UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.  )

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Filed by a Party other than the Registrant ☐

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Preliminary Proxy Statement

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

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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material under §240.14a-12

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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):

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No fee required.

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Fee paid previously with preliminary materials.

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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 FROM
OUR EXECUTIVE CHAIRMAN

Dear Fellow Shareholders,

You are cordially invited to join us for our 2022 virtual annual meeting of shareholders, which will be held on Thursday, June 30, 2022, at 11:00 a.m. Eastern Time. We have decided to use a virtual meeting format for our annual meeting, which allows us to conduct the annual meeting while mitigating the health and safety risks to participants and avoid the costs and travel inconveniences for our shareholders associated with an in-person meeting. The Notice of Annual Meeting of Shareholders and the Proxy Statement that follow describe the business to be conducted at the meeting.

With a heightened focus on driving growth and unlocking long-term shareholder value, the past several months have been pivotal for Dollar Tree. After gathering shareholder input, our Board of Directors (the “Board”) evaluated all feedback and determined it was in the best interest of stakeholders to reconstitute the Board in March 2022. These changes included the addition of seven new seasoned directors and improved corporate governance. As part of the changes, I joined the Company as your new Executive Chairman. I truly believe we are launching the next great chapter in the history of Dollar Tree.

I am excited and encouraged for the future. A great retailer relies on great people, and a key focus is and remains demonstrating deep care and concern for all of our associates. The Company will succeed when our associates succeed, and we should demand that the growth of the Company also open up many opportunities for the personal growth of our associates, such as through internal promotions. We will be accelerating initiatives to invest in our people and ensure that they can feel pride in the work that they do and believe in the power of their personal efforts to deliver on the Company’s promise of great everyday value and convenience for our customers.

The Company is more devoted than ever to the millions of customers who walk through our doors. We are driven to ensure every shopper has a great experience and that we deliver the high-quality, extreme-value goods that our customers rely on day to day. My goal is to elevate that experience and build up the brand loyalty and trust that make Dollar Tree and Family Dollar favorite destinations of consumers across the United States and Canada.

The Company brings two great banners under one roof, but they serve different customers, including some who are underserved by the rest of the retail community. These two complementary chains shouldn’t be treated as a single offering. Under the Board’s reconstituted leadership, Dollar Tree and Family Dollar will each be laser focused on how to be the best retail destination for their unique customer bases. At the same time, I believe there are more synergies to be unlocked from our combined brands. In coming months, we will be diving deep and exploring opportunities to improve Family Dollar and the supply chain for the entire enterprise. My hope and desire is to unlock the potential of the Family Dollar proposition while enhancing the long-running excellence that is Dollar Tree.

The world has seen a great deal of change in the last few years, and we have felt that here. The Company has weathered many challenges—from the continuing pandemic to soaring shipping costs and delays to the highest inflation in decades—and it has responded with many critical strategic initiatives. The Company reached an important milestone in its history when the Dollar Tree banner completed the successful conversion to a $1.25 price point across all U.S. stores, which significantly

 

 

enhances our ability to provide a meaningful assortment at extreme value to our Dollar Tree shoppers. The ability of our management team and associates to navigate the challenges of 2021 contributed to our continued annual growth in sales and earnings, and we remain in a strong position with $984.9 million in cash on our balance sheet at the end of our fiscal year. One thing that hasn’t changed is our unwavering dedication to producing consistent and exceptional results and being a prudent steward of capital.

At the same time, our Board and management recognize that stakeholders within our communities expect the Company to play an even more active, positive role. We strive always to be a responsible corporate citizen and to respond to issues of concern, including diversity, equity and inclusion for all peoples, the potential impact of climate change, and other sustainability risks. In 2022, we again are publishing a detailed Corporate Sustainability Report which includes details about our efforts across a range of topics, including environmental stewardship, DEI in our workforce, product safety and more.

The Board of Directors is committed to regularly re-evaluating how our long-term business strategy may be adapted to address these challenges and opportunities. To better facilitate director oversight of sustainability matters, the Board recently created the Sustainability and Corporate Social Responsibility Committee, a separate Board committee focused on key sustainability issues that affect the Company, such as environmental change, human capital management and workplace environment and culture matters. I am confident the Company is well-positioned from a governance perspective to address and manage current and future risks to our business.

I want to thank all of you for your support and confidence in the Board as we move forward to execute our strategy for long-term value creation. I look forward to engaging with you in the months and years ahead, and whether or not you plan to attend the virtual annual meeting, your vote is important, and I encourage you to vote your shares promptly.

Sincerely yours,

Richard W. Dreiling
Executive Chairman

 

 

LETTER FROM
OUR LEAD INDEPENDENT DIRECTOR

Dear Fellow Shareholders,

As discussed in the accompanying letter from Rick Dreiling, our Executive Chairman, the Board refreshment that took place in March 2022 brought seven new directors to our twelve-member Board. In connection with this change, the reconstituted Board appointed new leadership. Rick Dreiling, a distinguished retail executive, was appointed as Executive Chairman of the Board and Paul Hilal, founder and CEO of Mantle Ridge LP, was appointed as Vice Chairman. In addition to Rick and Paul, the Company will benefit from the experience and backgrounds of five exceptional new independent directors, while Dollar Tree’s President and Chief Executive Officer Michael Witynski and four other current independent directors will continue serving on the Board.

The Board views the changes to our governance and the arrival of Rick Dreiling as Executive Chairman, as a watershed opportunity for the Company. As the former CEO and Chair of Dollar General Corporation from 2008 to January 2016, Rick has extensive, highly relevant retail industry experience and a proven record of success in the dollar store segment. He has been an active director and board leader at a number of prominent public companies. As a strong retail leader with an established history of success, the Board looks forward to Rick’s leadership in driving the next chapter of growth for Dollar Tree. No one has more ability to achieve the Company’s two most important goals for enhancing shareholder value: unlocking the value inherent in Family Dollar and significantly improving the enterprise’s entire supply chain. Rick is the change agent needed to accomplish those goals.

SHAREHOLDER-FRIENDLY GOVERNANCE

Among the first steps taken by our Board under Rick Dreiling’s leadership has been to improve our governance structure to increase our responsiveness to our shareholders. We amended our By-Laws to move the advance notice time period for shareholder nominations of directors and the proposal of certain business closer to the annual meeting date, starting next year. In addition, as noted in this proxy statement, the Board has requested that shareholders approve an amendment to the Company’s Articles of Incorporation to permit stockholders that own 15% or more of the Company’s common stock to call a special meeting.

The Board has also added a new Finance Committee and restructured the existing Nominating, Governance and Sustainability Committee and Compensation Committee in order to create a new, separate committee focused solely on Sustainability and Corporate Social Responsibility. We believe these developments will allow the Board to exercise improved oversight in many critical areas, including diversity, equity and inclusion as well as greenhouse gas emission reductions.

The Board believes that implementing governance changes not only will improve our Board functions but also empower shareholders to engage with the Company more efficiently and conveniently. Our policies represent Dollar Tree’s ongoing commitment to preserving shareholder rights, and we pledge to assess additional governance changes against emerging best practices in the future.

INCENTIVE COMPENSATION FOR OUR EXECUTIVE CHAIRMAN

Prior to the reconstitution of the Board, members of our Board leadership including the prior Lead Independent Director met with shareholders owning more than 50% of the Company’s stock to understand their perspectives on our business strategy and leadership. The dominant view of those shareholders was that the Company should do whatever was necessary to secure Rick’s services as the Company’s top executive for a multi-year period. Without the inducement grant described below, the Board does not believe we would have achieved that objective.

In order to persuade Rick to take an active operating leadership role and employment with Dollar Tree as Executive Chairman and fully align his interests with the interests of shareholders over

 

 

the long-term, the Board approved a five-year employment agreement with Rick and granted him an option to purchase 2,252,587 shares of Dollar Tree common stock with an exercise price of $157.17 per share, the closing trading price of Dollar Tree common stock on March 18, 2022 and at the time the Company’s all-time high closing stock price. The number of shares covered by the award represented 1% of the shares of common stock then outstanding.

The option award vests over five years and, in addition to an annual base salary of $1 million, is the only direct compensation that Rick will receive for his service as Executive Chairman for the five-year term of his employment agreement. Since he will not be eligible for annual or any other long-term incentive awards, more than 95% of his annualized compensation is fully at risk and aligned directly with the creation of exceptional value for shareholders.

In the Board’s view, options are an ideal vehicle to support the creation of long-term value for the direct benefit of shareholders. Rick’s options will have economic value only if he builds long-term shareholder value in excess of the market’s expectation of transformational value reflected in the Company’s current share price. The long-term, five-year vesting schedule and ten-year term of the option award is intended to ensure that Rick will remain focused on long-term value-creating activity, including investments in talent and leadership, culture, succession planning, technology and transformational change of the business.

The other members of the Board and I believe Rick is in a unique position to drive long-term shareholder benefit. We expect him to be intimately involved in the operations of the Company and, because he will not participate in the Company’s annual or other long-term incentive plans, he will be incentivized to make the difficult decisions required to realize long-term value and will be positioned to ensure that Dollar Tree’s incentive plans incorporate metrics and targets that align directly with long-term shareholder value creation.

The Dollar Tree share price increased approximately 45% over the past several months since Bloomberg published rumors of Mantle Ridge’s investment in Dollar Tree. This share price increase has generated approximately $11 billion of shareholder value. We believe the shareholder response to Rick’s hiring and compensation has been strongly positive and is reflected in our share price.

We want to thank you for the input and support we have received to date and we look forward to engaging with you in the future.

Sincerely yours,

Edward J. Kelly, III
Lead Independent Director

 

 

QUICK INFORMATION

The following charts provide quick information about Dollar Tree’s 2022 annual meeting and our corporate governance and executive compensation practices. These charts do not contain all of the information provided elsewhere in the proxy statement; therefore, you should read the entire proxy statement carefully before voting.

Annual Meeting Information

Proposals That Require Your Vote

See “Information About the Annual Meeting and Voting” beginning on page 91 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 18, 2022.

 

 

Corporate Governance & Compensation Quick Facts

 

 

 

 

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

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
to be held on
Thursday, June 30, 2022

To Our Shareholders:

We will hold the annual meeting of shareholders of Dollar Tree, Inc. in a virtual format again this year. As a result, the entire meeting will be held online and there will be no physical location for shareholders to attend. Shareholders may participate in the annual meeting on Thursday, June 30, 2022 at 11:00 a.m. Eastern Time by logging in at:

www.virtualshareholdermeeting.com/DLTR2022

Shareholders will be afforded the same rights and opportunities to participate as they would at an in-person meeting. During the meeting, shareholders will be able to listen, vote and submit questions from any location using any internet-connected device. You may submit questions in advance of the meeting at www.proxyvote.com after logging in with your control number. Questions may also be submitted during the annual meeting through www.virtualshareholdermeeting.com/DLTR2022. To be admitted to the annual meeting, you must enter the control number found on your proxy card, voting instruction form or notice.

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

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

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

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To ratify the selection of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year 2022;

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To approve an amendment to the Company’s Articles of Incorporation to permit shareholders holding at least 15% of our outstanding shares of common stock to call a special meeting of shareholders;

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To vote on a shareholder proposal regarding climate transition planning; and

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

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Shareholders of record at the close of business on April 29, 2022 will receive notice of and be allowed to vote at the annual meeting.

 

 

We have elected to distribute our proxy materials primarily over the Internet rather than mailing paper copies of those materials to each shareholder. We believe this will increase shareholder value by decreasing our printing and distribution costs, reducing the potential for environmental impact by conserving natural resources, and allowing for convenient access to and delivery of materials in an easily searchable format. If you would prefer to receive paper copies of our proxy materials, please follow the instructions included in the Notice of Internet Availability of Proxy Materials that is being mailed to our shareholders on or about May 18, 2022.

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

WILLIAM A. OLD, JR.

Corporate Secretary

Chesapeake, Virginia

May 18, 2022

IMPORTANT NOTICE ABOUT THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 30, 2022

The Company’s proxy statement and annual report to shareholders for the fiscal year ended
January 29, 2022 are available at https://www.dollartreeinfo.com/investors/financial/annuals.

 

 

TABLE OF CONTENTS

 

 

 

 

OUR BOARD AND CORPORATE GOVERNANCE

The Work of the Board

Our Board of Directors is highly engaged and focused on strategy and the best use of capital to maximize shareholder value. The Board is also committed to having highly qualified and diverse directors with varying experiences, skills and perspectives to accomplish that goal. In fiscal 2021, the Board met fourteen (14) times, the Nominating, Governance and Sustainability Committee (now renamed the Nominating and Governance Committee) met four (4) times, the Audit Committee met eight (8) times and the Compensation Committee met nine (9) times.

Each year, strategy and capital allocation are a primary focus of the Board. In 2021 the Board oversaw the Company’s implementation of a multi-price point strategy which included the successful conversion to a $1.25 price point across all Dollar Tree stores in the U.S. Under the Board’s leadership the Company maximized the strength of its balance sheet by refinancing $1.3 billion with favorable interest rates, continuing its annual store expansion plans, repurchasing $950 million of shares and increasing its share repurchase authorization to $2.5 billion.

Our Board plays a critical role in overseeing enterprise risk, primarily through the work of its committees, which report matters relating to their areas of responsibility back to the full Board. In March 2022, the Board created two new standing committees, a Finance Committee and Sustainability and Corporate Social Responsibility Committee. These new committees will allow the Board to increase its focus on its strategic, finance and sustainability objectives and risks.

Recent Board and Corporate Governance Changes

On March 8, 2022, we entered into a Stewardship Framework Agreement with affiliates of Mantle Ridge LP, a registered investment advisory firm and owner of approximately 5.7% of our outstanding shares. Pursuant to the Stewardship Framework Agreement, effective March 16, 2022 our Board of Directors was increased from eleven to twelve directors and reconstituted to consist of seven new directors and five continuing directors following the retirement of six incumbent directors. For additional information regarding the Stewardship Framework Agreement and the reconstitution of the Board, see “Board Governance—Agreement with Mantle Ridge” on page 22.

The reconstituted Board appointed Richard W. Dreiling as Executive Chairman of the Board and Paul C. Hilal as Vice Chairman of the Board. On March 19, 2022, we entered into an Executive Agreement with Mr. Dreiling governing his service as Executive Chairman. For additional information regarding the terms of the Executive Agreement, see “Potential Payments Upon Termination or Change in Control” on page 77.

The Board also approved amendments to our By-Laws to, among other things, set forth updated roles and responsibilities for the positions of Executive Chairman, Vice Chairman and Lead Independent Director, and to move the advance notice time period for shareholder nominations of directors and the proposal of business closer to the annual meeting. Under the new advance notice requirements, for all annual meetings occurring after the 2022 annual meeting of shareholders, advance notice must be provided to the Company no earlier than 120 days and no later than 90 days before the anniversary of the prior year’s annual meeting.

In addition, the Board approved updates to the charters of the Nominating and Governance Committee and Compensation Committee and adopted charters for the newly-formed Sustainability and Corporate Social Responsibility (“CSR”) Committee and Finance Committee. These charters are aimed at clarifying and enhancing the roles of these key independent Board committees in accordance with corporate governance best practices.

The Board also approved amendments to our Corporate Governance Guidelines to refine the Company’s policy on director overboarding. Under the new policy, director candidates should generally

 

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not serve on more than four public company boards, other than the Company, or if the candidate serves as the chief executive officer of a public company, the candidate should generally not serve on more than two public company boards, other than the Company. The Board believes these changes to the Corporate Governance Guidelines strike the right balance in being able to attract exceptional director candidates while ensuring that these candidates have the necessary time to devote to the Board.

Director Refreshment and Tenure

In the past several years, the Board has been engaged in an effort to achieve a “fit-for-purpose” Board utilizing a waterfall strategy to reach and thereafter maintain a relatively balanced mix of short, medium and long-term tenured directors. The reconstitution of the Board in March 2022 resulted in the addition of seven new directors to the Board and the retirement of six incumbent directors. The tenure profile of our Board now consists of nine directors having two years or less in tenure and three directors with between three and five years in tenure.

Board Skills Matrix

The Board is committed to ensuring it has a relevant diversity of skills and experience to oversee the Company, its management, its strategic plan and the execution of that plan. The Board believes that our director nominees, as a group, represent an effective mix of skills, experiences, diversity and fresh perspectives. The table below summarizes the key skills, experiences, diversity and other qualifications of our nominees for director. The director biographies beginning on page 5 describe each nominee’s background and relevant experience in more detail.

 

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DIRECTOR BIOGRAPHIES

Biographical and other information for our directors is provided below.

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THE BOARD AND ITS COMMITTEES

The Board of Directors currently consists of 12 directors who are elected annually. The Board has re-nominated all current directors for appointment as directors to serve for a one-year term.

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

Pursuant to the Stewardship Framework Agreement, in March 2022 the Company reconstituted the leadership and composition of its committees and agreed to maintain such leadership at least until immediately prior to the 2023 annual meeting of shareholders. The current Board committee assignments are as follows:

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LD

Lead Independent Director

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C

Committee chair

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(1)

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

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(2)

The Board, after review of each individual’s employment experience and other relevant factors, has determined that Daniel Heinrich, Jeffrey Naylor and Winnie Park are qualified as audit committee financial experts within the meaning of SEC regulations.

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Audit Committee

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

Key functions of this committee include:

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

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

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

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reviewing our quarterly and annual financial statements;

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

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reviewing related party transactions; and

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

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The Audit Committee met eight (8) times in 2021. In addition, the Chair of the Committee conducted periodic updates with the independent auditors and/or financial management.

All members of the Audit Committee during 2021 met the independence requirements of the NASDAQ Stock Market and regulations of the Securities and Exchange Commission. The report of the Committee can be found beginning on page 99.

Compensation Committee

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

Key functions of this Committee include:

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overseeing our compensation and benefit practices;

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establishing the compensation arrangements for our executive officers;

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administering our executive compensation plans and Employee Stock Purchase Plan;

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

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overseeing our strategies and policies with respect to diversity, equity and inclusion as they relate to human capital management and talent development and retention with respect to our key personnel; and

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reviewing annually, in collaboration with the Nominating and Governance Committee, executives’ stock ownership levels to ensure compliance with the Company’s executive ownership policy.

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During 2021, the Compensation Committee was responsible for overseeing the Company’s strategies and policies related to human capital management, including with respect to matters such as diversity, equity and inclusion, workplace environment and culture, and talent development and retention, and reviewing, at least semi-annually, the Company’s initiatives related to human capital management, diversity, equity and inclusion programs and other workforce initiatives. Following the formation of the Sustainability and CSR Committee in March 2022, some of these responsibilities (other than certain matters relating to key personnel as described above) shifted to the Sustainability and CSR Committee.

The Compensation Committee met nine (9) times in 2021. In addition, the Chair separately engaged in numerous in-depth discussions with members of management.

All members of the Compensation Committee during 2021 met the independence requirements of the NASDAQ Stock Market and regulations of the Securities and Exchange Commission. The report of the Committee, together with our Compensation Discussion and Analysis and information regarding executive compensation, can be found beginning on page 45.

Nominating and Governance Committee

The purpose of the Nominating and Governance Committee is to advise the Board of Directors on the composition, organization and effectiveness of the Board and its committees and on other issues relating to the corporate governance of the Company. The Committee’s primary duties and responsibilities include:

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

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

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

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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;

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

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

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leading the Board in its annual performance evaluation;

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

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

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

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

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

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reviewing annually, in collaboration with the Compensation Committee, the directors’ stock ownership levels to ensure compliance with our director target ownership policy; and

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

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During 2021, the Committee also was responsible for monitoring and evaluating the Company’s sustainability and ESG risks affecting its stakeholders. Following the formation of the Sustainability and CSR Committee in March 2022, responsibilities relating to sustainability and corporate social responsibility shifted to the Sustainability and CSR Committee.

The Nominating and Governance Committee met on four (4) occasions in 2021. For further information on the Committee, please see “How Nominees to our Board are Selected” beginning on page 37.

All members of the Nominating and Governance Committee during 2021 met the independence requirements of the NASDAQ Stock Market.

Finance Committee

In March 2022, the Board formed a Finance Committee to assist the Board in its oversight of the Company’s financial policies, strategies, capital structure and allocation. The Committee’s primary duties and responsibilities include:

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reviewing and advising the Board on the Company’s capital structure and allocation;

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reviewing and advising the Board on significant financing and related transactions;

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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;

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reviewing and evaluating new store openings and performance;

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reviewing and advising the Board on the annual capital budget and advising the Board on major capital projects and commitments; and

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reviewing and advising the Board on acquisitions and divestitures and supporting the Board’s review with management of previously effected acquisitions and divestitures.

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Sustainability and Corporate Social Responsibility Committee

In March 2022, the Board formed a Sustainability and CSR Committee to assist the Board in its oversight of the Company’s sustainability and environment and social -related risks and strategies, external reporting, and workplace environment and culture. The Committee’s primary duties and responsibilities include:

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assisting the Board in discharging its responsibilities relating to oversight of the Company’s strategies, policies and initiatives and assessing, monitoring and making recommendations to the Board, with respect to sustainability and corporate social responsibility matters, including those related to environmental and social issues, human rights, labor, health and safety, workplace environment and culture, vendor and supplier diversity, philanthropy, and community and governmental engagement and relations;

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overseeing the Company’s strategies and policies related to human capital management, including with respect to matters such as diversity, equity, and inclusion as it relates to the Company’s workforce, workplace environment and culture, and the recruiting, selection, talent development, progression and retention of the Company’s workforce;

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

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at least semi-annually, evaluating, discussing, and, as appropriate, directing the disclosure of the Company’s risks relating to corporate social responsibility and sustainability, including the environment, human rights, labor, health and safety, workforce diversity, supply chain, and similar matters affecting Company stakeholders.

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Meetings of the Board of Directors

The Board of Directors has scheduled four regular meetings in 2022 and recently held one of these meetings in March 2022. The Board will hold special meetings when Company business requires. During 2021, the Board held fourteen (14) meetings. Informational update calls are periodically conducted during the year. Each member of the Board attended more than 75% of all Board meetings and meetings of committees of which he or she was a member.

We expect each of our directors to attend the annual meeting of our shareholders. All of the then incumbent directors were in attendance at the 2021 virtual annual meeting of our shareholders.

 

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BOARD GOVERNANCE

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

 

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Agreement with Mantle Ridge

On March 8, 2022, the Company entered into a Stewardship Framework Agreement (as amended, the “Stewardship Framework Agreement”) with affiliates of Mantle Ridge, LP, a registered investment advisory firm, which has a combined beneficial ownership interest in approximately 5.7% of the Company’s outstanding shares of common stock. Pursuant to the Stewardship Framework Agreement, (i) each of Bob Sasser, Arnold S. Barron, Gregory M. Bridgeford, Lemuel E. Lewis, Carrie A. Wheeler and Thomas E. Whiddon retired from the Board, (ii) the size of the Board was increased to 12 directors, and (iii) each of Paul C. Hilal, Richard W. Dreiling, Edward J. Kelly, III, Cheryl W. Grisé, Daniel J. Heinrich, Mary A. Laschinger, and Bertram L. Scott joined the Board, with Messrs. Dreiling, Hilal, and Kelly appointed to serve as Executive Chairman, Vice Chairman, and Lead Independent Director of the Board, respectively.

The Company further agreed to nominate Messrs. Hilal, Dreiling, Kelly, Heinrich and Scott and Mses. Grisé and Laschinger, as well as incumbent directors Michael A. Witynski, Thomas W. Dickson, Jeffrey G. Naylor, Winnie Y. Park and Stephanie P. Stahl, to stand for election at the 2022 annual meeting. In connection with the foregoing, Mantle Ridge has agreed to has agreed to cause all shares of the Company’s common stock owned by it and its affiliates and which it has the right to direct the vote to (i) be present for quorum purposes at the annual meeting and (ii) be voted in favor of the nominees herein and against the removal of any such director.

Pursuant to the Stewardship Framework Agreement, the Company also has agreed to limit the size of the Board to 12 directors until March 8, 2025, and to reconstitute the leadership and composition of its committees and agreed to maintain such leadership at least until immediately prior to the 2023 annual meeting of shareholders. See “The Board and its Committees” beginning on page 17 for more information regarding the current committee composition.

If Mr. Hilal 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 as set forth in the Stewardship Framework Agreement. The obligations under the Stewardship Framework Agreement will terminate upon Mantle Ridge and its affiliates ceasing to have an economic ownership position of at least 2.0% of the Company’s outstanding common stock (excluding the effects of any issuance of shares or similar transaction that increases the number of outstanding shares of common stock), subject to certain specified obligations that will terminate at a later date.

The Stewardship Framework Agreement provides that the parties will enter into a registration rights agreement granting to Mantle Ridge customary and reasonable registration rights with respect to shares of the Company’s common stock beneficially owned by Mantle Ridge. The Stewardship Framework Agreement further provides that, except for certain restrictions set forth in the Company’s insider trading policy, none of the restrictions in the Company’s policies applicable to Mr. Hilal or his successor as a director shall be deemed to apply to Mantle Ridge and certain of its affiliates’ transactions in the Company’s securities.

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 Securities and Exchange Commission.

Independence

Dollar Tree is committed to principles of good corporate governance and the independence of a majority of our Board of Directors from the management of our Company. The following ten of our current directors have been determined by our Board to be independent directors within the applicable listing standards of the NASDAQ Stock Market: Thomas W. Dickson, Cheryl W. Grisé, Daniel J. Heinrich, Paul C. Hilal, Edward J. Kelly, III, Mary A. Laschinger, Jeffrey G. Naylor, Winnie Y. Park, Bertram L. Scott and Stephanie P. Stahl.

 

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All members of our Audit Committee, our Compensation Committee and our Nominating and Governance Committee are independent under NASDAQ listing standards. Our Board has reviewed the various relationships between members of our Board and the Company and has affirmatively determined that none of our directors or nominees has material relationships with Dollar Tree, other than Messrs. Dreiling and Witynski, who are members of management. See “Certain Relationships and Related Transactions” on page 86 for further information.

If the slate of directors proposed to be elected at the 2022 annual meeting of shareholders is elected, all committees of our Board will continue to be comprised solely of independent directors. The basis for an independence determination by our Board is either that the director has no business relationship other than his or her service on our Board, or that while a director may have some involvement with a Company or firm with which we do business, our Board has determined that such involvement is not material and does not violate any part of the definition of “independent director” under NASDAQ listing standards. None of our current executives sit on any of our committees.

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

Board Leadership Structure

Our Executive Chairman and Vice Chairman both were appointed in March 2022 in connection with our entry into the Stewardship Framework Agreement. Because our Executive Chairman is not independent, our independent directors elect a Lead Independent Director, as required under our Corporate Governance Guidelines. In March 2022, Edward J. Kelly, III was 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 Chief Executive Officer, Executive Chairman, and the Vice Chairman;

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•

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 Executive Chairman, the Vice Chairman, the Chief Executive Officer, the Board as a whole and Board committees (including the chairs of Board committees);

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

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•

in the absence or inability to act of the Chairman and Vice Chairman, or if designated by the Vice Chairman in accordance with our bylaws, presiding at shareholder and Board meetings;

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•

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

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•

in conjunction with the Executive Chairman and the Vice Chairman, setting the agenda for meetings of the Board, advising the Executive Chairman, Vice Chairman and Chief Executive Officer as to the Board’s information needs and working with the Executive Chairman, Vice Chairman and Chief Executive Officer as needed to coordinate and provide direction, feedback, changes, input and approval regarding Board meeting agendas, schedules

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and materials in order to support Board deliberations and enable sufficient time for discussion of all agenda items;

•

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

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•

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

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being available, consistent with the Shareholder Engagement Policy described beginning on page 30, for consultation and direct communication with shareholders when appropriate.

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The Board has determined that its current leadership structure is the most appropriate for Dollar Tree and its shareholders. The appointment of Mr. Dreiling as Executive Chairman in March 2022 has brought to the Company a proven leader 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. Mr. Dreiling is expected to take an active operating leadership role in the Company focusing on driving transformational change in our supply chain and Family Dollar business, and in generating long-term positive results for the Company and its shareholders. 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 Executive Chairman, 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 periodically considers its leadership structure and the role of the Lead Independent Director.

Director Stock Holding Requirements

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

As of April 2022, Thomas W. Dickson, Daniel J. Heinrich, Paul C. Hilal, Jeffrey G. Naylor, Mary A. Laschinger and Stephanie P. Stahl have met the requirements of the guidelines. Cheryl W. Grisé, Edward J. Kelly, III, Bertram L. Scott are among our new directors appointed to the Board pursuant to the Stewardship Framework Agreement and have not yet acquired shares in excess of the amount required by the new guidelines. 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. Consistent with prior years, a majority of the directors chose to defer a meaningful portion of their annual cash retainer as shares of common stock, ranging from 50% to 100% of total compensation for participating directors during 2021.

Majority Voting in Uncontested Election of Directors

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

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

 

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Board’s Role in Risk Oversight

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

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

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

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

Information Security Risk Management

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

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

 

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We regularly conduct internal reviews and work with third-parties to identify and manage information security risks. By auditing and assessing our computing environment we are able to identify any gaps in our security programs or systems. We engage external certified and qualified entities to identify, manage and assess our information security policies, programs and systems. Payment Card Industry Data Security Standards (PCI-DSS) audits are conducted by PCI Security Council trained and certified PCI-DSS Internal Security Assessors (ISA’s). Additionally, external penetration testing and audits of network controls are periodically completed by a qualified external penetration assessor. Audit results and overall compliance attestations are submitted to our acquirers and card payment brands for our compliance. External audits, assessments and controls testing are conducted by qualified national consulting firms to evaluate the overall security and integrity of our computing environment. Third party partnerships, cloud-based services or hosted solutions are vital parts to the success of our business and as such we conduct continual reviews of our most critical partners. We conduct both administrative and technical assessments of our partners’ information security programs and practices.

On a regular basis, business continuity and disaster recovery exercises of our computing environment are conducted to ensure that mission critical systems are properly backed-up and capable of recovering from identified potential outage scenarios. Similarly, our CISO serves as the Incident Commander of our Incident Response team with representation from all major functional areas within the Company. Incident response plans are reviewed annually and validated by external third parties.

All associates receive information security training on protecting corporate data and digital assets. This training encompasses everything from password protection and social media expectations to physical asset protections. Targeted training is also provided on topics such as, but not limited to, phishing, secure application development, social media, and fraud. Periodic internal phishing exercises are conducted throughout the year to measure and reinforce concepts provided during security training.

In addition to managing our internal information security risk programs, we maintain cyber risk insurance as part of our risk mitigation efforts. Our insurance covers situations arising from, among other things, cyber related breaches and interruptions in the business continuity of our computing environment as well as certain coverage for under-insured third parties with whom the Company may be engaged. These policies are annually reviewed by industry underwriters at which time our security practices, programs, processes, and procedures are thoroughly disclosed, reviewed and evaluated for purposes of determining our insurability.

We have not experienced any computer data security breaches in the past three years as a result of a compromise of Dollar Tree or Family Dollar information systems. As a result, we did not incur any expenses, penalties or settlements relating to an information security breach of our systems during this period. In fiscal year 2021, we experienced a security-related event involving connectivity access to our commodity internet that only affected our principal corporate offices for a brief period of time with no impact on our e-commerce capability, retail stores, operations, associates or customers. To resolve and mitigate future similar scenarios, remedial measures have been implemented. In fiscal year 2020, there was a security incident suffered by a third-party service provider that affected the information of a small number of our associates. To resolve this issue, we worked with the third party and its forensics investigating firm, and appropriately notified affected associates and required state regulatory agencies. We incurred out-of-pocket expenses of approximately $23,000 in connection with the third-party incident.

Sustainability

Dollar Tree is concerned about and committed to environmental sustainability, product safety, human rights and human capital management, and continues to enhance its efforts in these areas. From its beginning over thirty years ago, we have operated our business with integrity and concern for others. We are focused each day on promoting a welcoming and safe environment for our customers and associates. The principles that guide us are ingrained in our people and our operations. From the

 

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global impact of climate change to the safety of the products we sell to our concern for the individuals who make them, Dollar Tree strives to stay focused on these values.

Board and Management Oversight of Sustainability

Our Board and management recognize the importance of assessing and planning for the potential impact of climate change and other sustainability risks of our business. The Board took on enhanced ESG oversight in 2020 by charging the then-named Nominating, Governance and Sustainability Committee with responsibility for related risks. Earlier this year, the Board created a separate Sustainability and CSR Committee specifically to monitor and evaluate the Company’s social impact, the sustainability of its operations and environmental and other related risks affecting our associates, our customers and our other stakeholders.

Under its charter, the Sustainability and CSR Committee’s primary duties and responsibilities include, at least semi-annually, to evaluate, discuss, and, as appropriate, direct the disclosure of the Company’s risks relating to corporate social responsibility and sustainability, including the environment, human rights, labor, health and safety, workforce diversity, supply chain, and similar matters affecting our stakeholders. The Committee is also responsible for developing and recommending to the Board policies and procedures relating to the Company’s sustainability and corporate social responsibility matters. This includes, among other things, reviewing and monitoring the Company’s strategies and efforts to address the Company’s short- and long-term brand trust opportunities and brand leadership priorities that are significant to the Company, its customers, shareholders and other stakeholders with respect to sustainability and corporate social responsibility matters, increasing transparency into the Company’s policies on sustainability risks for all Company stakeholders, and receiving regular reports from management regarding the identification, evaluation, management and mitigation of sustainability risks including any which may arise in the future.

Enhanced Sustainability and Climate Change Reporting

We recognize that sustainability reporting is an area of interest for our stakeholders. Starting in 2020, Dollar Tree partnered with outside experts to begin a new initiative to define and measure its carbon emissions footprint, to set long-term greenhouse gas (GHG) emissions goals, and to prepare a formal climate disclosure report. In developing our sustainability disclosures, we took into account shareholder input and in 2021 the Company published an enhanced Corporate Sustainability Report which (i) described our long-term corporate strategy development process relative to climate change; (ii) summarized the specific tasks performed by the Board and management in the course of this strategy development; and (iii) described our long-term goals for greenhouse gas reduction.

Our first-generation climate-related goals include:

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

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

​

The Company is continuing to provide robust sustainability disclosures this year through the publication of our 2022 Corporate Sustainability Report. This updated and enhanced report provides updates on our progress toward our greenhouse gas emissions goals, and our diversity equity and inclusion (DEI) initiatives. Over the coming months and years, our goals and disclosures around environmental sustainability will continue to develop in response to our continued analysis and learning around climate change initiatives and renewable energy, anticipated governmental and regulatory requirements, and the demonstrated strong concerns of our customers and shareholders.

Our climate change management approach is guided by the recommendations from the Task Force on Climate-related Financial Disclosures (TCFD), and we have developed a GHG emissions

 

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Inventory Management Plan (IMP) that standardized our GHG emissions footprint measurements and monitoring processes. The documented IMP has allowed us to report and improve upon these metrics year-over-year, including new comparison data we are presenting in our 2022 Corporate Sustainability Report. Additionally for 2022, we are planning to be a first-time responder to the CDP Climate Change questionnaire, the pre-eminent tool for sharing detailed information about our processes for governing, identifying, assessing and managing climate-related risks and opportunities.

Dollar Tree is focused on pursuing meaningful initiatives that minimize our environmental impact while reducing costs and driving efficiency, which we believe reduces risk and ultimately ensures the creation of sustainable shareholder value. Our GHG emissions come from the energy we consume across our stores and distribution centers, the emissions associated with the production of the goods we sell and the transportation of those goods from our suppliers to our stores. Having adopted our initial climate-related goals in 2021, we are now undertaking a variety of initiatives to achieve a reduction in our GHG emissions intensity and to target our spend with merchandise suppliers with a similar commitment. For details of these and our other environmental sustainability initiatives, please see our 2022 Corporate Sustainability Report which we are making available to the public on our Company website.

Product Safety and Sustainability

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

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

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

Human Rights

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

Human Capital Management

We continue to build a rewarding, engaging, diverse and inclusive work environment. In 2020, we formed the Diversity, Equity and Inclusion (DEI) Executive Council comprised of senior leaders from every department within the Company who are charged with creating a DEI engagement strategy aligned with our business goals. In addition to helping to foster a culture of diversity and inclusion, the DEI Executive Council has helped to drive accountability at the senior management level for progress on

 

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key DEI initiatives. Among its many activities, the DEI Executive Council has overseen the formal organization of the Champions of Women and Pride LGBTQ+ employee resource groups (ERGs), unconscious bias training for the workforce, and the creation of an Allyship Guide for associates. At the Board level, the Sustainability and CSR Committee has committed to meeting at least twice a year to review the Company’s initiatives related to DEI as it relates to workplace environment and culture, human capital management of the Company’s workforce and talent development and retention of the Company’s workforce.

In 2022, under the Board’s oversight, we have set a series of DEI goals for the Company. These include a review and expansion of our current DEI strategy and establishing for the first-time qualitative performance goals for executive leaders that support and drive our DEI efforts. We are also developing and validating systems that bring visibility to our DEI metrics and progress towards our goals via a dashboard available to our senior leadership and Board. Finally, we plan to further integrate a DEI focus into the range of Company talent life cycle programs, policies and practices, including talent acquisition, development and succession planning.

We believe in the growth and development of our associates and provide professional and leadership development experiences, including online and instructor-led trainings to assist associates in their current role and help prepare them for future growth. We are committed to providing market-competitive pay for all positions and we are a pay for performance organization, and performance-based compensation opportunities exist at almost all levels of the organization, including hourly paid positions. Both Dollar Tree and Family Dollar have implemented a Store Manager Bonus Program, which rewards store managers for strong performance. We also offer benefits to eligible associates such as participation in our 401(k) plan and Employee Stock Purchase Plan in order to help our associates plan for their retirement. All full-time and part-time associates are eligible for competitive health and welfare benefits, including medical, dental, vision, disability, life insurance and other benefits.

Code of Ethics

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

Engagement with Shareholders

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

During 2021, we engaged in an active shareholder outreach campaign. In addition, prior to the Board’s approval of the Stewardship Framework Agreement, members of our Board engaged with shareholders owning more than 50% of the Company’s common stock to better understand their perspectives on our business strategy and leadership. The feedback from our shareholders was an important factor in the Board’s consideration of the governance changes contemplated by the Stewardship Framework Agreement, including the reconstitution of the Board and the changes in our Board leadership.

Each year, we have continued our outreach to shareholders and stakeholders to understand their views on issues important to them. The Vice President, Corporate Governance together with the office of the Corporate Secretary leads this engagement process on matters of corporate governance, incorporating other executives and members of the Board where appropriate or as requested by

 

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individual shareholders. We engaged with our shareholders and stakeholders on topics related to board refreshment, executive compensation, long-term business strategy, social issues that affect our business and environmental impact and sustainability matters, including climate change.

The Board reviewed feedback from these conversations to better understand our shareholders’ priorities and perspectives. In response to feedback from shareholders, we took steps to increase our transparency and reporting on sustainability matters, including the preparation of an enhanced corporate sustainability report that evaluates how our long-term business strategy could be threatened by, and may be adapted to address, the potential challenges posed by climate change to our continued ability to create and build sustainable shareholder value. This report was published in April 2021 and an updated report is being published in May 2022.

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

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

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

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

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

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Identify the persons wishing to attend the meeting;

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Provide a description of the topics to be discussed; and

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

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The Board has the right to decline requests for any meetings requested by shareholders for any reason it deems appropriate, including where the proposed topics are not appropriate and in order

 

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to limit the number of such meeting requests to a reasonable level and prioritize acceptances based on the interests of all shareholders.

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

 

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COMMUNICATING WITH OUR BOARD MEMBERS

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

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

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

 

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DIRECTOR COMPENSATION

Director compensation is established by the Board of Directors and periodically reviewed. The table below sets out the compensation structure for non-employee directors that was in effect for fiscal 2021 and as revised effective March 19, 2022. The changes to non-employee director compensation effective March 19, 2022 were designed to:

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Simplify and streamline the non-employee director compensation

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Provide for 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

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Recognize the additional responsibility and workload expected of the Chairs of the standing Committees and the Lead Independent Director, while generally maintaining the overall level of non-employee director compensation until a full benchmarking review is completed during fiscal 2022

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Support an equitable allocation of Committee Chair and member responsibility and workload

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The Board may also authorize additional fees for ad hoc committees, if any. We do not offer non-equity incentives or pension plans to non-employee directors.

Under our shareholder-approved 2013 Director Deferred Compensation Plan, directors may elect to defer receipt of all or a portion of their Board and committee fees to be paid at a future date in either cash or shares of common stock, or to defer all or a portion of their fees into non-statutory stock options. Deferral elections must be made by December 31 for the deferral of fees in the next calendar year and must state the amount or portion of fees to be deferred; whether and to what extent fees are to be deferred in cash or shares or paid in the form of options; in the case of deferral into cash or shares, whether the payout shall be in installments or lump sum; and the date on which such payout will commence. In the case of deferrals into options, the number of options to be credited is calculated by dividing the deferred fees by 33% of the closing price on the first day of each calendar quarter, which is the date of grant. The options bear an exercise price equal to the closing price on the date of grant and are immediately exercisable. Deferrals into cash or stock are recorded in unfunded and unsecured book-entry accounts. Deferred shares to be credited are calculated by dividing the deferred

 

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fees by the closing price on the first day of each calendar quarter. If cash dividends are declared, deferred share accounts are credited with a corresponding number of deferred shares, based on the market price on the dividend date. In the case of deferrals into a deferred cash account, interest is credited to the account at the beginning of each quarter based on the 30-year Treasury Bond rate then in effect. See the Director’s Compensation Table below for a description of deferrals in the most recent fiscal year.

The following table shows compensation paid to each person who served as a director during fiscal year 2021 (compensation information for Bob Sasser and Michael Witynski can be found beginning on page 70).

(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.

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(2)

This column includes the grant date fair value of shares granted to non-employee directors on July 1, 2021. The number of shares were determined by dividing the value of the equity award by the Company’s closing share price of $99.91 on the date of grant, resulting in 750 shares of common stock for each of the non-employee directors.

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(3)

Mr. Saunders and Mr. Zeithaml retired at the 2021 annual meeting of shareholders.

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The following table shows, for each of our non-employee directors, amounts deferred in fiscal year 2021 under our 2013 Director Deferred Compensation Plan, the number of shares underlying those deferrals and the aggregate number, as of January 30, 2022, of outstanding stock options, including options obtained through deferral of fees (all of which are fully vested), and deferred shares: