Stahl serves on the Board of Directors of Carter’s Inc. and Newell Brands, Inc.
 
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Nomination and Election Process
All of our Directors are elected annually by a majority of votes cast in uncontested director elections and by a plurality of votes in contested elections. Candidates for nomination by our Board are recommended by our Nominating and Governance Committee. Our Nominating and Governance Committee considers candidates recommended by shareholders and, occasionally, the Committee may engage search firms to assist the Committee in identifying potential Board nominees.
As described in our Corporate Governance Guidelines, the Nominating and Governance Committee will consider several factors when considering a candidate for nomination, including:

the candidate’s ability to help the Board create shareholder wealth

the need of the Board for directors having relevant knowledge, diversity of background and experience

the candidate’s ability to represent the interests of shareholders

whether the candidate is a significant shareholder of the Company

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

whether the candidate is free of conflicts and has the time required for preparation, participation and attendance at meetings
Incumbent Directors nominated for reelection are subject to the director resignation policy included in our Corporate Governance Guidelines. Shareholders may recommend candidates for the Nominating and Governance Committee to consider by submitting a written notice in accordance with the procedures described under “Shareholder Nominations of Directors” on page 91.
The election of our Directors is subject to the terms of a Stewardship Framework Agreement entered into by the Company and affiliates of Mantle Ridge, LP, a registered investment advisory firm, which has a combined beneficial ownership interest in approximately 6.3% of the Company’s outstanding shares of common stock. Pursuant to the Stewardship Framework Agreement, if Mr. Hilal or a New Director (as defined therein) cannot serve or ceases to serve on the Board during the term of the Stewardship Framework Agreement, Mantle Ridge will have the right to designate a replacement, subject to certain conditions set forth in the Stewardship Framework Agreement. The Stewardship Framework Agreement is more fully described in, and is attached as an exhibit to, the Company’s Current Report on Form 8-K filed on March 8, 2022 with the SEC.
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 and Governance Committee is responsible for making recommendations regarding the size, composition and diversity of the Board and its committees, and seeks to include women and minority candidates in the qualified pool from which Board candidates are chosen.
The reconstitution of the Board in March 2022 resulted in the appointment of a diverse group of directors, including Cheryl Grisé, Mary Laschinger and Bertram Scott. In 2023 the Board continued its tradition of considering women and minority candidates and appointed, Diane Randolph, a female director from among a pool of diverse candidates. Our Board now includes five women, one of whom is a person of color, and a second minority member.
The following chart summarizes certain self-identified personal characteristics of our directors, in accordance with Nasdaq Listing Rule 5605(f). Each term used in the table has the meaning given to it in the rule and related instructions. As indicated in the chart, the Company more than meets Nasdaq’s diversity requirements.
 
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BOARD DIVERSITY MATRIX (AS OF MAY 1, 2024)
BOARD SIZE:
Total number of directors
11
FEMALE
MALE
NON-
BINARY
DID NOT
DISCLOSE
GENDER
Part I: Gender Identity
Directors
5 6 0 0
Part II: Demographic Background
African American or Black
0 1 0 0
Alaskan Native and Native American
0 0 0 0
Asian
1 0 0 0
Hispanic or Latinx
0 0 0 0
Native Hawaiian or Pacific Islander
0 0 0 0
White
4 5 0 0
Two or More Races or Ethnicities
0 0 0 0
LGBTQ+
0
Did Not Disclose Demographic Background
0
Board Tenure and Refreshment
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’s 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.
In the past several years, the Board has been engaged in an effort to achieve a “fit-for-purpose” Board which has included the retirement and replacement of the majority of our incumbent directors. The current tenure profile of our Board consists of two directors with five to ten years in tenure and nine directors with less than five years in tenure.
Board Commitments
Our Board is comprised of members with valuable experience gained from service on the boards of directors of other public companies, including companies in the retail industry. When making its recommendations for director nomination, the Nominating and Governance Committee considers the value of experience gained through service on other boards and conducts a rigorous review of the demands that such service may have on the director’s time. As set forth in our Corporate Governance Guidelines, as a general rule, the Nominating and Governance Committee will not recommend the election or reelection of an individual who (i) serves on more than four public company boards, other than the Company, or (ii) serves as the chief executive officer of a public company and serves on more than two public company boards, other than the Company. All of our nominees satisfy this rule.
In 2024 our Nominating and Governance Committee oversaw an annual performance review of our Board and its members that considered a number of factors including meeting attendance, preparation and director engagement with the Board and management. As part of this process, the Committee and the Board assessed our nominees for reelection and affirmed that each nominee has demonstrated that they are capable of devoting the necessary time to successfully meet their duties and otherwise fulfill the responsibilities required of directors in 2024, taking into account their principal occupation and membership and leadership positions on other boards.
 
15

 
CORPORATE GOVERNANCE AND OUR BOARD
Board Meetings and Attendance
The Board of Directors has scheduled four regular meetings in 2024 and recently held one of these meetings in March 2024. In addition, the Board will hold special meetings when Company business requires, and informational update calls are periodically conducted during the year.
In fiscal 2023, the Board met five times, the Nominating and Governance Committee met five times, the Audit Committee met seven times, the Compensation Committee met six times, the Finance Committee met four times and the Sustainability and Corporate Social Responsibility Committee met four times. 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 2023 annual meeting of our shareholders.
Independence
Dollar Tree is committed to principles of good corporate governance and the independence of a majority of our Board from the management of our Company. With the exception of Mr. Dreiling, all members of our Board have been determined by our Board to be independent directors within the applicable listing standards of the Nasdaq Stock Market. All members of our Audit Committee, our Compensation Committee and our Nominating and Governance Committee are independent under Nasdaq listing standards.
The independent members of our Board meet regularly multiple times each year in private sessions without management present. In addition, the Lead Independent Director, who has been granted robust leadership powers, may call special meetings of the independent members without management present.
Board Leadership Structure
Our Board is led by our Chairman and CEO, our Vice Chairman and our Lead Independent Director. As set forth in our Corporate Governance Guidelines, a Lead Independent Director is selected by our independent directors when our Chairman is not independent. In June 2023, Edward J. Kelly, III was re-elected as Lead Independent Director by the independent directors. Under our guidelines, the Lead Independent Director has clearly defined and robust leadership authority and responsibilities, including:

conferring regularly with the Chairman & CEO and the Vice Chairman;

in conjunction with the Chairman and the Vice 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 Chairman & CEO, the Vice Chairman, the Board as a whole and Board committees (including the chairs of Board committees);

communicating feedback from the Board regarding the performance of the Chairman & CEO;

presiding at shareholder and Board meetings in the event that the Chairman & CEO or the Vice Chairman are absent or unable to act or if designated by the Vice Chairman in accordance with our bylaws;

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 Independent Director will also coordinate feedback and follow-up as appropriate with the Chairman & CEO, the Vice Chairman, and the chairpersons of
 
16

 
relevant Board committees and other directors, as appropriate, concerning matters discussed among the independent directors;

in conjunction with the Chairman & CEO and the Vice Chairman, setting the agenda for meetings of the Board, advising the Chairman & CEO and the Vice Chairman as to the Board’s information needs and working with the Chairman & CEO and Vice Chairman 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 Chairman & CEO and Vice Chairman with issues that concern the Board;

remaining well-informed about senior management and succession plans; and

being available, consistent with the Shareholder Engagement Policy described beginning on page 22, 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. Mr. Dreiling is a distinguished retail executive with extensive, highly relevant retail industry experience at all operating levels, including success in the dollar store segment as the CEO and Chair of Dollar General Corporation from 2008 to January 2016. As the Chairman and CEO, Mr. Dreiling is in an ideal position to provide critical leadership to our business on strategic initiatives and to serve as a bridge between the Board and the operating organization. The role of the Lead Independent Director, as described above, facilitates the active engagement of our independent directors in the various aspects of the Board’s work and governance. We believe the functioning of our Board is enhanced by having Mr. Dreiling as Chairman and CEO, Mr. Hilal as Vice Chairman and Mr. Kelly as Lead Independent Director.
As part of the Company’s ongoing commitment to corporate governance, the Board annually considers its leadership structure and the role of the Lead Independent Director.
Board Committees
The Board has five standing committees, each comprised solely of independent directors. These committees operate under written charters which are available under the Investors tab on our corporate website at corporate.dollartree.com. The current Board committees and committee assignments are as follows:
Director
Independent
Director
Audit
Committee
Compensation
Committee
Nominating
and
Governance
Committee
Finance
Committee
Sustainability
and CSR
Committee
Richard W. Dreiling
Cheryl W. Grisé
C
Daniel J. Heinrich
C
Paul C. Hilal
Edward J. Kelly, III
LD
C
Mary A. Laschinger
Jeffrey G. Naylor
C
Winnie Y. Park
Diane E. Randolph
Bertram L. Scott
Stephanie P. Stahl
C
    LD = Lead Independent DirectorC = Committee Chair = Member    
 
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Description of Committees
Audit Committee
7 meetings held in Fiscal 2023
Primary duties and responsibilities:

Financial Reporting and Internal Control Structure. Monitoring the Company’s financial reporting processes and internal control systems and overseeing the Company’s audit processes and strategies.

Independent Auditor. Appointing and evaluating the Company’s independent auditor, including pre-approving audit and non-audit fees to be paid to the independent auditor.

Internal Audit. Overseeing the Company’s internal audit processes, including participating in the planning of the audit efforts of the internal audit and finance departments.

Enterprise Risk Assessment. Reviewing 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.

Compliance and Ethics. Reviewing the Company’s legal compliance processes and disclosures and systems of internal controls relating to legal compliance and ethics.

Related Party Transactions. Reviewing and overseeing any related party transactions and the reporting of any related party transactions.
Committee Members

Jeffrey Naylor (Chair)

Diane Randolph

Daniel Heinrich

Bertram Scott

Edward Kelly, III
Independence and Financial Expertise: The Board, after review of each individual’s employment experience and other relevant factors, has determined that all members of the committee satisfy the applicable standards of the Nasdaq Stock Market and SEC regulations for membership on the Audit Committee and that Daniel Heinrich, Edward Kelly, III, Jeffrey Naylor and Bertram Scott are qualified as audit committee financial experts within the meaning of SEC regulations.
Compensation Committee
6 meetings held in Fiscal 2023
Primary duties and responsibilities:

Executive Compensation. Establishing the compensation philosophy, structures and arrangements for our executive officers, including reviewing and approving our executive compensation benefits and programs.

Compensation of Directors. Reviewing and recommending to the Board the benefits and compensation plans and programs for the independent members of the Board.

Independent Compensation Consultant. Retaining independent compensation consultants to advise the Committee when appropriate.

Human Capital Management. Reviewing our initiatives with respect to diversity, equity and inclusion and human capital management, talent development and retention of key personnel.

Compensation Risk Assessment. Reviewing the Company’s incentive compensation policies and practices to assess whether such policies or practices encourage excessive risk-taking.

Executive Stock Ownership. Reviewing the executive officers’ stock ownership levels to ensure compliance with the Company’s stock ownership policy.
Committee Members

Cheryl Grisé (Chair)

Winnie Park

Paul Hilal

Mary Laschinger
Independence: All members of the committee satisfy the independence standards of the Nasdaq Stock Market and SEC regulations.
 
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Nominating and Governance Committee
5 meetings held in Fiscal 2023
Primary duties and responsibilities:

Board Composition and Governance Structure. Reviewing and making recommendations to the Board on the size, composition and diversity of the Board and overseeing our governance structure, including the structure of the Board and the governing documents and policies.

Board Candidates. Identifying, screening and recommending candidates to be nominated or appointed by the Board, including the re-nomination of any currently serving director.

Lead Independent Director. If the Chairman of the Board is not independent, recommending an independent director to be appointed as Lead Independent Director.

Committee Assignments. 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.

Conflicts and Waivers. Reviewing and resolving requests for waivers from directors of any provision of the Company’s Code of Business Conduct and any actual or potential conflicts of interest between the Company and any member of the Board.

Annual Performance Evaluations. Establishing processes for use by each of the Board’s standing committees to conduct annual self-assessments and leading the Board in its annual performance self-assessment.

Shareholder Engagement. Overseeing the Company’s shareholder engagement policy, monitoring shareholder communications with the Board on topics related to governance and recommending to the Board any actions the Committee deems appropriate.
Committee Members

Edward Kelly, III (Chair)

Stephanie Stahl

Cheryl Grisé

Paul Hilal
Independence: All members of the committee satisfy the independence standards of the Nasdaq Stock Market.
Finance Committee
4 meetings held in Fiscal 2023
Primary duties and responsibilities:

Capital Structure. Reviewing and advising the Board on the Company’s capital structure and allocation.

Financial Transactions. Reviewing and advising the Board on significant financing and related transactions.

Real Estate Transactions. Reviewing and advising the Board on financial considerations relating to the leasing, purchase, sale, conveyance and other acquisition and disposition of stores, facilities and real property.

New Store Openings. Reviewing and evaluating new store openings and performance.

Annual Budget. Reviewing and advising the Board on the annual operating plan and capital budget and advising the Board on major capital projects and commitments.

Acquisitions and Divestitures. Reviewing and advising the Board on acquisitions and divestitures and supporting the Board’s review with management of previously effected acquisitions and divestitures.
Committee Members

Daniel Heinrich (Chair)

Diane Randolph

Paul Hilal

Jeffrey Naylor
Independence: All members of the committee are independent.
 
19

 
Sustainability and Corporate Social Responsibility (CSR) Committee
4 meetings held in Fiscal 2023
Primary duties and responsibilities:

Sustainability. Overseeing our strategies, policies and initiatives with respect to environmental issues and impacts, including climate change, plastics and packaging, waste and chemical management.

Corporate Responsibility. Overseeing our strategies, policies and initiatives with respect to social issues and impacts, including those related to associate health and safety, workplace environment and culture, philanthropy, and community and governmental engagement and relations.

Human Capital Management. Overseeing our strategies and policies related to human capital management, including matters such as diversity, equity, and inclusion, recruiting and selection, and talent development and retention of the Company’s workforce.

Corporate Sustainability Disclosures. Reviewing our disclosures relating to sustainability, human capital and corporate responsibility topics, including our Corporate Sustainability Report.

Shareholder and Stakeholder Engagement. Overseeing our approach to shareholder and stakeholder engagement on sustainability and corporate responsibility matters.

Company Performance. Monitoring our performance against selected external sustainability and human capital indexes and internal metrics.
Committee Members

Stephanie Stahl (Chair)

Bertram Scott

Mary Laschinger

Winnie Park
Independence: All members of the committee are independent.
Board’s Role in Risk Oversight
Our Board 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 as necessary. In addition, the Lead Independent Director is responsible for facilitating director input and discussion regarding risks to the Company’s business.
[MISSING IMAGE: fc_boardofdirectors-bw.jpg]
 
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Oversight of Information Security Risk Management
The security of information shared with us by our customers, vendors and associates is important to us. We employ a comprehensive multi-layer approach in the implementation of our cybersecurity practices, including systems designed to prevent, detect and manage material risks from unauthorized access to our digital information systems.
The Board’s oversight of the Company’s information security and data privacy systems and processes and our investments in information technology infrastructure is monitored and overseen by our Audit Committee and Finance Committee. Our Audit Committee oversees the Company’s management of risks relating to information security and data privacy. The Audit Committee receives regular updates from management throughout the year on cybersecurity topics, including reports on the Company’s risk exposures related to information security and data privacy as well as any relevant mitigation or remediation tactics being implemented. Our Chief Information Security Officer serves as the designated executive leader for cyber or data-related incident response activities. Our Finance Committee monitors the Company’s investments in information technology systems. Our information technology team led by our Chief Information Officer has invested in internal and external resources to support and enhance our technology infrastructure over the next several years. The Finance Committee receives regular updates on our information technology investments and management’s plans for improving our systems and processes.
Oversight of Environmental and Social Sustainability and Responsibility
Dollar Tree is committed to environmental and social sustainability for our associates, customers and our communities. Our Board and management recognize the importance of assessing and planning for the potential impact of climate change and other sustainability and social risks of our business. The Sustainability and CSR Committee is primarily responsible for oversight of the Company’s social, environmental and safety programs affecting our associates, our customers and other stakeholders. The Sustainability and CSR Committee receives regular reports on a range of human capital management topics including talent development and retention, diversity and inclusion and associate engagement surveys and activities. The Sustainability and CSR Committee also provides guidance and oversight in the development of our environmental and social goals and strategies and improvements in our workplace safety programs.
The development and implementation of our social and environmental strategies and initiatives is led by members of our executive leadership team and by our Chief Sustainability Officer with engagement and support by business leaders throughout our organization. We report on our environmental and social sustainability strategies, initiatives and progress in our annual Corporate Sustainability Report which may be found on our website along with relevant policies. In 2023 Dollar Tree announced a commitment to set our ambition to achieve net zero Scope 1, 2 and 3 emissions by 2050 and to announce 1.5 degree aligned near-term Scope 1, 2 and 3 emissions reduction targets. More information about our climate related goals and efforts will appear in the Company’s 2024 corporate sustainability report and on our website.
Code of Business Conduct
Our Board has adopted a Code of Business Conduct for all our associates, including our directors, officers and employees, including our Chief Executive Officer and senior financial officers. The Code of Business Conduct reflects our commitment to conducting business in an ethical and lawful manner. Among other things, our Code of Business Conduct addresses such topics as honesty and integrity, workplace safety and belonging, relationships with our customers and our vendors, sustainability and environmental responsibility, compliance with laws, and the protection of Company assets.
Our Code of Business Conduct may be viewed at our investor relations website. In addition, a printed copy of the Code 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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Any amendments to, or waivers of, the Code of Business Conduct applicable to our directors, executive officers, principal accounting officer or controller or persons performing similar functions, will be posted on our investor relations website.
Shareholder Engagement Policy
Dollar Tree believes that effective corporate governance includes regular, constructive conversations with our shareholders. The Board’s commitment to shareholder engagement is reflected in the Shareholder Engagement Policy included in its Corporate Governance Guidelines. 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. Our Vice President of Corporate Governance serves as the primary liaison with shareholders on governance matters and our Chief Sustainability Officer regularly engages with shareholders and other stakeholders on environmental and social matters. Management is responsible for promptly reporting to the Board all material shareholder comments and feedback it receives.
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. Our Chairman and Chief Executive Officer regularly participates in dialogue with shareholders and on certain matters the Lead Independent Director or the Chairs of relevant Board committees may also participate.
Shareholders and other interested parties seeking to engage with us may send correspondence by mail to Dollar Tree Board of Directors, c/o Corporate Secretary, 500 Volvo Parkway, Chesapeake, VA 23320, or by email to CorpSecy@DollarTree.com.
 
22

 
DIRECTOR COMPENSATION
Director compensation is established by the Board of Directors and periodically reviewed. The table below sets out the compensation structure for non-employee directors in fiscal year 2023. The non-employee director compensation was designed to:

Simplify and streamline non-employee director compensation

Provide for at least 50% of the annual retainer to be awarded as equity, consistent with market practice and good governance and to align directors’ interests with those of shareholders

Recognize the responsibility and workload expected of the Chairs of the standing Committees and the Lead Independent Director, while generally maintaining an overall market competitive level of non-employee director compensation

Support an equitable allocation of Committee Chair and member responsibility and workload
In September 2023, the Compensation Committee, with the support of its compensation consultant, Meridian Compensation Partners, completed a peer benchmarking review of the non-employee director compensation program and determined that the compensation program was aligned with the market.
Compensation Element
Non-Employee Director
Compensation
Retainer
•Annual cash retainer $150,000
•Annual equity award $150,000
•Total annual retainer $300,000
Lead Independent Director $50,000
Audit Committee Chair $40,000
Compensation Committee Chair $35,000
Nominating and Governance Committee Chair $35,000
Finance Committee Chair $30,000
Sustainability and Corporate Social Responsibility
Committee Chair
$30,000
Committee Members
No committee member fees (except for service on ad-hoc committees)
Meeting Fees No meeting fees
The Board may also authorize additional fees for ad hoc committees, if any. In November 2023, the Board authorized the payment of a special service fee for the directors who served on an ad-hoc committee created to oversee certain litigation and compliance related matters. The special service fee in the amount of $25,000 for Mr. Kelly, the committee chair, and $20,000 for Ms. Stahl, Messrs. Heinrich and Scott is included in the table below. We do not offer non-equity incentives or pension plans to non-employee directors.
Directors may elect to defer receipt of all or a portion of their Board and committee fees to be paid at a future date. Prior to June 30, 2023 deferral elections were made pursuant to the 2013 Director Deferred Compensation Plan (the “2013 Deferral Plan”). The 2013 Deferral Plan permitted the deferral of fees in either cash, shares of common stock, or non-statutory stock options. Beginning July 1, 2023, deferral elections were made pursuant to the Non-Employee Director Deferred Compensation Program
 
23

 
(the “Deferral Program”). The Deferral Program operates in conjunction with, and under the authority of, the 2021 Omnibus Plan and allows deferral of fees into cash or shares of common stock.
The 2013 Deferral Plan and the Deferral Program are similar except that the Deferral Program does not offer stock options as a form of payment. Under both the 2013 Deferral Plan and Deferral Program, 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; the form of payment, the date on which payment will commence and in the case of deferral into cash or stock, whether the payout shall be in installments or lump sum. 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. In the case of deferrals into options made under the 2013 Director Deferred Compensation Plan, the number of options to be credited was calculated by dividing the deferred fees by 33% of the closing price on the date of deferral. The options bear an exercise price equal to the closing price on the date of deferral and are immediately exercisable.
The following table shows compensation paid to each non-employee director who served as a director during fiscal year 2023. Directors who serve as executive officers of the Company do not receive director compensation (compensation information for Richard Dreiling can be found beginning on page 51).
Name
Fees Earned
or
Paid in Cash

($)(1)
Stock Awards
($)(2)
All Other
Compensation

($)(3)
Total
($)
Thomas W. Dickson(4) 37,500          — 37,500
Cheryl W. Grisé          185,000          150,000          335,000
Daniel J. Heinrich 200,000 150,000 350,000
Paul C. Hilal(5)
Edward J. Kelly, III 260,000 150,000 410,000
Mary A. Laschinger 150,000 150,000 300,000
Jeffrey G. Naylor 190,000 150,000 340,000
Winnie Y. Park 150,000 150,000 300,000
Diane E. Randolph 93,904 131,918 225,822
Bertram L. Scott 170,000 150,000 320,000
Stephanie P. Stahl 200,000 150,000 350,000
(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 (i) on July 1, 2023 to all non-employee directors who were serving on July 1, 2023 in the aggregate amount of $150,000 pursuant to the annual director equity awards, and (ii) on October 1, 2023 to Ms. Randolph, the newly appointed non-employee director, in the aggregate amount $131,918 as a pro rata grant of the annual director equity award for service beginning on August 15, 2023. The number of shares were determined by dividing the value of the equity award by the Company’s closing share price on the date of grant ($143.50 on July 1, 2023 and $106.45 on October 1, 2023).
(3)
Non-employee directors occasionally receive perquisites provided by or paid by us. During fiscal year 2023, these perquisites included, samples of our products, temporary use of Company office space and transportation for the non-employee director or certain of their
 
24

 
family members. Any incremental cost to the Company of said perquisites, if any, is reported under “All Other Compensation.” The aggregate value of all benefits provided to each non-employee director in fiscal year 2023 was less than $10,000.
(4)
Mr. Dickson did not stand for reelection at the 2023 annual shareholders’ meeting held on June 13, 2023.
(5)
Mr. Hilal has waived all fees and stock awards for service as a director.
The following table shows, for each of our non-employee directors, amounts deferred in fiscal year 2023, the number of shares underlying those deferrals and the aggregate number, as of February 3, 2024, of outstanding stock options, including options obtained through deferral of fees (all of which are fully vested), and deferred shares:
Name
Amounts
Deferred in

2023
($)
(1)
Shares
Underlying
Amounts
Deferred in

2023
(#)
Total
Deferred
Shares (#)
Options
Outstanding,
including
Options
Acquired
through
Deferral of
Fees (#)
Total Shares
Underlying
Options
and Deferred
Amounts (#)
Thomas W. Dickson
Cheryl W. Grisé    335,000
2,449
4,938
4,938
Daniel J. Heinrich 210,000
1,511
3,327
3,327
Paul C. Hilal
Edward J. Kelly, III 300,000
2,184
4,640
4,640
Mary A. Laschinger 150,000
1,045
2,258
2,258
Jeffrey G. Naylor 221,250
1,599
7,375
2,803
10,178
Winnie Y. Park 37,500
263
263
263
Diane E. Randolph 131,918
1,239
1,239
1,239
Bertram L. Scott 150,000
1,045
2,258
2,258
Stephanie P. Stahl 350,000
2,552
9,623
9,623
(1)
This column shows the dollar amount of retainers and fees deferred in 2023 under the 2013 Deferral Plan or the Deferral Program. Directors were permitted 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.
Director Stock Ownership Requirements
In November 2022, the Board enhanced its stock ownership guidelines to require that each non-employee director should hold Dollar Tree stock worth no less than five (5) 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 director deferred compensation programs, are counted in meeting the guidelines, but unexercised stock options are not counted toward meeting the requirement. Under our policy, each director has five (5) years after he or she is first elected to the Board to meet the director stock holding requirements. As of April 2024 all of the directors are in compliance with the Company’s stock ownership guidelines.
 
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COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation Committee has reviewed the following 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 2024 annual meeting of shareholders.
SUBMITTED BY THE COMPENSATION COMMITTEE
Cheryl W. Grisé (Chair)
Paul C. Hilal
Mary A. Laschinger
Winnie Y. Park
COMPENSATION DISCUSSION AND ANALYSIS
Introduction
This Compensation Discussion and Analysis (“CD&A”) focuses on how our Named Executive Officers (“NEOs”) were compensated for fiscal 2023 and how their fiscal 2023 compensation aligned with our pay for performance philosophy. Our NEOs for fiscal 2023 are listed below.
2023 Named Executive Officers
Richard Dreiling
Chairman and Chief Executive Officer
Jeffrey Davis
Chief Financial Officer
Michael Creedon, Jr.
Chief Operating Officer
Lawrence Gatta, Jr.
Chief Merchandising Officer—Family Dollar
Richard McNeely
Chief Merchandising Officer—Dollar Tree
In order to present our executive compensation program in an understandable manner, the CD&A has been organized into the following sections:
A.
Executive Summary—an overview of key accomplishments and improvements implemented in 2023.
B.
Compensation Principles—the fundamental tenets upon which our compensation program is built.
C.
Components of Executive Compensation—the specific elements of the 2023 executive compensation program.
D.
Compensation Governance—key policies that govern the operation of the plans.
It is important to read the CD&A in conjunction with the detailed tables and narrative descriptions under “Executive Compensation Tables” beginning on page 51 of this proxy statement.
This CD&A includes the following important information:

a detailed description of our redesigned 2023 Executive Compensation Program
Page 29

a summary of our robust 2023 shareholder outreach, the feedback received and the Company’s response
Page 31

an analysis and discussion showing the alignment of pay and performance for our Chief Executive Officer
Page 36
 
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A.
EXECUTIVE SUMMARY
Fiscal 2023 was the second year of our transformational journey which included improvements in our products, pricing, store conditions and business operations. In 2023, we began testing and implementation of our new rotacart delivery process to streamline our truck unloading and store delivery process. We expanded the rollout of our new programs to improve store standards, working conditions and workplace safety. We continued the expansion of our multi-price initiatives under the Dollar Tree banner which began with our introduction of $3 and $5 products in select discretionary categories and has been expanded to $3, $4 and $5 frozen and refrigerated products and a wide assortment of other consumable and discretionary products. We initiated a comprehensive store portfolio optimization review which included a strategic assessment of our stores based on current market conditions, individual store performance and other factors and identified 970 underperforming Family Dollar stores and 30 underperforming Dollar Tree stores for closure. The store portfolio optimization impacted our 2023 financial performance; resulting in the recognition of impairments and related charges in the amount of $2,640.1 million. By making these strategic improvements and incurring these expenses in 2023 we have made meaningful improvements in the health of our business, the operation of our stores and our customer’s shopping experience.
Our ability to successfully execute this transformation requires highly skilled leadership. In 2022 and 2023, our Board of Directors assembled a new team of executive leaders with the skills and experience needed, including the addition of Jeffrey Davis, our Chief Financial Officer; Michael Creedon, our Chief Operating Officer; Jennifer Hulett, our Chief People and Communications Officer; Lawrence Gatta, our Chief Merchandising Officer—Family Dollar; Robert Aflatooni, our Chief Information Officer; Michael Kindy, our Chief Supply Chain Officer and Jonathan Leiken, our Chief Legal Officer and Corporate Secretary. Starting in 2023, Richard Dreiling was appointed to lead our new executive team as our Chief Executive Officer in addition to his role as the Chairman of our Board. As Chairman and CEO Mr. Dreiling provides critical leadership to our business and serves as a bridge between our Board and our operating organization. These leadership changes have positioned the Company to advance the Company’s strategic initiatives.
Our associates are a vital part of our success. We recognize that to be successful our associates must be well trained, highly motivated and fully supported by our business. In 2023, we continued our commitment to building our culture by reinforcing our values of serving with accountability, inspiring belonging, championing empowerment, operating with excellence and acting with integrity. These values are embedded into our ways of working and exemplified through our associate engagement strategy in 2022 and 2023, including associate surveys, improved issues reporting and communication platforms and frequent communication from our leadership team on our values, strategies and performance. We have also focused on making meaningful improvements in our business and our associate experience through simplifying work.
 
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2023 Business Performance
We are one of North America’s leading operators of discount variety stores, operating more than 16,700 discount variety retail stores under the names of Dollar Tree, Family Dollar and Dollar Tree Stores Canada. Highlights for fiscal 2023 include:
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Delivering Value to Shareholders
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In 2023, our Compensation Committee implemented incentive programs to reward executives for superior performance relative to goals that align the interests of executives with the long-term interests of our shareholders. Improvements to revenue growth and operating income and our total shareholder return, relative to peers, are all components of our new compensation program for 2023.
 
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New Compensation Program for 2023
In 2022, our Compensation Committee undertook a comprehensive review of our executive compensation program to assess the compensation elements and practices that would be needed to attract and retain the best executive leadership team to drive transformational change. The Compensation Committee met multiple times to consider program design and implementation, shareholder input received through the engagement process, and current market practices with respect to executive compensation. The changes resulting from the review are designed to increase the Company’s ability to attract and retain high-performing executives, enhance pay-for-performance alignment, support the Company’s culture, and align with the Company’s transformational growth strategy and shareholder expectations.
The revised compensation program includes multiple metrics for the short-term and long-term incentive program, and a blend of incentive vehicles designed to motivate and align the executive leadership team with the strategic objectives of the Company and the interests of shareholders. To support Dollar Tree’s transformational growth strategy, we considered it critical to have significant incentive focus not just on operating profit, but on profitable growth. The changes to our incentive program are described in detail below and include the addition of total revenue as a metric for short and long-term incentives, and adjusted earnings per share and total shareholder return relative to peers as new metrics for our long-term incentive program. The inclusion of a revenue metric in both the annual and long-term incentive plans is critical to ensure that management is focused on strategies to drive profitable growth in the short term with a strong focus on growth that is sustainable over the long term.
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Framework of our 2023 Executive Compensation Program
Base Salaries
The Compensation Committee increased base salaries based on various factors, including job performance and market benchmarking.
Annual Cash Incentive Performance Plan
The Compensation Committee diversified and broadened the metrics, adding total revenue (weighted 40%) to support the Company’s strategic focus on profitable growth.

Through a rigorous process the Committee set goals, thresholds and maximums and payout curves for each performance metric that are designed to be motivating and challenging.

The total revenue metric has a threshold payout for performance at 95% of target and a maximum payout for performance at 105% of target.

The operating income metric (weighted 60%) has a threshold payout for performance at 85% of the target and a maximum payout for performance at 112.5% of target.

There is an adjusted operating income hurdle of $1,500 million (73% of target) which must be achieved for any payout to be earned under the plan.
Long-Term Incentive Program Design
The Compensation Committee expanded and revised the mix of equity incentive awards to consist of 50% performance-based restricted stock units (“PSUs”), 30% service-based restricted stock units (“RSUs”) and 20% stock options.

The PSU awards are the largest incentive designed to reward exceptional performance in achieving the Company’s strategic objectives.

The stock option awards link a portion of our executive’s compensation directly to stock price appreciation and vest ratably over a three-year period from the grant date.

The RSU awards align with share price, add balance to the long-term incentive mix and support executive retention. The RSUs vest ratably over a three-year period from the grant date.
Long-Term Incentive Awards—PSU Goal
The Compensation Committee diversified and broadened the performance metrics for PSUs to include the following metrics measured over a three-year cumulative period:

Adjusted earnings per share (weighted 60%)

Adjusted total revenue (weighted 40%)

Modified by total shareholder return (“TSR”), relative to peers (+/- 25%)
 
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Compensation of Chief Executive Officer
Mr. Dreiling was appointed Chief Executive Officer of the Company effective January 29, 2023. Upon the recommendation of the Compensation Committee after receiving the advice of Meridian Compensation Partners, the Committee’s independent compensation consultant, the Board determined that Mr. Dreiling’s annual base salary for his services as Chairman and Chief Executive Officer will be $1,350,000 (the peer group median) and his target annual incentive, under the management incentive compensation plan, will be 175% of his base salary (also the peer group median).
As disclosed in our 2022 and 2023 Proxy statements, in March 2022, as a material inducement to persuade Mr. Dreiling to take an active operating leadership role and employment with Dollar Tree as Executive Chairman and to fully align his interests with the interests of shareholders over the long-term, the Board entered into a five-year executive agreement with Mr. Dreiling and granted him an option to purchase 2,252,587 shares of Dollar Tree common stock with a per-share exercise price of $157.17, the closing trading price of Dollar Tree common stock on March 18, 2022. The option award vests ratably over the five-year term of his executive agreement. In light of the grant, Mr. Dreiling is not eligible to receive additional long-term equity incentive awards for his service as Chief Executive Officer.
2023 Shareholder Outreach
Each year we ask our shareholders to participate in an advisory vote on our executive compensation programs (the “Say on Pay Vote”) and our Compensation Committee carefully considers the level of voting support and the feedback received from shareholders. At the 2023 annual meeting, ~57% of our shareholders cast votes in support of our Say on Pay Vote. While we were pleased that the majority of our shareholders approved our executive compensation program, we recognize that the level of support was much lower than the Company would like.
To better understand our shareholders’ perspectives, we conducted an in-depth outreach process during the fall of 2023. We requested meetings with our top 50 shareholders who, in the aggregate, represented over 80% of our outstanding shares. Twenty of these shareholders, representing more than 48% of our outstanding shares, agreed to meet with us. The shareholder engagement effort included members of our Board, our Chief Sustainability Officer and members of our Investor Relations, Human Resources and Legal teams. 80% of the 20 meetings were attended by either the Chair of our Compensation Committee, our Vice-Chair or our Lead Independent Director. These engagement sessions were opportunities for Dollar Tree’s Board members to hear directly from shareholders on topics including compensation, environmental, social and governance matters.
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Shareholder Feedback
Shareholder feedback on our regular executive compensation program, as revised and implemented in 2023, including our annual and long-term incentive plans was overwhelmingly supportive. Shareholder feedback on the one-time inducement award made to Mr. Dreiling in 2022 was mixed. Shareholders that were supportive of the inducement award shared comments indicating that they regarded the award as performance based, appropriate for the 5-year performance period and aligned with value creation for shareholders. Shareholders that were not supportive of the inducement award shared comments with some indicating that they prefer performance stock units to stock options and others expressing concern with the quantum of the award.
While the discussions were primarily listening sessions, we reemphasized the extraordinary circumstances that prompted the one-time award and assured our shareholders that the Board would consider their feedback and that the Company would communicate a clear response.
 
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Company Response
The table below summarizes the compensation related themes that arose from the feedback provided by shareholders and the Company’s response.
What We Heard
Our Perspective/ Our Response
Compensation Discussion
Inducement Award to Dreiling
While the majority of shareholders agreed with the Company’s rationale for providing the inducement grant, some shareholders had concerns with the magnitude of the grant, that similar grants of this magnitude would be made in the future, that the grant should have been tied to performance, or that the grant would not provide retention in the current market.

Our Compensation Committee has confirmed that the inducement award was a one-time grant designed to attract and incentivize an extraordinary leader with a proven track record and the skills needed to lead the transformation of our Company.

Our Compensation Committee has confirmed that future grants of this nature will not be made absent truly extraordinary circumstances.

We recognize that some shareholders would have preferred the use of performance stock units rather than options. We believe that the high strike price ($157.17 per share) of the options awarded under the inducement grant makes the award equivalent to a performance award and provides an incentive for Mr. Dreiling to build meaningful long-term shareholder value and aligns his interests with the interests of shareholders.

We believe that the inducement grant is a long-term incentive that appropriately motivates Mr. Dreiling. Absent a material change in circumstances, Mr. Dreiling will continue not to participate in the Company’s long-term incentive award program, and we believe that no further action is needed to retain him.
2023 Executive Compensation Program
The 2023 Say on Pay vote was based on compensation paid under our 2022 compensation program. In 2023, we launched a new incentive program which was previewed in our 2023 Proxy. We asked our shareholders for feedback on our newly redesigned 2023 incentive program.
The feedback provided was almost universally positive with most shareholders expressing strong support for the Company’s annual incentive design and metrics, long term incentive award mix, metrics and three-year performance periods. Some shareholders provided suggestions regarding performance metrics that the Company could consider in the future.

In 2023, our Compensation Committee redesigned our executive compensation program to include multiple performance metrics for our short- and long-term incentives and expanded the types of equity granted under our long-term incentive program. The new program is designed to motivate our leadership team during our period of transformation to align our executives with long-term shareholder value creation and profitable growth.

Given the very positive feedback on our current program, the Company concluded that no changes to the incentive program are needed at this time. We will, of course, continue to consider appropriate metrics, including potential return metrics, other financial metrics and sustainability metrics, as the Company progresses with its strategic initiatives.

A detailed description of the design of our 2023 Executive Compensation Program and the Company’s rationale for the structure and metrics chosen for the program is provided under the section entitled “Components of Executive Compensation” beginning on page 37.
 
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In addition to feedback on compensation, shareholders provided feedback on environmental and social matters. This feedback was shared with our Sustainability and Corporate Social Responsibility Committee. While we provide regular and detailed corporate sustainability reporting on the Company’s ongoing efforts to address the environmental and social issues that are central to our business, we have provided a brief summary of the environmental, social and governance (ESG) themes that were the focus of many of the shareholder meetings. The table below summarizes the feedback received and the Company’s response.
What We Heard
Our Perspective/ Our Response
ESG Discussion
Climate Change
Shareholders are pleased to see that the Company has committed to setting Net-Zero targets.

Additional details regarding the Company’s science-based targets and climate strategy will be provided in the Company’s 2024 Corporate Sustainability Report.
Worker Safety
Shareholders wish to understand the Company’s plans to improve worker safety.

Worker safety has been a focus for the Company in 2022 and 2023 and will continue to be an area of focus in 2024. The Company has developed a team of experts in the area of worker safety who are focused on implementing a multi-dimensional plan to address worker safety in our stores.
Worker Welfare
Shareholders are concerned with the health and welfare of our workers, including our associates ability to obtain fair wages and benefits.

We plan to conduct a benefits assessment to identify the programs that would be most valuable for associates working in our stores. Please refer to our Corporate Sustainability Report and corporate website for updates on our associate benefits programs.
Diversity Equity and Inclusion
Shareholders are generally interested in the Company’s culture and diversity equity and inclusion programs

In 2022 and 2023, we hired a Chief Sustainability Officer and a diversity team and engaged in a strategic planning process to develop our diversity, equity and inclusion strategy.
Human Capital Metrics
Disclose additional data on human capital metrics that are important to the Company’s business

We are committed to implementing new technology to gain additional detail regarding human capital metrics that are important to our business, and we will consider ways to communicate the insights gained over time.
 
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B.
COMPENSATION PRINCIPLES
Our Compensation Program Philosophy and Objectives
CEO Compensation
In 2022, Mr. Dreiling joined Dollar Tree as our Executive Chairman under an inducement grant of stock options that vest ratably over a five-year period. This long-term incentive was designed to fully align his interests with the long-term interests of our shareholders and to operate as an incentive for Mr. Dreiling to drive the transformational change that is expected to generate long-term shareholder value. Our Compensation Committee determined that a unique incentive plan was appropriate considering Mr. Dreiling’s critical role and exceptional experience. At the start of fiscal year 2023, our Board appointed Mr. Dreiling to be our Chief Executive Officer, which has allowed him to directly drive the transformational change that is vital to the success of our Company. Our Compensation Committee determined that, as CEO, (i) Mr. Dreiling should participate in the Company’s short-term incentive program, (ii) in light of the inducement grant made in 2022, he should not participate in the Company’s long-term incentive program, and (iii) the inducement grant made in 2022 continues to be an appropriate long-term incentive to motivate Mr. Dreiling and to fully align his interests with the interests of our shareholders.
Executive Compensation Program
For 2023, the Compensation Committee established a new executive compensation program (the “2023 Executive Compensation Program”) that is based on a pay-for-performance philosophy that links a significant portion of the executive’s total compensation to the Company’s performance and share price.
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The principal objectives of our compensation philosophy are to:

align the interests of executives with those of shareholders;

tie pay to performance;

focus executives on the long-term growth and profitability of our business;

recognize and reward achievement of corporate performance goals that create sustainable shareholder value;

attract, motivate and retain highly qualified executives;

unite the executive management team to a common objective; and

provide executive pay that is competitive with market.
 
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Target Pay Mix
Consistent with our desire to align pay and performance, our Compensation Committee used the primary pay elements of our 2023 Executive Compensation Program (base salary, annual incentives and long-term incentives) to develop a target pay package for each executive that is more heavily weighted towards variable or at-risk pay. As illustrated below, a significant portion of the pay is performance-based and therefore variable and at risk, which directly aligns the pay outcomes for our executives with the performance of the Company. To further align the 2023 Executive Compensation Program with long-term shareholder value, the Committee believes that long-term incentive compensation should be a substantial majority of our executive’s total compensation. In 2023, Mr. Dreiling, our CEO, participated in the short-term incentive plan under the Executive Compensation Program. Mr. Dreiling’s long-term incentive was provided in the inducement award made to him in 2022, therefore, he does not participate in the long-term incentive plan under the Executive Compensation Program.
CEO Pay Mix
The CEO’s 2023 compensation is comprised of base salary and annual bonus which, together with the long-term incentive awarded in 2022, provides for an incentive program that is primarily variable, at-risk and aligned with shareholder’s interests.
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Other NEO Pay Mix under the 2023 Executive Compensation Program
Under the 2023 Executive Compensation Program, the average pay mix for the NEOs (other than the CEO) is comprised of base salary, annual bonus, performance stock units, restricted stock units and stock options which provides for a significant portion of compensation that is variable, performance-based and at-risk.
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Alignment of Pay and Performance
Our 2023 Executive Compensation Program is grounded in a pay-for-performance philosophy to align pay outcomes with the interests of our shareholders. The Compensation Committee regularly reviews compensation outcomes to ensure that our incentive plans operate to effectively align compensation with performance and with the creation of long-term shareholder value.
The total compensation for the CEO of our Company in 2023, 2022, 2021 and 2020 (as reported in the Summary Compensation Table for each respective year), is generally aligned with the performance of the Company during those periods. In addition to the changes in performance year over year, the change in the compensation of our CEO in 2023 is due in part to the unique compensation arrangement with Mr. Dreiling and the introduction of our new 2023 Executive Compensation Program, including the addition of total revenue as a performance metric.
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Performance goals in both our short- and long-term incentive plans are set at challenging levels, to incentivize achievement of performance goals that drive long-term, sustainable shareholder value growth. When financial targets and performance goals are not met, performance-based incentive payments for our executives result in lower or zero payouts. We set relatively steep pay and performance curves for our short- and long-term incentive plans to give our executives meaningful downside risk and upside benefit if performance falls short of or exceeds the target. This aligns the executive’s pay with shareholder experience and expectations.
 
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C.
Components of Executive Compensation
Executive Compensation Program Overview
The Compensation Committee has adopted a compensation program for executive officers that balances each executive’s total compensation between fixed and at-risk and between short-term and long-term incentive components.
The 2023 Executive Compensation Program consisted of market-competitive base salary tied to the executive’s individual performance, experience and scope of responsibility; an annual cash bonus opportunity under our Management Incentive Compensation Plan (MICP) and long-term equity incentives in the form of PSUs, RSUs and stock options.
2023 Executive Compensation Program
Element
Vehicle Description & Strategic Role
Base Salary

Helps attract and retain executives through market-competitive base pay

Based on individual performance, experience and scope of responsibility
Annual Cash
Bonus Incentive

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

Cash bonus incentives in 2023 were based 60% on adjusted operating income and 40% on adjusted total revenue goals which are designed to promote profitable growth
Long-Term
Equity Incentive
Awards

Long-term incentive compensation composed of equity awards: 50% in PSUs, 30% in RSUs and 20% in stock options

PSUs incentivize executives to drive financial performance toward long-term objectives

PSUs awarded in 2023 were based on three-year cumulative goals for earnings per share (weighted 60%), total revenue (weighted 40%), with a three-year relative TSR modifier (+/- 25%)

RSU awards create a retention incentive through multi-year vesting and robust stock ownership guidelines

Stock options motivate executives to deliver long-term sustained share price performance
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.
Base Salary
Our base salary philosophy is to provide reasonable current income to our named executive officers at a market competitive level to 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 individual performance, increased individual experience, expanded scope of role or changes in the competitive marketplace.
The Compensation Committee, with the assistance of Meridian, approved base salary amounts for the executive officers, other than Mr. Dreiling, in March 2023. In determining the base salaries for 2023, the Compensation Committee considered market data from the peer group and retail industry peers, data on salary increases for executives and other relevant internal factors such as individual
 
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performance, scope of responsibility and retention. As a result of this review the base salaries of the named executive officers (other than Mr. Dreiling) were increased as follows: Mr. Davis 3.1%, Mr. Creedon 5.9%, Mr. Gatta 4.3% and Mr. McNeely 18.2%.
The Compensation Committee, with the assistance of Meridian, approved the base salary for Mr. Dreiling in January 2023 in connection with his appointment as Chief Executive Officer. The base salary for Mr. Dreiling was determined based on market data from the Company’s peer group to be approximately at the median of the peer group. The Committee noted that Mr. Dreiling’s salary was lower than the salary that would typically be paid to a CEO of his experience and record of performance but considered this to be appropriate in-light of the inducement award granted to him in 2022.
Annual Cash Bonus Incentives
We provide our executive officers with the opportunity to annually earn cash incentives under the MICP. These incentives are designed to encourage the achievement of corporate financial objectives and to reward our executive officers for the significant impact they make on our corporate results.
2023 Bonus Opportunities
Executive bonus opportunities are set as a percentage of salary. In 2023, the Compensation Committee determined that the payment of annual cash bonuses for the named executive officers would be based on two metrics: enterprise adjusted operating income (weighted 60%) and enterprise adjusted total revenue (weighted 40%). The 2023 incentive targets 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 and total revenue targets in 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. The performance targets are intended to be challenging but achievable with significant effort and serve to focus our management team on a common goal while aligning efforts with shareholder interests.
In prior years, the annual cash bonus was determined based only on adjusted operating income. In March 2023, the Compensation Committee added adjusted total revenue to the performance metrics used in fiscal 2023 to reward growth that is both profitable and sustainable. The metrics chosen for the annual cash bonus incentive plan are designed to encourage achievement of financial performance that is strategically important and creates sustainable shareholder value, and they are important metrics for evaluating the performance of retail companies. The definitions of adjusted operating income and adjusted total revenue used by the Committee are provided on page 40.
 
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Annual incentive awards in 2023 were determined as follows:
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2023 Corporate Performance Metrics
The Compensation Committee set the adjusted operating income target for 2023 at $2,046.5 million and the adjusted total revenue target for 2023 at $30,307.9 million based on the annual budget approved by the Board of Directors at the beginning of the fiscal year. To receive a payout under the adjusted operating income metric, we must achieve at least 85% of the adjusted operating income target and to receive a payout under the adjusted total revenue metric, we must achieve at least 95% of the total revenue target, provided however that no payout will be paid for either metric if the adjusted operating income is below $1,500 million (73% of the target).
Corporate Performance Goals for NEOs
The following tables summarize potential payout percentages for MICP awards based on the percentage of the adjusted operating income target and adjusted total revenue target attained. Potential payouts for adjusted operating income performance (60% of the potential MICP payout) increase on a payout curve that ranges from a payout of 0% for achieving less than 85% of the target performance to a payout percentage of 200% for achieving at or above 112.5% of target performance. Potential payouts for adjusted total revenue performance (40% of the potential MICP payout) increase on a payout curve that ranges from a payout of 0% for achieving less than 95% of the target performance to a payout percentage of 200% for achieving at or above 105% of the target performance.
Adjusted Operating Income
(60% of potential MICP payout)
% of Corporate
Performance
Target
Attained
Potential Payout
Percentage
Below 85.0%
0%
85%
50%
90%
66.7%
95%
83.3%
100%
100%
105%
140%
110%
180%
112.5% or above
200%
Adjusted Total Revenue
(40% of potential MICP payout)
% of Corporate
Performance
Target
Attained
Potential Payout
Percentage
Below 95.0%
0%
95%
50%
97.5%
75%
100%
100%
102.5%
150%
105% or above
200%
 
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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.
The definition of adjusted operating income and adjusted total revenue approved by the Compensation Committee for purposes of measuring the 2023 target performance under the MICP excludes from Operating Income (as calculated in accordance with GAAP) the effects relating to or resulting from the following, to the extent unbudgeted and approved by the Compensation Committee: (i) Canadian currency fluctuations; (ii) changes in accounting policies, practices and pronouncements; (iii) non-cash goodwill and intangible impairment charges; (iv) expenses incurred with respect to future mergers, acquisitions, or divestitures; (v) any cost or expense in excess of $5 million in the aggregate related to (a) uninsured natural disasters or casualties, or (b) legal disputes or governmental proceedings; (vi) lease costs, expenses, asset write-offs, incentive compensation, and severance related to closed stores or distribution centers; and (vii) future changes in laws or regulations.
The Committee may, in determining performance achievement, adjust the performance goal or results as it deems necessary or appropriate. In considering adjustments to performance, the Committee applies the target definition above based on guiding principles including, without limitation, avoiding rewarding or penalizing management for unexpected events; aligning incentives with long-term business strategy and best interests of stakeholders; providing flexibility to deal with unexpected events so that rigorous performance goals can be set; considering holistic performance in cash bonus incentive payouts; and avoiding penalizing management for making tough decisions that would negatively impact incentives.
During its March 2024 meeting, the Compensation Committee determined the following Company performance for fiscal 2023:
Metric
2023
Target(1)
($)
2023